I am currently undertaking my second-to-last paper in pursuit of my Bachelor of Law (LLB). Due to a complicated bunch of factors involving the potential staleness of my papers, if I do not apply to the New Zealand Council of Legal Education for a completion certificate with an LLB and a Professional Legal Studies certificate in hand prior to 31 Dec 2010, combined with limitations of my ability to do much more than one paper at the time due to my neck injury and chronic pain issues and due to the fact that with only two papers to go I need to submit three opinion papers (only one of which can be substituted with voluntary community legal service), I had little choice but to choose a summer school paper that had the option of an opinion credit. This set of circumstances has seen me engaged in the project for which I now hope some of our readers can help me with.
My paper is Mining and Natural Resource Law (there is not much choice at Summer School). As an opinion topic we were allowed to take our budding legal specialty and apply it to any of the topics on the course outline. I like to take a philosophical rights and freedoms approach to most of what I research and write within the field of law so I have submitted and had approved a topic with a bit of a jurisprudential twist. I intend to analyse the justifications given for the state appropriation of minerals in the sub-soil of privately owned property.
Most articles I have found on state appropriation so far seem to tacitly assume that if the state has legislated that it owns the minerals in the sub-soil of privately owned land then the state’s action is justified or the author simply does not question this, even if he or she acknowledges that a few private property owners had an issue with this at the time, which is not helpful as I intend to question the justification.
New Zealand philosophical writings from the perspective of classical liberal/pro-property rights/limited state angles are fairly difficult to find. Further international writings on this subject are not commonly cited in New Zealand so they too are hard to find. If any of our readers can point me to any good sources that might help me in the project or even if you can just leave your thoughts in the comments section (if I use your ideas in the work I promise to attribute them back to you) that would be most helpful.
The following is the gist of the direction I hope to take.
Since at least the 16th century, the maxim cujus est solum, ejus est usque ad coelum et ad inferos (Latin for for whoever owns the soil, it is theirs up to heaven and down to hell) meant that at common law, minerals in the sub-soil of land belonged to land owner. Such minerals were assumed to be conveyed along with the land on its change of ownership unless wording in the conveyance instrument specified otherwise. Until fairly recently, the last century or so, the only minerals not subject to this rule were gold and silver. The Case of Mines found “that by the law all mines of gold and silver within the realm, whether they be in the lands of the Queen, or of subjects, belong to the Queen by prerogative”. According to Dr Robyn Anderson,[1]
The Court of Exchequer found in Case of Mines, that base metals – tin, lead, iron, copper, and non-precious minerals – belonged to the owner of the soil, but that the right to gold, silver, and their ores and admixtures, lay with the Crown. That right was not an incident of ownership of the soil, but rather, an attribute of the monarchy. The Elizabethan assertion of the prerogative reflected the pragmatic needs of the developing English state to control the coinage, and finance an army … [1]
The argument that back in the 16th century the Monarch needed to be able to protect the realm by using coinage to raise an army (there was no standing army) and weapons to arm it, seems, prima facie, a reasonable justification for the state appropriation of gold and silver. However, in the last century or so many of the base metals and minerals deemed non-precious in the Case of Mines are now included in statutory reservations to the crown. This has reached the point in 2010 where, with few exceptions, the state currently owns almost all minerals in territorial New Zealand and has exclusive right to alienate (or grant a licence to alienate) most of those minerals from even those lands held in private ownership. Further, in many circumstances, land owners cannot even refuse consent for prospective, exploration and mining to occur on their land.
The New Zealand government owns all naturally occurring petroleum (including both oil and gas), radioactive minerals, and gold and silver in New Zealand. Any individual or company wanting to prospect, explore or mine these substances must obtain a permit under the Crown Minerals Act 1991 and pay the specified fees and royalties [to the state]. The same rules apply to coal and all other metallic and non-metallic minerals and aggregates on Crown-owned land.
Mining of minerals and aggregates other than petroleum, radioactive minerals and gold and silver on privately owned land requires the consent of the landowner together with resource consents from local authorities granted under provisions of the Resource Management Act. [Emphasis added] [2]
The current state of mineral rights in New Zealand seems to me, prima facie, to be a violation of ad coelum et ad inferos (the right of land ownership “down to hell” or in sub-soil), so the question I want to ask in my opinion is: what is the basis for the state’s appropriation of sub-soil minerals from the lands of private property owners and is it justified? The New Zealand army is not armed with gold and silver these days, further, I cannot see any legitimate argument for why the state needs to own petroleum and “Nuclear Free New Zealand” does not have a nuclear weapons program (and are, just a guess here, highly unlikely to in the future) so what is with the state ownership of radioactive resources?
Obviously 3,000 words will not give me a lot of space to develop this topic so I will try to keep the topic to more of a general overview but I need resources and fast both directly on this topic and on property rights generally so if you have any thoughts…
[1] Robyn Anderson Goldmining: Policy, Legislation, and Administration (Rangahaua Whanui Report, Waitangi Tribunal, Dec 1996) RANGAHAUA Whanui NATIONAL Theme N: GOLDMINING: Policy, Legislation, and Administration (Robyn Anderson ed., 1996) 1.
[2] Simon Nathan “Mining and underground resources – Mining regulation and education” Te Ara – the Encyclopedia of New Zealand, updated 2-Mar-09.
Tags: Jurisprudence · Law Studies · Minerals · Mining Law · Property Rights · Sub-Soil Land Rights18 Comments
A common objection to belief in the God of the Bible is that a good, kind, and loving deity would never command the wholesale slaughter of nations. In the tradition of his popular Is God a Moral Monster?, Paul Copan teams up with Matthew Flannagan to tackle some of the most confusing and uncomfortable passages of Scripture. Together they help the Christian and nonbeliever alike understand the biblical, theological, philosophical, and ethical implications of Old Testament warfare passages.
This may or may not be helpful, but I’ve found the Mises Institute to be very helpful when it comes to material from libertarian angles. If you can’t find any references to what you’re looking for on their website (mises.org), then the folks at the institute may well be able to point you somewhere.
The whole concept of “owning” land is ridiculous and you seem “tacitly assume” this concept unthinkingly. But given that is your starting point:
Is your proposal that if by historical happenstance some farmer/landowner happens to have inherited a bit of land with very valuable resources he should be able to have the “right” to make a vast profit on this, and has no obligation to share this wealth with the rest of the community?
Mitchell that is a great idea – thanks for that.
Max, first of all, yes I confess to tacitly assuming that 500+ years of land ownership jurisprudence is essentially correct.
Second no, you do not quite have my position correct. The obligation to give to charity when confronted with neighbours in need having just happened on a windfall, is not the same issue as my being opposed to the state abrogating centuries worth of land ownership jurisprudence without good justification.
Besides, on what basis do you assume that every instance of state appropriation of minerals over the last century has been on charitable grounds on the part of the state?
.-= My last blog-post ..Can State Appropriation of Minerals in Privately Held Land be Justified? Resources Needed =-.
I don’t know why the state wants radioactive minerals. But consider that it may be more to prevent individuals owning them (and their perceived potential) rather than the state wanting them.
Or it may antedate nuclear free NZ, ie. an archaic provision.
.-= My last blog-post ..The corporate focus in Romans 9 =-.
Max, first of all, yes I confess to tacitly assuming that 500+ years of land ownership jurisprudence is essentially correct.
> Ok interesting…
Second no, you do not quite have my position correct. The obligation to give to charity when confronted with neighbours in need having just happened on a windfall, is not the same issue as my being opposed to the state abrogating centuries worth of land ownership jurisprudence without good justification.
> OK I should have clarified. I meant *legally* obliged. Morally obliged is another matter.
Besides, on what basis do you assume that every instance of state appropriation of minerals over the last century has been on charitable grounds on the part of the state?
> I *DON’T* assume any such thing. Please don’t put such silly words into my mouth! I was asking you to clarify your views – not stating my own.
You might check land and mineral law in Appalachia (Kentucky, West Virginia, and Penn) and the direction they have taken in private land ownership and mineral extraction. (If you want an international perspective.)
.-= My last blog-post ..More on Killing People With Scriptures =-.
Thanks for that Joel. I have a found a couple of US articles that document how similar doctrines found their way into US law from UK Common Law but your suggestion gives me more key words to put into search engines.
I have found a useful NZ article written by some fairly well known economists which looks at the NZ state appropriation of minerals and critiques the justifications for it. It appears on a cursory skim glance to be a little light on support so it will say things like “New Zealand governments have a long history of confiscating private property rights in key natural resources and vesting these in the Crown once their value becomes apparent” but there is not much referred to to support that claim – I need to read it properly to know for sure and then chase up the footnotes. We’re on a field trip tomorrow around the main upper north island mining sites (Huntly, Waihi) so I have printed off that article and one that was recommended to me by another lecturer to read on the bus.
OK, I am coming to this from an economics perspective, which I don’t think is inappropriate, partly because I don’t think there is an underlying philosophical reason that would say what is the “right” specification of property rights. Rather, we could say what property rights specification might lead to the best decisions for New Zealand.
If we assume that people purchase land in order to undertake land-based activities (ie on the surface), then providing owners with a wide set of rights relating to the use of the land is consistent with what is best for NZ – the person who pays the most for the land is the one who values it the most. But, if minerals under the land are not known at the time of purchase (they are a surprise), then the land-owner has a windfall gain. This may not matter, but if the government gets that gain rather than the landowner, the government retaining that right does not change the decision to invest in land, so there has been no (economic) efficiency loss by the government retaining that right.
However, because foreigners can own land, if the windfall gain went to a foreigner, then the allocation of property rights to the landowner is detrimental to NZ (the profits are expatriated), again on the assumption that the land purchase was made in the absence of knowledge of the mineral.
There would also be some arguments around the incentives for exploration, ie the government would have less incentive to explore if they could not retain the surplus from exploiting the resource. And we might assume that the government was better placed to do this – being large etc. This has some weaknesses as the government could presumably do a deal with the landowner to pay a royalty/rental, but it would reduce the government’s surplus. And large companies can also purchase exploration rights from landowners and agree terms for any minerals found.
If the minerals are known, then the minerals will go to those that value them the most, and assuming that the mineral rights can be transferred independently of the land, this should not lead to bad land use decisions. The value will flow to the original (or current) owner of the land. But this is now academic, as changing the regime now would lead to windfall gains as noted above (with no benefit to NZ and a potential loss).
As I understand it, total ownership of NZ by Maori was recognised in the Treaty of Waitangi which included rights to natural resources.
The treaty established that Maori could only sell land to the Government.
Land purchased from the Government does not include rights to natural resourses.
As a result, Maori own the natural resources on/under Maori land; the Government owns the natural resources on/under all other land; and private property owners have no rights to the natural resources on/under their land.
The NZ Government not allowing private owners to mine natural resources from their property is not “confiscation” or “appropriation”.
Reed:
Very interesting. Can you just spell out this bit:
“Land purchased from the Government does not include rights to natural resourses.”
Cheers.
Anyone buying land from the Government today should know that they aren’t getting rights to natural resources. There are even other restrictions placed on the use of the land – so you can’t even do whatever you want with your land – it’s not unjust, it’s a contract. It does become unjust if the Government tries to change the contract after the agreement but I do not believe that is the case with natural resources.
I don’t know the history, but I expect that controlling natural resources was part of the reason for specifying that Maori could only sell land to the Government. So, I expect that it has always been known in NZ that when you purchase land from the Government it does not include the natural resources.
I guess it is important to deal specifically with the New Zealand situation then. Comparisons with other nations situations may not be all that useful?
Land ownership is different from ownership of other assets in New Zealand, as the owner owns an estate in the land rather than absolute title, and this raises the question of what rights are included in the estate and what are not. As other commenters have noted, this may not include subsoil mineral rights.
The validity of the argument that crown powers to raise and finance an army implies that the crown has rights to subsoil monetary metals is questionable, even when the monetary standard is metallic. The crown’s powers to tax, whatever kinds of taxes are permitted, is its power to use its sovereign power to raise revenue, which can be used to support an army. Appropriation or reservation of subsoil monetary metal is not required or even properly linked to taxation or use of sovereign power to raise revenue. The whole idea of taxation is that the revenue raised by sovereign power is by way of defined imposts on property, transactions etc. rather than by picking some random assets and expropriating them. That is to say the concern of taxation is that the incidence of it is to be distributed with some measure of equity on the subjects, and according to some political theories, according to some notion of representation.
Under a metallic standard of money, the ownership of the metals in the coins is not with the crown but with the holders.
‘It is the theory of the English monetary law that every individual is entitled to take gold to the mint and have it coined gratuitously, all the expenses being borne by the public revenues. It is intended that the coin shall be rendered identical in value with an equal quantity of gold bullion, so that it shall, in short, be so much certified bullion, and shall be reconvertible into ingots without loss.’ (Jervons, http://www.econlib.org/library/YPDBooks/Jevons/jvnMME10.html#Chapter%20X.%20The%20English%20System%20of%20Metallic%20Currency ) this quote shows that gold coin, even gold coin minted by the crown, is only so much certified bullion, the role of the crown being in the certification rather than in the ownership.
.-= My last blog-post ..How Faltering Financial Institutions can Raise Cash =-.
Maybe state ownership of radioactive resources is a provision to force any would be extractor into the RMA process, wherein consent would be not given due to conflict with nuclear-free law.
It has been a long time since I looked at land law so if my memory is incorrect about my basic assumptions I am more than happy to accept that the rest of my argument will fall down.
It occurs to me that your starting point has to be an investigation into the concept of ownership of land within the NZ jurisdiciton.
Without having read the Mines case I assume that part of the rationale was that the Crown owns all land and then grant it’s subjects, and other persons within it’s sphere of influence, rights with respect to that land. Those rights have eventually become colloquially known as “ownership”.
One of the problems with using that colloquial term may be that it confuses people because they assume that the definition of “ownership” for land is the same as the definition of “ownership” for something that they have complete power over (lets say, “apples” as a random example).
My memory of land law in NZ is that, as D HIllary pointed out, we do not own the land in the same sense that we own apples.The NZ Government, which, despite being all but independent from Her Majesty is still, at law, is subject to the Monarchy, grants certain rights to persons with respect to the land. Those rights are wide and far reaching but are not inalienable (for instance, the Police have the right in some circumstances to go on to private property without a warrant and search it and then keep privately owned items, including the fruit of the land, that they find).
If I am correct then a simple argument to justfy maintaining control of sub-soil land rights is that it is that the land was and still is owned by the Government. It can then chose how and to what extent it disposes of rights and responsibilites in relation to the land. It has chosen to dispose of them in such a way that does not include sub-soil land rights. It can do this because it owns the land like we own apples, or in a way that is very close to the way that we own apples. It does not need any justification beyond being the fount from which “ownership”, whatever that may be, springs.
Perhaps that last sentence was a little to lyrical, but you get the idea 🙂
As I said, I am working from a faint memory of land law and it may be that small things, such as the Magna Carta, may have superceded my argument. If that is the case then I apologise for wasting your time.
Hey did you complete this paper, I’d be interested in reading it as I’m working on a paper on Indigenous Resource Rights comparing NZ with US and Australia.
All the best – hope you’re feeling better.
Steph
Steph – yes I did, it is on this blog here:
Can State Expropriation of Minerals be Justified?
I also wrote this blog post drawing from exam study notes from the same paper:
Property Rights: Blackstone, Locke and the Legislative Scheme
“Radioactive resources” are used for far more than a weapons programme.
I presume that you have never had the misfortune to require treatment with nuclear isotopes. Hospitals are full of radioactive materials.
And of course New Zealand was seriously looking at nuclear power, from the 1960’s until the late 1970’s.
New Zealand is not nuclear freee. Its a myth.