On 13 September 2016, the Queensland Government tabled the Environmental Protection (Underground Water Management) and Other Legislation Amendment Bill 2016 (Qld) (Underground Water Management Bill). The Underground Water Management Bill seeks to overhaul the existing water licence regime to better manage the environmental impacts of groundwater take and to protect the interests of farmers and other landholders. The proposed laws would apply to new environmental authority applications for resource activities that include groundwater. Existing projects undergoing assessment would be captured by transitional environmental impact provisions comparable to the framework proposed for new projects.

Key changes

The Queensland Government’s proposed reforms set out to:

  1. strengthen the initial environmental assessment of resource projects involving underground water extraction;
  2. allow for ongoing scrutiny of underground water extraction during the operational phase of resource projects;
  3. improve the make good framework in the Water Act 2000 (Qld) (Water Act); and
  4. introduce appropriate assessment and third party appeal rights for advanced mining projects yet to secure water licences.

1. Initial environmental assessment

Under the proposed changes, environmental impacts of groundwater extraction for new projects will be addressed as part of the environmental authority application rather than a separate water licence process. This will result in a single environmental authority covering groundwater and other environmental impacts. Resource companies will be required to detail any proposed exercise of underground water rights, detail each aquifer affected by the activity and submit an analysis of the predicted quantities of water to be taken and any impact on the quality of groundwater.

2. Ongoing scrutiny

The reforms propose to amend the existing underground water impact reporting regime under the Water Act by requiring resource companies to report on past and predicted future impacts on environmental values. Those reports will be used to assess whether the initial conditions of an environmental authority are adequate to regulate environmental impacts to groundwater during the operational phase of resource projects. Changes in past or predicted impacts may trigger an amendment of the environmental authority.

3. Make good framework

The Underground Water Management Bill proposes to amend Chapter 3 of the Water Act to require resource companies to pay a landholder’s reasonable costs in engaging a hydrogeologist for negotiation of a make good agreement. Resource companies would also be required to bear the costs of any alternative dispute resolution in the make good agreement negotiation process. This is in addition to the existing requirement to cover the landholder’s reasonable accounting, legal and valuation costs. Moreover, the Underground Water Management Bill seeks to reinforce make good obligations in the context of water bores. Obligations will be triggered if a bore is impaired by free gas. The proposed threshold test for impairment is if there is a likelihood that the exercise of underground water rights is the cause of, or material factor towards, impaired water bore capacity, regardless of whether there is some scientific uncertainty. Resource companies will also be required to meet the hydrogeologist, accounting, legal and valuation costs of bore owners. The reforms propose a cooling-off period to allow either party to walk away from a make good agreement without penalty.

4. Assessment of advanced mining projects

Mining projects which have proceeded part way, or completely, through the environmental authority and mining tenure application process will not be subject to the new upfront assessment requirements proposed by the Underground Water Management Bill. However, transitional arrangements are proposed under the Mineral Resources Act 1989 (Qld) and the Water Act to provide for a separate associated water licence that will involve an environmental impact test comparable to that proposed for new resource projects. The Queensland Government explains that this will ensure environmental scrutiny of groundwater extraction impacts while offering stability to resource companies with assessment on foot. Associated water licences will be subject to third party rights to be heard, the right to make submissions and the right to merits based review. Upon being granted an associated water licence, it is intended that a resource company will not be prevented from taking water by the instigation of the review process.

Timetable

The Underground Water Management Bill has been referred to the Agriculture and Environment Parliamentary Committee for review. Subject to further amendments and the Bill being voted into law, the substantive aspects of the Underground Water Management Bill will commence immediately after the commencement of the final provisions of the Water Reform and Other Legislation Amendment Act 2014 (Qld). Those provisions automatically commence on 6 December 2016.