Coalition — Additional Comments
Questionable process
1.1
Coalition Senators are concerned at the absence of sound process in
arriving at the introduction of this legislation. Not only has this legislation
been drafted without consultation, such legislation was not recommended by the
most recent thorough independent review of the principal act (the Hawke Review)
and to which the Government responded as recently as August 2011.
1.2
The absence of consultation was confirmed by the Department in response
to a question taken on notice.
Consultation was not undertaken on the detailed text of the
Bill prior to its introduction and consideration by the Parliament.[1]
1.3
The absence of appropriate consultation or identification by the Independent
review of the Environment Protection and Biodiversity Conservation Act 1999 (or
Hawke review) was outlined by the Australian Network of Environmental Defenders
Offices.
Ms Walmsley: I think the clear example of an ideal
process would be the Hawke review. That was a 10-year review of the act. It was
independent. The panellists on the Hawke review interviewed hundreds of
industry, farmer and environmental groups. They did a thorough, independent
review. They put out 71 recommendations. The government put out a response.
There were so many great things in that package that could strengthen the bill
and address a lot of these issues that are being incrementally addressed by
really specific small bills that deal with really small issues, whereas I think
that waiting in the wings for two parliamentary sessions now we have
potentially had a solution to make the EPBC a better act, clarify the
Commonwealth role and address inefficiencies. We have had the opportunity to do
that.
So, no, I do not think it is ideal that the EPBC Act is being
amended by piecemeal bills. I think we should embrace the opportunity to follow
the Hawke review and actually do a proper amendment of the act itself to
strengthen the Commonwealth role. The problem with that is that the government
response cherry-picked aspects of the Hawke review and did not support some of
the more important reforms that were recommended. But, in terms of ideal
process, the Hawke review was based on extensive consultation with experts. So
that is our benchmark for EPBC reform rather than dealing with these
piece-by-piece bills.[2]
1.4
Among other organisations considering themselves to be qualified to
offer feedback but expressing concerns at not being consulted were AGL:
Ms McNamara: AGL operates across the supply chain with
investments in energy retailing, coal- and gas-fired generation, renewables and
upstream gas exploration and production projects. AGL is also one of
Australia's largest retailers of gas and electricity, with more than three
million customers across the eastern states and South Australia. AGL is an
experienced developer and operator of a number of CSG exploration and
development projects. Accordingly, AGL believes it is well place to provide
feedback on the issues raised in the bill.[3]
...
Senator BIRMINGHAM: Did the government consult AGL in
the drafting of this bill?
Mr Ashby: No. Absolutely not.[4]
1.5
In expressing concerns at inadequate processes, both the Australian Coal
Association and the Australian Petroleum Production and Exploration Association
also drew attention to the absence of a Regulation Impact Statement that might
have identified both issues needing to be addressed and the relative merits of
possible solutions.
...we are particularly concerned with the way this
legislation has been rushed into parliament, without any consultation or the
preparation of a regulatory impact statement. There is no justification that we
can see for such a gross failure of process and, accordingly, we welcome the
Senate committee's close scrutiny of the bill.[5]
...if there were an actual problem to be addressed we would
actually know what that was if we had been through a regulation impact
assessment process, the first part of which is to identify the problem and then
to identify the costs and benefits of addressing the problem and how they
relate to the overall public policy outcome we are trying to achieve. We are
here today because of a fundamentally flawed process.”[6]
“We believe that the bill requires far greater consideration
than what has been able to be given to date. The process that has led to the
bill entering parliament has not provided satisfactory consultation with the
industry. It is important for detailed consultation to be the centrepiece where
significant regulatory changes are envisaged, such as the one contained in this
bill. Key policy-making processes designed to test the full impacts and
implication of the bill have been deficient in the process to date. APPEA notes
that the House Standing Committee on Climate Change, Environment and the Arts
has not provided a report on the bill and that no regulatory impact statement
has been prepared, despite government commitments in the past that this should
rarely occur and only in urgent and unforeseeable events, and no meaningful
consultation with industry or other affected stakeholders was undertaken prior
to its introduction.
As the industry can see that no additional environmental
benefit is established by implementing the proposed amendment, it is difficult
to understand, particularly from a policy perspective, why such important
legislation has missed these standard processes. Conversely, there are
considerable risks associated with the heightened uncertainty, increased cost
and project delays.”[7]
Duplication with state legislation & role of Independent Expert
Scientific Committee
1.6
Coalition Senators acknowledge evidence given to the committee that
measures given effect by this bill potentially duplicate processes already in
place. Further, these changes add new regulation on top of the Independent
Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development
that was established as part of a national partnerships agreement between state
and federal governments only late last year, with no evidence that this new
process has yet proven to be ineffective.
1.7
Further, Coalition Senators note that evidence to the inquiry tended to
focus on just one state, despite exploration and extraction activities
occurring or planned across several states. This seems to suggest that if there
is a regulatory gap it should be addressed in jurisdictions where it may occur,
rather than having a new layer of regulation imposed across all jurisdictions,
including those where current regulations appear to be working without
significant concerns.
1.8
The introduction of this bill is symptomatic of an ad hoc policy
process by this Labor Government that does not properly assess the need for
reform before legislating in response and also has not afforded sufficient time
to allow proper assessment of the effectiveness of newly implemented measures.
Mr Sullivan: The trigger ... duplicates already
comprehensive state assessment and approvals processes. The establishment last
year of the Independent Expert Scientific Committee on Coal Seam Gas and Large
Coal Mining Development obviates the need for the trigger. The IESC has already
provided advice on over 30 projects and there is no evidence that this process
has failed or that additional regulatory intervention is justified ... The
fundamental point I would make is that we are essentially talking about an issue
of duplication here to start with, because these water issues are the subject
of regulatory frameworks in the states and territories. For example, New South
Wales has comprehensive and elaborate legislative arrangements to protect
water, the use of water, extraction of water and the environment in relation to
all aspects. So this is a duplication of existing regimes.
...
Certainly one of the things I became well aware of in almost
20 years in the regulatory space was that regulation is not necessarily the best
tool to use when you are after particular outcomes. Incentives, collaborative
initiatives and programs into research all play an important role. The
Commonwealth has those programs. So we would say that there is certainly no
need for this amendment. My colleague may wish to add to that.
Ms McCulloch: Section 131AB, I believe, of the EPBC
Act requires the Commonwealth to refer coalmining or coal seam gas projects
that are likely to have a significant impact on a water resource to the IESC.
Our advice from the department is that they do take into account the advice of
the IESC in relation to impacts on water resources insofar as they are linked
to other matters of national environmental significance, and in issuing
approval conditions they factor in the water impacts and respond to the water
impacts in those conditions. To reiterate, this is unnecessary duplication of a
process that is already in place.[8]
1.9
AGL also expressed concerns at the interaction with existing processes.
My understanding in relation to the independent scientific
commission is that it advises both state and federal governments in terms of
the application of the environmental approval process and would therefore have
had input into the current processes that we have to satisfy to get our
projects going forward. So my understanding is that it is not just limited to
the federal government; it is state and federal governments that are advised by
that body. We welcome scientific perusal and study of our projects, and we are
very happy to make all that data available.
So our understanding is that they already have a good
interaction at the state and federal levels in the formulation of, for
instance, our development conditions. For that reason, we think that that is
very good and should be encouraged. We think therefore that this EPBC Act amendment
could undermine that process by legislating where it is not necessary to do so.[9]
1.10
The IESC process is still in its relative infancy. It is a transparent
process that provides advice to both state and federal governments. The
publication of this advice means that governments will clearly be exposed
should they ignore such expert advice. As recently as last year the Government
argued this process was sound and would address community concerns, rejecting
independent and Greens attempts to amend the EPBC Act in a way that this
legislation proposes. Evidence by the NFF highlighted this about face by the
Gillard Government:
Ms Kerr : I can certainly do that, but I will go back
to the original bills introduced by Tony Windsor and Senator Waters. We had
some engagement with both the opposition and the government when they were
introduced and we were advocating that these bills not be supported. We made
those representations to the opposition as well, and there was general support
at that point in time for the NFF position and the reason for our position.
Senator McKENZIE: Can I just clarify whether the
government was supportive of that position at that time?
Ms Kerr: The minister's office—not the minister
himself—was certainly indicating support for that particular position, as was
the opposition and the people who we talked to. Coming to the introduction of
this particular bill by the minister, we were not consulted on the introduction
of the government's bill.
Senator McKENZIE: I really want to be clear on that.
So the government supported not introducing the water trigger to the EPBC Act.
How long ago was that?
Ms Kerr : That was early in 2012 or mid-2012. The
reason I believe at that point in time was that the national partnership
agreement had been signed in the previous December and was only just being
rolled out. It certainly needed time to be implemented and the states and the
Commonwealth needed to implement their obligations under the national
partnership agreement.[10]
1.11
While Coalition Senators are concerned at unnecessary duplication in and
of itself, and at legislating in the absence of a need to do so, Coalition
Senators are particularly concerned that such duplication has the potential to
cause additional costs and delays associated with additional regulation, as
canvased by numerous stakeholders, including the Australian Petroleum
Production and Exploration Association,[11]
which as discussed earlier have not been explored by a Regulation Impact
Statement.
Targeting a specific industry
1.12
The majority report canvases arguments, notably from the National
Farmers’ Federation and the Australian Petroleum Production and Exploration
Association, against the precedent of targeting specific industries as being
subject to controlled action provisions, as distinct from the Act’s currently
stated objectives and focus on matters of national significance exclusively
concerned with environmental outcomes, not the means or cause of any potential
impact.
1.13
The inconsistency in approach that would be created by this bill was
also highlighted in inquiry hearings by the Minerals Council of Australia.
If we are managing impacts on water resources, and quoting
from the results of the Namoi model, where they model something like 24 open
cut coalmines, seven underground coalmines and eight CSG fields will be in
place in the Namoi region.' Analysis of model water balance for that extreme
scenario shows that within the groundwater within the lower and upper Namoi
alluvium will experience a relatively low impact when compared to existing
anthropogenic water use impacts'. What is the rationale behind targeting a
sector when it is just a drop in the ocean in terms of potential impacts? It
makes no sense whatsoever. If water is going to be a matter of national
environmental significance you need to manage, in line with the other matters
of national environmental significance, the impacts on that matter, not just
target a specific industry, regardless of what activity that industry is
undertaking.[12]
1.14
Concern at the bill’s approach in targeting an industry rather than an
environmental outcome was also expressed by The Australian Coal Association,
including the further inconsistencies this action creates with the findings of
the Hawke Review:
The industry does not support the proposed inclusion of a
water trigger for coalmine developments in the EPBC Act. The bill discriminates
against the coal and coal seam gas industries rather than focusing on a clear
environmental objective. This is inconsistent with the intent of the EPBC Act
and, particularly, is inconsistent with the Hawke review, which highlighted
that the focus of the act should be on matters of national environmental
significance and not on the regulation of specific industries.[13]
1.15
Similarly, conservationists have advanced arguments in favour of
extending the ‘water trigger’ to other industries, including agriculture and
any other industries with similar potential impacts on water resources to those
captured by the bill.
Senator WATERS: You talked a bit about how you think
the bill before us could be improved and expanded and you talked about the fact
that it should apply to other forms of extractive industry with similar
impacts. Are you talking about things like shale gas, tight gas and underground
coal gasification?
Ms Zomer: I think so. We do not really know what turns
the unconventional mining industry will take. I guess any industry that is
going to have a significant impact on water resources should be treated
equally, and I think, yes, probably shale gas and tight gas are examples of
industries that I would think are appropriate.[14]
Senator McKENZIE: Do you think that this trigger
should be applied across industries that are significantly impacting water
resources?
Mr Knowles: Yes, I think that is the logical and
equitable approach to take.
Senator McKENZIE: Would that include agriculture?
Mr Knowles: It could. Agriculture is the largest
consumer, I believe, of water in Australia, although the resource industry is a
big user of water. But in the national accounts for water there is a
distinction between consumption and use and discharge back into the environment.
They are both big users and consumers of water.[15]
Other industries, such as agriculture, can also have
significant impacts on water quality and quantity. There would therefore be
merit in considering extending the water trigger to other industries and projects
that would have a significant impact on water resources.[16]
1.16
Coalition Senators are concerned that this bill creates an inconsistent
approach within the EPBC Act, which has the potential to be highly problematic
and sets a dangerous precedent for the singling out of industries. The
Coalition would certainly not want to see farmers or other water users facing
the same regulatory duplication this measure appears to create, but are equally
unhappy with the singling out of the coal and coal seam gas industries.
Coalition Senators believe these issues could have been avoided had a proper
consultation process been undertaken prior to the introduction of this
legislation.
Definitions
1.17
As the majority report canvases, a number of organisations have
expressed concerns at definitional issues. Of particular concern to Coalition
Senators is that “exploration” and “appraisal” activities could themselves be
captured by way merely of the potential impact of the later activity for which
such exploration and appraisal is conducted.
1.18
As outlined in the majority report, these concerns appear to have been
confirmed in evidence given by the Department of Sustainability, Environment,
Water, Population and Communities.[17]
1.19
Coalition Senators have sympathy with suggestions that the bill should
be amended to expressly exclude or clearly limit the inclusion of exploration
activities.
1.20
Coalition Senators are also concerned about the breadth of definition
that may apply to a water resource. In their response to Questions on Notice
the NSW Irrigators Council confirm that this definition remains entirely
subjective and will have the potential to cause uncertainty. Andrew Gregson,
Chief Executive Officer, states that under the current construction, “we think
it would apply to all water resources”.
1.21
Concerns were also raised by the Minerals Council of Australia about the
consequences of the water resource definition:
Are we talking dry creek beds, are we talking dams, are we
talking tailing dams, are we talking water coal seam gas, what are we
talking—surface, groundwater, the lot? What is a large coalmine? What and where
do mining related activities fit in the equation? Are we talking about the
building of housing and amenities, roads, pipelines, other sorts of things that
are related to the mining activity that may, in fact, fall in that prospect?
Are we talking about projects that are currently working within the context of
the state laws? If there is even a minor change, that would then trigger a
referral to the EPBC Act. One could imagine the consequences of that in
Victoria, for example, where coalmines are busily providing power to the state.
If they make what is a largely immaterial change to their workplan, that
triggers a referral to the EPBC Act and everything stops. So, too, do the
lights. This is not over-the-top conjecture. This is quite serious.
There is no bureaucrat or regulatory agency who can possibly
know and understand the implications and consequences of what is being proposed
from the context of the practitioners on the ground. Unless there is an
'opening of the books' and unless there is constructive and proper dialogue you
will not get to the kind of outcomes that are necessary to avoid what I hope
are unintended consequences. As I said, we will do that within the context of
the frame of this bill. The easiest thing for us to do is to say 'no' and let
it fall where it falls. But, as I said, we can count and we are not naive to
the processes that are before us and, therefore, we will engage.[18]
1.22
Environment organisations also acknowledged the ambiguity this creates
and highlighted the comprehensive definition of a significant impact on water
resources included in the National Partnership Agreements signed between state and
federal governments in relation to coal and coal seam gas mining:
In principle, we would not have a problem with clarification
of definitions. Obviously it depends on the detail, but we would be open to
tightening up the language of the bill.[19]
However, the EPBC Bill 2013 does not seek to include that
definition in the EPBC Act. Furthermore, under Part 9 of the EPHC Act,
requirements are provided for the Minister to consider when making his decision
about an activity for each of the existing controlling provisions. However, the
EPBC Bill 2013 does not seek to introduce any requirements under Part 9 in
relation to water resources. The ability to protect water resources in the future
will depend on the provision of a strong definition or requirement under Part 9
for water resources.[20]
1.23
Coalition Senators encourage the government to clarify the definition of
water resources in the legislation.
Retrospectivity
1.24
As outlined in the majority report, a number of organisations have
expressed concerns that the legislation will have retrospective application and
potentially apply to projects either already partially underway or in advanced
stages of assessment.
1.25
Coalition Senators believe the potential retrospective application of
this bill to projects either underway or already in advance stages of
assessment should be removed.
Bilateral agreements (the ‘Windsor amendments’)
1.26
Coalition Senators strongly oppose amendments made in the House of
Representatives, and opposed there by Coalition Members, that would prevent the
use of accreditation under bilateral agreements for assessments.
1.27
Coalition support for approvals bilateral agreements has previously been
outlined at length, including in Coalition Senators’ Dissenting Report of 12
March 2013 to this same committee’s inquiry into the Environment Protection
and Biodiversity Conservation Amendment (Retaining Federal Approval Powers)
Bill 2012 that specifically sought to prevent such approvals bilaterals.
1.28
In particular, however, Coalition Senators can see no justification for the
assessment of one particular national matter of environmental significance
being treated differently to assessments of other such matters.
1.29
Coalition Senators are also not persuaded that arguments put by some
regarding the perceived present capacity of states to undertake assessments
under such bilateral arrangements should preclude them from doing so at any
time in the future under properly constituted and mutually agreed arrangements
not yet in place but for which provision exists under the EPBC Act.
1.30
Some arguments in favour of retaining at least the capacity for
bilateral arrangements have been canvassed in the majority report but were also
given voice in inquiry hearings by the Australian Coal Association:
...broadly, our position is that there should be a reduction
in duplication and that where it is possible to accredit state processes they
should be accredited. Ideally, where approval bilaterals can be put in place,
they should also be pursued in order to streamline the process and reduce the
inefficiencies. It certainly does not mean that there is any reduction in
environmental protection. It just means that the process is more efficient.”[21]
1.31
Coalition Senators are strongly of the view that the ‘Windsor
amendments’ passed in the House of Representatives regarding bilateral
agreements should be removed from the bill.
Conclusion
1.32
Coal seam gas requires a comprehensive policy approach that addresses
its environmental, community and economic impacts. The principles underpinning
our approach take a measured, rational and balanced assessment of mining and
its management.
1.33
Managed properly, coal seam gas has the potential to revitalise parts of
regional Australia, delivering a new economic boom. Poorly managed, it could
produce serious environmental and social problems.
1.34
Coalition Senators believe the development of Australia’s coal seam gas
resources should be based on certain core principles, specifically that:
- No coal seam gas development should proceed where it poses a
significant impact to the quality of groundwater or surface water systems. It
must be absolutely clear that no coal seam gas development should occur unless
it is proven safe for the environment;
-
Prime agricultural land is an increasingly important natural
asset. It must be protected from activities that harm its capacity to deliver
food security – not only for our nation, but for a hungrier world, for
generations to come;
- Coal seam gas development must not occur close to existing
residential areas. People who have bought homes, with a reasonable expectation
of being well away from gas extractions, must not be thrown into turmoil by
coal seam gas operations springing up on their doorstep;
- Landowners are entitled to appropriate pecuniary returns for
access to their land. Remuneration for landowners should not be merely
compensation; and
- The regions that deliver much of the wealth from coal seam gas
developments deserve to see a fair share of the generated revenues reinvested
in their communities. There is an opportunity to grow our nation and encourage
a lasting legacy from coal seam gas developments.
1.35
Given the above principles and the Coalition’s strong appreciation for
community sentiment on this matter we did not oppose this legislation in the
House of Representatives and will similarly not do so in the Senate. However,
given the terrible failings of process and numerous concerns with this
legislation identified in these comments, we urge the government to adopt
appropriate amendments that may remedy at least some of the concerns raised.
Senator Simon Birmingham
Deputy Chair |
Senator
Bridget McKenzie |
| |
|
| Senator Anne Ruston |
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