On 30 October 2013, the Mining Legislation Amendment Bill 2013 (Bill) was introduced into the WA State Parliament, representing the beginning of a major overhaul of environmental approval processes for WA mining projects. The Bill is the first tranche of reform to be undertaken as part of the Reforming Environmental Regulation (RER) program and will make key amendments to the Mining Act 1978 (Mining Act) and the Mining Rehabilitation Fund Act 2012 (WA) (MRF Act). The amendments are intended to facilitate the release of environmental data and streamline environmental approval processes, with the aim of reducing red tape and generating foreign investment in large scale mining projects.
Norton Rose Fulbright has a market leading environmental practice and we would be happy to discuss the implications of the proposed reform for your business with you.
Background to reform
Throughout the past year, the WA government has focused on creating a transparent and improved environmental approval process in the mining industry. The Ministerial Advisory Panel (MAP) recommended that the Department of Mines and Petroleum (DMP) implement a number of reforms to clarify its role and responsibility for environmental regulation, resulting in the DMP's introduction of its RER program in June 2012. The RER program was developed to complement the wide scale legislative reform taking place in the mining industry, including the establishment of the Mining Rehabilitation Fund (MRF) and new legislative requirements for emerging industries such as unconventional gas and uranium mining.
By targeting large scale improvements to the mining and petroleum approval and compliance processes, the Government aims to create a strong risk based framework and, in doing so, improve public and industry confidence in DMP approval processes. The Bill is the first stage of the RER program and will deliver largely administrative reforms which are geared to improving effectiveness and efficiency in environmental regulation.
The Bill will make several amendments to the Mining Act and the MRF Act, including changes to the provisions regarding public release of environmental data, environmental assessment information and tenement rehabilitation liability data. The proposed amendments relate to four distinct areas:
- Facilitating environmental data release
- Simplifying environmental approval processes
- Streamlining issue of notices under the MRF Act, and
- Enabling recovery of Mining Rehabilitation Fund (MRF) money in some circumstances.
Environmental data release
From 1 July 2014, the MRF Act will require approximately 20,000 tenements to submit clearance and rehabilitation data to DMP annually. There is currently no specific reference in the Act to the public release of data. This lack of transparency has been at the forefront of reform discussions given that DMP receives around 3,000 mining related proposals each year but only around 1,000 of these are made publicly available in some form.
In December 2012, the DMP sought to address this issue with the release of the MAP report "Reforming Environmental Regulation in the WA Resources Industry". The MAP recommended that the Mining Act be amended to allow the Director General to make publicly available DMP's regulatory assessment reports of Mining Proposals and Mine Closure Plans, approvals, and annual environmental reports, as well as disclosure of information submitted to comply with environmental reporting requirements. The Bill formalises this recommendation and will amend the Mining Act to provide for the release of environmental data. However, DMP will still be able to limit public disclosure of information that is commercially sensitive or confidential in nature.
DMP environmental approval processes
Following the Bill's introduction, the approval powers of position holders within the DMP will also undergo reform, which will simplify the authorisation process for environmental approvals. The authority to approve Programmes of Work or a Mining Proposal is currently limited to persons who hold senior positions within the DMP as specified in the Mining Regulations 1981 (WA). Consequently, any changes to the position holders require amendments to the regulations. Failure to simplify the authorisation process, has resulted in an inefficient and onerous process for obtaining environmental approvals.
To address this issue, the Bill will amend the Mining Act to directly vest the approval functions for Mining Proposals, Mine Closure Plans and Programmes of Work in the Director General, who may then authorise appropriate department officials to perform those functions from time to time. This approach removes the need to regularly update the regulations.
Issuing of notices under the MRF Act
The current legislation requires DMP to issue individual notices to each tenement holder for a MRF levy assessment or reassessment notice. The Bill will address the cost of this process by streamlining the requirements under the MRF Act. Issuance of a notice or assessment to each liable person for mining tenements with more than one tenement holder will be replaced by delivery to a single point of contact for each tenement.
Mining Rehabilitation Fund
The MRF is administered by DMP and is used to rehabilitate abandoned mines in WA. Following the introduction of the MRF Act late last year, tenement holders make annual contributions, determined as a percentage of total closure liabilities, to the MRF. This system replaces the previous project-specific environmental bonds process, in which tenement holders posted unconditional performance bonds as security to ensure they complied with environmental obligations. Under the new scheme, rehabilitation is funded by the MRF in circumstances where the party liable to rehabilitate cannot be found or is unable to comply with rehabilitation obligations.
The Bill will amend the MRF Act so that any money spent from the MRF to carry out rehabilitation of an abandoned mine may be recovered from a person who was legally responsible for carrying out the work. Each person found liable for failure to comply with an obligation requiring rehabilitation of the land will be jointly and severally liable to pay to the MRF the amount applied.
Response to the Bill
The RER program has promised to deliver greater certainty, confidence and clarity around the environmental regulatory system. As the first tranche of the program, the Bill aims to strengthen the enforcement capacity of DMP, reduce red tape and improve transparency. Mines and Petroleum Minister Bill Marmion has stated that the introduction of the reforms is to "make it clearer, easier, and cheaper to do business in WA, whilst maintaining strict environmental standards." The Minister went on to state that "risk based regulation enables government to set strict environmental standards and clear expectations of industry and allows companies to manage and mitigate any risks to achieving these standards. This frees up our regulators from designing prescriptive conditions for each project they assess, and they can instead direct their time to monitoring and enforcing compliance." Chamber of Minerals and Energy WA Chief Executive Mr Reg Howard-Smith echoed this sentiment, stating that the amendments would allow for greater transparency and more effective approvals and compliance arrangements.
The primary concern regarding the reform of the approval process is that the regulatory activity will not be sufficiently targeted and proportional, which may result in a failure to achieve environmental outcomes. In order to address concerns that a surge in development will result in environmental harm, Minister Marmion stated the Bill's reforms do "not mean development at any cost."
Whilst the reforms have been surrounded by positive publicity, the DMP will also need to ensure that implementation of these reforms complements the current regulation of State Agreement Acts and operates consistently with the various mining and petroleum legislation for which DMP is responsible. MAP has suggested that the successful transition to the risk based framework will require the adoption and implementation of processes at an administrative and operational level by DMP and the industry it regulates.
The changes introduced by the Bill are largely administrative and may not have an immediate impact on the daily operations of tenement holders. However, if correctly implemented, the reforms may bring greater clarity and consistency to the regulatory approvals processes in WA. The long term success of the reforms will depend on the DMP's ability to strike a balance between reducing red tape, encouraging Australia's long term viability as an investment destination and ensuring the WA environment is protected. Additional reforms to strengthen the compliance framework and underpin a risk based assessment system as part of the RER program are planned for 2014.
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