Property rights and mineral legislation

Abstract

It is a commonplace that the ultimate constituents of the social world are individual people who act more or less appropriately in light of their dispositions and understanding of their situation, i.e.it is individuals, and not society as a whole, that make decisions. In understanding the consequence of existing law, and the likely implications of its reform, it is necessary, therefore, to comprehend the logic of the situation that the law provides individual decision makers and how that situation would be adjusted by reform. In particular, the way in which natural resources are used and managed is influenced by the definition and structure of property rights that the law provides. Property rights are enforceable claims to use or to benefit from resources. An example is a mining licence that allows its holder to extract minerals in a specified area. Property rights establish the structure of incentives, opportunities and constraints within which resource use decisions are made, i.e. the logic of the situation, and hence influence the use and management of resources. The extent and type of mining in New Zealand, for example, reflects the rights that miners have to extract minerals, and their rights to benefit from mining as against their duties to compensate landowners and pay royalties. This paper describes the characteristics of minerals that are relevant to the definition of property rights, analyses the implications of alternative property right arrangements and describes the existing situation.