New mining exploration laws reveal State vs Fed divide

A NEW Productivity Commission inquiry that will look into the regulatory barriers faced by minerals and resource exploration companies has been criticised by a leading land use and planning expert for failing to include environmental and social criteria within its scope. While, new laws in Victoria will give the regulator the power to hand out huge fines to minerals explorers who fail to adhere to strict environmental regulations.
New mining exploration laws reveal State vs Fed divide New mining exploration laws reveal State vs Fed divide New mining exploration laws reveal State vs Fed divide New mining exploration laws reveal State vs Fed divide New mining exploration laws reveal State vs Fed divide

A CSG exploration site in the Pilliga State Forest in NSW.

Max Pichon

Assistant Treasurer, David Bradbury, and Minister for Resources and Energy, Martin Ferguson announced the inquiry into Non-Financial Barriers to Mineral and Energy Resource Exploration.

Ferguson said the inquiry would outline reform options to address barriers to exploration for mineral and energy resources in Australia.

“The Inquiry will examine exploration approvals systems and processes, within and across jurisdictions, to assess their effectiveness and efficiency,” he said.

The mining industry has been described as being has been accused of over-regulated, affecting the level of investment, with Australia seen as a complicated and costly place to do business. A report released by law firm Baker & McKenzie found that 61% of those surveyed believed there is too much government involvement in the mining industry and pointed to reducing the complexity of mining regulation so companies were less likely to spend their capital elsewhere.

BEN Business spoke to Warwick Giblin, director at OzEnvironmental, which provides expert technical and strategic advice on land use planning matters. Giblin has some concerns about the inquiry, which in his view needs to look beyond just the microeconomic factors when considering the regulation of mineral and resource exploration projects.

“You need to ask yourself why the Productivity Commission is undertaking this inquiry; presumably the industry has lobbied for it," Giblin said.

"It would seem that, for the commission, the primary focus is on delivering a more productive economy in terms of higher living standards and hence raising the level of GDP. This does not automatically translate to better outcomes for social wellbeing or for managing environmental risk.

“What I would argue is that the commission’s primary focus on higher living standards is now misguided and it’s time we started looking at the green economy metrics and measuring the quality of life.

"Such initiatives are being pursued by the United Nations, the UK government and the G20 nations. We need to start getting the environment and social wellbeing on the balance sheet.

"In other words, looking at simply increasing GDP is far too short term, is no longer relevant and we need to start pricing natural capital."

According to Giblin, mineral and resource exploration activity has gone under the radar in the past in terms of being accountable for environmental and social impacts.

“It is only as a consequence of the last three years of active representation by the NSW community, for example, that we have now seen the NSW government respond by tightening regulations not only for production activity but also for exploration activity,” he added.

“I hope the Productivity Commission will take a much wider and more holistic brief than just one of microeconomic reform, and that it will start pricing environmental and social costs and benefits. A good example is what Puma has done recently with the creation of an environmental profit and loss account.

“I would challenge Australia’s mineral and resource companies to do the same,” Giblin concluded.

Mining exploration sector on notice in Victoria

The Victorian government’s new Mineral Resources (Sustainable Development) Amendment Bill 2012 will deliver clearer enforcement powers and increase the penalties for breaches of notices prohibiting activities or for failure to take required remedial action.

“These new laws will give the regulator stronger powers in cases where a company fails to comply with the Act, posing a serious risk to public safety, the environment, infrastructure, land or property,” Energy and Resources Minister Michael O’Brien said.

“Importantly, the changes will not impose any extra regulatory burden on the industry, but will provide the regulator with more effective powers to enforce the law," O’Brien said.

The act regulates for the mining of minerals including coal, gold, coal seam gas, mineral sands and also extractive industries, including quarries.

In contrast to what government has been doing a the federal level, the Victorian government has been strengthening it’s laws around CSG and minerals exploration. The latest bill will broaden the circumstances in which the minister can issue notices to prohibit activities or require remedial action. Currently this is restricted to environmental risks, but the bill will widen the reasons for acting to include public safety, infrastructure, land and property.

It will also significantly increase the penalties for failing to comply with notices to $352,100 for a company and $70,420 in any other case, with a daily default penalty of $42,252 for a company and $8,450 in any other case.

The bill will introduce new powers for a court to make orders to require compliance with notices from the minister and for the minister to apply to the Supreme Court for injunctions to ensure compliance with notices.

As a last resort, the state government will also be able to carry out remedial work itself if there is a serious risk to public safety, the environment, infrastructure, land or property. The bill provides for those costs to be recoverable from the authority holder.

This article first appeared in BEN-Global.

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