Australia: Natural Resources and Other Legislation Amendment Bill (No. 2) 2010

The Natural Resources and Other Legislation Amendment Bill (No. 2) 2010 (Bill) was introduced to Parliament on 5 October 2010. Amendments to the Bill were agreed to during Consideration in late November 2010.

Part 5 of the Bill (which makes certain amendments to the Geothermal Energy Act 2010) takes effect on commencement of the Act. The remainder of the Bill takes effect on proclamation.

The Bill proposes certain changes to other Acts, including the Environmental Protection Act 1994 (EP Act), the Mineral Resources Act 1989 (MRA) and the Petroleum and Gas (Production and Safety) Act 2004.

The Bill also proposes important changes to the exemptions for the offence of taking protected plants under the Nature Conservation Act 1992 (NCA) and assessment of vegetation clearing under the Vegetation Management Act 1999 (VMA) and the Sustainable Planning Act 2009 (SPA).

The problems with s89 of the NCA creating a 'double-dipping' of assessment by the Department of Environment and Resource Management (DERM) (which was concerning under the administrative arrangement where the EPA and DNRW were separate departments, but even more so after the departments merged to form the DERM in March 2009) have been well known in the development industry for many years. Finally, changes are proposed to address some of these problems, but they are to some extent hidden away within this mix of proposed amendments.

Changes proposed

Changes are proposed to, amongst others:

  1. the duty to notify environmental harm under the EP Act (including in relation to greenhouse gas storage activities and petroleum activities, referred to as chapter 5A activities)
  2. the use of certain fluids while carrying out a chapter 5A activity (in particular a coal seam gas (CSG) activity)
  3. exemptions to the offence of taking protected plants under the NCA
  4. regional vegetation management codes and approval of area management plans under the VMA.

Duty to notify environmental harm

Under the current section 320 of the EP Act, a duty of care to notify of environmental harm is imposed on a person who, while carrying out an activity, becomes aware that serious or material environmental harm is caused or threatened by their own or someone else's act or omission while carrying out that activity (or a related activity).

If the person is an employee or agent of another (referred to as the 'employer'), that person must notify the employer of the event, its nature and the circumstances in which it happened as soon as reasonably practicable, in which case the employer must then immediately provide written notice of these matters to DERM. If the employer cannot be contacted or if the duty rests on the employer, the person or the employer must give written notice to DERM about these matters as soon as reasonably practicable.

However, there is currently no obligation on any relevant party to notify others who might also be affected by the environmental harm. For example, in the case of an unauthorised release of contaminated water, landholders downstream may be affected. If such landholders are not aware of the contamination event, they are not in a position to take steps to mitigate or manage the impacts (e.g. ensure stock is removed from the vicinity of the affected waterway).

The Bill initially proposed amendments to section 320. However, the Bill was amended during Consideration after industry consultation and now seeks to repeal section 320 altogether and replace it with 8 new sections (sections 320 to 320G) detailing very specific notification obligations. Many of the obligations are identical to those currently in place. However, additional duties to notify will be imposed when the legislation is passed.

The current duty to notify DERM or an employer about actual or threatened material or serious environmental harm will remain – although such notice will be required to be given within 24 hours (unless the person has a reasonable excuse).

If the employer cannot be contacted, the employee must still give DERM written notification of the event, its nature and the circumstances in which it happened within 24 hours (unless the person has a reasonable excuse).

The Bill will impose a further duty on employers and those carrying out the primary activity (otherwise than in the course of employment or engagement as an agent) to give:

  1. Written notice of the event, its nature and the circumstances in which it happened to any combination of the following for the affected land:
    1. Any occupier of the affected land (that is, any person who lives or works on the affected land)
    2. Any registered owner of the affected land (that is, the registered owner of the land or any lessee of the land under the Land Act 1994).
  2. Public notice of the event, its nature and the circumstances on which it happened to person on the affected land.

Affected land is defined to mean 'land on which an event has caused or threatens serious or material environmental harm'.

The manner in which public notice can be given will be prescribed by regulation. However, examples given in the explanatory memorandum include a radio or television broadcast to allow a large number of affected landholders or occupiers to be notified, particularly in circumstances where the impacts of an incident are widespread.

Written notice can be given to occupiers of affected land by addressing the notice to 'The Occupier' and:

  1. leaving the notice with someone who is apparently an adult living or working on the affected land
  2. leaving the notice on the affected land in a position where it is reasonably likely to come to the occupier's attention, such as a letterbox drop (if there is no-one on the land or access has been denied to the land)
  3. posting the notice to the affected land.

The obligation for employers to notify landholders and occupiers arises where they themselves have been notified by employees and agents under the proposed new section 320B(2). However, the obligation does not appear to arise in circumstances where an employee or agent notifies DERM where the employer cannot be contacted. This leaves a significant gap in notification and would appear to be a drafting error, as this does not seem to be the intent of the proposed amendments.

The penalty for failure to notify is currently 100 penalty units ($10,000 for an individual and $50,000 for a corporation). The Bill seeks to increase this to 500 penalty units ($50,000 for an individual and $250,000 for a corporation) on the grounds that:

  1. the current penalty does not reflect the seriousness of the offence, particularly as the failure to notify can increase the likelihood of a major environmental incident
  2. is too low to provide an adequate incentive to notify given that, if the incident leads to a prosecution, the penalty could be much higher.1

It is a defence to the offence of failing to give such notice that reasonable efforts were made to identify the affected land and give written notice to each registered owner or occupier of the affected land.

It is not possible to rely upon the privilege against self-incrimination as a reasonable excuse for failing to notify. However, the notice is not admissible in evidence against the person in any prosecution for the offence to which the notice relates. This does not prevent DERM from gathering other evidence regarding the offence and relying upon that evidence in a prosecution. This is the position in the current section 320 and the Bill does not seek to change this.

Specific duty to notify obligations in relation to chapter 5A activities are also proposed and dealt with in section 5 below.

Chapter 5A Activities

In addition to the proposed expansion of the duty to notify discussed above, the Bill seeks to impose a duty to notify within the 'notice period' where a person who, while carrying out a chapter 5A activity, becomes aware of 1 or both of the following events:

  1. the activity has negatively affected, or is likely to negatively affect, the water quality of an aquifer
  2. the activity has caused the connection of 2 or more aquifers.

The same obligation to notify landholders and occupiers also applies to these circumstances as exists in relation to the duty to notify serious or material environmental harm.

However, the penalty for failure to notify about the impact on aquifers will be 100 penalty units ($10,000 for an individual and $50,000 for a corporation) on the basis that such interconnection may not necessarily cause serious or material environmental harm.

Other amendments regarding chapter 5A activities relate to the use of petroleum compounds containing benzene, toluene, ethylbenzene and xylenes (commonly referred to as B-TEX) in coal seam gas operations, in particular in the process of 'fraccing'. Fraccing involves pumping fluid at high pressure into a coal seam to facture the seam and allow gas to flow readily into gas wells (although the vast majority of gas wells do not need to be fracced).2

On 4 August 2010, the State Government announced it would ban such compounds. At the time, legislation had not been introduced to effect this requirement, however, the Minister for Natural Resources, Mines and Energy announced that he would be writing to all existing CSG environmental authority holders to express the expectation that 'the current non-use of B-TEX chemicals will continue until such time as the new legislation is in place'. The Minister also foreshadowed that he will use the existing head of power in the EP Act to require DERM to refuse any application for new CSG activities that involve the use of B-TEX chemicals to facture the coal seam.

The Bill initially sought to implement these changes by deeming an environmental authority (chapter 5A activities) to include a condition prohibiting the use of 'restricted stimulation fluids' such as B-TEX in fraccing. However, after industry consultation, this section was amended during Consideration to prohibit B-TEX in 'more than the maximum amount prescribed under a regulation'. The amendment was said to be required because trace amounts of B-TEX may contaminate fraccing fluids even though they do not consist of B-TEX. Therefore, it is not practically possible to require zero readings of B-TEX and some trace amounts will be acceptable3.

Addition of exemptions for taking protected plants under the NCA

Finally, changes are proposed to address some of the problems with s89 of the NCA. Section 89 makes it an offence to take a protected plant, subject to certain limited exemptions. There can often be a 'double-up' of assessment (and inconsistent conditions) under the SPA and under the NCA for the same clearing.

Despite the problems with s89 of the NCA being well known to the development and resources industries for some years, this is the first step that has been taken to address some (but not all) of those concerns.

The Bill proposes changes to s89 of the NCA to create further circumstances for when it is not an offence to take a protected plant. The following circumstances are proposed to be added:

  1. where it is necessary and reasonable to take the plant to avoid or reduce an imminent risk of death or serious injury to a person and the taking can not reasonably be avoided or minimised
  2. where each of the following applies—
    1. it is necessary and reasonable to take the plant to avoid or reduce an imminent risk of serious damage to a building or other structure on land, or to personal property
    2. if the damage is not prevented or controlled, a person may suffer significant economic loss
    3. the taking can not reasonably be avoided or minimised
  3. where taking the plant is, or is a necessary part of, a measure that is—
    1. authorised under the Fire and Rescue Service Act 1990, section 53(1) or 68(1)(c)
    2. required under section 53(2)(j) or 69(1) of that Act
  4. where a person takes the plant by lighting a fire that is—
    1. authorised under a notification under the Fire and Rescue Service Act 1990, section 63 or a permit granted under section 65(2) of that Act; and
    2. necessary to reduce hazardous fuel load
  5. where a plant is taken under a development approval—
    1. for work that includes the clearing of native vegetation under the VMA
    2. for which taking the plant was assessed under a regional vegetation management code or concurrence agency policy
  6. the taking of the plant is authorised under a land management agreement under the Land Act 1994
  7. each of the following applies—
    1. the plant is least concern wildlife
    2. the plant is taken other than under a relevant development activity
    3. taking the plant, other than under a relevant development activity, is not assessable development.

Significantly, the changes allow that taking of a protected plant in an emergency situation is not an offence – this is just common sense. The Explanatory Notes for the Bill clarify that the exemption is not intended to apply where the risk of death or serious injury is remote, nor is it intended to apply for clearing plants comprising a flying-fox roost due to a perceived risk from spread of disease.

Most importantly, the changes provide that where a development approval has been issued and the clearing that has been assessed under the VMA, the clearing does not require further approval under the NCA. At first look, this appears to address the issue of doubling-up of assessment. However, the Explanatory Notes for the Bill state that the exemption is only intended to apply if the regional vegetation management code or the concurrence agency policy against which the development application was assessed provides performance requirements for the taking of a protected plant. Under the VMA, as it is currently drafted, regional vegetation management codes may provide for the protection of the habitat of native wildlife prescribed under the NCA, but not for the taking of protected plants. Changes will therefore be required to the regional vegetation management codes (see below for changes proposed to the VMA) and the concurrence agency policies for material change of use and reconfiguration of a lot before this exemption will apply.

Changes to the VMA

Section 11 of the VMA is proposed to be amended (among other changes) to allow regional vegetation management codes to provide for the protection of protected plants. Section 10B of the VMA, in relation to the content of concurrence agency policies, is not proposed to be amended.

Section 10B does not include an express reference to protected plants under the NCA, and arguably is not expressed sufficiently broadly to permit inclusion of performance requirements in relation to protected plants in the concurrence agency policies.

Accordingly, the changes to enable the proposed new exemption to apply under s89 of the NCA will be required to be made to the regional vegetation management codes (not the concurrence agency policies). The amendment process for the regional vegetation management codes is a lengthy process (as changes to incorporate performance requirements in relation to protected plants would not be minor changes). Therefore, the proposed new exemption under s89 of the NCA may not come into play for some time.

Other amendments are also proposed to the VMA under the Bill, including in relation to area management plans. The Explanatory Notes for the Bill state that a landholder whose property is included in an area management plan will be able to undertake vegetation management activities in accordance with that plan, providing the procedural requirements have been met and the activities are undertaken in accordance with the plan, without the need for obtaining a separate development approval under the SPA, with the exemption to be given effect through an amendment to Schedule 24 of the Sustainable Planning Regulation 2009.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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