Australia: Water resources set to become a new Matter of National Environmental Significance… sometimes

Planning and Environment Alert: 28 Mar 2013

The Federal Environment Minister, Tony Burke, introduced the Environment Protection and Biodiversity Conservation Amendment Bill 2013 into Parliament earlier this month. If enacted, the Bill will require the Federal Government to assess and approve coal seam gas (CSG) development and 'large coal mining development' that has a significant impact on a water resource.

This Bill comes hot on the heels of changes introduced to the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) in November 2012 that established the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development. This Committee is tasked with providing scientific advice to the Environment Minister on proposed CSG or large coal mining developments that are "likely to have a significant impact on water resources, including any impacts of associated salt production and/or salinity".

Partner Sarah Persijn and solicitor Kylie Panckhurst outline the changes to the EPBC Act as proposed by the Bill, and explain the impacts these changes will have on new and existing projects.

Key points

  • Any activity involving coal seam gas extraction and any coal mining activity will be subject to the new laws if the project has, will have, or is likely to have a significant impact on water resources.
  • Where a proponent of any CSG development or large coal mining development thinks the project has, will have, or is likely to have a significant impact on water resources, the project must be referred to the Federal Environment Minister for a decision about whether an approval is required. Corporations face fines of up to $5.5 million for proceeding with a project without the requisite approval.
  • Existing projects may avoid the operation of the provisions if they have already been given EPBC Act approval or if the Minster has decided that the project is not a 'controlled action'.

When is the Bill expected to be enacted?

When introducing the Bill to the lower house, Tony Windsor MP received support from both Labor and the Greens for a further amendment. Mr Windsor's amendment would prevent State or territory governments undertaking water resource-related assessments if EPBC Act approval powers are devolved to each State under new bilateral agreements.

The Bill has moved to the Senate and it is understood that the Government hopes for a quick inquiry ahead of its passage before the September 14 Federal election.

How will new projects be affected?

The Bill proposes a new Matter of National Environmental Significance (Protected Matter) (MNES) in relation to the protection of water resources from CSG development and large coal mining development.

The EPBC Act's broad definitions of 'CSG development' and 'large coal mining development' mean that any activity involving coal seam gas extraction or any coal mining activity will be captured by the new trigger if the project has, will have, or is likely to have a significant impact on water resources (including any impacts of associated salt production and/or salinity). Significantly, a project will be considered a coal seam gas development or large coal mining development when it has a significant impact on water resources in its own right or when considered cumulatively with other developments, whether past, present or reasonably foreseeable developments.

'Water resource' is also broadly defined to mean surface water, ground water, watercourses, lakes, wetlands and aquifers (whether or not it currently has water in it), and includes all aspects of the water resource (including water, organisms and other components and ecosystems that contribute to the physical state and environmental value of the water resource).

Although the EPBC Act does not define 'significant impact', Federal EPBC guidelines state:

"A 'significant impact' is an impact which is important, notable, or of consequence, having regard to its context or intensity. Whether or not an action is likely to have a significant impact depends upon the sensitivity, value, and quality of the environment which is impacted, and upon the intensity, duration, magnitude and geographic extent of the impacts."

Where a proponent of any CSG development or large coal mining development thinks the project has, will have, or is likely to have a significant impact on water resources, the project must be referred to the Federal Environment Minister for a decision about whether an EPBC Act approval is required.

Corporations face fines of up to 50,000 penalty units ($5.5 million) for proceeding with a project without the requisite approval.

What will be the effect on existing projects?

An existing CSG development or large coal mining development is likely to avoid the operation of the new provisions if, before the new provisions commence:

  • the action has already been given an EPBC Act approval; or
  • the action has already been referred to the Minister, and the Minister has decided that the action is not a 'controlled action'.

For referrals for CSG development or large coal mining development that the Minister has determined are 'controlled actions', but has not yet decided, the Bill's transitional provisions require the Minister to determine within 60 days whether the new MNES is a 'controlling provision' for the action. That is, the Minister must determine whether the project has, will have, or is likely to have a significant impact on water resources (referred to herein as a 'new MNES decision').

Before making a new MNES decision, the Minister must:

  • notify the person proposing to take the action; and
  • invite the person to give written comments on the proposed decision within 10 business days.

The Minister may also request further information from the person proposing to take the action.

Within 10 business days after making a decision, the Minister must give written notice of the decision to the person proposing to take the action and publish notice of the decision.

The effect of a new MNES decision

If the new MNES is a controlling provision for the action, and assessment (for example, preparing an environmental impact statement) is already underway, it is not intended that the new MNES decision will alter the process (for example, by requiring the EIS process to restart). Instead, the Minister has the power to request additional information where required, and will ultimately assess the action having regard to the new controlling provisions and the project's impacts on water resources.

Likely impact on the shale gas industry

The drafting of the new MNES proposed by the Bill differs from existing MNES, which focus on the impact, or likely impact, an action has or will have on the MNES protected. The new MNES targets only specific actions - namely CSG development and large coal mining development - and requires a consideration of the impact or likely impact of only those actions on the particular matter protected, a 'water resource'. It is specifically the 'actions' of those particular industries and their impacts on 'water resources' that are the target of the Bill.

As presently worded, the new MNES for water resources does not apply to shale gas. However, it is important to note that a shale gas development will be subject to the EPBC Act if the action triggers other MNES.

© 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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Kylie Panckhurst
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