Australia: NSW Government responds to the Minerals Industry Action Plan

Key Points:

The NSW Government's response to its Minerals Taskforce includes retaining the Planning Assessment Commission, and renewed commitments to reducing decision-making timeframes and reform of planning system processes.

The NSW Government has released its response to the final Industry Action Plan: NSW Minerals prepared by the NSW Minerals Industry Taskforce.

In December 2014, we outlined the 12 recommendations which the Government's industry-led Minerals Taskforce made in its Action Plan, aimed at supporting the long-term competitiveness and growth of the minerals industry. These included abolishing the Planning Assessment Commission (PAC), which currently determines most applications for planning approval for mining projects, or at least limiting its role to advice in the planning approval process.

The Government considered the Taskforce recommendations and published its response to the Action Plan in early November. The response outlines several initiatives which the Government has taken over the last year, provides some broad-based commitments for further action, and identifies some areas where the Government seems unlikely to adopt the Taskforce's recommendations.

We discuss some key Government responses below.

Faster, more accountable PAC decisions

The Government has declined to remove the PAC or return decision-making to the Minister for Planning. Currently the PAC determines most applications for planning approval for mining projects, under delegation from the Planning Minister. The removal of this delegation was the Taskforce's first recommendation.

The Government's response instead is to focus on making the NSW planning system more streamlined, accessible, transparent, predictable and balanced. Although the fate of the PAC is not entirely clear, it appears it will keep its delegation for now.

The response highlighted and recommitted to the Planning Minister's announcement in November 2014 that:

• the PAC's assessment timeframes, and its accountability to meet those timeframes, would be made clear;
• an independent expert panel would be set up to advise the NSW Government and the PAC on technical issues; and
• the Government would give the PAC clearer guidance on the application of government policies in determining planning applications.

The Government will also consider additional system improvements to meet its promise of halving processing times of planning application within this term of government while maintaining a comprehensive assessment process.

Consequently, the PAC will continue to determine most SSD proposals in NSW under delegated authority from the Minister for Planning. Improvements to internal processes should ensure that PAC assessment timeframes are continued to be reduced.

Whole-of-government approach

The Government has declined to follow the Taskforce's call for a lead agency to drive cross-agency decisions. Instead, it proposes to define end-to-end assessment timeframes for mining development applications and to assign case managers to work with proponents to facilitate major project assessment and minimise delay. Case managers will regularly report to a Cabinet Committee of the Department of Premier and Cabinet and have a working relationship with newly introduced Key Account Managers of the Department of Industry (Division of Resources and Energy) (DRE).

An inter-departmental panel is also proposed to co-ordinate agency input on mining applications and develop inter-agency assessment protocols.

Further, stronger and consistent engagement with stakeholders will be coordinated by DRE Community Liaison Officers.

Continued regulatory reform

The Improved Management of Exploration Regulation (IMER) and Integrated Mining Proposal (IMP) are two key policy reforms that the Government has adopted to streamline decision-making processes and address policy gaps as recommended for immediate action by the Taskforce.

The IMER is a risk-based regulatory framework that has reduced 158 resources exploration activity conditions to a standard set of 13 conditions, while maintaining a high level of environmental protections.

We have previously outlined the Government's release of Stage 1 and Stage 2 of the IMP, as well as the release of economic assessment guidelines for mining projects, to improve access to information and regulation and assessment of major mining projects.

The Government's response to the Action Plan highlighted that the IMER is being phased in from 1 July 2015 and several IMP documents have been exhibited. The remaining draft IMP documents are intended to be finalised by the end of 2015.

Lower costs

The Taskforce recommendation to freeze the ad valorem royalty rate for 25 years was not adopted by the Government. However, in 2015-16, DRE will conduct an internal review of the fees and levies imposed on explorers and mine production companies to identify ways of reducing administrative costs on a revenue neutral basis.

Developing skills and providing supporting infrastructure

Additional proposed actions in response to the Taskforce recommendations include:

• ongoing review of the NSW Skills list in respect of the skills requirements of the mining sector;
• preparing a long term strategy for improving non-coal mineral exploration in NSW;
• conducting a technical and economic evaluation study into emerging technologies that may assist the competitiveness of the NSW minerals sector; and
• continuing to work with the Commonwealth Government to reduce bottlenecks and increase the capacity of the freight network, including the completion of the Northern Sydney Freight Corridor Program in June 2016.

Keeping NSW informed

The Government will regularly report its implementation progress and the impact of actions undertaken in response to the Action Plan to the DRE.

Stakeholders and the general public will be able to access consolidated and factual information through various online information hubs, which include:

• Common Ground, launched in June 2015, provides exploration, mining and production titles for minerals, coal, petroleum and gas in NSW; and
• Environmental Data Portal, to be released in late 2016, will provide a single access point for environmental data held by the Government from all industries.

Some key targets

On recommendation of the Taskforce, the Government has also established three key benchmarks to measure industry performance:

• Target 1: Halving assessment times for SSD projects during the current term of government;
• Target 2: NSW will average a 9% share of Australia's greenfields exploration expenditure over 5 years to 2025; and
• Target 3: NSW will achieve an average score of at least 75 over the five years to 2025 in the Fraser Institute's Policy Perceptions Index. The Index provides an annual snapshot of the effects of government policy on the attitudes toward investment decisions. The types of policy factors measured by the Index include environmental regulations, infrastructure, regulatory duplication, socioeconomic conditions and labour and skills availability.

Overall, the proposed response to the Action Plan and benchmarks outlined above aim to improve efficiencies in the NSW planning assessment process, increase greenfields exploration expenditure and enhance the attractiveness of investing in the NSW minerals industry.

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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.