NSW Government pursues improved environmental outcomes for mines

By Nick Thomas, Tom Dougherty

08 Jun 2017

Proposed increases in the regulation of ancillary mining activities, and new offences and enforcement powers, should prompt mine operators to review existing environmental management and rehabilitation programs.

On 31 May 2017, the Mining and Petroleum Legislation Amendment Bill 2017 passed the upper house of the NSW Parliament and awaits approval from the lower house before becoming law.

The Bill will make various amendments to the Mining Act 1992, Mining Regulation 2016 and Petroleum (Onshore) Act 1991 which:

  • clarify how "ancillary mining activities" (currently known as "mining purposes") are carried out with regard to mining leases and mineral claims;
  • provide a streamlined approval process for ancillary mining activities;
  • introduce new powers to relating to enforceable undertakings; and
  • establish new offences for providing false or misleading information under the Mining Act and the Petroleum Act.

Ancillary mining activities

The NSW Government has acknowledged that ancillary mining activities are the key activities, facilities and infrastructure used to directly support primary mining operations.  Examples of ancillary mining activities include the construction, maintenance or use of tailings dams or stockpiles of displaced soil from mine operations.

The Bill would simplify the regulatory regime for these activities and, in doing so, strengthen the regulation of them.

The proposed definition of "ancillary mining activities" adopts and builds on the current definition of "mining purposes" in the Mining Regulation and inserts a new activity: the environmental management, protection and rehabilitation of land on which an ancillary mining activity is being or has been carried out.

The Bill introduces a concept of "designated ancillary mining activity", which is focused on reservoirs, dams (including a tailings dam), drains and water races, and the removal, stockpiling or depositing of overburden, ore or tailings associated with mineral extraction or beneficiation.

Under the Bill, a "designated ancillary mining activity" can be carried out only:

  • within the area of an authorisation under the Mining Act (eg. mining lease) if it is carried out in accordance with that authorisation; and
  • ·outside such an area if it is in the immediate vicinity of, and directly facilitates, the relevant mining lease and is carried out under that mining lease, or another mining lease which authorises the carrying out of the activity.

The Bill will also facilitate the consolidation of Mining Act authorisations for ancillary mining activities, which should make the approval pathway, and post-approval administration and compliance, simpler and more cost-effective.

The Hon. Don Harwin, Minister for Resources, also emphasised, in the Bill's Second Reading Speech, that the changes under the Bill will impose security deposits, rehabilitation obligations and compliance and enforcement powers on ancillary mining activities, including any relevant planning and environment regulation (eg. obtaining development consent or environmental protection licences).  The Minister described this as a "fit-for-purpose regulatory framework".

The Bill would also impose maximum penalties for unauthorised carrying out of designated ancillary mining activities of:

  • $1.1 million for corporations, plus $110,000 for each day the offence continues; and
  • $220,000 for individuals and/or five years' imprisonment, plus $22,000 for each day the offence continues.

Currently, these maximum penalties apply to the unauthorised carrying out of mining purposes.

Enforceable undertakings

The Bill seeks to address minor gaps in the enforceable undertakings framework following the NSW Government's reform of the regulatory framework for the resources sector in 2015.

To improve compliance and enforcement, the proposed changes allow for criminal proceedings to be commenced in the NSW Land and Environment Court for serious breaches of an enforceable undertaking under the Mining Act or the Petroleum Act (rather than the NSW District Court). 

In addition, the Secretary would be required to publish every enforceable undertaking under the Mining Act and the Petroleum Act that is accepted by the Secretary, including any variation or withdrawal.

New offences and increased penalties

The Bill increases the maximum penalty that may be imposed by a court for the offence of providing false or misleading information  to $1.1 million for corporations (currently $110,000) and $220,000 for individuals (currently $55,000).

The Mining Act and the Petroleum Act will also be amended by the Bill to include a new offence relating to providing false or misleading information by persons in connection with the holder of an authorisation or title.

This new offence requires a holder to ensure that an agent, employee or any other person acting on behalf of the holder does not provide false or misleading information, records or other material in purported compliance with any requirement under the Mining Act or the Petroleum Act (either knowingly or recklessly).  This offence will carry the same maximum penalties noted above for the offence of providing false or misleading information.

The Bill also provides a defence to prosecution if the holder of an authorisation or title establishes that all reasonable steps were taken to prevent the offence.

Although the Government has indicated that this essentially codifies the law of agency, we think it goes further and places a clear obligation on mine owners and operators to keep a close eye on their contractors.

Next steps

Mine operators and other proponents should consider the impact of these reforms on current operations and environmental management programs.

In particular, holders of an authorisation or title should review all relationships with agents, employees and other persons acting on behalf of the them to minimise the risk of being subject to the new offence of those associated persons providing false or misleading information.

Get in touch

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 communication. Persons listed may not be admitted in all States and Territories.