Royalties on Oil

Press, Volume LXXIV, Issue 22345, 8 March 1938, Page 12

Royalties on Oil

It may be regretted that the debate on the question of royalties under the Petroleum Act was so shallow. The Minister for Mines put the matter concisely when he said that the sole point at issue was whether the owners of land under which oil is found are entitled to "special consideration." His own answer was that he thought himself "in good company in " joining with the House of Commons and the " House of Lords, which decided in an act simi"lar to the Petroleum Act, 1937, that the " royalty should go to the State." Members of the Opposition differed. Some were prepared to state their difference in an extreme form, urging, for example, that "owners of land are "entitled to whatever minerals may be found "under the soil" and that, accordingly, the "royalty for oil ought to go to the landowner"; or that the act sets up "a comman- " deer of private property "; or that the royalties clause is "nothing less than confiscation "without compensation." These are opinions which find little recommendation in modern social thought—not necessarily Socialistic — and the two last quoted are contradicted by the act itself, which authorises nothing that can be called a "commandeer" and certainly provides for compensation. The so-called " com- " mandeer " clauses, of course, simply apply the well-established principle of the Public Works Act. But the amendment on which the House divided was one which, more moderately, proposed a compromise in the division of the royalty between landowners and the State. It is as well to.say at once, however, that compromise here is not really appropriate. Either the individualist or the' national principle should prevail. They are not reconcilable. And if all considerations are duly weighed, there is not much doubt that the nation's rights should be admitted, unqualified. It is a pity that the question of "special consideration" was not more carefully (and generously) considered in relation, not to the royalties clause, but to the provisions under which land is entered and used and, if necessary, taken oyer for petroleum mining. The formula applied has been taken too literally from the Public Works Act; but the analogy is not exact enough. The Public Works Act enables land to be taken only for public purposes; the Petroleum Act adopts the same device where the purposes may be those of private gain as well as of public good. A more liberal formula, therefore, might have been aimed at and devised, and amendments to this effect should be sought for. But two points in the debate are worth separate comment. One concerns the argument that the royalty clause transgresses against the Treaty of Waitangi, and that the rights of the native race ought to have been preserved. This is a fallacious argument, and one which itself forgets the Waitangi principle of equal law and treatment for Maori and pakeha. If the pakeha's claim upon oil royalties is denied, in favour of the State, the Maori's cannot be conceded. The position of the native race requires only such special protection as is, in essentials,

already defined in the considerable body of legislation covering the use and control of native lands. Second, there arises from this the question of the Government's assurance, apparently given by the Prime Minister and the Minister for Mines, that, if oil is found on Maori land, " the owners will not lose by it." Two Maori members accepted this as an assurance of sufficient value to win their support for the Government; but it is impossible to tell what the assurance implies. If it means merely that the Maori, like the pakeha, can depend on equitable treatment under the act, it promises only what could and should be taken for granted. If it means more, it amounts to a promise of an undefined special provision, and such things are dangerous. Specifically, if it means more, it appears likely.to conflict with the provision that " compensation shall not be " payable ... in respect of any petroleum ex- " isting in its natural condition on or below the " surface of any land." The Government should open the secret of this assurance, or else confess that the assurance was empty but given in the hope of finding some way of filling it if need should ever arise.