Financial Impact of the Introduction of Risk Based Work Plans

DR ELIZABETH GIBSON, General Manager of CMPA reports on the financial impact of the introduction of Risk Based Work Plans on 8th December 2015.

The CMPA Management Committee and Secretariat support the following statement:

The CMPA, as a member based association, is continually working towards fair and just outcomes for the extractive industry; and to maintain a healthy, diverse and compliant sector.

The CMPA has always believed that the introduction of the risk based regulation i.e. risk based Work Plan (RBWP) required a Regulatory Impact Statement (RIS), however, this was discounted by the Government. CMPA further believes that this regulatory change has triggered an unplanned financial impact upon the industry, will compound as it inhibits future access, and will impact upon the State’s proposed infrastructure programs.

The CMPA is in no doubt that the impact on our sector (given there are in excess of 1,400 Work Authorities (WA) registered with ~580 putting in returns) will be well beyond the Government’s figure of less than $2 million (stated at the Public Accounts and Estimates Committee 2017) and believes that a RIS must be urgently undertaken by the Government to fully understand the impact of this regulation on the industry and the Victorian economy.

To understand the magnitude of this transition, if Earth Resources Regulation were able to approve 10 WA’s per month, this would take more than 10 years to fully implement without taking on board new WA and variations.

Below are the primary cost impacts for the industry resulting from the introduced legislation, RBWP guidelines and RRAMs platform on the current Work Plan process.

Please contact the Secretariat for further information on this matter and feel free to pass this correspondence onto any interested party such as your local Member of Parliament.

PRIMARY FINANCIAL IMPACT ISSUE

Containment of all documentation on ERR’s website:

Issues of Members’ connectivity; software and hardware purchases; training; upkeep and auditing. Time penalties incurred through attempting to access and platform stability.

Necessity for engagement of third parties

The legislation change requires additional documentation to be attached to the WP, e.g. previously a third party report to measure fly rock, air blast and ground vibration was not embedded into full risk management protocol as required under the introduced legislation.

Duplication of documentation storage:

Technically 1,400 copies of plans stamped and endorsed have to be transitioned and altered to attain standard required for a RBWP.

Requirement of varying reports for the same purpose

May not be limited to blasting let alone regulators different needs i.e. Blast Management Plan for Council, ERR and WorkSafe all have different requirements. In addition to third party reports
required for the RBWP; these reports are also required by Council but they vary despite being for the same purpose.

Delays in WP/WP variation approval process

Numerous CMPA Members and non-members have experienced lengthy delays in applications for WPs and WP variations with examples of delays in the excess of 2 years. These delays are impacting on the businesses being able to access resource, meet market needs and to purchase plant and equipment. The site may be exposed to greater risk as working areas become restricted. Members are also finding difficulty in accessing the appropriate ERR officer to assist them through the process or even obtain competent direction as result of ERR’s transition to RBWPs.

Potential contraction of existing extractive limit

An example of the projected impact of this adjustment will be where a current WA will be required to decrease their extractive limits within the WA boundary to meet the geological risk assessment. This will be particularly pertinent to WAs whose extractive areas are contained through area and proximity to sensitive receptors. It would not be unreasonable to see a WA losing 30% of its available resource making it commercially unviable to hold on to the asset or continue to operate. This could also be applied to any other of the hazards (i.e. noise, dust).

 

Existing WA may be lost during “transitioning”:

The requirement by ERR for confirmation by the Shire/Council that a proposed transition to a RBWP does not require a Planning Permit amendment or a new Planning Permit could lead to the loss of both approvals (Permit and WA). Regardless of the outcome an application fee will be required ranging from $1.6K – $11K.

Expanded opportunities for objectors to discredit

There is a higher degree that the process will fail as recently seen in VCAT. There is no evidence that RBWP will increase the chance of success. This would therefore mean that there is a higher chance that the application will be rejected as the higher degree of information is provided i.e. Seymour Quarry case. More applications in the future as there is limited supply to markets.

Increased documentation attached to planning permit

Understanding of how the Planning Permit and the attached documents are managed. It is most likely that they will become public with no change able to be made without application for a new planning permit. Most of the management plans are live documents and industry will be locked into applying for a new planning permit every time a change is required. Providing an expert report that is able to comply is totally different to the management plans.

Loss of ease of use of the WA to the operator

Duel systems will have to be run: language based documentation for use by their managers and employees; a general document for Councillors and Council Officers and community which more closely represents the reality. Or devise a mechanism for providing the current reports into a format that will be able to be used. Some may choose to do nothing and run with the entered documentation in RRAMs but whether the outcome is currently to the same standard can only be assumed as improbable. Currently, some WA holders already run a second document for the
planning process.

Note: excludes Native Vegetation Clearing Regulations and excluding Aboriginal Heritage Cultural Heritage Management Plans. Sterilisation and potential closure has been triggered from these two areas.

On a positive note, Anna Cronin (Commissioner for Better Regulation) is conducting a review into Earth Resources Regulation at the request of the Minister for Resources, The Hon Tim Pallas, MP; which may lead to constructive outcomes in this area.

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