18 Mar 2013

Water trigger for EPBC approval, but only for mining and CSG projects

More mining and coal seam gas projects will require Commonwealth environmental approval, if a new Government Bill passes Federal Parliament.

The Commonwealth Government has introduced a Bill to amend the Environment Protection and Biodiversity Conservation Act 1999, which proposes to include as a "matter of national environmental significance" an action involving coal seam gas development or large coal mining development that has, will have or is likely to have a significant impact on a water resource. As a consequence, these actions will require approval under the EPBC Act.

Approval trigger for water impacts under the EPBC Bill

Under the Bill, a person, a constitutional corporation or the Commonwealth (or agency) commits an offence if they take an action involving:

  • coal seam gas development, or
  • large coal mining development,

and the action has, will have or is likely to have a significant impact on a water resource, unless they first obtain approval for the action for the Commonwealth environment minister under the EPBC Act.

The approval trigger will apply to an action which has, or is likely to have, a significant impact on water resources whether in its own right or when considered with other developments.

The existing EPBC Act contains definitions of “coal seam gas development” and “large coal mining development” as any activity involving coal seam gas extraction or any coal mining activity (respectively) that has, or is likely to have, a significant impact on water resources. “Water resource” is defined by reference to the Commonwealth Water Act 2007, being surface water or ground water, or a watercourse, lake, wetland or aquifer (whether or not it currently has water in it) and including all aspects of the water resource including water, organisms and other components and ecosystems that contribute to the physical state and environmental value of the water resource.

According to the Department of Sustainability, Environment, Water, Population and Communities guidelines on what is a “significant impact”, a significant impact is an impact that is important, notable or of consequence, having regard to its context or intensity. As yet, no specific guidance has been given by the Department as to what constitutes a significant impact on a water resource.

Projects already undergoing assessment

Transitional provisions specifically provide how the proposed approval trigger applies to actions that have already been assessed or that are currently undergoing assessment.

The proposed new trigger does not apply to a proposed action if:

  • an approval for the action has been granted (under Part 9 of the EPBC Act);
  • a decision is in force that the action is not a controlled action (ie. it does not need approval under the EPBC Act) by reference to the existing approval triggers (under Part 7 of the EPBC Act);
  • the Minister has already received the advice of the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining (IESC) in relation to the action (under section 131AB of the EPBC Act);
  • the final advice of the IESC has already been provided to a relevant State or Territory Minister in relation to the action; or
  • the action has been authorised by a specific environmental authorisation (including an environmental authority) and no Commonwealth approval was necessary to allow the action to be taken.

(The IESC was established under an amendment to the EPBC Act in 2012, and the EPBC Act requires State Governments to consider its work in a relevant State assessment process.)

For actions that have been determined to be controlled actions by reference to the existing approval triggers in the EPBC Act but for which an approval has not yet been given, the Minister must decide within 60 business days of the commencement of the amendments whether the new approval trigger is a controlling provision for that action. This has the potential to significantly extend assessment periods, for the approval of controlled actions, particularly those that are close to completing the assessment process.

To raise further issues with respect to timeframes, the proposed amendments in relation to the Minister’s decision specifically provide that anything done by the Minister in respect of deciding whether the impact on a water resource is a new controlling provision for an action is not invalid merely because it was not done within the period required.

Before making a decision as to whether the impact on a water resource is a controlling provision for an existing controlled action, the Minister must notify the proponent of the proposed decision and invite the proponent to provide written comments on the proposed decision. The proponent has 10 business days in which to make submissions.

If the Minister determines that the new referral trigger is the controlling provision for the action, the decision is taken to be a variation of the existing "controlled action" decision. Impacts relating to the new referral trigger may be considered in deciding whether to approve the action and whether to impose conditions under Part 9 of the EPBC Act.

The Minister is also able to request further information on the impacts of the action in relation to the new referral trigger if the Minister believes on reasonable grounds that he or she does not have enough information to make an informed decision about whether or not to approve the taking of the action.

Implications of the EPBC Bill for CSG and coal mining

If passed, the Bill has the potential to:

  • increase the number of mining and CSG projects which require EPBC Act approval, which would not otherwise trigger other controlling provisions; and
  • broaden the scope of the Commonwealth Government's assessment in the exercise of its approval function for projects.

It appears from the Bill that the IESC will retain its advisory role.

The Commonwealth Minister has also stated that the approval trigger may not require additional assessment work from mining and CSG proponents, because they will need to prepare the same assessment material to address State approval requirements and the reviews done by the IESC.

However, even if the proposed EPBC Act approval trigger does not require a proponent to carry out additional assessment work (and this is not certain), the trigger may cause additional difficulties for proponents, because:

  • it is likely to add time and cost to the approval process;
  • it will involve the Commonwealth Government in an approval role which it might not have had without the amendment; and
  • it will increase the risk of inconsistent Commonwealth and State approval requirements, which is one of the main concerns about the EPBC Act approval requirements.

The Prime Minister has exempted the Bill from the regulatory impact statement requirements, although it has been indicated that a post-implementation review will commence within two years from the date the Bill commences. This suggests the Government proposes to expedite the passage of the Bill through Parliament, and the Bill (if passed) could become law before the next Federal election in September 2013.

It has been referred to the Senate Environment and Communications Legislation Committee, which must report by 14 May 2013.

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