Minister for Resources – Letter to CMPA Members

In response to the ERR media release dated 14 February 2020 “Better site rehab to underpin public confidence”, the CMPA Management Committee asked Members to send letters of concern to the Minister for Resources Jaclyn Symes MP. Below is her response to CMPA Chairperson Garry Cranny.

I write to you to address the matters raised in letters received recently from CMPA members following Earth Resources Regulation’s media release, “Better site rehab to underpin public confidence”. I have also responded directly to your members’ letters and appreciate their interest in taking the time to write to me.

I acknowledge the past context for the regulation of quarries, including the merger of the extractives and minerals laws, legislative changes requiring work plans that address quarry site risks, and the more recent regulations governing the operation of quarries.

Over the last few years, the Victorian Government has instigated actions to improve the regulator’s decision‐making and procedures in response to the Commissioner for Better Regulation’s report, Getting the Groundwork Right, which was developed by Commissioner Anna Cronin through close consultation with the CMPA and other industry participants. Significant improvements have been delivered for assessing work plans and work plan variations, as well as introducing the new ‘notifications’ pathway.

As a result, the regulator doubled the total number of approvals for quarries last financial year, compared to the average over the previous five financial years, with 100 per cent of the decisions made within the relevant statutory timeline. A total of 76 work plan approvals were granted between 1 July 2013 to 30 June 2018, resulting in an average of 15 per year. By comparison, a total of 30 work plan approvals and notifications were made in the 2018‐19 financial year, including 15 quarry works changes via the new fast‐track notifications pathway. The regulator is well on track to exceed the established performance standard to make 95 per cent of decisions within the tight statutory timelines in the current financial year.

The notification pathway also provides a much cheaper and quicker way for industry to make site changes. Operators have been able to prepare notifications in less than three months, whereas variations have previously taken from six to 24 months. Similarly, the cost for operators to prepare a notification now ranges from less than $1,000 to $75,000, compared to similar variations that used to cost industry between $10,000 and $500,000.

It is therefore great to see that a number of quarry operators, including CMPA members, have already taken the opportunity to adjust their operations in response to market demand and site conditions, such as the Lima South, Dandy Premixes Grantville and Barro quarries.

We are well aware that the demand for resources in Victoria is continuing to grow rapidly. To ensure access and supply of these materials, the resources need to be secured through proactive resource, land use and transport planning, in conjunction with councils, local communities and the regulator.

Failing to ensure that a sufficient supply of extractive resources is available within close proximity to our growth areas and infrastructure projects will significantly impact the cost of constructing affordable houses, public infrastructure and other private sector developments.

The Extractive Resources in Victoria: Demand and Supply Study 2015‐2050 identified areas across the State with potential extractive resource shortfalls in the future. It found that 34 per cent of demand for extractives in 2050 will need to be sourced from quarries not yet built or planned.

This is why the Victorian Government is investing $13.3 million over the next four years in strategic resource and land use planning to secure areas with high quality extractive resources. This important work is proceeding under the oversight of the Extractives Taskforce, including the CMPA’s representative, and is a key ongoing priority for the department.

I recognise that more needs to be done to improve the timely collection, verification, analysis and public release of data for the quarry sector, which could potentially include resource reserves and production data in the future. This will require close collaboration between the sector and the regulator to develop and deliver an effective and efficient approach. At the same time, I appreciate the regulator’s decision not to divert available staff time from assessing work plans and other priorities in order to extract past data from paper records.

More broadly, the Victorian Government is making an unprecedented investment of over $107 billion over the next ten years in constructing major public infrastructure across the State over the coming decade, which is generating strong and sustained demand for CMPA members and other operators in the extractives industry.

The success of these regulatory improvements and substantial government investments hinge on continuing community confidence in the quarry sector and its regulator. The commitments made at the start of a quarry project must be fulfilled when extraction finishes, and a site is rehabilitated.

I understand that this has not always been the case in the past – some quarry operators have not fulfilled their obligations and the regulator has not held them to account by requiring them to complete their site rehabilitation or called in the bonds to complete the work. The Regulatory Practice Strategy for the Rehabilitation of Earth Resources Sites and the regulator’s media release highlights the actions that are being taken to improve site rehabilitation outcomes and ensure public confidence in the sector remains high.

The media release does not assume or assert that the extractives industry has been negligent in its rehabilitation obligations. Instead, the release points to the Royal Botanic Gardens in Cranbourne, Newport Lakes and Niddrie’s Valley Lake as excellent examples of rehabilitated former quarries. As an action under the strategy, the CMPA’s Executive Officer and other industry representatives have been invited to put forward other examples of good site rehabilitation, which will be shared across the sector and wider community.

I encourage the CMPA to take this opportunity to highlight the work of its members.

Other actions under the strategy include establishing guidelines for site rehabilitation and closure, updating rehabilitation bond calculators, conducting an orderly program of bond reviews starting with the highest risk sites, improving the regulator’s internal governance and procedures, and balancing education and enforcement activities. The regulator will work with the CMPA and the quarry sector to tailor the rehabilitation requirements for quarries, rather than treat them like mines or any other resources project.

The strategy also clarifies a range of regulatory settings sought by quarry and other industry representatives, including: ‘minimising’ the State’s exposure to rehabilitation liabilities rather than setting it to zero; being specific about regulating rehabilitation for a safe, stable and sustainable end landform, not land use; and not linking bond reviews to minor work plan variations or notifications. Additionally, the strategy seeks to harness operators’ commercial drivers to optimise their resource production and rehabilitation works, particularly by providing an option to review and adjust rehabilitation liabilities and bond annually. It will be rolled out in an orderly and progressive way over the coming years, starting with sites that have known rehabilitation issues.

At this stage, the regulator has deferred consultation on an update to the bond calculator with its Stakeholder Reference Group, which includes the CMPA’s representative, pending clarification on the impacts of the COVID‐19 pandemic on quarry businesses.

I trust that the adoption of the rehabilitation strategy will assist all operators to understand their regulatory obligations for site rehabilitation. I also acknowledge the ongoing efforts and positive results of many quarry operators to rehabilitate their sites.

The ultimate outcomes for all of us are a sustainable and productive extractives industry, the protection of the environment, and the ongoing confidence of the Victorian community.

Thank you for your continuing interest and engagement in these important matters for the quarry sector and the State.

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