Improving the Regulation of the Earth Resources Sector

DR ELIZABETH GIBSON reports on the Action Plan for the Earth Resources Regulation Branch on the improvement of regulations within the earth resources sector.

A letter was received from the Minister for Energy and Resources, The Hon Lily D’Ambrosio MP, on improving the regulation of the earth resources sector. Effectively, a statement of expectation was issued by the Minister to the Department of Economic Development, Jobs, Transport and Resources (DEDJTR). DEDJTR replied with an Action Plan for the Earth Resources Regulation Branch (ERR). In the Minister’s statement, critical performance improvements which ERR must achieve in the next 12 months are identified. Specific requirements include greater confidence in the accuracy, timeliness and reliability of advice in the short and medium term. Additional requirements are outlined for:

• Role clarity;
• Risk based strategies;
• Stakeholder consultation and engagement;
• Clear and consistent regulatory activities;
• Timeliness; and
• Communication and transparency.

A progress report is expected by 29 February 2016 and a full report is expected for 30 June 2016.

DEDJTR responded with an Action Plan which had the following contents with strategies and time frames.

1. Role clarity;
2. Building capability and culture;
3. Risk-based strategies;
4. Clear and consistent regulatory activities;
5. Stakeholder consultation and engagement;
6. Timeliness;
7. Communication and transparency; and
8. Continuous improvement.

Some of the responses from DEDJTR are detailed here due to their impact on the extractive industry.

3. Risk-based strategies
Risk management is an integral part of good regulatory administration and underpins many of the improvements the minister seeks. ERR is implementing key strategies to meet your expectations for a risk-based approach to regulation and compliance.

Risk management framework.
ERR will develop a risk management framework for the full range of its activities, from licensing and approvals to operations. This overall risk framework will allow a shared understanding of risks and enable a consistent approach to managing, in partnership with industry, the risks arising from earth resources activities.

ERR will finalise and implement a quantitative risk assessment tool. This will provide a systematic framework for identifying, analysing and prioritising risks at select earth resources sites, and will inform of compliance priorities to be outlined in a Compliance Strategy. This tool will enable ERR to target compliance resources to areas where they are most needed and will prove most effective.

ERR will adopt risk-based approaches for all of its regulatory activities. It is investigating the introduction of a cash bonds system for rehabilitation. Other options to tailor bonds to reflect risk, informed by the Hazelwood Mine Fire Inquiry, will be considered in 2016.

Earth Resources Policy and Programs will develop and implement a new approach to resource development, including strategic planning and public interest zones. The approach will ultimately inform allocation of mineral rights by ERR. Earth Resources Policy and Programs will test the framework, and develop capability to use the framework, through a regional pilot project focusing on the Stavely geological province in western Victoria.

Implementing risk-based mining and extractive work plans.
Legislative amendments to the Mineral Resources (Sustainable Development) Act 1990 have been brought forward. From 8 December 2015 applications for new work plans, or to vary existing work plans for mines and quarries, must be riskbased (All work authority holders will have received a letter to this effect). Similar requirements already form part of petroleum, pipeline, geothermal and greenhouse gas storage legislation.

ERR will provide clear information to industry about requirements under risk-based work plans legislation. ERR has developed a draft risk-based work plan guideline, in consultation with industry, and will seek industry feedback on this draft. The guideline will be revised and refined in response to industry feedback and published on the website.

ERR will establish a work plan assessment taskforce, and use the quantitative risk assessment tool mentioned above to select the highest risk sites (approximately 50 sites) to submit risk based work plans.

(Currently, CMPA is having discussions with ERR about the 50 high risk sites (which equates to 1 in 16 work authorities) and the requirement to being risk based not incurring additional fees where a variation is not warranted.)

4. Clear and consistent regulatory activities
ERR will develop its compliance approach based on good regulatory practice and recommendations from the Victorian Auditor-General’s Office Report Effectiveness of Compliance Activities: Departments of Primary industries and Sustainabilityand Environment (2012).

ERR will develop an Earth Resources Compliance Strategy, informed by a risk assessment that outlines compliance priorities. The Compliance Strategy will drive clear and consistent regulatory activities. It will set out how ERR will use compliance tools for its licensing, approvals and enforcement activities along a continuum from information provision and education, through infringement notices to prosecution and licence revocation.

The Compliance Strategy will include a strong focus on early, proactive compliance. It will also incorporate a strategy for managing and developing the professional capabilities of the ERR compliance workforce. This first Strategy will identify priorities for one year, after which future strategies will take a three to five year horizon.

Building on the Compliance Strategy, ERR will develop an annual compliance plan to outline the basis for delivering on the priorities identified in the Compliance Strategy. The compliance plan will set out compliance activities, address availability and deployment of resources and reaffirm ERR’s commitment to the compliance principles.

DEDJTR is improving its systems for managing complaints, whether these relate to industry non-compliance, regulatory decisions or the conduct of Authorised Officers. ERR will fulfil its roles within these departmental systems to ensure fair, accessible and transparent management of complaints relating to earth resources.

CMPA will have the opportunity to comment on the compliance strategy in January 2016 and will report back, through Sand & Stone Issue 85, on the compliance strategy and what it will mean for the extractive industry.

The Minister’s Statement of Expectations and DEDJTR  documents can be found at www.energyandresources.vic.gov.au/earth-resources.

 

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