Efficient Regulatory Framework

RON KERR, CMPA’s Honorary CEO reviews the requirements on an efficient regulatory framework.

OVER the last 10 years I have been privileged to hold discussions with many members of the CMPA and other industry participants. All have a passion for our industry; have it as their chosen profession and are proud to be associated with it. Their views and concerns, which come from many years of personal experience, need to be taken into account by our regulators.

In the following review I have tried to relay their concerns within specific areas which may shed some light on the direction our industry should move when reviewing the MRSDA.

The areas are:

• Stone Stewardship
• Lead Agency
• Registration of EIWA Application
• Statutory Endorsement
• Work Plans, EIWA and Planning Permits
• Issuing EIWA’s
• Variation of Work Plans

STONE STEWARDSHIP

Historically the government has had a commitment to identify and register stone resources throughout the state of Victoria.

This can be seen in the early maps of Victoria, more recently with the Melbourne Metropolitan Board of Works (MMBW) in the late 1960s and now with the Extractive Industry Interest Areas (EIIA) which are currently in place.

The CMPA is concerned that the present EIIA is of too broad a scale to use and provides no planning protection. A refinement process is required to address access, future land use and demand.

Accessible areas available at a reasonable cost to applicants under the EIIA are no longer readily available. When taking into consideration land that is sterilised through buffers 1 – 500m the other side of water courses, roads, houses, native vegetation, aboriginal artifacts, national parks and local, state and federal government overlays it has left the industry with minimal resource access.

The future land use is further exacerbated by land being rezoned for residential (i.e. of Melbourne–Urban Growth Boundary), which has created unrealistically high land values for the extractive industry. Prices in excess of $200K per hectare with future options are being offered for this land by developers.

The DPI needs to have an understanding of resources left under the EIIA which are proven geologically and also the future demand required by the state and industry to ensure future generations are not left without access to materials.

LEAD AGENCY

The CMPA would like to see the government perform a lead agency role and enable the central management of EIWA’s. The lead agencies objectives would cover:

• A leadership role in identifying and strengthening protection of future stone resources
• Setting a value for extractive reserves (i.e. accounting for native vegetation)
• A strong stand in encouraging the presence of multiple material supply options across markets;
• Coordinating and tracking the EIWA applications and process to its conclusion within committed timelines

The lead agency would need to be adequately funded and be outcome based to ensure its capability and credibility.

REGISTRATION OF EIWA APPLICATION

The CMPA has witnessed the unfair treatment of members undertaking preliminary screening meetings for an EIWA with the information used by others to ensure any future application is made as complex and as difficult as possible. An example is where an adjoining property owner applies for a planning application to construct a house before the adjoining land has been tagged and clearly labelled as a future extractive industry asset. This occurs as a result of the information gleaned from the screening meeting.

As such when the screening meeting is held with DPI and referral agencies, the DPI should issue an EIWA number on that day. This date should then be set as the date from which the DPI enacts temporary protection of the resource against non-compatible planning decisions and protection against legislative changes.

STATUTORY ENDORSEMENT

In undertaking an EIWA application the applicant must firstly develop an attainable business plan identifying market resource and return. This plan must then have some confidence of being able to be undertaken within a reasonable period of time. As such, a commitment is required on timelines for each phase of the endorsement process.

The Brumby government and regulator introduced Statutory Endorsement which was not supported by the CMPA on the grounds that it was not proven that “additional benefits” would not be nullified through the potential increase in financial costs to its members, further restricting entry into the market.

The concerns covered issues such as

• Endorsement may not be forthcoming from a referral authority which would then require the applicant to apply to VCAT
• The Initial goodwill of referral agencies to endorse may become diluted following challenges at VCAT during the Planning Appeals process

It has been drawn to the CMPA’s attention that there will be a need for increased financial support and willpower to manage and oversee this process by the DPI for it to have any chance of success.

An early commitment from the Ballieu government to support a lead agency role of the department and the Statutory Endorsement process will require a review of the departments’ resources to ensure these outcomes are achievable.

If the status quo remains the additional roles taken upon by the department and obligations on the industry will result in further restriction of entry and the continued depletion of resources.

The significance of depleting resources has been clearly identified by the CMPA and the CCAA. Numerous customers in the concrete plant and earth works fraternity have approached CMPA members in recent times pleading for access to materials. Members have also advised us that their stock levels are at historical lows.

WORK PLANS, EIWA AND PLANNING PERMITS

The CMPA feels that Work Plans (WP) should only contain a physical plan demonstrating the site’s proposed activities. All other information relating to the activities to be undertaken on site, as previously detailed in WP’s, would comply with an industry and government standard tool, i.e. Code of Practice.

This would result in a far less complicated WP and appeals process. Work Plans would no longer have to detail information that was identified in the Code of Practice. Appeals to VCAT pertaining to the WP which were specific to the code would have to recognise that industry and government accept them as a minimum best practice.

ISSUING EIWA’S

It was not many years ago that an extractive industry license was issued with a range of terms and conditions attached. In recent times this has been replaced by the EIWA which has a diminished range of conditions, title particulars and other obligations including the securing of a rehabilitation bond and is issued by the department once a planning permit has been approved and any outstanding issues resolved by the applicant.

The CMPA proposes the EIWA is structured to address:

• Title
• An agreement between the EIWA holder and the DPI that the former agrees to comply to the approved work plan and the Code of Practice, and
• Rehabilitation Bond security

For this to succeed the DPI would have to define those items required on the work plan and those required on the planning permit to ensure that duplication does not occur. If this was taken up many items which are currently required on both the work plan, planning permit and EIWA would no longer be duplicated. The outcome would mean cost savings for all parties involved.

VARIATION OF WORK PLANS

CMPA is aware that there are exiting EIWA’s which will most likely never be worked out to their full potential as the WP variation process has become too onerous. Under the previous government additional obligations were placed upon the industry through the amalgamation of EIDA into the MRSDA Act.

These obligations cover issues such as the development of a community consultation management plan for new EIWA applications and any future WP variations.

Alterations on the site relating to reserve extensions would be seen as a work plan variation. As such the applicant has to consider the total cost to his business of having the variation approved.

Many obligations associated with the WP variation were not in place when the applicants’ EIWA was first approved. As a result of a plethora of new obligations being placed upon the industry in the last 15 years including Native Vegetation, AAV, and community consultation, means seeking a variation to a WP is far more complex and financially prohibitive for many EIWA holders.

Exacerbating this through the WP process, is that the EIWA holder may be required to fully overhaul the WP, picking up additional obligations and losing previously negotiated hard fought gains.

As a result many EIWA holders are unwilling to undertake variations and or apply for new EIWA’s. The cost complexity and unknowns involved has an impact on decision making and makes many question their presence and future in the industry – and business exits only further accelerate resource access and availability issues.

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