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INTRODUCTIONWelcome to the July 2018 edition of the Mining Sector Update from Corrs Chambers Westgarth. Published each month, this briefing keeps you up-to-date with recent mining deals, market rumours, potential opportunities and relevant regulatory updates.
MINING SECTOR UPDATE
AUSTRALIA AND PAPUA NEW GUINEA
JULY 2018
Mining Royalties to Blame for Queensland’s Billion Dollar SurplusIt came as little or no surprise to the resources sector that Queensland’s operating surplus upsurge from the mid-year review prediction of A$485 million to a trebled A$1.5 billion came almost exclusively from the mining royalties of over A$4 billion pumped into the economy by coal and gas.
The resources sector’s contribution to vital infrastructure and services that will be able to be enjoyed by all Queenslanders was in spite of regulatory changes to the industry, including the “chain of responsibility” changes to the Environmental Protection Act 1994 (Qld) (more information on the effects this has had on the industry can be found here and here).
However, despite a growing hostility towards the resources sector (particularly coal) by some residents of Queensland, as pointed out by Queensland Resources Council’s (QRC) Ian Macfarlane, the Queensland resources sector now provides one in every six dollars in the Queensland economy, sustains one in eight Queensland jobs and supports more than 16,400 businesses across Queensland. For the second year in a row, the State’s revenue from coal and gas exports is over a billion dollars higher than estimated and every person in the resources sector is expected to generate over A$72,000 over the next five years, totalling a contribution of over A$20 billion towards the Queensland State Budget by 2023.
If the 2018 budget provides a snapshot into future spending plans, this revenue will contribute significantly to funding essential projects like the Cross River Rail project, two sections of the M1 highway, the building of new state high schools, increased and more efficient health services, protection measures for the Great Barrier Reef, provision of drought relief for farmers, indigenous housing and the national redress scheme for victims of institutional child abuse.
RECENT ANNOUNCEMENTS
IN THIS EDITIONWe hope you enjoyed our bumper June edition of the Mining Sector Update. In this month’s MSU:
• A brief overview of the 2018-19 Queensland Budget and the resource sector
• The Supreme Court’s decision on Peabody’s Wilpinjong Coal case
• The recently released ‘ipso facto’ regulations
• The impact on the resource sector of the Victorian Environmental Protection Amendment Bill 2018
However, in pursuing its obligations to moving towards renewables, the State must still remain cautious about placing too much reliance on the resources sector but not providing it with adequate support, particularly in light of an increasingly competitive global market.
“It would be a grave mistake and a risk to its own projections of A$20 billion in royalties, for the government to revisit these rates. There is strong international competition for investment in resource projects and market share for resource commodities. Higher prices for prized commodities such as metallurgical coal only opens the door to less attractive deposits overseas being developed and less competitive suppliers being more aggressive in our traditional markets. Queensland cannot afford to be complacent about recent reports that US suppliers are seeking to make inroads into our well established Japanese markets”1 Macfarlane noted, and added that additional regulatory burdens implemented with little or no consultation would also add further costs and deter international investment that is looking for a stable, safe and secure environment in which to develop resources.
All in all, this year’s budget is good news for the resources sector, once again demonstrating its tenacity and the gargantuan contribution that a mere 0.1 percent of Queensland’s land mass makes to the State’s coffer. No change to the royalties regime was announced, and Treasurer Jackie Trad acknowledged the “important role” the resources industry continues to play in the Queensland economy.
1 Ian Macfarlane, ‘Resources Sector Delivers for all Queenslanders’, Media Release, 15 June 2018.
Safeera MoosaLawyer, BrisbaneTel +61 7 3228 [email protected]
Bruce AdkinsPartner, BrisbaneTel +61 7 3228 9431Mob +61 418 874 [email protected]
RECENT DECISIONSNSW Land and Environment Court Dismisses Climate Change Challenge to Approval of Wilpinjong Coal Mine ExpansionThe New South Wales Land and Environment Court (Court) has dismissed an appeal by the Wollar Progress Association (Association) against the Planning Assessment Commission’s (PAC, now the Independent Planning Commission) decision to approve the continuation and expansion of mining activities at the Wilpinjong open cut coal mine near Wollar, New South Wales.
Implications
The judgment of Justice Sheahan, delivered on 19 June 2018, provides useful guidance on the approach of the Court to clause 14(2) of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (NSW) (Mining SEPP). This clause requires a consent authority determining a development application (DA) for mining, petroleum production or extractive industry development to consider the greenhouse gas (GHG) emissions (including downstream emissions) of the development, having regard to applicable State or national policies, programs or guidelines concerning GHG emissions.
In particular, the Court’s consideration as to what is an “applicable” policy, will mean that DAs for mines will not need to be assessed against long term “aspirational” or political targets of the kind set out in the Paris Agreement and the 2016 NSW Climate Change Policy Framework (CCPF).
Background
On 24 April 2017, Wilpinjong Coal Pty Ltd (Wilpinjong) obtained approval from the PAC to physically extend the mine and continue operations until 31 December 2033 (from 8 February 2027). The proposed extension was predicted to result in increased GHG emissions from the mine (direct and indirect) and clearing of native vegetation.
The Association brought judicial review proceedings challenging the PAC’s decision to approve expansion of the mine on the grounds that the PAC:
1. did not properly consider the climate change impacts of the expansion, including the downstream emissions of the development;
2. did not properly assess the impacts of the expansion on biodiversity; and
3. was not properly constituted in accordance with the law.
Justice Sheahan rejected grounds 1 and 2. The Association conceded that ground 3 could not be sustained following commencement of clause 7(4) of the Environmental Planning and Assessment (Savings, Transitional and Other Provisions) Regulation 2017 (NSW) on 1 March 2018 (which has the effect of validating certain PAC decisions made before 1 March 2018).
Christine Covington Partner, SydneyTel +61 2 9210 6428Mob +61 419 607 [email protected]
Louise Lee Senior Associate, SydneyTel +61 2 9210 [email protected]
Ground 1 – Climate Change Impacts
The Association submitted that in granting development consent, the PAC did not consider the following two policies and therefore failed to comply with the requirement in clause 14(2) of the Mining SEPP to “have regard to any applicable State or national policies, programs or guidelines concerning greenhouse gas emission”, rendering the consent invalid:
1. Australia’s commitments under the 2015 Paris Agreement on climate change; and
2. the CCPF,
(together, the Policies).
Justice Sheahan held, accepting the submissions of Wilpinjong, that:
• the first requirement of clause 14(2) of the Mining SEPP is for the PAC to conduct an “assessment” of the GHG emissions of the development. A policy, program or guideline is “applicable” to the assessment of a development only if it could “meaningfully guide” the PAC in the conduct of the assessment;
• the Policies are not “directed to the process of assessment” and could not be applied by the PAC. This is because applying the “aspirational” targets set out in the Policies would require the PAC to engage in the unrealistic task of assessing Australia’s national emissions in 2030, or the emissions of NSW in 2050, before determining the impact of the proposed expansion of the mine on those emissions; and
• the PAC had in fact considered the Policies, as the Policies had been put before it, the PAC stated that it had “carefully considered” a range of matters, and the Association failed to establish that the Policies were not considered.
Ground 2 – Biodiversity Impacts
Section 79C(1)(b) (now section 4.15(1)(b)) of the Environmental Planning and Assessment Act 1979 (NSW) required the PAC to consider the environmental impact of the proposed expansion of the mine in its assessment of the DA.
Argument in the Court focussed on the impact of clearing two areas of woodland that had been identified as an endangered ecological community (EEC). One area of woodland was located in the proposed expansion area of the mine, while the other was located in an area already approved for mining but not yet cleared (Previously Approved Area).
The Association submitted that:
1. section 79C(1)(b) required the PAC to consider the environmental impact of the entire development, and not just the proposed expansion; and
2. the PAC only considered clearing in the proposed expansion area and therefore had failed to comply with section 79C(1)(b).
Justice Sheahan agreed with Wilpinjong’s submission, holding that the PAC’s requirement for a biodiversity strategy involving both existing and additional environmental offsets led to an “irresistible inference” that the environmental impact of the whole development had been considered. The fact that the PAC had been provided with more material on the impact of clearing in the proposed expansion area relative to the Previously Approved Area did not threaten the validity of the PAC’s assessment.
Argument in the Court focussed on the impact of clearing two areas of woodland that had been identified as an endangered ecological community (EEC)
AUSTRALIA
Corrs advises Peabody Australia on Sale of Wotonga South Coking Coal Deposit
Corrs has advised Peabody Australia in relation to the recently announced sale of the Wotonga South project to Stanmore Coal.
ASX-listed Peabody Australia will sell the Wotonga South coking coal deposit contained in two mining tenements (MDL 137 and EPC 728) to ASX-listed Stanmore Coal for A$30 million cash plus a production based royalty capped at circa A$10 million.
The Wotonga South deposit has a coal resource of 22.8 million tonnes, and is located 10 kilometres south of Stanmore Coal’s existing coal handling and processing plant at Isaac Plains in Queensland.
Subject to approvals, the acquisition of these mining tenements will provide Stanmore Coal with the right to develop an open cut mining operation, with the ability to extract around 15-20 million tonnes of coal and extend the life of the Isaac Plains Complex.
Completion of the transaction is subject to customary conditions precedent.
The Corrs team was led by partner Bruce Adkins and supported by Special Counsel Stuart Clague and Lawyers Caitlin McPhee and Safeera Moosa.
South32 secures 100% interest in Arizona Mining
ASX-listed South32 Limited announced on 18 June 2018 that it had entered into a US$1.3 billion all-cash agreement to acquire 83 percent of issued and outstanding shares of TSX-listed Arizona Mining Inc. On completion, South32 will have obtained 100 percent ownership of the company. Completion is subject to shareholder approvals, with the shareholder vote expected to take place in the September 2018 quarter.
Arizona Mining owns the Hermosa Project, a greenfield development project located close to key infrastructure in the US State of Arizona, which contains zinc, manganese and silver oxide resources.
RECENTLY COMPLETED DEALS
Bruce AdkinsPartner, BrisbaneTel +61 7 3228 9431Mob +61 418 874 [email protected]
Stuart ClagueSpecial Counsel, BrisbaneTel +61 7 3228 9784Mob +61 419 642 [email protected]
Mineral Resources agrees to purchase Cleveland-Cliffs Koolyanobbing operations
ASX-listed Mineral Resources Limited announced on 13 June 2018 that it had entered into an agreement with NYSE-listed Cleveland-Cliffs Inc. to acquire the Koolyanobbing iron ore operation (including tenements, all remaining iron ore, fixed plant, equipment and non-process infrastructure items on those tenements, and fixed infrastructure assets at the Port of Esperance) located in the Yildarn region of Western Australia. The cost of the acquisition was not disclosed. The Western Australian government provided considerable support in facilitating the transaction.
Mineral Resources has negotiated a below rail access agreement with Arc Infrastructure and intends to commence iron export from the Port of Esperance.
Hancock Prospecting announces Atlas Iron takeover offer
ASX-listed Hancock Prospecting Pty Ltd, through its wholly-owned subsidiary Redstone Corporation Pty Ltd, announced a A$390m all-cash offer takeover offer of ASX-listed Atlas Iron Limited on 18 June 2018.
Atlas has been the subject of interest of competing bidders Hancock, Mineral Resources and Fortescue Metals Group Limited. Earlier this month Fortescue acquired a 19.9 percent stake in Atlas while Hancock similarly obtained a 19.96 percent shareholding. The ABC has since reported that Mineral Resources has withdrawn its earlier A$280m bid and will not be able to better that of Hancock.2 The Atlas Board has unanimously recommended its shareholders to accept the Hancock offer.3
Atlas’ primary iron ore exploration takes place in the Pilbara region of Western Australia, and it holds a 63 percent stake in the North West Infrastructure Joint Venture.
EMR Capital agrees to purchase BHP Cerro Colorado copper mine
ASX and LSE-listed BHP Billiton announced on 19 June 2018 it had entered into a US$320 million deal with Melbourne-based mining private equity EMR Capital to sell Cerro Colorado Mine. The acquisition remains subject to financing and closing conditions, and is expected to close in the fourth quarter of 2018.
The mine, located in the Atacama Desert in Northern Chile, produced 65,000 tonnes of copper cathode during the 2017 financial year.
OZ Minerals to commence compulsory acquisition of Avanco Resources
ASX-listed OZ Minerals Limited announced on 27 June 2018 that it had recently acquired 90.46 percent of shareholdings in Avanco Resources, and intends to compulsorily acquire the remaining shares. OZ first commenced the A$418m takeover bid in March 2018 in order to expand its operations into South America.4
Avanco holds copper and gold assets in Brazil.
A$30 million cash plus a production based royalty capped at circa A$10 million
2 David Chau, ‘Atlas Iron Backs Gina Rinehart’s $390 Million Takeover Offer’, Australian Broadcasting Company (online), 21 June 2018.
3 Atlas Iron Limited, ‘Atlas Recommends Hancock Offer’ (ASX Announcement, 29 June 2018).
4 Peter Ker, ‘OZ’s Bid for Avanco ‘Too Low’’, Australian Financial Review (online), 5 May 2018.
RECENTLY COMPLETED DEALS CONTINUED
PAPUA NEW GUINEA
Mayur Resources granted environmental permits for coal extraction and lime and cement project
ASX-listed Mayur Resources Ltd announced on 18 June 2018 that it has been granted an Environmental Permit for coal bulk sample extraction from EL1875, including the Depot Creek project in the Gulf Province in PNG.
According to the company, this is the first time the Conservation and Environmental Protection Authority has issued an Environmental Permit for coal bulk sampling in PNG to enable commercial grade shipments.
The permit will enable Mayur Resources to provide coal for technical and marketing acceptance in power generation in Asia. The company also announced that the bulk sampling test works will also help to confirm the suitability of the coal for use in domestic power generation.
Mayur Resources also announced on 25 June 2018 that it has been granted an Environmental Permit for the development of its vertically integrated lime and cement project located on EL2303 in the Central Province in PNG.
The company has declared that the project is the first of its kind in PNG and will advance the nation’s capacity to produce Quicklime and Cement locally, removing reliance from imports and generating an export-based industry.
Highlands Pacific agrees placement and streaming agreement with Cobalt 27
ASX and POMSox-listed Highlands Pacific Limited announced on 23 May 2018 that it has entered into binding agreements relating to a streaming arrangement, private placement and strategic relationship with Canadian battery metals company, Cobalt 27 Capital Corp.
Under the terms of the streaming arrangement, Cobalt 27’s wholly owned subsidiary, Electric Metals Streaming Corp, will pay Highlands an upfront deposit of US$113 million to secure an entitlement to 55.0% of Highland’s share of cobalt production and 27.5% of Highland’s share of nickel production from the Ramu Nickel Cobalt Mine for the life of the project. Electric Metals will also make ongoing volume-based payments for product it is entitled to receive under the streaming agreement.
In addition, Highlands has agreed to issue shares to Colbalt 27 through a private placement to raise approximately A$15 million.
Nick ThornePartner, BrisbaneTel +61 7 3228 9342Mob +61 424 157 [email protected]
Vaughan MillsPartner, BrisbaneTel +61 7 3228 9875Mob +61 413 055 [email protected]
MARKET RUMOURS AND OPPORTUNITIESPalaszczuk Government to release more land for exploration in QueenslandMore than 44,000 square kilometres of land has been earmarked for release to facilitate the next round of exploration for resources projects.5
Though the majority of this area contains potential petroleum and gas stores, 1140 square kilometres will be available for coal exploration, including nine areas within the Bowen basin and one within the Eromanga basin.
Queensland’s resources industry is valued at almost A$60 billion, with the Bowen basin containing almost all of the state’s metallurgical coal reserves. The close proximity to existing projects will enable any new projects to be supported by existing rail and pipeline infrastructure.
Minister for Natural Resources, Mines and Energy, Dr Anthony Lynham, addressed investors at the Energy, Mines and Money Conference in Brisbane last fortnight and encouraged investment in metallurgical coal as a critical element of our renewables future, and imperative to development of wind turbines, solar farms and electric cars.
Queensland’s resources industry is valued at almost A$60 billion
5 Minister Anthony Lynham, ‘New ground to be released to unlock next wave of resources projects’, Media Release, Department of Natural Resources, Mines and Energy, 20 June 2018.
REGULATORY UPDATESCOMMONWEALTH
Stay on enforcement of ‘Ipso Facto’ clauses regulations released
Our June edition of the Mining Sector Update discussed the mandatory stay on enforcement of so-called ‘ipso facto’ clauses arising out of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) (the Act) that apply to contracts entered into on or after 1 July 2018.
The Corporations Amendment (Stay on Enforcing Certain Rights) Regulations 2018 (Cth) (Regulations) have now been finalised and set out the types of contracts that are excluded from the ipso facto stay provisions. As per the exposure draft regulations, most of the exceptions focus on finance arrangements, however, there are a few new additions and variations that are relevant to mention:
• A contract for the sale of all or part of a business, including by way of the sale of securities or financial products;
• A contract that involves a special purpose vehicle, and that provides for a project finance arrangement under which:
– Finance is to be repaid primarily from the project’s cash flow; and
– All or most of the projects assets are held as security;
• A contract entered into or renewed on or after 1 July 2018, but before 1 July 2023, as a result of the novation, assignment or variation of one or more rights under a contract entered into before 1 July 2018.
For more information on the application of the ipso facto stay, see our article published in our June edition of the Mining Sector Update here.
QUEENSLAND
Financial Provisioning Scheme Update
By Stuart Clague (Special Counsel)
Since our March Mining Sector Update discussing the ‘financial provisioning scheme’ to be established under the Mineral and Energy Resources (Financial Provisioning) Bill 2018 (Qld), the Queensland Department of Natural Resources, Mines and Energy has produced two new discussion papers on proposed regulatory reforms.
The first paper discusses potential reforms regarding:
• Identifying and managing the risk of the State becoming responsible for rehabilitation where resource operations enter care and maintenance (C&M).
The Government considers that sites in C&M are a higher financial risk to the State due to the increased likelihood of the State becoming responsible for rehabilitating the site, and therefore proposes stricter reporting obligations for sites which enter C&M. These stricter reporting obligations would allow the State to use their regulatory powers under the Environmental Protection Act 1994 (Qld) and resources legislation to ensure compliance with the environmental authority and resource authority.
• Assessing the financial and technical capabilities of resource authority holders in ownership transitions which result in a change of control.
Stuart ClagueSpecial Counsel, BrisbaneTel +61 7 3228 9784Mob +61 419 642 [email protected]
If the holder of a resource authority (eg a mining lease) wishes to directly sell the resource authority to a buyer, the transfer of resource authority to the buyer must be approved by the State under Mineral and Energy (Common Provisions) Act 2014 (Qld) (MERCP Act). This allows the State to assess whether buyer has the technical and financial capability to comply with the resource authority.
However, presently, the sale of a controlling interest in a company which holds a resource authority does not require approval from the State, even though this effectively results in an indirect sale of the resource authority to the buyer.
The Government has proposed amending the MERCP Act so that a ‘change of control’ of a company which holds a resource authority will be treated analogously to a direct sale of a resource authority, allowing the Government to assess the transaction. The assessment would be required prior to the transaction occurring. A condition would also be inserted into all existing and new resource authorities obliging all parties involved in the ‘change of control’ transaction (i.e. the resource authority holder, the divesting entity and the new controlling entity) to notify the responsible Minister of any proposed transaction. Assessment of whether a transaction results in a ‘change of control’ of the resource authority holder would apply the definition of ‘control’ under the Corporations Act. The financial provisioning scheme also includes provisions for reviewing the risk category to which an environmental authority is allocated, and therefore the type and quantum of financial provisioning to be provided, as a result of a ‘change in control’ transaction.
• Reducing risks to the State when liquidators disclaim resource authorities.
When the holder of a resource authority becomes insolvent, its liquidators may ‘disclaim’ the resource authority, which terminates the holder’s rights, interests and liabilities under the resource authority.
The Government has proposed amendments to the MERCP Act which would provide a mechanism for transferring a disclaimed resource authority to the State so that it can be ‘warehoused’ until it is sold to a new holder who will assume obligations under the resource authority and associated environmental authority. The proposed amendments would deem the resource authority to survive the disclaiming process. This reform is designed to reduce the number of sites becoming abandoned and restore economic orebody sites to production faster through the reduction of costs and delays associated with the resource authority application process.
The second paper discusses reform ideas designed to complement the financial provisioning scheme and enhance the Government’s capacity to manage the risks and opportunities presented by abandoned mine sites. Proposals for the improvement of the processes used for prioritising site resource allocation and the legislative and regulatory frameworks assisting stakeholders in site rehabilitation and repurposing are also discussed.
The Government is seeking industry and community feedback related to the policies and reform ideas in both discussion papers with submissions due 5.00 pm, 16 July 2018. The DNMRE has also flagged an upcoming residual risk discussion paper, to be released later this year for public consultation. The paper will discuss a proposed policy framework requiring resource operators to make a payment when surrendering their environmental authorities to cover long-term monitoring or maintenance costs and risks associated with the potential failure of rehabilitation work.
The financial provisioning scheme also includes provisions for reviewing the risk category to which an environmental authority is allocated
REGULATORY UPDATES CONTINUED
The Queensland Government has also announced the selection and appointment of a Risk Advisor to assist with the design, implementation and operation of the financial provisioning scheme. The Risk Advisor consists of a Consortium headed by KPMG and includes Advisian and Australia Ratings. The Consortium will be involved in risk assessment component of the scheme, in addition to advising the scheme manager with input from key industry stakeholders.
For more information regarding the new financial provisioning scheme, see our initial article published in the March edition of the Mining Sector Update here. Corrs is also currently in the process of compiling a comprehensive summary of the new financial provisioning scheme which will be made available via our website.
VICTORIA
The New Environment Protection Amendment Bill 2018 tabled in Parliament
By Carol Daicic (Partner) and Patricia Saw (Senior Associate)
The Victorian Minister for Energy, Environment and Climate Change recently introduced the long awaited Environment Protection Amendment Bill 2018 (Vic) (EP Bill 2018) into State Parliament. The EP Bill 2018 is part of the Victorian Government’s complete overhaul and replacement of the Environment Protection Act 1970 (Vic) (EP Act 1970).
The first step in this overhaul occurred last year with the passage of the Environment Protection Act 2017 (Vic) (EP Act 2017) which implemented reforms to the Victorian Environment Protection Authority’s (EPA) corporate governance structure. The EP Bill 2018 is the second and final step in this overhaul, and contains the substantive provisions to ‘fill in’ the framework set up by the EP Act 2017. The EP Bill 2018 will repeal the EP Act 1970.
These changes implement the key reforms in the Victorian Government’s response to the 2016 Inquiry into the EPA and represent the most significant changes to Victoria’s environmental regulatory regime since the introduction of the EP Act 1970 more than 47 years ago.
If the EP Bill 2018 is passed this year, a long implementation period is expected to allow businesses and regulators time to adjust to the new regime. If passed as currently proposed, the new regime will commence full operation no later than 1 December 2020.
Key Reforms
General environmental duty
One of the most significant changes introduced by the EP Bill 2018 is the creation of a new general environmental duty. This duty requires any person who is engaging in an activity that may give rise to risks of harm to human health or the environment from pollution or waste to either eliminate or minimise those risks, so far as reasonably practicable.
As opposed to the current ‘after the harm has occurred’ approach, this duty represents a shift away from merely prohibiting environmental harm, to requiring minimisation of risk in order to prevent harm from occurring in the first place. Furthermore, this duty applies broadly to the community and businesses at large, and not just to environmental licence holders.
Patricia SawSenior Associate, MelbourneTel +61 3 9672 [email protected]
Carol DaicicPartner, MelbourneTel +61 3 9672 3473Mob +61 438 177 [email protected]
If the Bill is enacted, a breach of the general environmental duty would attract a penalty of up to A$317,000 for an individual or A$1.6 million for a corporation. For an intentional or reckless breach of the duty that results in material harm, a higher penalty of up to A$635,000 and/or 5 years imprisonment for an individual, or A$3.2 million for a corporation would apply.
New environmental permissions
A new hierarchy of permissions will be introduced that will be required in order to conduct a prescribed activity. Whereas the current regime focuses on permissions required for prescribed premises, the new regime will focus on activities. This new regime may cover a much wider range of activities and businesses than are currently captured by the current ‘scheduled premises’ regime, and will accommodate mobile activities that carry environmental risk.
Development of the regulations prescribing activities for these different categories of permissions will be a key implementation priority in the period prior to full commencement of the new regime.
New provisions require that operating licences must specify a term – in other words, licences will no longer be granted indefinitely. Operation licences will also be subject to regular reviews every 4 years or any longer period determined by the EPA.
Contaminated land
Significant changes to Victoria’s contaminated land regime are also introduced by the EP Bill 2018. These provisions apply irrespective of whether the land was contaminated before or after the commencement of the new regime and include:
• a duty to manage contaminated land;
• a duty to notify EPA of contaminated land;
• long-term Site Management Orders; and
• an improved environmental audit system.
Third party enforcement – civil proceedings
The introduction of third party enforcement provisions brings Victoria into line with most other Australian jurisdictions. These provisions allow that an “eligible person” may apply to the Court for enforcement of an environmental permission or the Act. The Court may make orders to remedy or restrain a breach of any requirement of the Act or any permission. These provisions will have a delayed start. No such applications will be permitted within 12 months from the full commencement of the Act.
Transition of current works approvals and licences
Transitional sections of the EP Bill 2018 provide for current works approvals, licences and RD&D approvals to be deemed to be a development licence, operating licence or pilot project licence respectively under the new regime. The existing conditions set out in the old approvals will also be transitioned across unchanged in the first instance. However, within 12 months of the full commencement of the new regime, the EPA may adjust those conditions to ensure compatibility with the new scheme.
New provisions require that operating licences must specify a term – in other words, licences will no longer be granted indefinitely
Changes to the Mineral Resources (Sustainable Development) Act 1990
The EP Bill 2018 proposes minor amendments to the Mineral Resources (Sustainable Development) Act 1990 (Vic) including:
• the EPA will be a referral authority in the case of a work plan or a variation of an approved work plan for mining work proposed to be done under a mining licence; and
• the EPA will receive copies of work plans or variations to approved work plans from the Department Head whose task is to endorse them.
What does this mean for the mining sector?
It is important for the mining sector to familiarise themselves with the practical effects the new regime will have. For example:
• Whereas previously businesses were incentivised to seek exemptions from obtaining works approvals or licences to evade additional regulation, businesses may consider actively seeking environmental permissions to authorise activities now to act as a shield from the new general environmental duty.
• Existing site contamination, depending on levels and the contaminant in question, may need to be notified to the EPA and other parties upon commencement of the new regime. Work may need to commence to understand the nature and extent of pre-existing contamination on-site ahead of this date as land managers and controllers have proactive duties to investigate and assess contamination.
• Proactive and successful community engagement in the area surrounding industrial activities is all the more important now given that third parties will, in limited circumstances, be able to seek civil remedies enforcing compliance with licence conditions or the Act. This is particularly the case for mining and quarrying activities which can carry higher risks of environmental and amenity impacts. These community justice provisions will mean that enforcement will no longer be the exclusive remit of the regulator.
To the extent that any adverse impacts are anticipated, it is important to note that – as the EP Bill 2018 is currently before parliament – there is scope for consultation and engagement with the Bill through the Environment Minister’s office. Following the passage of the EP Bill 2018, there will also be scope for business to have input into the development of subordinate legislation and other instruments that will support the new environment protection regime.
REGULATORY UPDATES CONTINUED
It is important for the mining sector to familiarise themselves with the practical effects the new regime will have
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