What has happened?

Parliament has passed legislation that imposes a federal layer of environmental approval on coal seam gas (CSG) and large coal mining developments that have a significant impact on water resources through the introduction of a new matter of national environmental significance (MNES). The Department of Sustainability, Environment, Water, Populations and Communities (SEWPaC) has also released the ‘Draft significant impact guidelines: Coal seam gas and large coal mining developments—impacts on water resources’1 (Guidelines) in relation to the new MNES.

The Environment Protection and Biodiversity Conservation Amendment Act 2013 (Cth) (EPBC Amendment Act)2 (see our previous alert on the Environment Protection and Biodiversity Conservation Amendment Bill 2013 (Cth)3). The EPBC Amendment Act commenced on 22 June 2013. It amends the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) to insert sections 24D and 24E, which create a new MNES in relation to water resources.

Who needs to know?

Anyone who has in interest in a coal mining and coal seam gas project located in Australia.

Details

The EPBC Amendment Act requires CSG and large coal mining developments, which may not have been captured by pre-existing controlling provisions, to undergo federal assessment and approval to ensure the protection of water resources. Before this amendment was made, projects with water related risks could only be regulated if they had flow on impacts to existing MNES, such as nationally endangered plants and animals.

Since 2012 these projects have been referred to the Independent Expert Scientific Committee (IESC) for advice on their impact on water resources. However, prior to the commencement of the EPBC Amendment Act, the federal Minister for Environment (Minister) did not have the power to consider and impose conditions directly relating to impacts on a water resource itself.

The EBPC Amendment Act does not change the role and function of the IESC, and does not affect the National Partnership Agreement that requires signatory State governments to seek and have regard to the IESC’s advice in determining whether to grant State approvals for mining and CSG projects. The amendments do enable the Minister to impose water specific conditions on large coal mining and CSG projects.

Transitional arrangements and effect on existing projects

The amendment does not apply to actions already approved under the EPBC Act. However, if an approved project is substantially changed or extended, the new MNES may apply if the project is likely to have a significant impact on a water resource.

The amendment will also not apply to an action which has already been the subject of a decision under the EPBC Act that it is not a controlled action.

However, if any CSG or large coal mining project has been determined to be a controlled action, but has not yet been approved, the Minister must decide if the new water trigger will apply or not to that project. SEWPaC has indicated that approximately 60 projects are likely to be in this situation. The Minister has 60 days from 22 June 2013 to decide whether the project requires approval in relation to the new water trigger. The Minister then has to advise and consult with the individual proponents affected on the proposed decision for a period of 10 days before a final decision is made.

If the Minister decides that the new provisions do apply to the proposed action, impacts relating to the new MNES will be considered in deciding whether to approve the action and whether to impose conditions under Part 9 of the EPBC Act. While this does not mean that proponents must re-start or repeat any aspect of the assessment process carried out to date, it may mean they need to undertake additional work, and incur associated expenses and delays, in order to prepare new information to assess the development’s impact on water resources.

Draft significant impact guidelines: Coal seam gas and large coal mining developments - impacts on water resources

On 19 June 2013 SEWPaC released Guidelines that aim to provide guidance around the application of the new water trigger to current and future developments. The purpose of the Guidelines is to assist any person who proposes to take an action which involves a CSG development or a large coal mining development to decide whether the action has or is likely to have a significant impact on a water resource. The Guidelines assist in determining whether or not a proponent should submit a referral to SEWPaC for a decision by the Minister on whether assessment and approval is required under the EPBC Act.

The Guidelines outline a ‘self-assessment’ process, that includes criteria, to assist persons in deciding whether or not a referral is required. The criteria are intended to provide general guidance on when actions will and will not require assessment and approval.

The Guidelines provide that a ‘significant impact’ is an impact which is important, notable, or of consequence, having regard to its context or intensity. Whether or not an action is likely to have a significant impact is independent of the size of the water resource, and depends upon the sensitivity, value, and quality of the water resource which is impacted, and upon the intensity, duration, magnitude and geographic extent of the impacts.

For a significant impact to be ‘likely’, it is not necessary for it to have a greater than 50 per cent chance of happening; it is sufficient if a significant impact on a water resource is a real or not remote chance or possibility.

The Guidelines provide that an action is likely to have a significant impact on a water resource if there is a real chance or possibility that it will directly or indirectly result in:

  • a substantial change to the hydrology of a water resource, or
  • a substantial change in the water quality of a water resource.

The Guidelines provide guidance in relation to whether a project is likely to cause a substantial change to the ecosystem function and integrity of a water resource. The Guidelines also provide examples of projects that do (and do not) trigger the need for federal approval under the new MNES.

The draft significant impact guidelines are currently available for public comment. Comments close at 5.00pm on Thursday 25 July 2013.