Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697643677802.pdf (Australia)
Senate Environment and Communications References Committee — Inquiry into the rehabilitation of mining and resources projects as it relates to Commonwealth responsibilities Submission from the South Australian Government May 2017 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 Executive Summary This submission to the Senate Environment and Communications Reference Committee (the Committee) has been prepared by the Department of Premier and Cabinet, Resources and Energy Group for the South Australian Government.
The Resource and Energy Group has the lead role in the administration of South Australian legislation that governs both mining and energy (petroleum and geothermal) projects in South Australia.

The South Australian Government understands the importance of maintaining a balance between the economic and social benefits that are gained from mining and energy projects and the need to protect the environment for future generations.
The South Australian regulatory framework for mining incorporates world’s best practice principles that support the achievement of environmental outcomes.
Principally this is achieved through:  Consideration of plans proposed by mining developers (including for rehabilitation) as part of the initial environmental impact assessment process for all new mining operations;  Timely review of legislative frameworks and policy;  Ensuring mining operators are clearly accountable for their legal responsibilities to meet agreed rehabilitation outcomes;  A substantial commitment to ensuring the community is heard and considered in the development of all mining and resource projects;  Appropriate compliance and enforcement frameworks that are risk-based, and focus on ensuring that those operators who fail to meet their lease conditions face appropriate action;  The maintenance of a sound financial assurance (bonds) regime to ensure where mine failure occurs, the State is protected from assuming the cost of rehabilitation;  Clear, transparent and publically available information on the regulatory assessment process, consultation on projects and reporting of mining regulatory activity to ensure that both industry and the government remain accountable to the community; 2 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58  Assessing the capability of mining and resource operators to ensure mining project outcomes (including rehabilitation and mine closure outcomes) can be achieved.
The regulatory framework incorporates input from other South Australian Government agencies including the Department of Environment, Water and Natural Resources (DEWNR), Primary Industries and Regions SA (PIRSA), the Environment Protection Authority (EPA), and the Department of Planning, Transport and Infrastructure (DPTI).

These departments provide input into the assessment and ongoing regulation of mining and energy (petroleum and geothermal) activity in South Australia.
This co-regulatory framework works to strategically manage multiple land use outcomes and ensures appropriate environmental protection standards are maintained on resource and energy projects.

Interaction with Commonwealth legislation The Commonwealth’s jurisdiction in regards to mining and energy activity conducted in South Australia is limited to their responsibilities under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).
The EPBC Act specifically relates to the assessment and approval of impacts on matters of national environmental significance (MNES).
These are defined as:  world heritage areas  national heritage places  wetlands of international importance  nationally threatened species and ecological communities  migratory species  Commonwealth marine areas  The Great Barrier Reef Marine Park  nuclear actions (including uranium mining)  a water resource, in relation to coal seam gas development and large  coal mining development.
3 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 Where the impact of any action (including a mining project) is likely to have an impact on MNES, this provides a ‘trigger’ for an environmental assessment to be completed to consider the impact on MNES.

The EPBC Act gives the Commonwealth powers to approve or not approve the proposed action, or to set conditions that must be met in order for any action to be undertaken.
Final approval of any activity that triggers the EPBC Act is still required by the Commonwealth Minister for the Environment, or delegate.

The South Australian Government works cooperatively with relevant Commonwealth agencies to ensure that its assessment processes meet the same threshold as required by the EPBC Act.

A bilateral agreement between the Commonwealth and South Australia for the assessment of mining proposals under the South Australian Mining Act 1971 (Mining Act) commenced in October 2014.
While there is no bilateral currently in place under the Petroleum and Geothermal Energy Act 2000 (PGE Act), to ensure consultation requirements align with the EPBC Act, regulated activities under the PGE Act that may significantly impact MNES under Division 1 of the EPBC Act will automatically trigger, at a minimum, a medium environmental impact classification process, which requires public consultation on Environmental Impact Report (EIR) and Statement of Environmental Objectives (SEO) documentation, in line with Part 12 of the PGE Act.
To date no onshore upstream petroleum regulated activities under the PGE Act have triggered assessment under the EPBC Act.

South Australia is working collaboratively with the Commonwealth to develop innovative options for former mine rehabilitation, and was the initiating jurisdiction for the current COAG Energy Council Land Access for Resources Working Group Leading Practice Former Mines Subgroup.
Opportunities for EPBC reform The South Australian Government supports the EPBC Act in its current form with its focus on national environmental matters.
Given that projects approved under the EPBC have yet to move to the rehabilitation phase, a review of the effectiveness of the EPBC could focus more appropriately on the integration of 4 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 assessment processes to reduce regulatory burden and ensure a focus on ensuring appropriate environmental outcomes.
The South Australian Government supports potential reform of the EPBC to further harmonise assessment and approval arrangement for matters of national environmental significance.

South Australia is of the view that the Commonwealth could progress approval bilateral agreements to improve efficiency and effectiveness of the intent of harmonization of EPBC Act assessment and approval processes across all jurisdictions.
South Australia also supports the consideration of strengthening financial disclosure legislation through the Commonwealth Corporations Act to ensure mining companies are required to publically disclose the allocation of financial provision for rehabilitation, commensurate with the likely final cost of rehabilitation over the life of the mine.

This would give the community increased confidence of the ability of the company to meet rehabilitation outcomes.
Focus of this Submission This submission considers the terms of reference for the inquiry in the context of the current regulatory framework for resource and energy projects in South Australia.

It provides detail on South Australia’s regulatory and legislative frameworks and South Australia’s commitment to maintaining a consistent approach to regulation which encourages and supports industry to remain compliant and to meet their rehabilitation obligations.
The submission also outlines the significant reform process that has been underway over the last number of years as well as the current legislative reform program – all of which is focussed on ensuring South Australia maintains its place as a leading practice regulator of resource and energy projects.
The submission addresses mineral resource projects (such as copper, gold, zinc, uranium and quarrying for construction materials) and energy projects (which focusses on the regulatory framework for onshore petroleum and geothermal energy projects as approved under the PGE Act).
Offshore petroleum projects are administered under the PGE Act to a distance of 3 nautical miles at which point they become regulated by the Commonwealth through the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).
5 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 Mineral Resources Legislative Framework Mineral Resource project development, operation and rehabilitation at the end of mine life in South Australia is regulated principally by the Mining Act.
Amendments undertaken in 2011 require applications for new mining operations to identify rehabilitation outcomes (as part of the environmental impact assessment process) in line with land owner and community expectations of end-land-use.

Proposals must also include closure plans and identify outcomes based compliance criteria that will be used to measure the plans effectiveness, throughout the life of the mine and at mine completion.
Part 10A of the Mining Act – Program for Environment Protection and Rehabilitation (PEPR) sets the regulatory requirements for the environmental management of impacts of a mining operation including the development of strategies to limit environmental impacts across all life of mine phases including for mine completion and closure.
Further, Regulation 65(2) of the Mining Regulations 2011 specifically requires PEPR’s to include mine completion outcomes as well as the criteria that will be used to measure those outcomes.

Mining activity cannot commence until a PEPR has been approved by the Minister.

The Government’s framework for best practice regulation outlines its approach to effective regulation through a whole-of-mine-life approach across the phases of a mining project.
This incorporates post-production phases including mine completion and closure.

Financial Assurance for Mineral Resource Projects Section 62 of the Mining Act authorises the Minister to require an applicant for, or a holder of, a mining tenement to enter into a financial bond, for such an amount and under such terms and conditions, to ensure any civil and statutory liabilities and all present and future rehabilitation obligations, are satisfactorily met.
The Government’s default policy for financial assurance requires the lodgement of a Bond equivalent to 100% of the estimated maximum rehabilitation costs (generally as cash or a bank guarantee) before any mining activity can occur.

6 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 As at 30 December 2016, the Department held approximately $122.5 Million in Bonds.
The Department undertakes active management under its compliance framework to ensure Bonds are reviewed when required.

The Department makes available data relating to compliance activity, including bond information, through the South Australian Mineral Resources Regulation Report.

The report for 2016 will be released shortly.


Extractive Areas Rehabilitation Fund for Quarries Unique to South Australia, the Extractive Areas Rehabilitation Fund (EARF) has operated since 1971 as a pooled fund form of financial assurance for the quarrying industry.

The fund receives revenue from hypothecating a portion of the royalty the South Australian Government receives from the production of quarried materials.
It has funded the completion of over 1000 rehabilitation projects to the value of over $34 million.

Section 63 of the Mining Act governs the administration and operation of the EARF.

The Minister is able to expend funds on rehabilitation of extractive mines where rehabilitation has not been undertaken as required by the tenement holder, or for the rehabilitation of former extractive mines.

In this way the fund operates as a surety to government and the community against the cost of rehabilitation.
Actuarial assessment undertaken in 2015 assessed that the fund was adequate to meet rehabilitation costs of existing extractive operations over the next 20 years at the current royalty hypothecation rate of 22 cents per tonne of material.

Leading Practice Mining Acts Review South Australia is currently conducting its Leading Practice Mining Acts Review (the Review), which is the most holistic review of the Mining Act 1971, Opal Mining Act 1995 and Mining Works Inspection Act 1920 ever undertaken.
In late 2016 and early 2017 the Government released three discussion papers on the respective Acts, and sought written submissions on amendments that would position South Australia as the leader in adopting modern and efficient practices for regulating exploration and mining activities in the State.
7 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 The Government recently completed its extensive external engagement program for the Review which included a comprehensive program of regional visits around South Australia, and targeted consultation with industry peak bodies, Members of Parliament and other relevant Government agencies.
More than 20 community meetings and information sessions were held across the State, including five key regional meetings planned by the Grain Producers of SA.

During this consultation phase, the Review Team directly engaged with more than 500 individuals and 61 organisations and distributed more than 1000 discussion papers, and a similar volume of supporting documents.
The initial public submission round for the Review closed on 31 March 2017, and over 130 submissions were received, numbering over 1000 pages, from landowners, industry, government agencies, consultants, environmental groups, native title representatives, farming advocacy groups, the Wardens Court, regional development boards and business groups, and members of Parliament.
The level of feedback and discussion that the Review has generated within the community and those industries is encouraging, and a clear indicator of the importance of this Review to the community.

The Government is continuing to consult with the community, and is currently reviewing and consolidating all submissions and proposals.

Once the Government has completed its review of the submissions, it will publically announce the next phases of consultation, review and/or consideration.
Financial assurance and mine rehabilitation reform are key focuses of the Review, and South Australia recently held the South Australian Intergovernmental Forum on Financial Assurance, which was attended by key representatives from all States and the Northern Territory.

Petroleum Legislative Framework Onshore petroleum and geothermal energy exploration and production activity is regulated by the PGE Act.
Offshore petroleum projects occurring within State waters (less than 3 nautical miles offshore) are also regulated by the Petroleum (Submerged Lands) Act 1982.
8 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 The PGE Act features an objective-based regulatory regime to ensure that all risks to the health and safety of the community and to the environment are either completely avoided, or managed and reduced to a level that is as low as reasonably practicable and acceptable to the community.
Regulated activities under the PGE Act cannot be carried out unless there is an approved Statement of Environmental Objectives (SEO) in place, which identifies the environmental objectives to be achieved (including rehabilitation obligations) and the criteria to be used to assess achievement of the objectives.

The SEO is prepared on the basis of an Environmental Impact Report which identifies all potential risks relating to the activity and describes the appropriate risk mitigation strategies.
Rehabilitation Obligations Under section 66 of the PGE Act, the Minister may impose licence conditions that require the licensee to lodge a security of a kind and amount acceptable to the Minister to cover obligations arising under the Licence at the time of grant or renewal of the licence.

Current policy requires all licensees lodge a minimum security per licence.

The Minister does have the right to increase the level of security if considered necessary.
Under section 75 of the PGE Act, it is a mandatory condition of every licence that the licensee must have adequate technical and financial resources to ensure compliance with the licensee’s environmental obligations, including rehabilitation of land adversely affected by regulated activities carried out under the licence.
Under section 111 of the PGE Act, a licensee or former licensee is liable to compensate the State for the cost of environmental rehabilitation the State is reasonably required to carry out as a result of serious environmental damage, or the threat or potential of serious environmental damage arising from activities carried out under the licence.
An assessment of each company’s financial capacity to meet environmental requirements under the PGE Act is undertaken at the time of licence approval and on an ongoing basis to ensure the company’s ability to meet rehabilitation costs as required.

Each case is managed on a risk weighted basis taking into account many factors including but not limited to risk failure on a company and industry wide basis.
9 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 Improving guidance to industry The Inquiry Terms of Reference include considering the State’s view on whether any mining company has engaged in conduct designed to avoid fulfilling its rehabilitation obligations.

The South Australian Government is committed to ensuring that industry has a clear understanding of all of its obligations in relation to undertaking mining operations in South Australia.
The Government continuously reviews and improves operational policies and guidelines which relate to operational aspects of the mining project life-cycle, including for rehabilitation and mine closure.

In December 2016, the Government released Mining Act compliance and enforcement in South Australia, an operational policy that broadly outlines how the compliance regime operates in relation to the regulation of mining activity in South Australia.
This includes outlining the process of investigating non-compliance against PEPR outcomes and/or conditions of the mining lease, including agreed outcomes for mine closure.

Further, the Government’s Mineral resources regulation report, outlining the regulatory performance of the mining industry as well as regulatory activity undertaken by the Government, was first released last year.
This publically available document will become a feature of the Government’s reporting on compliance, including mine closure requirements.

The 2016 report will be released by mid-2017.


In November 2015, the Government released a number of guidelines including, Preparation of a Mining Proposal and/or Management Plan for Metallic and Industrial Minerals (excluding coal and uranium) in South Australia and Preparation of a Program for Environmental Protection and Rehabilitation (PEPR) for Metallic and Industrial Minerals (excluding coal and uranium) in South Australia.
The guidelines provide clear principles for mine closure and rehabilitation which reflect the requirements outlined in the Ministerial Determinations under the Mining Act.

The guidelines also provide detailed advice on the potential elements or key events likely to characterise a whole-of-mine-life cycle and the key outcomes of mine closure that must be addressed in the initial planning stages of a new mine in both mining proposals and PEPRs.
10 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58 Submission Conclusion The South Australian Government supports further harmonization of the existing EPBC Act bilateral arrangements to incorporate both assessment and approval under the relevant State legislation.
Harmonisation of regulation across the Commonwealth and the States can improve regulatory outcomes by giving clear direction to industry as to responsibilities in relation to delivering resource and energy projects that meet the increasing community expectation regarding environmental outcomes.
South Australia would not support any increase in the scope of the EPBC Act where it may encroach on the State’s rights to manage land use outcomes and its own mineral assets for the benefit of the South Australian community.

11 Rehabilitation of mining and resources projects as it relates to Commonwealth responsibilitiesSubmission 58