On 27 August 2013 the Western Australian Department of Mines and Petroleum (DMP) released a paper for public consultation containing proposed amendments to various pieces of mining legislation in Western Australia (Consultation Paper). The reforms proposed in the consultation paper are the next stage in the implementation of DMP’s Reforming Environmental Regulation program with the proposed amendments intended to facilitate greater transparency, streamline approvals processes and strengthen compliance mechanisms. The consultation period closed on 27 September 2013.

On 31 October 2013 DMP released a paper in response to the submissions it received from stakeholders in relation to the Consultation Paper (Response Paper). The Response Paper set out both stakeholder submissions and the DMP’s response to those submissions. Submissions were received from various interested parties including the Chamber of Minerals and Energy, the Australian Mining Petroleum Law Association and the Association of Mining and Exploration Companies.

Copies of the Consultation Paper and the Response Paper can be found here.

The Mining Legislation Amendment Bill 2013 (Bill), which will amend the Mining Act 1978 (WA) (Mining Act) and the Mining Rehabilitation Fund Act 2012 (WA) (MRF Act) to implement the proposed amendments, was introduced into Parliament on 30 October 2013. DMP has not given an indication as to when the Bill is likely to be passed by Parliament, however, given that the last sitting dates for the Legislative Assembly and Legislative Counsel for 2013 are 5 December 2013 and 12 December 2013, respectively, it is likely that the Bill will not be passed until Parliament re-commences sitting in the new year.

Summary of amendments

The amendments which are the subject of the Consultation Paper, Response Paper and the Bill (discussed in more detail below) have the effect of:

  • amending the MRF Act to allow money paid from the Fund (defined below) to rehabilitate abandoned mine sites to be recoverable against the person responsible to carry out the rehabilitation work;
  • amending the Mining Rehabilitation Fund Regulations 2013 (WA) (MRF Regulations) to provide for the capacity to issue infringement notices for the offence of failing to submit assessment information on or before the date due under the MRF Act;
  • amending the MRF Act so that a single assessment notice can be issued to a nominated address for each tenement;
  • amending the Mining Act to authorise the Director General of DMP to approve mining proposals and mine closure plans, and to permit the Director General to delegate this authorisation to other officers within DMP; and
  • amending the Mining Act and the MRF Act to provide that an approved programme of work, mining proposal, mine closure plan or any information submitted to comply with environmental reporting requirements (including assessment information and details as to how levies are calculated under the MRF Act) may be made publicly available at the discretion of the Director General of DMP.

Recovery of expenditure from the Mining Rehabilitation Fund

Under the MRF Act, a fund has been established for mining rehabilitation levies required to be paid by tenement holders in Western Australia in relation to their rehabilitation obligations (Fund). For further information on the Fund and the operation of the MRF Act and MRF Regulations, please refer to our previous articles (Mining Rehabilitation Levy, Update on the Mining Rehabilitation Levy - Release of bonds and Mining Rehabilitation Fund Levy Update.)

Money from the Fund is to be used to rehabilitate abandoned mine sites or land affected by operations on abandoned mine sites. Under the Mining Act, tenement holders are required to rehabilitate the land affected by their operations. The MRF Act establishes a system whereby money from the Fund can only be used to rehabilitate sites where the tenement holder cannot be found or is unable to comply with their obligations to rehabilitate, or safety or environmental conditions are such that rehabilitation is required expeditiously, rather than pursuing the responsible person.

Currently the MRF Act does not include a provision which allows DMP to recover the money spent by the State from the Fund on rehabilitation work. Instead, DMP may impose a penalty under the Mining Act for failure to rehabilitate but this is likely to be less than the cost of rehabilitation.

Under the Bill, a new section 9A is to be inserted into the MRF Act which provides that, if money from the Fund is applied to rehabilitate an abandoned mine site, each person liable to comply with an obligation to rehabilitate the tenement the subject of the abandoned site is jointly and severally liable to pay the Fund the amount incurred by it in undertaking the rehabilitation. The CEO of DMP may recover the amount payable as a debt due to the State.

The Consultation Paper originally stated that the right to commence action for recovery of money would not be limited in time and several stakeholders raised concerns in relation to identifying potential claims and liabilities as a result. However, the DMP has since confirmed in the Response Paper that the general 6 year limitation period under the Limitation Act 2005 (WA) will apply to an action to recover money under the new section 9A of the MRF Act.

The Response Paper also clarified that the person liable to comply with the obligation to rehabilitate, and who may be pursued for recovery of expenditure by DMP, is the existing or more recent past tenement holder and not any previous tenement holder.

Infringement notices

The MRF Act imposes certain obligations on tenement holders and sets out offences for a failure to comply with these obligations. At present it is necessary for the DMP to prosecute offenders in court for a breach of their obligations under the MRF Act. However, DMP does not consider this to be practicable for offences at the lower end of the scale in terms of culpability, such as the offence of failing to provide assessment information on or before the due date.

Under the proposed amendments, the MRF Act will be amended such that infringement notices could be issued for the offence of failing to submit assessment information on or before the due date. A modified penalty of $4,000 will apply.

Industry raised several concerns in relation to the issue of infringement notices as proposed by the DMP in submissions. The key stakeholder concerns included:

  1. infringement notices should not be issued for minor breaches and tenement holders should be given an opportunity to rectify the breach;
  2. lack of flexibility to determine whether the penalty is appropriate given the nature of the offence;
  3. denying the right to appeal to the Minister for Mines against an infringement notice amounting to a lack of procedural fairness and natural justice; and
  4. lack of clarity as to how the MRF Act will be amended to take into account the modified penalty

In the Response Paper, the DMP took a hard line approach in relation to the adoption of infringement notices. In DMP’s opinion, the $4,000 penalty associated with the infringement notice is fair given the fact that tenement holders have “adequate notice of the due date for data submission and sufficient opportunity to ensure their compliance during the reporting year”. Similarly, DMP does not propose to allow for rectification notices to be issued due to the unambiguous nature of the obligation. Further, DMP is of the view that the issue of infringement notices does not subvert a tenement holder’s right to procedural fairness because the tenement holder is able to dispute the notice by electing to have the matter heard in court.

One issue which remains unclear, however, is how the DMP proposes to amend the MRF Act in order to implement the infringement notice and modified penalty concept. While the Consultation Paper refers to amending the MRF Regulations in order to implement the proposed changes, the Bill was not accompanied by any document amending the MRF Regulations to give effect to the proposed change. It is expected that the proposed amendments to the MRF Regulations to implement these changes will be released by DMP at a later date.

As an aside, we note that the money received as a result of the payment of an infringement notice is to be paid into the consolidated account and applied to the benefit of the State in general and not returned into the Fund.

Assessment notices

The MRF Act currently requires that assessment or reassessment notices be issued to “the person liable to pay the levy”. As a result, in the case of multiple tenement holders, DMP is required to issue individual copies of the assessment notices and reassessment notices to each joint holder. As well as being administratively onerous, this requirement also increases the risk of miscommunication between tenement holders and can lead to overpayment or underpayment of the levy. DMP faces a similar problem in relation to the payment of rents and other fees and currently experiences over or under-payments in 10% of payments where the tenements are jointly held.

The Consultation Paper stated the amendments will streamline the process of issuing assessment notices by providing for tenement holders to nominate a contact address at the time assessment information is issued. Assessment notices will then only be issued to that single address. The nomination will only be effective for MRF purposes and will not affect notices issued under the Mining Act (for example, rent notices).

From the Response Paper it is clear that the mining industry has some concerns in relation to the issue of only one notice of assessment because of the increased risk of non-compliance for tenement holders where they are not the primary holder of the tenement and, as such, will not receive assessment notices. In the Response Paper, DMP noted that it would be possible to send out ‘notification’ letters to all tenement holders advising that an assessment notice had been sent. However, the nature of such notification is to be developed with industry prior to implementation. While the Bill contains the amendments required to enable notices to be sent to a single nominated contact point in the case of multiple tenement holders, it does not contain amendments providing for notification letters to be sent to all holders. Further, given the argument in favour of issuing only one assessment notice is that it will reduce the administrative burden on DMP, we query whether it will not be more onerous if notification letters are to be sent to each tenement holder in addition to a single assessment notice.

Streamlining authorisation

The Mining Regulations 1981 (WA) (Mining Regulations) currently specify senior positions within DMP as persons having the authority to approve a programme of work, mining proposal or mine closure plan. This is administratively complicated for DMP as it requires an amendment to the Mining Regulations if there is a change in organisational structure or a change to a position title. Under the proposed amendments, the Director General of DMP will be authorised to approve mining proposals, mine closure plans and programmes of work and will be permitted to delegate these powers to other officers within the agency.

The Response Paper notes that, while these proposed amendments will make the process administratively simpler for DMP, in practice the proposed amendments are not expected to change the decision makers in the department, only the way by which they are authorised to make such decisions. Clause 8 of the Bill implements these amendments.

Releasing information to the public

In relation to mining related proposals, currently only mining proposals, mine closure plans and parts of annual environmental reports are made publicly available.

In the interests of improving transparency, the proposed amendments to the Mining Act and MRF Act provide that information submitted with a programme of work, mining proposal or any information submitted to comply with environmental reporting requirements can be made publicly available at the discretion of the Director General. The Consultation Paper noted that the details as to which information will be made available, and how this will occur, will be determined by way of DMP policy.

The concerns raised by stakeholders in relation to these amendments, as set out in the Response Paper, were largely around preventing the release of commercially sensitive information to the public. The comfort given by DMP in relation to these concerns is that the DMP policy which will continue to apply following the amendments already takes into consideration the protection of commercially sensitive information when deciding whether to release that information to the public.

The Response Paper also states that specific changes to practices are to be implemented by way of regulations which will involve further consultation with stakeholders. However, we note that, while the changes to the release of information collected under the Mining Act are subject to the enactment of further regulations, the amendments in the Bill to clauses 13 and 15 of the MRF Act provide that the chief executive officer of DMP may make available to the public the details of how a particular levy is calculated and any assessment information submitted by the tenement holder. As the release of levy and assessment information is (assuming the Bill is passed through Parliament) expressly permitted to be released under the MRF Act, supporting regulations will not be required.

Conclusion

In summary, while the amendments proposed in the Bill are fairly minor in nature, they could have significant impacts on exploration and mining companies operating in Western Australia. These impacts could include:

  1. the risk of being pursued by DMP for recovery of money spent by the State from the Fund up to 6 years after a rehabilitation liability arises
  2. receipt of an infringement notice accompanied by a $4,000 penalty for failure to provide assessment information under the MRF Act by the 30 June due date;
  3. the need to ensure communication occurs between multiple holders of a tenement as assessment notices under the MRF Act will only be issued to the primary tenement holder; and
  4. the potential release of commercially sensitive information lodged with DMP under the Mining Act and MRF Act by DMP.

While we appreciate that DMP undertook public consultation in relation to the Bill, we query whether stakeholder concerns have been adequately addressed given the Bill was introduced into Parliament prior to the release of the Response Paper and, as such, stakeholders were not given an opportunity to engage with the DMP in response to the Response Paper.

The proposed amendments are the first of three stages of legislative reform proposed by DMP. Stage two will involve more complex amendments to streamline environmental approvals processes and reduce duplication and is subject to further development and more extensive stakeholder consultation. The third stage of amendments will support the implementation of a risk-based approach for environmental regulation and will similarly be subject to further development and consultation. It is anticipated that stages two and three will commence in 2014.