Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697643328402.pdf (Australia)
17 April 2018 Committee Secretary Senate Standing Committees on Environment and Communications PO Box 6100 Parliament House Canberra ACT 2600 Greenpeace Australia Pacific supplementary submission to the inquiry into the rehabilitation of mining and resources projects as it relates to Commonwealth responsibilities 1.
Greenpeace Australia Pacific Greenpeace Australia Pacific (hereafter referred to as ‘Greenpeace’) consists of over 500,000 people, including board members, staff, activists, volunteers and supporters who care about protecting the environment.

Greenpeace stands for positive change through action.

We investigate, expose and confront environmental abuse in Australia, the Pacific and around the world.
We champion environmentally responsible and socially just solutions, including scientific and technological innovation.

Greenpeace is a charity registered with the Australian Charities and Not-for-profits Commission (ACNC).

Greenpeace is not aligned with any political party and advocates equally to governments of all persuasions.

We do not solicit or accept funding from governments, corporations or political parties.
Greenpeace neither seeks nor accepts donations which could compromise its independence, aims, objectives or integrity.

2.

Greenpeace report ‘Done & Dusted?

Cleaning up coal ash in Port Augusta’ Greenpeace welcomes the opportunity to provide a supplementary submission into the inquiry into the rehabilitation of mining and resources projects as it relates to Commonwealth responsibilities.

Our submission is provided in the form of the attached report, ‘Done & Dusted?
Cleaning up coal ash in Port Augusta’ (hereafter referred to as ‘the report’).

The report highlights the experience of one community - Port Augusta, South Australia - in the aftermath of the closure of a coal-fired power station and, in particular, the disposal and management of waste from the power station ash dam.
The report was written and released by Greenpeace in March 2018 to assist the Port Augusta community in obtaining commitments to a full and proper remediation of the closed down coal-fired power station.

The report was prepared by Greenpeace staff with technical advice provided by Murrang Earth Sciences.

The research is based solely on publicly available information.
The report discusses the Augusta Power Stations, the negative impacts of inadequate rehabilitation on the closing down of the stations - particularly in relation to the ash dam - and best practise rehabilitation.

The report makes findings relevant to the current Terms of Reference of the inquiry.

We recommend reading the report in its entirety.
Additionally, for 1 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 25 - Supplementary Submission ease of reference, below are the passages in the report which relate most directly to the current Terms of Reference: TOR c. the adequacy and transparency of financial mechanisms, including assurances, bonds and funds, to ensure that mining and resources projects and power station ash dams are rehabilitated without placing a burden on public finances The issue of financial liability for rehabilitation and bonds is one of concern across Australia.
Under mining legislation, rehabilitation bonds are a requirement in every state to ensure that the government can cover the costs of rehabilitation if the operator does not fulfil its obligations.

Although these bonds are often woefully insufficient, the situation is worse in the case of power stations, where typically no bonds exist at all.
While other financial assurances can be imposed through a State’s environmental protection laws, this does not appear to be a practice adopted in South Australia, New South Wales, Victoria or Queensland.
This issue has been raised by the Federal Senate Environment and Communications References Committee, which has noted that “without adequate rehabilitation bonds or provisioning for the costs of rehabilitation there is a real risk that taxpayers will end up bearing the burden of these rehabilitation costs, or alternatively that rehabilitation will not be performed to an adequate standard.” (p. 11) TOR d. the effectiveness of current Australian rehabilitation practices in safeguarding human health and repairing and avoiding environmental damage During the dust event, locals complained of skin irritation, problems breathing and the exacerbation of conditions such as asthma.
For many, there was also a bigger concern that with every breath of the foul air, their risk of cancer and other diseases would rise.

The community also expressed concerns about the lack of communication from authorities and limited access to data about air quality.

(p. 14) TOR ea.

the effectiveness of existing and past power station ash dams with regard to repairing environmental damage and safeguarding human health This matter is addressed throughout the report.
TOR f. whether any mining, resources or electricity generation companies have engaged in conduct designed to avoid fulfilling their rehabilitation obligations known as Alinta Energy Flinders Holdings).
Responsibility In July 2016, Alinta Energy transferred all of the assets and liabilities associated with the mine and Augusta Power Stations to Flinders Holdco, a company incorporated in the Cayman Islands in 2015 (formerly for decommissioning and rehabilitating the power station sites, including the ash dam, lies with the Flinders Power Partnership (hereafter referred to as Flinders Power), a partnership of three subsidiaries of Flinders Holdco.
Flinders Power Holding GmbH is incorporated in Switzerland and has a 50 percent stake in the partnership.

Flinders Labuan No.

1 and Flinders Labuan No.

2 are incorporated in Malaysia and each have a 25 percent stake in the partnership.
As part of the reorganization, Alinta Power Cat Pty Ltd transferred AUD 135.7 million to the Flinders 2 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 25 - Supplementary Submission Group, to allow Flinders Power to “fulfil obligations in relation to the closure [of the mine and Augusta Power Stations], on a solvent, stand-alone basis.” The restructuring was viewed by the ratings agency Moody’s as “positive based on our understanding that it will insulate [Alinta Energy] from unforeseen liabilities associated with the closure.” While it may have been a positive step for Alinta Energy’s shareholders, it can hardly be seen as such from the perspective of Port Augusta’s residents.
The AUD 135.7 million that Flinders Power received from Alinta has to cover a wide range of costs (e.g.

ongoing leases, salaries, demolition works).

The amount that Flinders Power has spent contracting McMahon Services for demolition and rehabilitation work is confidential.

It is beyond the scope of this report to provide an estimate of what full and proper rehabilitation of the Port Augusta ash dam would cost.
However, it is worth noting that the owners of the Hazelwood Power Station in Victoria have estimated the cost of rehabilitating that station to be at least $304 million (close to half of the $743 million it estimates is necessary to rehabilitate the entire Hazelwood site).

If Flinders Power has been insufficiently resourced to conduct a full and proper remediation of the ash dam and other sites, the result will either be that the taxpayer ends up footing the bill or the community is left in the lurch.
According to the 2017 Financial Statements of Flinders Power Holding GmbH, the Partnership will be dissolved and the companies liquidated “as soon as the reorganization measures related to the cease of activities and closure of the operations of the Leigh Creek coal mine township and rail line and the Augusta Power Stations will have been completed.” However, as the following sections detail, there is a need for ongoing monitoring and maintenance of the ash dam site.
The Government of South Australia was consulted on the separation of Alinta Energy from the Flinders Group.

The SA EPA confirmed to Greenpeace Australia Pacific that there is no bond or financial assurance mechanism under the Environment Protection Act 1993 to cover the Port Augusta ash dam rehabilitation should Flinders Power renege on its responsibilities.
However, according to the Department of Treasury and Finance, Flinders Power has set up a cash fund for the rehabilitation and the government closely monitors the company’s expenditure and remaining budget.

Additionally, the company has provided a letter of credit that will not be returned until the SA EPA signs off on the “completion” of the rehabilitation.
However, Treasury is unable to disclose either the amount remaining in the cash fund or the value of the letter of credit because of contractual confidentiality clauses.

Flinders Power is at liberty to disclose these amounts should it wish to assuage community concerns that there is insufficient funding for rehabilitation that meets their expectations.
(p 9, 10 & 11) TOR g. the potential social, economic and environmental impacts, including on matters of national environmental significance under the EPBC Act, of inadequate rehabilitation During the dust event, locals complained of skin irritation, problems breathing and the exacerbation of conditions such as asthma.

For many, there was also a bigger concern that with every breath of the foul air, their risk of cancer and other diseases would rise.
The community also expressed concerns about the lack of communication from authorities and limited access to data about air quality.
(p. 14) 3 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 25 - Supplementary Submission TOR j. proposals for reform of rehabilitation of mining and resources projects and power station ash dams That federal and state energy ministers undertake a national audit to assess the costs of decommissioning and rehabilitating Australia’s coal-fired power stations, including ash dams, consistent with best practice; That all states impose bonds or financial assurance requirements on all coal-fired power stations, their ash dams and associated infrastructure that reflect the costs determined by the national audit, with full transparency so that affected communities and taxpayers can be confident that they will not be left footing the bill for rehabilitation.
Alternatively, that a site remediation levy be imposed on all Australian coal to generate funds to cover rehabilitation costs.

(p. 21) 3.

Conclusion In many respects, Port Augusta can be seen as one in a long list of communities that will have to deal with the harsh reality that the negative impacts of coal combustion do not end when a power station is closed.

The majority of Australia’s operating stations are close to or past their useful life.
This means that there will be a number of closures in the next decade regardless of any developments in the government’s climate policy.

Advance planning is required to ensure that workers and communities are not left in the lurch when companies announce, on very short notice, that they will close a power station or mine.

Much of the discussion around the need for a “just transition” for communities focuses on issues of employment.
However, mines and power stations also leave a large environmental footprint and the issue of site rehabilitation must be taken into consideration in transition planning.

Greenpeace would welcome the opportunity to appear before the Committee to expand upon any aspect of this submission.

Prepared by: Alix Foster Vander Elst Campaigner Greenpeace Australia Pacific 4 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 25 - Supplementary Submission