Australia: Draft Mining Industry Action Plan proposes radical reforms for NSW

Clayton Utz Insights
Last Updated: 14 December 2014
Article by Nick Thomas and Tom Dougherty

Key Points:

The Planning Assessment Commission would be history, if the NSW Minerals Industry Taskforce's recommendations are accepted.

The NSW Minerals Industry Taskforce has issued a draft report calling for the removal of the Planning Assessment Commission (PAC) and other radical regulatory financial measures, with a view to reigniting and sustaining the development of the minerals industry in NSW.

The Taskforce was appointed by the NSW Minister for Resources and Energy primarily from the resources industry, and is one of eight industry taskforces 1 formed to prepare 10 year action plans outlining:

  • the issues raised by industry and what industry leaders believe needs to be done to continue to grow their sector domestically and overseas; and
  • recommendations for action by Government, industry players and research institutions.

The Government intends that, once the action plans are adopted, priority actions will be tracked and performance will be reported at an annual Business Leadership Forum.

The NSW Government released the Taskforce's draft Action Plan (dated October 2014), in late November. It proposes a 25 year strategy with 12 recommendations for urgent action. Public submissions are invited until Friday 19 December.

Remove or reduce the PAC

According to the draft Action Plan, "the single most important initiative that the NSW Government can take to support the development of the industry is to provide greater certainty, transparency and timeliness to the planning and regulatory decision-making regime".

The Taskforce's primary concerns are that the PAC members are not elected, so they are not accountable in the same way as ministers are, and they are established to operate independently of Government policy, so there is limited transparency and certainty in decision-making.

The Taskforce also notes that "NSW is the only jurisdiction in Australia where major projects are often approved by an independent body, not the relevant minister". The PAC determines most State significant project development applications, under delegated authority from the Minister for Planning.

The Taskforce's primary recommendation is that the relevant minister hold decision-making power for approvals for major projects, so that the Government is accountable for project approval decisions. Consequently, it recommends that the PAC be abolished, or that its role be limited to an advisory one. Even then, the Taskforce views the PAC as unnecessary, given that the Department of Planning and Environment provides a comprehensive assessment of major project applications.

It will be interesting to see how the Government responds to this recommendation, given that the Minister for Planning delegated decision-making authority to the PAC in order to de-politicise decisions, but the PAC has come under fire recently for decisions in relation to some mining projects.

Other recommendations on the regulatory system

The Taskforce's other recommendations on the regulatory system for mining exploration and production include:

  • establishing a lead agency to drive cross-agency decisions within agreed time-frames;
  • streamlining the decision-making processes for exploration and mining activity and addressing policy gaps, with an emphasis on risk-based regulation (to reduce process and time frames) and provision of greater certainty in approach (as an example, the Taskforce proposed a broader power to modify planning approvals for mining);
  • demonstrating excellence in service delivery for, and regulation of, the resources sector;
  • communicating more clearly the comprehensiveness and robustness of the NSW regulatory regime; and
  • continuing to improve community engagement in the mining assessment process.

Recommendations for fiscal certainty

In order to reduce the financial burden on the NSW, the Taskforce recommends that:

  • current royalty rates be held for 25 years to create greater security; and
  • the current list of overall fees and levies be consolidated and reduced in real terms over time.

Developing skills and providing supporting infrastructure

The Taskforce recommends that the NSW Government:

  • work with industry to provide a skilled workforce to enhance the NSW mining industry's international competitiveness;
  • commit to investing in the availability, accessibility and promotion of geosciences information to current and potential explorers in Australia and overseas;
  • work with researchers and industry to fund research in deep cover exploration, mining operations productivity and low emission energy technology; and
  • work with the Commonwealth Government to boost the competitiveness of the freight network available in NSW.

Importance of the Action Plan

The Taskforce notes that:

  • NSW coal production is set to fall without significant investment to expand existing mines and develop new ones; and
  • the production of no-coal resources will also fall sharply without an increase in mineral exploration – specifically, six of the State's 12 large-scale mines are expected to close between 2021 and 2027.

The Action Plan is intended to reverse these trends.

The Action Plan comes at a time when the State Government is reviewing its regulatory schemes for minerals and onshore petroleum, in response to recommendations from the NSW Chief Scientist.

Next year is shaping up to be a significant one in terms of regulatory reform for the resources industry.

You might also be interested in...

1The other taskforces cover agriculture, creative industries, the digital economy, international education and research, manufacturing, professional services and the visitor economy.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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