Parliamentary Committee recommends that the FA Bill be passed

WHO SHOULD READ THIS

• All stakeholders in the Queensland resources sector, including Environmental Authority (EA) holders, providers of third party sureties, providers of resource sector site rehabilitation services.

THINGS YOU NEED TO KNOW

• Queensland’s financial assurance and rehabilitation regimes are set to be overhauled from 1 July 2018.

WHAT YOU NEED TO DO

• Get ready for major changes to your EA, FA and rehabilitation strategies.
• Consider the timing and implications of any amendments to existing EAs, and whether additional work is required to transition your current EA rehabilitation conditions to a Progressive Rehabilitation and Closure Plan (PRCP).

Another step towards the introduction of the overhaul of the Financial Assurance (FA) and progressive rehabilitation regime on 1 July 2018 was taken today as the Economics and Governance Committee (Committee) tabled its report in Parliament.

The Committee’s report unanimously recommends that the Mineral and Energy Resources (Financial Provisioning) Bill 2018 (Qld) (MERFP) is passed, subject to one inconsequential drafting recommendation.

The Parliament’s next sitting day is 1 May 2018, and with MERFP already listed in the daily agenda we expect to see it debated in Parliament during the next session. With two sitting weeks in May, there is ample opportunity for MERFP to be passed in time for the 1 July 2018 commencement date.

We provided a comprehensive overview of MERFP when it was first introduced to Parliament in October 2017. While this version lapsed with the intervening State election, little changed and it was re-introduced in the first week of the new Parliament in February 2018.

A total of 51 submissions were made to the Committee from mining and gas companies, industry bodies and other interested parties. Despite opposition to components of MERFP and concerns around lacking detail – which has been relegated to as yet unpublished Guidelines – the Committee report provides no impediment to the Government moving ahead with a 1 July commencement, having not recommended any substantive changes.

Fast-tracked public consultation on the detail is expected to continue to unfold, with many holding their breath in anticipation.

Committee comments

In addition to the two recommendations noted above, and a summary of key comments made by stakeholders to the Committee, the Committee passes comment in its report on some possible breaches in the drafting of MERFP of the ‘fundamental legislative principles’ (FLPs) under the Legislative Standards Act 1992 (Qld). In each case, the Committee notes the relevant components of the explanatory notes that deal with the possible breach.

For example:

• review or appeal rights: the Committee noted that the lack of merits review of Scheme Manager decisions may breach the FLP regarding legislative power needing to be the subject of appropriate review
• offence penalties: the Committee raises whether the penalties for new offences introduced by MERFP are proportionate to the breach
• power of entry: the lack of a requirement to obtain a warrant before entering premises is noted as a potential breach of the FLP
• Scheme Manager immunity: the immunity conferred on the Scheme Manager (or delegate) from civil liability arising for his or her acts or omissions may breach the FLPs

Finally, the Committee calls into question the extent of the ‘devil in the detail’ left to be finalised by regulation, noting that that:

“Allowing a regulation to ‘make provision about a matter for which this Act does not make provision or enough provision’ has been found to be an inappropriate delegation; matters about which transitional regulations may be made should be stated in the Bill. This breach is arguably exacerbated by the provision that the transitional regulations may have retrospective effect.”

Key things you need to know

For existing EA holders:

• your current or next plan of operations may be your last and the transition to the new regime is expected to commence shortly
• the risk allocation of scheme participants will be subject to regular review – at least annually and when there is a change in holder
• unless you are considered ‘high risk’ (or carry more than $450 million in estimated rehabilitation costs), your existing financial assurance requirements will fall away in favour of an annual fee based on your rehabilitation liability (contribution rates are as yet unknown)
• key decision-making powers will fall to the Scheme Manager, who is set to be appointed in May 2018
• from 1 July 2019 existing environmental authority rehabilitation conditions will need to be ‘translated’ into ‘milestones’ which will form part of new compliance documents – a ‘progressive rehabilitation and closure plan’ (PRCP) and a PRCP Schedule
• all existing resource environmental authorities will need to be amended
• some PRCPs will be subject to public notification, with Land Court review available
• progressive rehabilitate requirements will acquire new teeth, and
• PRCP enforcement will be backed by a requirement to complete a third party audit of the PRCP every three years.

For projects at the development stage:

• your PRCP will need to be included in the environmental assessment material, and
• mines within a floodplain will need to carefully review their final landform plans – with final voids and certain other structures prohibited.

Further information

1 July 2018 is fast approaching. McCullough Robertson has been running a number of regional information sessions about the MERFP changes. In March we presented to a number of resource companies in Townsville and in May and June we will be running sessions in Emerald, Mackay and Rockhampton.

For further information or to register your interest in attending one of these sessions, please contact:

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.