FROM THE CMPA SECRETARIAT (Issue 56)
Is there light at the end of the tunnel?
CMPA General Manager, BRUCE MCCLURE, re-visits rehabilitation bonds and it’s imposition on the industry.
THE current application of rehabilitation bonds remains unsustainable and is creating a financial impediment for many of our Members businesses’. As a result the CMPA has kept this issue on our radar over the last decade.
Most recently, the CMPA has been part of a Rehabilitation Bonds Working Group which is assisting the DPI’s deliberations as to how to better meet the state’s perceived risk while minimising the Work Authority holder’s burden.
This is part of the review of the Mineral Resources (Sustainable Development) Act review and it is expected that the DPI will be releasing a discussion paper before this edition of Sand & Stone is released.
Following are extracts from the CMPA’s submission to the Working Group:
“The foundation of the CMPA in 1999 was largely built on the egregious nature of rehabilitation bonds imposed on the industry at the time, and the financial pressure being placed upon industry participants with a rise in rehabilitation bonds from 1995 to 1999 of approximately $5million to $20.2 million. Now some 11 years down the track with rehabilitation bonds now approaching $70 million, it seems little has changed.
The rehabilitation bond system was originally established to ensure that worked out licensed areas were left in a safe and stable condition and the financial risk to the community and environment was covered. It has become increasingly obvious to the CMPA that this original objective has expanded over time imposing unjustifiable costs upon the industry.
Recent increases in the bonds for many CMPA members have destroyed their capital acquisition activities as the DPI-perceived liability has tied up assets in security for the bank guarantee. It is also creating a financial impediment for entry into the industry by new applicants. It needs to be recognised early in this debate that there are many fundamental differences between the extractive and mining sectors.
There is clear evidence that extractive sites which are terminal or unviable are acquired by others as they have further commercial life. This is supported by the limited number of calls on rehabilitation bonds being made by the DPI for the extractive sector since the inception of the EIDA in 1966. To then link the extractive industry to the mining industry to justify the present rehabilitation bonds being placed upon them is neither accurate nor justified.
The question must be asked – why is the government nominating itself to be the final port of call to undertake the rehabilitation of extractive sites when the government has had no financial association or return with the activity throughout the site’s life whilst there are many other parties who have had financial interests but who are presently not drawn to account (i.e. land owner/manager, and any others who have a vested financial interest)?
The Association sees great benefit to both the government and the industry if the following three conclusions were brought forward as key discussion points and a definitive position established by the government for the extractive sector before any further decisions are made.
- The land owner/manager needs to be jointly accountable with the Work Authority holder for rehabilitation risks, thereby lowering the risk upon the government.
- The assessment tool should be restricted to ensuring the site is left in a safe and stable condition.
- The value of the site with respect to rock reserves, generated airspace, position, and permits held should also be taken into consideration within the assessment tool as offsets.
In conclusion, despite numerous studies conducted by Government and organisations such as the CMPA we still have not sorted out a system that is a win/win for all. To impose a system that currently ties up both bureaucratic systems and capital which could be used to upgrade plant equipment, to enhance a business by employing more staff and generally benefit the community beggar’s belief. ”
COUNTDOWN TO ECHUCA MOAMA AGM & DINNER 2011
The CMPA AGM & Dinner 2011 in Echuca Moama is fast approaching with extra activities across the weekend now finalised, it looks like being an enjoyable weekend.
The Associate Sponsorship is almost fully subscribed and the entertainment is booked. There is now only three months to go, so it’s very important to book your weekend away now to avoid missing out on a place of your choice.
Refer to the following website for all your accommodation needs www.echucamoama.com
If you haven’t already, put this date in your diary here are the details:
Date: Saturday 27th August 2011
Location: Moama Bowling Club
Time: 5.00pm for AGM, 6.00pm for Dinner
Cost: CMPA Members $95.
The extra activities across the weekend include:
- Paintball
- Breakfast at Star Hotel, Echuca
- Golf, Ambrose event
- Paddlesteamer cruise
Invitations to the big event will come out in the second half of June 2011.
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