In the decision of Century Mining Limited v Department of Environment and Science [2021] QLC 3 the Land Court of Queensland substituted the Department's Estimated Rehabilitation Cost (ERC) decision on the basis that the ERC Guideline (ESR/2018/4425) does not need to be strictly followed. Rather, the purpose of the guideline is "to provide guidance."
Under section 298 of the Environmental Protection Act 1994, the ERC proposed by the applicant must be worked out in accordance with the methodology decided by the chief executive. The ERC Guideline sets out, among other things, that methodology and refers to the ERC calculator. The Land Court considered whether the ERC decision must be directly based on the ERC Guideline methodology, or whether the Department retained some discretion in considering an alternative approach.
Century Mining Limited appealed the Department's initial ERC decision on the basis of an alternative design for the covers for the waste rock dumps and the tailings storage facility. Century Mining's design for the covers involved a significantly lower cost than the assumed cost in the ERC Guideline and calculator. The appeal was directed to Court Managed Expert Evidence and a Joint Expert Report was produced. The Joint Expert Report concluded that Century Mining's design would be more effective in preventing environmental harm than the assumed cover design in the ERC calculator, due to the mine's location in a semi-arid climate.
The President of the Land Court found that DES must consider the ERC Guideline but retains discretion as a decision maker to consider other information. The President also found that the ERC Guideline contemplates that the ERC decision may be influenced by a number of considerations, including additional rehabilitation plans, reports, evaluations and assessments. Therefore, while DES must have regard to the ERC Guideline methodology, they are not required to adopt the amount arrived at using that methodology.
The President further concluded that the requirements in the Act take precedence over the Guideline. The Act requires the Department to decide the amount of the estimated cost of:
- (a) rehabilitating the land on which the resource activity is carried out; and
- (b) preventing or minimising environmental harm, or rehabilitating or restoring the environment, in relation to the resource activity.
Century Mining had successfully shown the cost of preventing environmental harm was lower than that proposed in the ERC Guideline Methodology.
This decision shows that the Department has the discretion to consider expert evidence on the ERC in preference to the amount calculated by reference to the ERC Guideline and calculator. Such evidence in this case resulted in an approximately $46 million reduction in the ERC decision.
Although it was raised by the parties, the Court did not directly address whether the Department can refuse to accept an ERC application on the basis that the proposed ERC was not worked out in accordance with the ERC Guideline methodology.
What do ERC decision applicants need to know?
Applicants should consider providing expert reports and assessments to support their ERC decision applications, where variations to the Guideline methodology are proposed.
Where it can be shown that an alternative approach is as effective, or more effective, at preventing environmental harm or rehabilitating the environment, the Department has the discretion to accept the cost of the alternative method.