WHO SHOULD READ THIS
- All resources proponents, operators, investors, planners and consultants.
WHAT DO YOU NEED TO KNOW
- The new progressive rehabilitation and mine closure regime commences today, on 1 November 2019, which affects the obligations of EA holders in Queensland to progressively plan for rehabilitation and mine closure, and meet those binding commitments.
WHAT YOU NEED TO DO
- Identify when your site may be transitioned into the new regime.
- Seek advice regarding your likely obligations, particularly having to existing mine planning documents.
- Commence mine planning, engagement with consultants and with the regulators accordingly.
Existing environmental authority (EA) holders will start being transitioned into the new progressive rehabilitation regime from today, 1 November 2019, under the Mineral and Energy Resources (Financial Provisioning) Act 2018 (Qld) (MERFP Act) amendments.
The MERFP Act was passed in late 2018, overhauling the financial assurance and progressive mine rehabilitation regime for resource projects in Queensland.
On 1 April 2019, the first phase of these amendments, including significant changes to the Environmental Protection Act 1994 (Qld) (EP Act) under the MERFP Act, came into effect, with the introduction of a new financial provisioning scheme that replaced the previous financial assurance requirements. More information on the first phase can be found here.
From 1 November 2019, the second phase of the MERFP Act commences, requiring EA holders to comply with new procedures and obligations relating to mine planning and progressive rehabilitation. Although legislative amendments have recently been made to assist the operation of the new regime, industry is still anxiously awaiting the release of a new guideline providing details for the rollout.
This article provides an overview of what owners of mining projects need to know about their new obligations.
The new regime requires holders of a site-specific EA for a mining activity to prepare:
- a progressive rehabilitation and closure plan (PRCP); and
- an accompanying schedule to the PRCP (PRCP Schedule), which contains binding rehabilitation milestones.
All applications for a new site-specific EA must now include a proposed PRCP and PRCP Schedule. Designed to require proponents to proactively plan for how and where project activities will be undertaken in a way that maximises progressive rehabilitation, a PRCP must set out binding milestones for rehabilitation activities. It will be an offence to carry out environmentally relevant activities under an EA without a PRCP in place.
For existing operations, the PRCP and PRCP Schedule will, on dates specific to the particular site, replace plans of operations (POps) under the EP Act. Since commencement of the MERFP Act on 1 April 2019, it has no longer been possible to lodge a POps, although POps lodged before this time continue in operation until expiry or transition into the new regime. Transitional provisions also apply such that it does not immediately become an offence to carry out activities without a PRCP in place for existing operations.
The MERFP Act also introduces the concept of 'non-use management areas' (NUMAs), which are areas of land that cannot be rehabilitated to a 'stable condition' – that is, safe, structurally stable, non-polluting, and able to sustain a post-mining land use. A residual void with no beneficial post-mining use is a common example of a NUMA. A PRCP and PRCP Schedule must set out details of any NUMA that is intended to remain after a project's closure, unless the NUMA has already been identified under a 'land outcome document'.
The MERFP Act introduces requirements for a public interest evaluation (PIE) to be carried out for any EA applications that include a NUMA in a PRCP and PRCP Schedule. A PIE report is to be prepared following the evaluation, providing a recommendation on whether the NUMA is in the public interest having regard to specified mandatory considerations. These include the benefit to the community that results from the proposed project, any impacts that may reduce that benefit, and whether there are alternative options available for the land, other than a NUMA. A PIE will not be required for a NUMA that is the same or substantially similar to a NUMA already identified under a land outcome document.
PRCP and PRCP Schedule
The Department of Environment and Science (DES) is responsible for assessing the PRCP and PRCP Schedule. Among other things, the PRCP must include a detailed description of how and where mining activities will be carried out, how consultation was undertaken and considered in preparing the PRCP, and any risks of not being able to rehabilitate the land to a stable condition.
Where an EA holder proposes that a NUMA remain at the end of a project's life, the PRCP must include:
- a justification for each NUMA;
- a proposed management and rehabilitation plan for each NUMA;
- a description of public interest considerations for the inclusion of each NUMA; and
- detailed rehabilitation milestones to achieve the rehabilitation objectives of the PRCP.
Once approved, the PRCP Schedule will act almost as a secondary EA, in that its milestones are enforceable and may be subject to conditions. The process for amending an approved PRCP Schedule will be more extensive than the regime for amending a POps.
As mentioned above, certain PRCP requirements do not apply to NUMAs that were identified under a land outcome document.
Except for those NUMAs, DES may only approve a proposed PRCP Schedule that contains a NUMA if:
- carrying out rehabilitation of the land would cause a greater risk of environmental harm than not carrying out the rehabilitation; or
- the risk of environmental harm as a result of not rehabilitating the land is confined to the area of the relevant tenure, and the applicant considers that it is in the public interest for the land not to be rehabilitated to a stable condition.
Notwithstanding these requirements, a PRCP must not include a (new) NUMA that is a final void in a flood plain. A PRCP Schedule must provide for rehabilitation of the land to a stable condition for a void situated wholly or partly in a flood plain.
A draft 'PRCP Guideline' was released from May to June of this year for public consultation. Although publication of a final version of the guideline had been anticipated by 1 November 2019, it is yet to be released. The Guideline will provide much needed detail on the content requirements of PRCP Schedules, particularly with respect to NUMAs and binding rehabilitation milestones.
Transitioning to the PRCP Regime
Existing projects will be required to submit a PRCP and PRCP Schedule for approval after receiving a 'transition notice' from DES, which must allow at least six months for the submission. DES has 3 years from 1 November 2019 to transition existing EA holders to the progressive rehabilitation regime. McCullough Robertson understands DES will gradually issue transition notices during this period, and has a rough (although not fixed) order of priority in mind for transitioning existing operations.
For projects transitioning into the regime, a PRCP Schedule may be refused if DES considers it to be non-compliant with the transition notice. However, the offence of failing to have a PRCP Schedule will not apply in those circumstances unless the holder:
- fails to re-submit a PRCP Schedule within 40 days from the notice of rejection; or
- re-submits a PRCP Schedule within 40 days from the notice of rejection, and is issued with a further written notice refusing to approve the re-submitted PRCP Schedule.
Continuing relevance of POps
Existing projects' POps will continue to operate and must be complied with until the earliest of:
- the expiry of the POps;
- the day a PRCP Schedule is approved; or
- an estimated rehabilitation cost (ERC) decision is made in response to an application by the holder because of change in circumstances
Since 1 April 2019, POps may not be amended in any way that 'replaces' the POps (e.g. increasing the term) or increases the total disturbance area. However, other minor amendments may be possible. EA holders considering a change to their activities while the POps remains on foot under the transitional provisions should seek specific advice as to whether a proposed increase in disturbance will trigger an application for a new ERC decision and/or the PRCP regime.
Existing EA holders may also continue to operate under the EA conditions once their POps ceases to have effect and before a PRCP Schedule is approved, as they are not subject to the offence provision during an interim period. This protection will end when either a PRCP transition notice is not complied with, in the circumstances mentioned above, following rejection of a PRCP Schedule.
Some questions answered
On 4 October 2019, the Environmental Protection (Rehabilitation Reform) Amendment Regulation 2019 (Amendment Regulation) was published, providing some clarity on the new regime. In summary, the Amendment Regulation amends the Environmental Protection Regulation 2019 (EP Regulation) to:
- clarify what regulatory requirements DES must consider when assessing a PRCP Schedule;
- outline what type of entity may undertake a PIE for a PRCP;
- the meaning of 'flood plain'; and
- establish additional transitional provisions for the EP Regulation.
'Relevant Regulatory Requirements'
The amendments clarify that DES must, when making a decision about a PRCP Schedule, carry out an objective assessment against 'PRCP objectives' and corresponding 'PRCP performance outcomes', as outlined in Schedule 8A, part 3 of the EP Regulation. Different PRCP objectives apply for post-mining land use (PMLU) areas or NUMAs.
Importantly, Schedule 8A sheds light on the requirements projects must meet to justify NUMAs on site, and the lengths that they will need to go to satisfy DES that land will have a sufficient PMLU. DES may approve or amend a PRCP Schedule only if each PRCP objective for the PRCP Schedule listed under Schedule 8A is achieved.
Public Interest Evaluation
The Amendment Regulation also prescribes the characteristics that an entity must have to qualify to carry out PIEs on NUMAs included in a draft PRCP Schedule. That is, a 'qualified entity' must have a qualification relating to, and at least 10 years experience in, a broad range of fields including environmental risk assessment, financial impact assessment, regional and State macro-economic assessment, rehabilitation planning and management, resource project planning and management, and social impact assessment. Moreover, a substantial part of the experience must be relevant to mining, the nature of the mineral to be mined, mining methods and associated impacts.
The PRCP Guideline is expected to provide further information on the processes involved in carrying out a PIE.
Meaning of 'flood plain'
Crucially, the Amending Regulation clarifies the assessment methodology relating to impacts on flood plains for the purposes of the PRCP regime. If an EA holder proposes to leave a void wholly or partly situated in a flood plain, DES:
- must consider the results of flood plain modelling carried out in relation to the land the subject of the PRCP Schedule;
- must treat the land as a flood plain to the extent the results of the flood plain modelling show that, when all relevant activities carried out on the land have ended, the land is the same height as, or lower than, the level modelled as the peak water level 0.1% AEP for a relevant watercourse under the Australian Rainfall and Runoff; and
- if DES is satisfied land the subject of a PRCP Schedule contains a void situated wholly or partly in a flood plain, it may approve or amend the schedule only if it provides for rehabilitation of the land comprising the void, to the extent it is situated in the flood plain, to a stable condition.
Other changes to transitional provisions
As outlined above, the MERFP Act inserted transitional provisions into the EP Act to ensure that EAs issued for a site-specific application for a mining lease require a PRCP Schedule to operate, but would not be subject to the offence of operating without an approved PRCP Schedule for a period of time to enable the transition to the PRCP framework.
Drafting issues identified in the transitional provisions meant they may not operate as intended in all situations. The Environmental Protection (Financial Provisioning) (Transitional) Regulation 2019 (Qld) (Transitional Regulation) clarifies that the following EA holders will not be in breach for carrying out environmentally relevant activities without a PRCP in place where an EA:
- holder had a POps which expired, but was not replaced, before 1 April 2019;
- holder was required to submit a POps, but did not do so, before 1 April 2019; or
- applicant was issued an EA on or after 1 April 2019.
The objective of the Transitional Regulation is to remedy these drafting issues and seek to have consistent transitional arrangements apply to all EA holders. The Transitional Regulation is taken to have commenced on 1 April 2019.
As of today, old and new mining projects must start to fall in line with their new progressive rehabilitation requirements under the EP Act. Projects must now plan for binding rehabilitation milestones as part of their project activities. Until the release of the PRCP Guideline, however, it remains to be seen the benchmarks against which projects must establish these milestones.
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.