4. Roles and Responsibilities to Respond to an Oil Supply Disruption
4.1 The Ministry of Economic Development proposes that the oil emergency response strategy will outline the roles and responsibilities for: the initial decision on whether government involvement is necessary; subsequent decisions on the emergency measures to implement; and the appropriateness of an ongoing response. This section outlines a possible framework for these roles and responsibilities.
Summary of Roles and Responsibilities
Initial Decision
Trigger event
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Ministry of Economic Development consults with industry and government departments to determine whether government involvement is necessary
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Ministry of Economic Development makes a recommendation to the Minister of Energy
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Minister of Energy makes final decision of whether government involvement is necessary in consultation with the Prime Minister and the Ministers of Finance, Transport and Foreign Affairs (and if relevant Civil Defence)
Ongoing Roles and Responsibilities
Ministry of Economic Development convenes and leads the Senior Officials Coordination Team which then sets up other teams as appropriate
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Senior Officials Coordination team takes the lead in developing and coordinating a plan of action in consultation with the other teams and provides advice to the Minister of Energy
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Minister of Energy makes final decision on what measures to implement in consultation with the Prime Minister and the Ministers of Finance, Transport and Foreign Affairs (and if relevant Civil Defence)
Initial Decision Making Framework
4.2 The oil companies whose operations are affected by the emergency have initial responsibility for responding to an oil supply disruption. The oil emergency response strategy would only be activated if required to fulfil New Zealand's obligations to the IEA or if petroleum supplies to New Zealand are materially disrupted and government involvement is necessary to rectify the situation and/or minimise the impact on New Zealand.
4.3 The Ministry of Economic Development would consult with the National Emergency Sharing Organisation (NESO), an existing committee of oil industry representatives chaired by the Ministry of Economic Development, to determine whether government involvement is necessary.
Background: NESO
Under the International Energy Agreement, every IEA member is required to have a NESO. It exists to make arrangements for sharing oil supplies between member countries in the event of a severe emergency. New Zealand also uses the NESO committee to assist with invoking lower level or non IEA emergency measures.
4.4 The Ministry of Economic Development would then consult with senior officials from other government departments about whether government involvement is necessary. The government departments would include the Ministry of Transport, Energy Efficiency and Conservation Authority, Ministry of Civil Defence and Emergency Management, Department of Prime Minister and Cabinet, Treasury, and the Ministry of Foreign Affairs and Trade, as considered relevant by the Ministry of Economic Development in a given emergency situation.
4.5 Following consultation, the Ministry of Economic Development would make a recommendation to the Minister of Energy about whether government involvement is necessary.
4.6 The Minister of Energy is responsible for deciding whether to accept or reject the Ministry of Economic Development's assessment and recommendation in consultation with the Prime Minister and the Ministers of Finance, Transport and Foreign Affairs (and if relevant Civil Defence).
4.7 If the Minister of Energy agreed with a recommendation for government involvement, the Ministry of Economic Development would convene a Senior Officials Coordination Team to take the lead role in developing and coordinating a plan of action.
Ongoing Roles and Responsibilities for Responding to an Oil Supply Disruption
Senior Officials Coordination Team
4.8 The Ministry of Economic Development would convene and lead a Senior Officials Coordination Team. Membership may include senior officials from the Ministry of Transport, Energy Efficiency and Conservation Authority, Ministry of Civil Defence and Emergency Management, Treasury, Department of Prime Minister and Cabinet, and the Ministry of Foreign Affairs and Trade, as considered relevant in a given emergency situation.
4.9 The Senior Officials Coordination Team would:
- take the lead role in developing and coordinating an appropriate plan of action for the length of the oil emergency. This includes deciding upon the Industry/Government and the Communications Teams that need to be set up and confirming the roles and responsibilities of each team;
- provide advice to Ministers on measures to be implemented in consultation with the other teams; and
- coordinate the collection of information on the emerging crisis.
4.10 Ultimately, it is the Minister of Energy, in consultation with the Prime Minister and the Ministers of Finance, Transport and Foreign (and if relevant Civil Defence), who makes the decisions on the emergency response.
Industry/Government Management Team
4.11 The Industry/Government Management team is likely to be in the form of the existing NESO.
4.12 The Industry/Government Management Team would:
- make decisions regarding industry response;
- convey information and provide advice to the Senior Officials Coordination Team through the Ministry of Economic Development on the ongoing oil supply situation; and
- be the forum by which the oil industry is kept informed of government decisions.
Communications Team
4.13 The Communications team would comprise communications managers/senior advisors of the Ministry of Economic Development, the Energy Efficiency and Conservation Authority, the Ministry of Transport, and oil companies, as considered appropriate by the Senior Officials Coordination Team in a given emergency situation.
4.14 The key function of the Communications team would be to develop and implement a communications strategy to support the agreed plan of action.
4.15 Section 10 sets out a broad approach to communications in the event of an oil supply disruption. Given the need for a high degree of flexibility to respond to specific scenarios, this pre-planned communications strategy will necessarily remain a relatively high-level one.
Areas for Feedback
This section outlines a possible framework for institutional arrangements. The Ministry of Economic Development welcomes feedback on the proposed framework including:
- the expectation that the oil companies whose operations are affected have initial responsibility for responding to an oil supply disruption;
- the proposed consultation with industry to decide whether government involvement is necessary and the role for industry in the ongoing response;
- the proposed process by which the initial decision for government involvement is made; and
- the proposed teams and their roles in managing the ongoing response to an oil supply disruption.
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