DRAFT Quarry Regulations

By on December 3, 2019

DR ELIZABETH GIBSON, General Manager of the CMPA reports on the Regulatory Impact Statement (RIS) for Draft Mineral Resources (Sustainable Development) Extractive Industries Regulations (EIR) 2019.

The current Mineral Resources (Sustainable Development) Extractive Industries Regulations 2010 are due to sunset (expire) on 27 January 2020. As such, the Resources Division (Department of Jobs, Precincts and Regions) had released for comment the draft EIR 2019 and accompanying RIS on 20 September 2019. Submissions were due by 21 October 2019.

The proposed draft EIR 2019 includes changes to work plans, rehabilitation and rehabilitation plans, reporting requirements and infringements. Fees and royalty rates are out of scope of this remake due to the Commissioner for Better Regulation’s (Anna Cronin) Report 2017 – “Getting the Groundwork Right” which recommended that fee adjustments not be in scope until 1 July 2020.

According to the Resources Division: “the new regulations aim to improve the efficiency and effectiveness of the sector by reducing red tape while encouraging an outcome-based approach to managing risk through work plans.”

There was little evidence of the reduction of red tape in the draft EIR 2019 apart from no longer requiring statutory declarations for annual returns reporting.

Below is the process for the making of the draft EIR 2019 according to the RIS.

Following is an extract from the CMPA submission. The full submission may be found on www.cmpavic.asn.au

“The CMPA supports the principle of responsible, balanced legislation that is in the best interests of the State of Victoria.

Thank you for the opportunity to comment on the Regulatory Impact Statement (RIS) for the draft Mineral Resources (Sustainable Development) Extractive Industries Regulations (EIR).

The CMPA has been involved in the development of the risk based work plans since 2014 and despite CMPA input, comments and suggestions; the work plan approval process has become more and more complex to the point of being almost unattainable. This is evidenced by the chart in Attachment 1 (www.cmpavic.asn.au) of number of hectares and work authorities approved versus year approved with the data available from GeoVic (http://earthresources.vic.gov.au/earth-resources/maps-reports-and-data/geovic).

The CMPA has three major concerns with the RIS and EIR:

1.Risk based work plan: It is noted that the Code of Practice for risk management and Ministerial guidelines for work plans has not been included in the EIR. However, proportionality is glaringly absent with small to medium quarries subject to the same stringent work plan approval process as the Hazelwood coal mine.

The annual regulatory burden for the extractives sector appears to have been underestimated. Please see Attachment 2. (www.cmpavic.asn.au) CMPA paper “Financial impact of the introduction of risk based work plans on 8 December 2015”.

2.Rehabilitation: Of concern are the proposed changes including the review of rehabilitation plans for all licensees; the introduction of Ministerial guidelines on rehabilitation and the projected increase in rehabilitation costs of 20-30% (as predicted in the RIS for MIR).

With regards to rehabilitation bonds, alone, this is equivalent to an increase of $18 million – $28 million on 2017/18 figures which could see an increase in the average construction material unit price from $16/tonne to $19-$21/tonne.

The extractive industry has a good record of quarry rehabilitation over the past 20 years (~$20K) in comparison to mines where government has had to spend ~$10 million on rehabilitation. Additionally, the EIR does not allow for innovative end land use.

No evidence is given that justifies the same regulation as the minerals industries which is recognised elsewhere in the world, for example, a recent decision by the USEPA was affirmed in court. The USEPA decision not to require CERCLA (rehabilitation) Bonds at hard rock mines (quarries) was affirmed (October 2019).

3.Reporting requirements: Reserves information is available through the work plan and could be obtained by GSV once approved. Then deducting total annual reported tonnage from initial reserve estimates would provide the data.

It is not necessary too add additional burden too small to medium businesses.

The Multi Criteria Analysis (MCA) was erroneously skewed towards the proposed regulations and should be amended.

It was noted that there were only token differences between the Mineral Industries Regulations 2019 (MIR)/RIS when compared to the EIR/RIS. Hence, it is disappointing that the RIS and EIR has not taken into account or even acknowledged the differences between mines and quarries: higher risk large coal mines (fires, heavy metals), gold mines (arsenic/cyanide/mercury) which leads to over-regulation of the lower and different risk extractive industry.

Concern is also held that the extractive industry may also be subject to restricted open competition which will lead to the detriment of the community through increased costs for construction materials used in major infrastructure Government projects.

“Given that the proposed regulations impose a significant burden on stakeholders”

As the Resources Division continues on its current path it will decimate small to medium quarry operators. Some have left and some are already planning their exit strategies.

“CMPA does not support the EIR in its current form.”

Currently, all submissions are being considered with the draft EIR 2019 to be made late December 2019.

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