A recent study1 has found that:
- a single liquefied natural gas project could require up to 390 regulatory approvals; and
- 66 regulatory approvals (both primary and secondary) were required by the AngloGold Ashanti and Independence Group joint venture to develop the Tropicana Gold Project near Kalgoorlie WA.
Statistics such as these are not required to demonstrate that the approvals process for major projects in WA is in urgent need of streamlining. Indeed they underscore the point that inefficient regulatory processes impose unnecessary costs on business.
A state of change
In recent years, the State Government has implemented policy changes that have no doubt played a role in seeing nearly two thirds of major project of investment in Australia being located in WA.
In 2009, the ‘lead agency framework’ was introduced with the establishment of the WA Department of State Development to provide a single point of entry for project proponents seeking to establish a major project in WA across any industry or any size.
The mining industry has benefited from efficiencies created by the Department of Mines and Petroleum (DMP) by the introduction of target timelines for non-complex approval decisions and online tracking of those decisions. Quarterly performance reports drive regulatory performance to these standards. Case managers guide project proponents and published memorandums of understanding between Government agencies have no doubt improved the transparency of their actions.
Changes such as these are signs that the State Government has taken seriously the well-funded studies into regulatory efficiency of projects approvals, such as those conducted by the Australian Productivity Commission and countless other State based reviews.
Industry in need
Despite some recent changes, there are clear examples where a piece-meal approach to regulatory reform in WA has created an inefficient regulatory market. Invariably, the cost of partial reform is to the account of business.
For example, the policy changes implemented at the DMP in recent times have not been replicated under the Crown land regulatory framework administered by the WA Department of Lands. The Crown land legislation applies where a project has insufficient connection to one particular mining tenement.
Unlike the mining industry where the DMP manages the approval requirements arising out of a programme of works or a mining proposal, proponents of Crown land projects must themselves navigate the multi-agency framework to obtain each disparate approval (ie environmental, heritage, planning and (a myriad!) of other primary and secondary approvals). Significant resources are required to separately plan and execute each of the approval work streams which is a major disincentive to business.
High profile examples of such projects include the port infrastructure in the Mid-West and the proposed processing facilities to serve the Browse Basin. Other types of projects include the establishment of industrial estates to support the secondary capacity requirements of the mining or petroleum industry, and burgeoning industries such as agriculture that are seeing interest from local and overseas investors.
The role of State Agreements in enabling the development of State significant projects cannot be ignored, however small to medium size enterprises do not often have the benefit of such support of the State.
Where to next
The removal of red-tape for major project approvals is the latest focus of the Productivity Commission. The Commission has found that while Australia has in place the building blocks of a sound approvals system, there is substantial scope to comprehensively overhaul the framework for all jurisdictions in Australia2.
By reference to leading international practices, the Commission recommended that the current arrangements in WA be refined (in terms of functions and resources) by the establishment of a ‘major-projects coordination office’ (or similar).
The key differentiating factor of a ‘major-projects coordination office’ model is that the lead office would be independent of the major projects regulatory system, meaning that they do not have any assessment or approval responsibilities.
What is evident is that the approvals framework for major projects in WA is in need of comprehensive reform backed by legislative changes and not just ad-hoc policy change.
There is no suggestion that a streamlining of the regulatory framework should be at the expense of the broad range of social, environmental and cultural objectives that legislation and its administration should serve.
However, at a critical point in time when the mining industry is experiencing contraction, and other industries such as agriculture and secondary processing are also looking to take advantage of the abundant natural resources in this State, a case for major project approval reform in WA is compelling.