Australia: New safety laws added to overlapping tenure regime with passage of Water Reform and Other Legislation Amendment Act 2014 (Qld)

HG Water Alert: 1 December 2014
Last Updated: 4 December 2014
Article by Martin Klapper and Rob McEvoy

On 26 November 2014, the Queensland Parliament passed the Water Reform and Other Legislation Amendment Act 2014 (Amendment Act).

Among other changes (concerned with water law reform), the Amending Act introduces new safety laws designed to provide greater guidance to both the coal and coal seam gas (CSG) industries about their safety obligations when in an overlapping tenure situation.

This is principally achieved through amendments to the Coal Mining Safety and Health Act 1999 (CMSH Act), the Petroleum and Gas (Production and Safety) Act 2004 (PG Act) and the Mineral Resources Regulation 2013 (MR Reg).

The new safety laws are in addition to the new overlapping tenure regime, recently enacted under the Minerals and Energy (Common Provisions) Act 2014 (Common Provisions Act). They, and the new regime, will commence by order of the Queensland Government (expected in early 2015).

The key changes include:

  • a requirement for overlapping coal and CSG parties to agree a joint interaction management plan (JIMP) before coal mining commences or CSG infrastructure is operated in the overlapping area; and
  • compulsory and final arbitration of the terms of the JIMP, where agreement cannot be reached within three months of the CSG party receiving it.

Additionally, the amendments harmonise some key terminology under the CMSH Act, the PG Act and the MR Reg, so that the parties are speaking a common language when managing overlapping safety risks and hazards.

In this Alert, Senior Associate Rob McEvoy discusses the core changes to mining and petroleum safety legislation and explains the types of overlaps to which the new laws will apply. From this discussion, we recommend that a coal party in an overlapping area does the following:

  • Open a dialogue with any overlapping CSG parties to identify and discuss the management and documentation of applicable safety risks and hazards.
  • Review and amend existing safety overlap plans (for example, under a Co-Development Agreement) so that it is compliant with the new laws.
  • Prepare a compliance manual for the senior site executive (SSE) so that he or she will not inadvertently breach the many new responsibilities and procedures of this key safety position.
  • If the transitional provisions apply, develop a 'transition plan' about how you will comply with the new laws upon their commencement (or expiry of any 'grace periods').

Our previous Alert – covering the law reform under the Common Provisions Act and implications of the new overlap regime – is accessible here.

We note that the summary of legal changes set out by this Alert are of a general nature only and that specific advice should be sought for particular questions or matters that arise.

Core changes to the CMSH Act

The new safety laws are inserted into the CMSH Act as a new Division 3A, Part 4 (New Coal Laws).

Agreement of the JIMP

The principal requirement under the New Coal Laws is for the SSE for the coal mine to make a JIMP with each CSG party conducting petroleum activities in the overlapping area, about the applicable safety risks and hazards. Importantly, coal mining cannot commence in the overlapping area until this is done and JIMP notified to the Minister.

The intention is that the SSE will consult with the principal CSG operator in the overlapping area, who in turn will consult with any other active CSG parties and coordinate those parties input into the JIMP.

The SSE must give the operator(s) a draft plan and negotiate any reasonable provisions which are proposed and, if agreement is not reached within 3 months from the plan's receipt, apply for arbitration of any disputes so the plan is resolved.

Arbitration is the same as for the new overlap regime – fast and final – however it is noteworthy that any final agreements which are determined will not limit the authority of the coal inspectorate to regulate in accordance with its powers under the CMSH Act.

Once agreed (whether voluntarily or by arbitral award), the JIMP becomes part of the mine's safety and health management system and must be stored or kept with the other parts of the system. It must also be available for review by overlapping operators.

Content of the JIMP

The JIMP must identify the initial mining area, the rolling mining area and any simultaneous operations zone – key concepts under the new overlap regime – in the overlapping area (the parties may not have identified these areas under bespoke arrangements). It must be documented in a way that makes it capable of being audited.

Other requirements for the JIMP relate to identifying hazards and risks to be controlled and triggers or material changes which must be monitored and which will require the plan to be reviewed. Response procedures and times and reporting procedures are also included. Proposed or likely interactions with other persons in the overlapping area and associated risks from the interactions must be documented, together with the safety responsibilities of each person including stating the names of key safety persons responsible for operating plant in the overlapping area.

The JIMP must also include a description of the way it will be reviewed and revised (including through ongoing consultation) and the way in which the details of any new SSE or other senior person in the management structure for the mine will be communicated to all operators. Further requirements for the content of the JIMP may be expanded upon through regulations.

Other changes

Currently only the Commissioner can prosecute offences under the CMSH Act. The Amending Act expands this jurisdiction to include the Minister, or delegate of the Minister who is an 'appropriately qualified person' (eg Deputy Director-General or chief inspector).

The Amending Act also widens the qualifications criteria for appointing the Commissioner, on the basis they are overly restrictive given the scope of the role. A person with a law degree (and experience in the advocacy of mine safety matters), or at least 10 years experience in a senior position relating to mine safety, are now eligible.

Core changes to the PG Act

The new safety laws are inserted into the PG Act as a new Subdivision 1, Division 5, Part 4, Chapter 9 (New CSG Laws). They are effectively the same as the requirements for the SSE, except this time it is the petroleum operator that must make the JIMP before carrying out activities in the overlapping area. The plan must apply to all operators of operating plant in the overlapping area.

The New CSG Laws also provide that any final agreement determined by arbitration will not limit the authority of the gas inspectorate to regulate in accordance with its powers under the PG Act.

Core changes to the MR Reg

The new safety laws are also inserted into Chapter 2, Part 4, Division 4 of the MR Reg, for consistency.

When do the changes apply?

The New Coal Laws will apply from commencement to coal tenures (mining lease (ML), exploration permit for coal (EPC), or mineral development licence (coal) (MDL)) that become overlapping with petroleum tenures (petroleum lease (PL) or authority to prospect (ATP)).

However, they will not apply:

  • to overlapping coal mining and petroleum leases which are already subject to chapter 2, part 4, division 4 of the MR Reg (to avoid duplication); and
  • for a period of 6 months (to allow a 'grace period' for compliance) to coal mining operations carried out under an EPC or MDL overlapping an ATP or PL, if an activity under an ATP or PL is also carried out in the overlapping area.

Broadly, the New CSG Laws will apply to CSG "operating plant" that operates or is to operate in the area of a coal mining tenement and the operation of the plant will physically affect or may physically affect the mining of coal under the tenement. "Operating Plant" is as defined by section 670 of the PG Act and includes most CSG infrastructure – plant and equipment used to extract, process and treat CSG and produced water and pipelines for transporting petroleum – and authorised petroleum activities.

However, again there is a 'grace period' of 6 months (before compliance is mandatory) for:

  • operating plant in the above-mentioned circumstances; and
  • activities carried out under an ATP in an overlapping area, if coal mining operations under an EPC, MDL or ML are also carried out in the overlapping area.

Amendment of water rights for MDL, ML and petroleum tenure holders

The Amendment Act amends the Water Act and Mineral Resources Act to reflect that the holder of an ML or MDL is authorised to take or interfere with underground water in the area of the licence or lease, where the taking or interference happens during the course of, or results from, the holder's authorised activities (this water is defined as "associated water"). Water that is otherwise taken or interfered with will still require a water licence under the Water Act.

It is important to note that this underground water right is limited to incidental take that is reasonably necessary and cannot be reasonably avoided in carrying out authorised activities to extract the mineral resource. The amendment is not intended to provide a right to take or interfere with water for any use, although it does permit the holder to make use of water that is incidentally taken.

The new provisions also attempt to provide more certainty and consistency to landholders whose bores may be affected by mine dewatering activities, as the make good obligations in Chapter 3 of the Water Act will apply to the take of associated water by all holders of MLs and MDLs.

For petroleum tenure holders, the take of underground water is not subject to the same assessment as applies to mining and other sectors. Instead, the take of both associated and non-associated water is a statutory right under the PG Act. The Amending Act establishes a more consistent framework for managing access to Queensland's underground water resources including the take of non-associated water for the petroleum and gas sector, by limiting the statutory right to apply only to the take of associated water. As a consequence of this amendment, a petroleum tenure holder will be required to obtain a water entitlement before extracting non-associated water in a regulated area, allowing the take of non-associated water to be managed in accordance with the planning and allocation process under Chapter 2 of the Water Act

© HopgoodGanim Lawyers

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