What has happened?

On 13 March 2013 a Bill was introduced into the House of Representatives to amend the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) so as to include ‘water resources’ as a new matter of national environmental significance for large coal mining and coal seam gas projects. The Bill was read for a second time in the House of Representatives. The Bill has now been referred to the Senate Environment and Communications Legislation Committee which is required to report on the Bill by 15 May 2013. The Bill will then be referred back to Parliament. Political commentators have indicated that the Bill is expected to be passed by Parliament.

Who needs to know?

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

Details

The Bill will, if made in its current form, amend the EPBC Act by requiring ‘large coal mining development’ and ‘coal seam gas development’ which are likely to have a significant impact on a ‘water resource’ to be referred to the Minister for Sustainability, Environment, Water, Population and Communities (Minister) for a determination as to whether they are a controlled action. If the Minister determines that any such projects are likely to have a significant impact on a ‘water resource’ such that they are a controlled action then the project will require assessment and approval under the EPBC Act.

The Bill does not propose to make any amendments to:

  • the role or function of the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (IESC) which was only recently formally established under the EPBC Act to provide advice on the water impacts of mining  and coal seam gas projects, or
  • the National Partnership Agreement entered into between the Commonwealth, Queensland, New South Wales, Victorian and South Australian governments which requires the State governments to seek and have regard to the IESC’s advice in determining whether to grant State approvals for mining and coal seam gas projects.

Rather, the key effects of the proposed amendments are:

  • to empower the Commonwealth to require the impacts of ‘large coal mining’ and ‘coal seam gas projects’ on ‘water resources’ to be assessed under the EPBC Act, even where those projects may not otherwise have required assessment or approval under the EPBC Act, and
  • to enable the Minister to impose water specific conditions on ‘large coal mining’ and ‘coal seam gas projects’ (as opposed to being limited to conditioning water impacts only to the extent that any such impacts relate to an existing matter of national environmental significance protected by the EPBC Act, such as listed threatened species).

‘Large coal mining development’ is currently defined by the EPBC Act to cover any coal mining activity that has, or is likely to have, a significant impact on water resources (including any impacts of associated salt production and/or salinity) either in its own right or as a result of cumulative impacts.

‘Coal seam gas development’ is currently defined by the EPBC Act to cover any activity involving coal seam gas extraction that has, or is likely to have, a significant impact on water resources (including any impacts of associated salt production and/or salinity) either in its own right or as a result of cumulative impacts.

‘Water resource’ is currently defined broadly in the EPBC Act to mean:

  1. surface water or ground water, or
  2. a watercourse, lake, wetland or aquifer (whether or not it currently has water in it),
  3. and includes all aspects of the water resource (including water, organisms and other components and ecosystems that contribute to the physical state and environmental value of the water resource).

This definition does not draw any distinction between:

  • water resources which are used for beneficial purposes (including environmental purposes) and
  • water not used for any beneficial purpose (such as the water located within a coal seam which is typically not of a quality or location to make it suitable for any beneficial use).

This means that even projects which will only have a significant impact on water resources which are not used or capable of being used for any beneficial use (including environmental purposes) will still be subject to the new water resources trigger.

None of these definitions are proposed to be amended by the Bill.

The Department of Sustainability, Environment, Water, Population and Communities (DSEWPAC) has indicated that the factors which may directly or indirectly bring about a significant impact on ‘water resources’ will include those that:

  • change the quantity, quality or availability of surface or ground water,
  • alter ground water pressure and/ or water table levels,
  • alter drainage patterns, or
  • substantially increase demand for, or reduce the availability of water for the environment.

Most (if not all) mining or coal seam gas projects are likely to, have at least some of these impacts on water resources.

The new ‘water resources’ trigger will apply to “large coal mining development’ and “coal seam gas development’ which are proposed to be carried out:

  • in a Commonwealth area or a Territory, or
  • by:
    1. a constitutional corporation,
    2. a person undertaking a project for the purposes of trade and commerce between Australia and another country or between any two States or Territories, or
    3. the Commonwealth or a Commonwealth Agency.

This will capture most coal mining and CSG production projects (unless the project is located outside a Commonwealth area or Territory and is being carried out by unincorporated persons for the sole purpose of supplying customers within the State in which the project is located).

The Bill proposes that the amendments will not impact on projects which:

  • have already been approved under the EPBC Act,
  • have already been the subject of a determination by the Minister that the project is not a controlled action under the EPBC Act,
  • are currently being assessed under the EPBC Act where the Minister has already obtained the advice of the IESC,
  • are currently being assessed under the State laws where the advice of the IESC has already been obtained, or
  • which are already the subject of a prior environmental authorisation and did not require any further environmental authorisations.

However, the new water resources trigger is proposed to apply to the approximately 40 mining and coal seam gas projects which are currently being assessed under the EPBC Act but which are yet to be the subject of advice from the IESC. This may result in delays to the determination of these projects under the EPBC Act where the Minister does not have sufficient information in relation to the impacts of the projects on water resources.

The Bill has drawn significant criticism from mining and coal seam gas industry groups and the Queensland State Government on the basis it will:

  • increase the assessment cost and result in delays to important projects, and
  • offer no increase in environmental outcomes.

What Should Proponents of Coal Mining and CSG Projects Be Doing?

The proponents for coal mining and coal seam gas projects will need to:

  • assess whether they will be subject to the new ‘water resources’ trigger proposed by the Bill, and
  • if so, review their overall approvals strategy so as to ensure that steps are taken to minimise the cost, approval and delay risks which may otherwise arise as a result of this new trigger.