What you need to know

For the current financial assurance regime, the litigation resulted in the following:

  • A party appealing a decision on the amount of financial assurance required for an environmental authority (EA) will need to pay 75% of the amount of financial assurance assessed by the Department of Environment and Heritage Protection (EHP) before any stay can be granted, pending appeal.
  • This reverses an earlier decision of the Land Appeal Court, which found that the requirement to pay 75% applied only for a stay of an original decision pending an internal review and did not apply to a stay of the review decision appealed to the Land Court.

For the new Mineral and Energy Resources (Financial Provisioning Bill):

  • A party appealing an estimated rehabilitation costs decision (ERC Decision) will need to give a surety of 75% of the amount required during the period of the stay.

Background

If a party is dissatisfied with the amount of financial assurance they are required to pay or, under the new Bill, the decision on the amount of their estimated rehabilitation cost, then they have a right to seek an internal review by EHP and appeal to the Land Court, and can apply for a stay of EHP’s decision during this period.

The requirement that an EA holder pay 75% of the required financial assurance before seeking a stay of the financial assurance decision pending appeal was introduced into Section 522A of the Environmental Protection 1994 (EP Act) by the Chain of Responsibility Amendments.

The circumstances in which the EA holder is required to pay 75% were considered by the Land Appeal Court and the Court of Appeal in the Alphadale cases. Last month the Court of Appeal reversed the earlier decision of the Land Appeal Court2 and confirmed that a party appealing a financial assurance decision will need to pay the 75% before any stay can be granted.

The effect of this judgment is that Sections 522 and 522A of the EP Act apply in all circumstances where a stay of a financial assurance decision is sought pending internal review or the determination of an appeal by the Land Court.

Where to from here?

  • In light of the Court of Appeal’s decision, careful consideration needs to be given to bringing a stay application in respect of a financial assurance decision, given the requirement to provide security of 75% of the amount required.
  • The new Bill replaces financial assurance decisions with ERC Decisions and also requires that a party seeking a stay of an ERC Decision provides 75% of the required amount as a surety.
  • The Alphadale cases arose out of uncertainty in the drafting of the EP Act, regarding which decision of EHP was being appealed. The Bill includes amendments which give much needed clarity to the EP Act to confirm that a dissatisfied person may seek internal review of the original decision by EHP and will then appeal EHP’s “review decision” to the Land Court.
  • The Bill proposes a wide range of changes to Queensland’s financial assurance regime. We will follow up with a further article on the balance of the Bill. It remains to be seen whether the Bill will pass in its current form