COLLATERAL DAMAGE The regulatory the cuts that slowly kill

A government inquiry into greenfields mineral exploration and project development in Victoria has been given a compelling insight into the multiple threats facing the quarrying industry. TOM MCKENNY reports

CALLED to present to the all party parliamentary committee, CMPA representatives, Ron Kerr, Bruce McClure, John Mawson and Basil Natoli, detailed the burgeoning demand for quarry materials and the myriad of threats that are locking up resources, stymie greenfield development and site expansion.

Of most concern is the lack of government resolve to secure future stone and sand reserves, forcing the industry further away from markets.

Mr McClure told the inquiry aggregate was already being carted from as far afield as Bendigo to Melbourne and that transport costs were rising. “It is adding anywhere between 15 to 20 per cent at the moment but as it gets worse as we run out of more materials we estimate that it could end up being higher than a 35 to 40 per cent cost increase because of lack of materials that you can source directly. The further you have to cart it the more expensive it becomes.”

Urban development and poor planning had seen reserves that should have been set aside for future development sterilised or taken up for residential or commercial development.

Mr Kerr said unless government determined to secure resource reserves, or issue or extend work authorities companies would be forced to look further afield for resources.

Mr Natoli explained the 1972 scenario with the Mines Department (under the Extractive Industries Act) being proactive in identifying and protecting resources.

“That work probably stopped in the mid1990s. There is no longer a role within DPI to either identify and protect resources or to even keep and inventory of the current resources available to the community. They were wanting to save costs,” he said.

The precipitous position of the industry was highlighted. Geelong was almost out of stone in 2003 and special deputations were needed to the then Minister of Planning to extend a quarry. “… the extension application for that quarry had to go through an EES and an EPBC process and it is still not resolved,” Mr Natoli explained.

“They have a minor extension to get themselves a short term supply which has just about run out now and they are still trying to get the finalisation of this EES process and also the federal process as well.”

Committee member Inga Peulich (Lib) wondered why resource security planning had been halted. Mr Natoli said he believed it was a result of the earlier Mines Department work being so effective, but that “people forget that at 10 tonne per head per year if Melbourne goes to five million people it will be 50 million tonnes a year and that is an awful lot of material.”

The pressures and costs associated with obtaining a work authority were highlighted by the delegation.

Mr Kerr said the industry was strangled by red tape. “In the last 10 years the sector has been buried by a plethora of new and advanced legislation requirements that make entry into the game just about impossible. So you have a dying industry from the point of view of lack of access to resource … but you have also got this other side of not having an identified resource.

“Then you put in all the overlays – by the time you place your overlay of 100 to 200 meters off a watercourse then the AAV on top of that which is another 200 metres, plus all your roads and plus your 500 metres on all housing plus 500 metres on all areas which has titled, say national parks, you are suddenly left with a block about the size of a 10 cent coin.”

The chairman, Neale Burgess (Lib) considered whether the industry had suffered “collateral damage from governments trying to protect other things.”

Mr Mawson said the collateral damage was the result of urban growth pressures. “The urban sprawl has advanced at such a rate that it has overtaken any areas around the periphery that may contain viable resources and that should have been set aside.

“I think the thing to remember is that what we need at one point and what we need to set aside now in terms of area is bigger than what it was 20 years ago before we had so many other overlays and buffers zones required.”

Mr Kerr said it was not only resource security impacting the future of the industry, but marketplace entry that was “being eliminated”.

“The right of access is being removed … and a small family business would be thinking ‘why are only those with a couple of million dollars able to do that’?”

Martin Foley (Lab) questioned whether rural areas were also feeling similar pressures to the urban areas, particularly urban growth and expansion.

Mr Natoli said the key impacts on rural operations was native vegetation framework and the Cultural Heritage Act, “they would be two of the biggest killers that are very much adding to the cost and the time of getting the approvals through.”

The inquiry chair, questioned whether the CMPA had considered mechanisms for addressing the issues facing the industry. Mr McClure said the CMPA was seeking “balanced regulation”.

“We all realise we have our regulations but at the moment they are simply not balanced. We believe that really needs to be addressed. The other thing I want to touch on is that with work authority proposals there has been an 87 per cent decline in these applications since 1979.”

Mr Mawson added that Work Authorities were subject to multiple impacts and “might be knocked back by any one of the referral departments. That could be local government, it could be DPI, it could be DSE … if you trip on anything you are out the door and then the whole legal thing opens up if you have the nerve and resources.”

Ms Peulich questioned whether post-quarrying impacts, namely landfills would stymie councils allowing developments.

Mr Kerr responded by suggesting the economic value of a quarry was also often overlooked, while Mr Natoli said landfills were an obvious result of our lifestyle choices.

“I think [there is] a clearly limited understanding of the returns that come back into the community from quarries. I would suggest a500,000 tonne quarry would probably have a wages bill in excess of $1.5 million without all the indirects of drilling, welding and transport.

“There is a lot of activity … that is bringing revenue back into the state, whether it is PAYE or other forms of taxation at state and federal level.” Mr Natoli said councils once insisted on obtaining the landfill rights to exhausted quarries.

“That was commonsense; that saved the community – the ratepayers – money, and some of the councils made squillions of dollars out of it.

“If a proper protection buffers is put around the extractive resource in the first place there is no reason why you cannot have both. To me that is fundamental to … long term planning for the use of these resources because it is a win-win situation.”

“A large number of inner city reserves and parklands are filled quarries. They are current assets for the community. If you look far enough ahead and do the planning and the protection for it, then everyone can win in that process. But if you get greedy and people subdivide and put house up against the boundary you will end up with conflict these days.”

The CMPA delegation took the opportunity to reiterate the major issues causing the industry grief and also detailed impacts including native vegetation prescriptions and crown land rehabilitation bond requirements in comparison to private land bonds and cultural heritage assessments.

Mr Natoli said CHMP had been mooted by the department to cost up to $5000 when first instigated but now cost up to $100,000 if an artifact was found – or, as often is the case, only fragments of artifacts.

“In Western Australia those fragments are not classified as artifacts, whereas we have developed an industry in finding useless bits of stuff and doing massive reports on almost nothing.”

Mr Kerr suggested costs mooted by government when legislation such as CHMP was introduced should be assessed and redressed if they are found to be having completely different economic impacts later.

“When regulators put things forward they are putting them forward with rose coloured glasses to get their policies forward, I am saying that we need to look at the evidence at say, ‘the cost we originally said doesn’t stack up with the cost that is actually happening’, I do not think that is an unreasonable outcome.”

Mr Natoli said the native vegetation process for example, was never before Parliament, and was adopted policy. “The whole concept behind the process is an ideology; it is not science,” he said.

Money is being spent in tying up the Trust for Nature blocks and covenants on many thousands of hectares across the state being set aside as reserves which is tying up valuable commodities.

Native vegetation reduction is a fact, Mr Natoli said, “but we have a population of how many million people and we have to provide food and resources for them and land to live on.

“When the framework first came out the concept was to return Victoria to 1850s vegetation coverage which to me is absurd.”

Mr Kerr added that the vegetation had been assigned a value by the state but not the possible stone or sand reserves they tied up. “From the point of view of an environmental footprint to push the material an extra 100 kilometres to the market, or to remove a tree, it seems to me that that if we have to play this game, the field should be level and there should be an identified value for the rock as well.”

In noting that the inquiry had chosen to have a question and answer discussion instead of formally hearing the CMPA’s submission, the inquiry requested a copy of the CMPA document.

In concluding and summarising proceedings, Mr Kerr said “regulators and policy should be in the same world but it seems one is always stronger than the other. We have to as a state have a clear understanding of what we want. Do we want future access for resource? Do we want a resource there for future generations and are we willing to look out past 20 or 30 years?”

Mr McClure said the lack of understanding of planners was of concern. Recent urban growth corridor plans did not contain any quarries. “I think the problem is there is no understanding within the community and local government area and among the planners and even within government departments of the need for viable product close to the market.”

Mr Mawson said the challenge was across all government departments. “So many are involved in this process you can find that the level of knowledge in any particular one is inadequate and they can almost work for conflicting purposes while everyone is trying to achieve the common good.

“We have to find that balanced regulation in the middle ground which will require that departments work proactively and together come up with the right access to resources.”

Mr Mawson said Victoria had taken a step backward by incorporating extractive industries with mining. “The impact on the environment, the size and the scale of the impact on road traffic and all the local government issues are quite different.

“Following the model elsewhere in the country which has bought the extractive industries under the Mines Act, and developing the Mineral Resources Sustainability Act has actually been a negative step.

“We need to have a head department; one that is responsible to coordinate the whole thing and ensure that the other departments … are fully informed and aware of the issues.”

A full copy of the CMPA submission and transcript of the Inquiry can be found at: http://www.parliament.vic.gov.au/edic

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