MERGING QUARRY LEGISLATION INTO MINING

A Benefit…or a Burden?

Merging raises concerns about duty to consult and rehabilitation liability reports SARA H ANDREW, CMPA Project Manager.

DPI released a consultation paper on August 14 considering how it will progress the proposed ‘Resources Industry Legislation’ – i.e. merging the Extractive Industries Development Act and the Mineral Resources (Sustainable Development) Act. Following is the CMPA’s submission sent to DPI on August 29.

The CMPA fully supports the submission made by the Victorian Limestone Producers Association. A key outcome of the CMPA’s ‘Statement of Purpose’ is to demonstrate our commitment to the:

• Viability of the industry;
• Protection of the environment; and
• Community in which it exists.

Our Members are small to medium enterprises (SME). Such SMEs are the driving force behind the extractive industries and hold a substantial percentage of the state’s tonnage output. These operations are responsible for all new Work Authority applications made in the last two years and the majority in the last 10 years.

Having had [business] ten days to consider the consultation paper, we have not had the opportunity to consult in depth with all our membership to assist [DPI] in [their] deliberations. That said, from the limited consultations that have been undertaken we have identified three areas that Members totally oppose – namely ‘Duty to Consult’, ‘Rehabilitation’ and ‘Merging’. CMPA contends that changes proposed in the consultation paper will further reduce sustainable viability of these SMEs.

DUTY TO CONSULT

CMPA Members contend that introducing a further ‘Duty to Consult’ obligation beyond that currently enshrined in the planning process will result in significant additional financial imposts. This will severely jeopardise our Members’ sustainable viability, as they will impact most adversely on SMEs who are unable to amortize such costs over their limited tonnage outputs.

Concerns regarding this additional obligation are highlighted by increases in legislative obligations for referrals over the last five years, which have already created an unpredictable and prohibitive financial impost, driving the number of Work Authority applications down.

We would welcome the opportunity to work with the DPI to address the perceived information asymmetry that apparently gives rise to this proposed duplication.

We have enjoyed working with the DPI to ensure the long term viability of SMEs in the extractive industry.

A previous example of the DPI and CMPA working in such a cooperative partnership has been the upgrading of OHS management which efficiently and cost effectively addressed the issues at hand.

In the absence of an opportunity to redress the proposed duplicity of obligations, our Members will be confronted with unbearable financial imposts that will negatively impact upon their businesses’ to the probable extent of undermining their viability.

Our Members have reiterated the consequence of this scenario in that there will be a reduction in the number of Work Authority applications and thereafter a shortage of construction materials to meet the State’s ever increasing population and increasing needs which will create a less competitive market.

REHABILITATION

Our Members do not support increasing their liability exposure to “any potential long term degradation”, introducing self assessment, and ceasing to return the rehabilitation bond within six years.

Such changes will further jeopardise their sustainable viability, and will place inequitable and unfair outcomes upon SMEs as it is not definable, it is not limited in time, there are increased operational charges, there is no closure, the DPI has no accountability and redress is not provided for.

The Association maintains a continued interest in alternative methods to providing the security for the rehabilitation bond liabilities and again looks forward to working with the DPI on any regulations which are developed whereby it is hoped this issue can be more satisfactorily addressed.

MERGER

CMPA contends that the Extractive Industries Development Act has enhanced the quality of operator and the diversity of providers throughout the State since its inception in 1966.

The “Review of the efficient regulation of Victoria’s extractive industry” did not give due consideration to the significant value gained by the State in maintaining a separate Act.

Victoria enjoys a distribution of ownership not equaled in any other state resulting in a highly skilled workforce and competitive market. CMPA feels that opportunity may have been lost as a result of focusing solely on merging the Acts.

Unproven issues and the resultant regulatory changes have been put forward in an attempt to address merging more so than improving legislation for the extractive industries.

Merging the EID Act into the MRSD Act to be consistent with other jurisdictions should not be the sole reason for decision making, especially where it will:

• Increase our duties and therefore red tape;
• Create industry and community confusion;
• Remove the appropriate ‘light touch’ regulatory approach; and
• Create additional and unnecessary fiscal imposts.

There are issues within the consultation paper that are supported by the CMPA, and others raised previously that need to be addressed.

Those within the consultation paper:

• Codes of Practice within the extractive industry
• Changes to Work Plan requirements linked to Codes of Practice
• Work Authority – landowners consent
• Transfer and splitting Work Authorities

Those raised in the past:

• Protection and efficient use of resources
• Whole of government agreement reached for DPI to be the lead agency for approvals
• Royalty scheme be reviewed
• Prevention of Work Authority encroachment

SUMMARY

Discussion with Members has identified the duty to consult and changes to rehabilitation as the most contentious of those encompassed in the proposed merger of the EIDA and MRSDA.

We respectfully submit that government should recognise our locally based, private capital membership is a mainstay of the affordable housing and commercial construction industries that have enjoyed unparalleled growth over a prolonged period throughout Victoria.

In addition, our SME Members also provide governments; be they state, local or federal (in the case of jointly funded infrastructure projects); with the most affordable construction materials necessary for our ever expanding Victorian road network.

This currently occurs in a highly competitive business environment that enables our end-user community to be the ultimate beneficiary of the invaluable balance between private and corporate extractive industry interests.

This balance stands to be severely disrupted, if not totally undermined if the current EIDA and MRSDA merge proposal is implemented.

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