Australia: Proposed changes to State Development Act to affect Queensland resource projects

Resources and Energy Alert: 9 Nov 2012
Last Updated: 11 November 2012
Article by David Nicholls, Martin Klapper and Damian Roe

In the lead up to the recent Queensland State election, the LNP made commitments to put the economic development of the State at the forefront of the government's policy agenda.

The Economic Development Bill 2012 was recently introduced into Parliament, with the intention of facilitating economic development and "equipping the government with the tools necessary to identify and drive development projects that contribute to a strong and sustainable State economy".

The Bill amends a number of Acts, including the State Development and Public Works Organisation Act 1971. The changes to be introduced will have a significant impact on the development of infrastructure for resource projects.

Partners David Nicholls and Martin Klapper and senior associate Damian Roe outline the significance of the amendments to the State Development Act for resources and energy projects.

Key points

  • The criteria for determining whether a project will be a 'coordinated project' have been broadened, and a greater discretion is available to the Coordinator-General.
  • The Coordinator-General will have broad powers to cancel a declaration that a project is a 'coordinated project', which may mean that some projects have to restart the approvals process.
  • A change to a project may have a significant impact on the approvals process and result in the cancellation of the declaration that it is a 'coordinated project'.

The introduction of coordinated projects

Under the amendments to the State Development Act proposed by the Bill, 'significant projects' will become 'coordinated projects'. This is said to ensure that there is no implication that such projects have some form of State support.

The criteria for determining whether a project is a coordinated project have been broadened and made more discretionary. The broad discretion is subjected to four limiting criteria, and the Coordinator-General need not consider the project unless one of the criteria applies. The criteria are:

  • complex approval requirements imposed by any level of government;
  • strategic significance to a locality, region or the State;
  • significant environmental effects; or
  • significant infrastructure requirements.

The Coordinator-General's power to cancel coordinated projects

The Bill also allows the Coordinator-General to cancel a declaration for a coordinated project. There are six alternative grounds on which a cancellation can be made, the broadest of which is that "the Coordinator-General considers it is in the public interest to cancel a declaration". As the Judicial Review Act 1991 does not apply to a decision, action or the conduct of the Coordinator-General under this part of the State Development Act, this is an extremely broad power. The declaration may also be cancelled if the project substantially changes from what was described in the initial advice statement for that project.

The explanatory notes to the Bill say that the current absence of such a power to cancel a declaration has resulted in some projects 'languishing on the books', and that it is not intended that merely triggering any one of the grounds for cancellation would automatically result in a decision to cancel the declaration. However, the end result of any cancellation will be that the approvals process will need to be restarted for the project.

Assessing proposed changes to projects

Two new sections, 35M and 35N, are inserted to allow the Coordinator-General to assess a proposed change to a project on the Coordinator-General's own initiative. The Coordinator-General is required to give written notice of the intention to assess the proposed change. The Coordinator-General may then give a notice to the proponent, requiring the proponent to apply to the Coordinator-General to evaluate the environmental effects of the proposed change.

Changes to timeframes

The Bill also amends various timeframes under the State Development Act, including:

  • reducing the timeframe for submitting an Environmental Impact Statement from two years to 18 months; and
  • reducing the period of currency of the Coordinator-General's report in relation to a project from four to three years.

The introduction of private infrastructure facilities

Another important change is the insertion of two new subdivisions in part 6, division 7 of the Act, which provide for the approval of a project as a 'private infrastructure facility'. The amendments delete the term 'infrastructure facility of significance', again to avoid the implication that there is any level of State support for the project. The amendments facilitate the proponent applying in the one application for approval of the project as a private infrastructure facility and for compulsory acquisition of the land required for the facility.

There are seven criteria which must be satisfied before the Governor-in-Council may approve a project as a private infrastructure facility. Essentially the decision-making is based around economic or social significance, identified public need or demand, and certainty that the project will be completed in a timely way. Approval cannot be given by the Governor-in-Council unless the proponent has negotiated with each registered owner of land in accordance with guidelines for at least four months, and has taken reasonable steps to purchase the land by agreement. Also, where native title exists in relation to the land, the proponent must have taken reasonable steps to enter into an Indigenous Land Use Agreement for the land.

The impact of these changes on resource companies

The amendments to the State Development Act will improve the State's capacity to fast track projects that are economically important. However, the ability of the Coordinator-General to cancel a declaration of a coordinated project on 'public interest' grounds is concerning, because it is only through what are essentially public interest grounds that a project is declared in the first place. The existence of this power will create some potential risk for proponents.

In addition, the possibility that a declaration may be cancelled or further assessment may be required due to a change in the project will mean that proponents will need to carefully plan any proposed project, or risk substantial delays in the event of any change.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

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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David Nicholls
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