Key Points:

Stakeholders should consider making comments on the draft policy documents for the second stage of NSW Government's Integrated Mining Policy.

The NSW Government has now released the second stage of its Integrated Mining Policy (IMP), with a focus on audit and reporting, development contributions and water regulation.

This follows the release of Stage 1 on 28 May, which related primarily to the development application process for State significant mining and coal seam gas (CSG) projects. The public exhibition period for Stage 1 finished last month. Stage 2 is open for public comment until 7 September 2015.

Stage 2 documents

The second stage of the policy package includes exhibition of:

  • Post Approval Guidelines ‒ Web-based Reporting Framework;
  • Post Approval Guidelines ‒ Annual Review;
  • Post Approval Guidelines ‒ Independent Audits;
  • Planning Agreement Guidelines; and
  • Water Regulation and Policy Paper.

Independent Audit Guidelines

Mining and CSG operators are often required to undertake periodic independent audits. These requirements may be imposed under the conditions of their development consents, or by a regulator, such as the Department of Planning and Environment (DP&E), the EPA or the Department of Trade and Investment's Division of Resources and Energy, in the exercise of its compliance and enforcement functions.

Key features of the Independent Audit Guidelines include:

  • Audits should be conducted by an independent audit team which has not provided services to the project previously, if the audit would involve reviewing work done by the auditor or his/her company. Any previous work by the proposed audit team in relation to the project must be declared to the relevant regulator.
  • Audits may assess compliance with legislation, approval requirements, assessment documents and management plans, and administrative obligations, as well as other matters which the regulator specifies.
  • Audit assessments should rate compliance on specified criteria and include a risk analysis of any non-compliances according to their environmental significance, using a prescribed risk matrix.
  • The audit should involve consultation with various regulatory agencies and the Chair of any Community Consultative Committee for the project, unless otherwise agreed with the lead regulator.
  • Audit reports should be distributed to relevant agencies and the relevant local council within two weeks of being finalised, and a copy should be placed on the project website. In addition, the project operator should prepare a response to the audit and an action plan within four weeks of receiving the final report, and this too should be placed on the project website.

It is worth noting that the Independent Audit Guidelines are not limited to mining and CSG projects, and so they could apply to other State significant development as well.

Annual Review Guidelines

Operators of State significant mine and CSG development typically are required to prepare annual reviews which summarise the performance and operation of the mine during the reporting period. Previously, mining operators would rely on the expertise of their environmental consultants to prepare the annual review (in accordance with the relevant review requirements).

The Guidelines specify content and procedural requirements for annual reviews. They also state that the review should describe any measures to be implemented over the next 12 months to improve environmental or community performance.

Web Reporting Guidelines

The Guidelines state that mining and CSG operators should establish a project website (which many operators already have) and then set out an extensive list of content expectations for those websites.

Planning Agreement Guidelines

Voluntary planning agreements (VPAs) are statutory agreements between the mine or CSG operator and a regulator (usually DP&E or the relevant local council), which set out material public benefits which the operator will provide in connection with the project. A condition of the project's development consent usually requires compliance with the VPAs.

The Guideline provides extensive guidance on the kinds of contributions which a VPA for a mining or CSG project may cover, and sets out four principles governing the negotiation of a VPA.

Among other things, the Guideline emphasises the importance of considering the impacts of the mine or CSG project over its lifetime on the local community.

The Guideline also states that it should be read in conjunction with DP&E's Practice Note for Planning Agreements 2005 which provides advice around the use of VPAs and the legislative framework, as well as a draft template VPA.

Water Regulation and Policy Paper

This Paper provides a useful overview of the water regulatory and policy framework for mining and CSG projects, and also outlines the roles of relevant regulators in this regard.

This is a welcome addition to the water regulatory guidance materials. It provides clarity in an area which is particularly complex, as indicated in the Aquifer Interference Policy which was released several years ago.

What's next

The Stage 1 and 2 materials provide some clear guidance for mining and CSG proponents on how to obtain approval for a project, and then comply with the many regulatory requirements for that project.

They also raise the bar in terms of regulatory practice and expectations of proponents.

Key documents which the Government has proposed but not yet released include:

  • Guidelines for the Economic Assessment of Mining and Coal Seam Gas Project; and
  • standardised development consent conditions.

The current draft documents contain important policy positions on key issues in the assessment of mining and CSG proposals. Proponents, project operators and other stakeholders should review the documents and consider making submissions.