OH&S Products

Are we on an uphill road to approvals in the 21st century?

For proponents, obtaining extractive industry approvals in the past 10 years has become a game of cat and mouse around the interpretation of the legislation and regulations evolving from the principle mining legislation. There is no doubt tension between industry and government has also risen in regard to the time and cost of approval, as experienced in Victoria and South Australia.

The central thesis of this discussion is that regulators’ interpretation of the law, represented in guidelines and the approvals process, often exceeds the principal act’s requirements. This seems a consequence of society’s “green” influence on the political stakes and in turn pressure on our public servants.

It may also have been in part brought about by industry inadvertently upping the ante early in the decade in its forays into legal appeal forums. While industry may have had no choice, a proliferation of specialist reports desired by the “silks” and others such as councils, water authorities, etc inevitably followed.

A political vote winner has been the adoption of the ever increasing emergence of environmentalism in society: green is good. The outcome of this fervour has been the imposition of more governing legislation and the apparent unforeseen influence it has over the central Mining Act.

Most quarry operators acknowledge the need to look after the environment. However, the degree to which the approvals process seeks to engage proponents on a huge number of environmental, OHS and stakeholder levels is extremely costly and time-consuming, sometimes at the forfeiture of the project’s viability. A comparison of what large multinational companies and small operators have to do in the extractive industries shows they are remarkably similar in scope, regardless of the scale of operation or the strength of community resistance.

The resultant development proposals required by the regulators are “environmental” documents, not practical mining engineering and rehabilitation documents at all, and they often do not bare any relationship to the scale of the operations proposed.

How do we deal with this situation now?
Historically, the purpose of a mining act was to grant exploitation of minerals or stone within the confines of the mining tenement, of which the area inside a nominal buffer was understood by industry to be sacrosanct for extraction purposes.

In Victoria, the principle legislation is the Mineral Resources Sustainable Development Act 1990 (MRSDA) and Mineral Resources Sustainable Development (Extractive Industries) Regulations 2010. This is regulated by the Victorian Department of Primary Industries (DPI): Earth Resources Regulation, which has released at least six directly related guidelines. Further to this are at least eight acts relevant to the MRSDA that are explained in more than 19 guidelines, nine policies, and two standards.

Likewise, South Australia’s principle legislation is the Mining Act 1971 and the Mining Regulations 2011, with at least 15 directly related guidelines regulated by the SA Department of Manufacturing Innovation Trade Resources and Energy (DMITRE): Resources and Energy Group. There are 18 main acts associated with the Mining Act 1971, mentioning more than 26 guidelines, policies and standards.

The government policy of the day is meant to be reflected in legislation and determines how an industry might be shaped and operates in that environment. Legislation leads to prescribed regulations and subsequent guidelines are simply interpretations of the enacted laws.

In the past decade, “guidelines” framed to assist the extractive industry proponent to navigate the plethora of “requirements” under the act have erupted in number, size and complexity. What has emerged, however, is that much of the expansion of these guidelines’ content and size appears prescriptive, thereby introducing regulation by internal departmental “policy” drawn from the various interpretations or opinions of the legislation.

{{image2-a:r-w:250}}Guidelines are not law, but could be described as “preferred content” rather than prescribed regulation. The espousing of such “policy” advice might also be termed “procedure” or “protocol”.

In attempting to progress through the approvals process, proponents often encounter similar verbal advice based on “policy”, not legal fact.

Inconsistencies arise when dealing with regulators at different regional offices. Experience in Victoria and South Australia, particularly over the past 10 years, has shown that, depending upon the main issue(s) at hand, the departmental officer you’re dealing with and the potential for local sensitivity, the manner in which the matter is dealt with is often inconsistent with the same example elsewhere.

A matter of internal “policy” seems to emerge where interpretive or discordant interpretation of regulation appears.
So are we in a state of regulation by policy or policy by regulation? Currently it would seem the former.

In Victoria, Work Authorities (WA) are the main extractive industry tenement and require an approved Work Plan (WP) or WP variation for quarrying operations. Private Mines (PM), Extractive Mining Leases (EML) and Miscellaneous Purposes Licences (MPL) are the main tenement types for extractive mineral operations in South Australia which require a Mine Operations Plan (MOP) or Program for Environment Protection and Rehabilitation (PEPR).

Over time, as other legislation has impinged on the principle act, accommodations have been made. In the past 10 to 15 years, the notion of a move toward self-regulation has been apparent by regulators over a range of industries, including the extractive industry. Undertakings and conditioning within the proponent’s development plan and approvals documents has increased.

Extractive approvals (of the mining title and development plans) are all reliant on obtaining other permits/licences on numerous fronts including local council planning permits, surface and groundwater permits, Aboriginal and cultural heritage agreements (CHMP in Victoria/Part 9B in SA), native vegetation management plan approvals (Framework in Victoria/SEB in SA), EPA air, noise, water discharge licences and even possibly the Federal Government’s Environment Protection and Biodiversity Conservation Act. The notion of a one-stop shop has not — and probably will never — come into existence.

With numerous issues to be considered and possible agencies to be dealt with, it is no wonder the recent trends for regulation specifying community consultation has been met with reluctance or concern and is slow to be embraced by the industry.

Inside or outside?
A distinguishing feature of mining design of a mineral ore body is it can be made as “inside-out” compared with a quarry proposal that is “outside-in”. That is, a miner’s ore body is the central constraint that design and infrastructure moves outward from spatially within a comparatively large mining tenement.

However, extractive industry tenements are bound by small land titles, often in a populated area, where the resource often extends beyond these boundaries; hence, the quarry proposal is confined (by the land title boundary) so that all considerations must be dealt with inside a predetermined space. In the past decade, the cycle of extractive operation has been toward extensions of existing sites rather than greenfields proposals because this has been perceived as a simpler path.

The advent of extending a quarry has inadvertently created issues with the community which has in the meantime been allowed to encroach upon operating sites, bringing with it and magnifying issues of amenity, health and environment and all the regulation these issues impose. The resultant cry of “We thought the quarry would close!” indicates the planning authorities’ clear lack of forethought and understanding.

Flavour of the month?
Various phases of environmental issues have gained the forefront of regulatory issues in the past decade. For example, in Victoria, this has been through Community Consultation Plans, preceded by licensing of water storages or dams in quarries and before that the Native Vegetation Framework. The framework was not considered before Parliament and is adopted policy (by an interdepartmental Memorandum of Understanding), in which the concept and guidelines provide a questionable interpretation of the value of vegetation coverage, not allowing consideration of the value of other resources the land might be utilised for.

The most recent highlighted issue concerns what constitutes a safe and stable landform (s77J(1)(a)), an inadvertent impact on the extractive industry by the merging of the Extractive industries Act into the MRSDA – hence the DPI has been focused on developing a raft of guidelines regarding geotechnical input into work plans over the past few years.

A recent extractive industry proposal in the Melbourne metropolitan supply area was confronted with this issue, as policy on geotechnical issues became focused following the Yallourn Mine batter failure in 2007 (the collapse allowed the Latrobe River to flow directly into the brown coal mine near Morwell, Victoria). Originally, DPI provided a response requesting that a slope stability analysis be prepared, confirming the design slope as stable or calculating a suitable slope.

A year later, following geotechnical investigations and assessment, the design was amended to a lower slope and the proposal submitted for approval. The proponent was subsequently advised the design did not meet policy requirements at that time, focusing on preference of a certain Factor of Safety. A “guideline” was in preparation but would not be made available for the proponent.

Several iterations of “what if” propositions followed submissions of further requested information between both parties’ experts and agreed wording in the work plan. Meetings seeking resolution of the issue progressively escalated up the organisational hierarchy.

The matter reached a resolution after three years of negotiating understandings and consensus of opinion that had often faltered along the way following inconsistent or contradictory response from the regulator. The time delay and associated cost, including numerous reiteration of geotechnical modelling, was substantial to the project. The resources viability was significantly threatened by the accommodations and conditions imposed on the proponent.

The approval process suffered partly from occurring at a time when DPI could not offer an unambiguous position on the geotechnical issue at hand. This affected the consistency of responses, creating a perception of “policy on the run”. While there appeared no significant disagreement between the various expert advisers quantifying the parameters requested, the proponent was stuck in a “do-loop” of further requests with the regulator apparently unable to satisfy its internal policy position.

This was exacerbated by a sensitivity with the wording that would be deemed to be considered satisfactory; a case of policy thwarting the ability to make a timely decision. The final outcome also resulted in a situation compelling the proponent to make additional undertakings for an array of scenarios which were unlikely to happen.

The first geotechnical guideline draft was finally released in mid-2011 and sought to categorise sites by definition of their geotechnical risk. Following responses from industry and government advisors, this was abandoned for a completely rewritten second draft which advises a method of assessment of geotechnical risks. This version underwent initial consultation in April 2012 with industry groups and the DPI released the guideline in August 2012.

It is apparent there remains disagreement as to its approach, necessity and cost for many extractive industry operations. A difference in interpretation of what comprises “safe and stable” in standard practice and experience is clearly evident between the industry and the regulators.

It is noted that the geotechnical guideline proposes an offset distance of four times the final batter height that may be used, effectively widening the buffer zone. It also suggests that issues within the “geotechnical risk zone” might be alleviated by limiting the extraction area to reduce the geotechnical risk.

{{image3-a:l-w:250}}While these may be accommodated at greenfield sites proposals, difficulties are expected to arise in attempting to apply this guidance material to existing sites (with established buffer zones) or extensions to sites where the majority of current activity and future expansion exists. Considering the “outside-in” nature of quarries, these approaches may again only impact proposals by reducing the already scarce resource available and add pressure to project viability.

As described above, one difficulty in attaining timely approvals appears to revolve around the preferred wording of the regulating authority. Guidelines are often written as addressing requirements but tend to suggest a default format or methodology that will promote a smooth passage to approval. Unfortunately, industry experience shows that responses to submissions seemingly require recommended rewording and address issues that proponents consider irrelevant to the site. These responses often lack consistency with similar or identical situations of previously approved proposals.

This issue is exemplified in the setting of an environmental objective and criteria-based system in South Australia that was instituted in the Mines Act and regulations, and was particularly obligatory after the Private Mines Amendment Act in 2001. Formalisation of guidelines has undergone numerous iterations over the following 12 years between industry and government, which centred on the actual required content under the act compared with the preferred subject matter.

Only recently this was brought to a head for MLPs and PEPRs under ministerial determinations that now prescribe what must be provided. However, guidelines concerning MOPs still maintain input that is simply not required under the act and regulations.

It is not just the issue of content but rather how that content is presented that causes many problems. Over time, submissions have seemed to assume automatic draft status with the prospect of an inevitable request to modify.

A common issue is that agreement on the risk analysis and the wording that surrounds the setting of these objectives and the criteria bounces back and forth from the South Australian DMITRE without seemingly any prospect of appropriate resolution. Presentation of the information, whether in paragraph or tabular form, has also been an issue raised for modification.

Over the period, approval of specific wording has shown marked evolvements to a point now that objectives and criteria in “plans” of various kinds ratified only a few years ago would seemingly no longer meet the regulators’ approval now. This lack of consistency in general has added to the requirements at ever increasing expense. Additional costs of pre-commencement conditions (before cash flow), implementing and reporting monitoring and delay in obtaining the approval in the first place all potentially affect the market position of a proposal.

The extractive industry has always sought consistency and certainty. The timeline of commercial necessity rarely, if at all, equates to a bureaucratic one.

How to get the tick
Proponents should never lose sight that guidelines present an interpretation of the legislative requirements, ie the regulators’ preferred content and presentation. This may not necessarily all be prescriptive requirements. The difficulty remains in the regulators accepting your information and any associated undertakings in the form you wish to present them.

Planning ahead is therefore critical to the proposal from the outset. An optimal approach has been to identify the sticking point issues and work toward satisfying the response to a measured degree. Also, always, always, always anticipate an unexpected issue from left field.

It is suggested appeals forums should be avoided like the plague and only used as an absolute course of last resort should a project be rejected, not as a means of forcing issues. Spend the money on understanding your prime asset – your resource.

So are we moving to policy by regulation?
It is believed we may have come full circle in that more prescriptive regulation could be on its way back. The review of the South Australian Mining Act imposed changes and Ministerial determinations that prescribe what must be provided for development approval which may, somewhat paradoxically, provide certainty of content for some mining approvals/tenements.

Victoria is undergoing a similar review that is purporting to move toward a risk-based philosophy. Of the 25 recommendations of the EDIC report presented to the Victorian Parliament on Greenfields Mineral Exploration and Project Development, at least 17 are directly relevant to the extractive industry, including a whole of government approach, areas of high prospectivity for extractives, strategic land use framework and statutory timeframes under the act.

An opportunity therefore exists in Victoria for industry input to improve the interpretation of the legislation’s intent and better determining the appropriate requirements for extractive industry proposals.

As for the future? The industry has a penchant to tick off the boxes but is resilient in confronting challenges – it is expected adjustments will occur. But at what cost? In major capital cities, scarcity of resources is an enormous issue for this millennium due primarily to restriction of access.

It needs to be recognised that quarry resources are finite and as such resources need to be fully utilised, not partly sterilised.
Sources of sand and stone have and are likely to move further from metropolitan centres where they are required, resulting in a greater cost to the community who demand the products but have driven the industry away.

In the absence of any governmental regional exploration for extractives, it is expected the investment of time and cost to obtain new approvals will progressively be left with larger organisations that are purportedly able to afford this. While there are obvious issues of the geographical position of projects, one option may be to encourage concentration of operations in areas where appropriate resources occur and limit encroachment of incompatible land uses through the planning schemes.

Government policy should engender regulation that eases the opportunity for existing or identified resources to be optimised and limits the spasmodic location of quarries. In turn, the regulators should feel encouraged to execute the intent of the central mining legislation.

Chris Prowse is the principal consultant for CK Prowse & Associates Pty Ltd. The group conducts geological investigations, resource assessment, development design and project management for the extractive industries. Email: admin@ckpa.com.au

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