Regulatory Impact Statement for DRAFT Mineral Industries Regulations

By on June 4, 2019

The following is an extract from the CMPA submission to the Regulatory Impact Statement for the draft Mineral Industries Regulations that was submitted to the Victorian Government on 23rd April 2019.

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 Minerals Industries Regulations (MIR). While not directly relevant to the lower risk and different end use extractive industries, we are keenly interested in the proposals to improve how the regulations operate for work plans. These work plan proposals may end up being accepted, and CMPA would be highly concerned if our comments were not taken into account were a similar approach/model that is meant to control the higher risk large coal mines (fires. heavy metals), gold mines (arsenic/cyanide/ mercury) were to be considered for the much lower risk extractives industries.

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 of a 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/MIR:

1.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%. 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 in comparison to mines where government has had to spend ~$10 million on rehabilitation. Additionally, the MIR does not allow for innovative end land use.

2.Risk based Work plan: There are 3 documents being proposed for development of a work plan: Preparation of Work Plans and Work Plan Variations (already released and subject to a 6 month review); a Code of Practice for risk management and Ministerial guidelines for work plans. It is difficult to believe the RIS statement that the level of complexity created by these documents will lead to a reduction in cost to the proponent. Additionally, 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. CMPA paper “Financial impact of the introduction of risk based Work Plans on 8 December 2015”.

3.Significant risk: Significant risk in the RIS is defined as where new or changing work is assessed as medium or above. This is contrary to the current Preparation of Work Plans and Work Plan Variations guidelines and Statement of Operating Change which stipulate that a significant increase in risk is defined as where new or changing work is assessed as high or above.

Concern is 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” concern is also held that this significant burden will impact the much lower risk extractive industry if all of the proposed regulations are applied in remaking of the Mineral Resources (Sustainable Development) Extractive Industry Regulations 2010.

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. For this reason (including specific comments below) CMPA does not support the proposed Mineral Resources (Sustainable Development) (Mineral Industries) Regulations 2019 and accompanying Regulatory Impact Statement.

The full submission may be found on https://cmpavic.asn.au/

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