CONSTITUTIONAL AND STATUTORY FRAMEWORK FOR APPRAISING MINING APPLICATIONS

Mining in Australia is largely conducted under State and Territory legislation. General Commonwealth power in the field derives from the external affairs power under the Constitution (section 51 (xxix)). This constitutional power of the Commonwealth is manifested in an export control regime.

A second foundation of a Commonwealth role is its special position in the Northern Territory. Although self-government was granted in 1978, the Commonwealth retained control and ownership of uranium.

Uranium is only mined in Australia for export, and so Commonwealth power is especially significant. This was particularly evident during the currency of the so-called three mines policy under the Hawke and Keating Labor governments. Several possible mines did not proceed because of inability to secure Commonwealth approval to export uranium.

The power over exports is the foundation for the Commonwealth role in appraisal of the environmental implications of proposals to mine uranium. Environmental matters are, however, not the only reason for Commonwealth interest in mining of uranium. There are significant security reasons as well. These will be addressed in chapter 6 of this report on "International Safeguards and Related Matters."

The Commonwealth Minister for Resources and Energy is responsible for administering export controls on uranium pursuant to Schedule 9 of Regulation 11 of the Customs (Prohibited Exports) Regulations.

Under the "three mines policy" export permits for uranium were only issued for uranium mined at "listed" mines, namely Nabarlek, Ranger and the Olympic Dam Operation.

The policy of the Liberal-National Party Government elected in March 1996 is to approve mining and export of uranium from any project which meets stringent environmental, heritage and nuclear safeguards obligations.

The Atomic Energy Act 1953 requires the Minister for Resources and Energy or, as the case may be, the Department of Primary Industries and Energy, to take account of the requirements of the Environment Protection (Impact of Proposals) Act 1974 when dealing with project approvals or issuing export permits.

According to the Department of Primary Industries and Energy:

In the case of export permits, which apply to exports from all uranium mines, the Administrative Procedures under the EPIP Act require that consideration not only be given to the direct environmental impacts of decisions to issue export permits for individual export shipments of uranium but also to whether they would have the effect of promoting or facilitating other actions affecting the environment to a significant extent. Accordingly, it is necessary to consider the potential environmental impact of the uranium projects from which exports are sourced in this context. (S 91, 9)

The workings of the system are described by the Department thus:

Should the Minister decide that, either directly or indirectly, relevant decisions will potentially result in the environment being affected to a significant extent (and exemption provisions under the Administrative Procedures do not apply), the matter is referred to the Minister for the Environment. Once the environmental assessment processes are concluded, the Minister for the Environment provides advice to the Minister which is then taken into account in relation to the granting of the relevant export permits (S 91, 9).

Under the EPIP Act the Minister for the Environment may deal with matters on the basis of an environmental impact statement. Alternatively, the Minister may appoint a commissioner or commissioners to conduct an inquiry.

Both methods have been employed in processing applications to mine and export uranium. What is generally known as the Fox inquiry was a commission appointed under section 11 of the EPIP Act. (The Fox inquiry also made a report under the Aboriginal Land Rights (Northern Territory) Act 1976.)

A commission established under the EPIP Act has a range of powers such as power to summon witnesses (section 15), to take evidence under oath or affirmation (section 17) and provides that commissioners in performance of their duties have the same protection and immunity as a Justice of the High Court (section 19(1)).

All other proposals for mining of uranium have been dealt with by environmental impact statement. According to the Department of the Environment, Sport and Territories:

Environmental impact statements prepared under the Act must assess the potential impact on the environment of the proposed action and of any feasible and prudent alternative to the proposed action. The assessment must also include consideration of the effectiveness of any safeguards or standards for the protection of the environment in relation to the proposed action and monitoring arrangements in respect of the safeguards (S 99, 5).

The Commonwealth Environment Protection Agency, which is part of the Department of the Environment, Sport and Territories, draws up guidelines for preparation of environmental impact statements in collaboration with the firm designated by the Minister for Resources and Energy as the proponent for a project. The Department has explained that: "The guidelines set out what matters are to be dealt with and the extent to which those matters shall be dealt with" (S 99, 5).

The content of an environmental impact statement is governed by Administrative Procedures made under the EPIP Act:

Contents of environmental impact statement

4.1 To the extent appropriate in the circumstances of the case, an environmental impact statement shall -

state the objective of the proposed action;analyse the need for the proposed action;indicate the consequences of not taking the proposed action;contain a description of the proposed action;include information and technical data adequate to permit a careful assessment of the impact on the environment of the proposed action;examine any feasible and prudent alternative to the proposed action;describe the environment that is likely to be affected by the proposed action and by any feasible alternative to the proposed action;assess the potential impact on the environment of the proposed action and of any feasible and prudent alternative to the proposed action, including, in particular, the primary, secondary, short term, long-term, adverse and beneficial effects on the environment of the proposed action and of any feasible and prudent alternative to the proposed action;outline the reasons for the choice of the proposed action;describe, and assess the effectiveness of, any safeguards or standard for the protection of the environment intended to be adopted or applied in respect of the proposed action, including the means of implementing, and the monitoring arrangements to be adopted in respect of, such safeguards or standards; andcite any sources of information relied upon in, and outline any consultations during, the preparation of the environmental impact statement.

(Extract from the Administrative Procedures under the Environment Protection (Impact of Proposals) Act 1974)

The draft guidelines for the proposed ERA mine at Jabiluka are contained in Appendix 2.1 to this report and serve as an illustration of the form and scope of environmental impact statements. As described by the Department:

The guidelines require that the report should address a wide range of potential impacts during the construction and operation of the mine site and associated areas such as the milling site and transport routes. The guidelines highlight potential impacts such as noise, waste disposal, site runoff, water quality, exposure to radiation, impacts upon World Heritage values and other natural and cultural values, effects upon biological diversity, social impacts upon communities and, in particular, on traditional owners (S 99, 6).

Environmental impact studies for Nabarlek, Ranger and the Olympic Dam Operation were all conducted under Commonwealth legislation. The Northern Territory at that time had not achieved self-government and, at that stage, the South Australian Parliament had not enacted environmental impact legislation.

State and Territory legislation now also requires conduct of environmental impact studies.

The present environmental impact study for the proposed ERA mine at Jabiluka is being conducted under joint Commonwealth and Territory auspices with the Commonwealth Environment Protection Agency taking the lead in consultation with the Environment Protection Division of the Northern Territory Department of Lands, Planning and Environment.

In the case of South Australia, environmental assessment is conducted under the Mining Act (SA). When a company deemed to be the proponent applies for a mining lease, the Minister for Mines can require the applicant to furnish any information or surveys that the Minister thinks fit. Under this provision the Minister can obtain information regarding the "measures that the applicant proposes to take to remedy damage to land that may result from the proposed mining operations."

Under the South Australian Development Act, section 75, either the Minister for Mines or the Minister for Housing and Urban Development may also call for an Environmental Impact Statement (EIS) or a Public Environmental Report (PER) to be prepared. (The Committee has been informed that it is proposed in a revision of the Mining Act now in progress that the Minister for Mines will also be able to call for an EIS or PER under the Mining Act.)

The Minister for Housing and Urban Development is, alternatively, able to declare a proposal to be a "major project" under section 46 of the Development Act and have the Major Developments Panel determine whether an EIS or PER is required and the issues to be addressed.

In the view of the South Australian Government, environmental impact assessment conducted under the Development Act follows a process similar to that utilised by the Commonwealth. These are said to be based on a "National Approach to Environmental Impact Assessment" adopted by the Australian and New Zealand Environment Conservation Council (ANZECC) to which South Australia is a signatory (S 109, 5).

As has already been pointed out, the original EIS for Olympic Dam was prepared under Commonwealth legislation in accordance with a letter of agreement between the responsible ministers because, inter alia, there was no South Australian legislation at the time. The EIS itself was prepared by Kinhill Stearns of Adelaide.

The EIS for the proposed extension of the Olympic Dam Operation is being prepared according to joint State/Commonwealth Guidelines. The process is being conducted by South Australia on behalf of both jurisdictions and the EIS will be assessed independently by those jurisdictions (S 109, para 2.2).

It is expected that a new EIS for the proposed Beverley mine in South Australia will be conducted this year on a similar basis.

The environmental assessment for CRA's proposed mine at Kintyre in Western Australia will be done jointly by the State and the Commonwealth under their separate legislation. The assessment will be coordinated by the Western Australian authorities through the Department of Environmental Protection and is based on an agreement between the State and the Commonwealth at ministerial level (20 January 1997, 869).

The rationale for the joint approach in this instance was explained thus:

The idea of having a joint assessment, since the statutory procedures are very similar in many cases, is to use a single document and a single process to allow each jurisdiction to report to their respective ministers. So the level of duplication is in fact minimised under that process. At the end of the day, you have state legislation and Commonwealth legislation which applies to the Kintyre project, but in terms of the environmental impact assessment process it is essentially a single process. So a lot of that potential for duplication has already been removed. (20 January 1997, 869)

There have been several observations about the process whereby mining of uranium is approved. The main aspects to attract attention are the possibility of unnecessary overlap or duplication between Commonwealth and relevant state or territory authorities; the discretionary nature of a decision to refer a mining proposal to the Minister for the Environment for analysis; the process of analysis; and the period of time for which an environmental impact statement remains valid.

Mr Robert Suttie, Director, Policy and Advisory Services in the Western Australian Department of Resources Development, was most concerned about duplication. He told the Committee that:

There seems to be some concern regarding the unnecessary overlap of Commonwealth and state bureaucratic functions and inefficient duplication of government roles. My experience has been that duplication does exist and, I believe, reduces Australia's international competitiveness. It is very difficult to prove the precise reduction in competitiveness in international markets, but it does seem to be fairly obvious that duplication of bureaucracy must result in increased costs in Australia and these must be paid for at some stage by someone (20 January 1997, 866-7).

Mr Suttie drew upon administration of the oil and gas industry in offshore waters and the protection of heritage values as examples.

He concluded: "Clearly, attempts can be made to minimise duplication. But, even so, its mere existence must seem inefficient and costly to the general public" (20 January 1997, 867).

Mr Suttie's views received little support in submissions or other evidence. The Chief Executive Officer of ERA, Mr Phillip Shirvington, stated that he regarded the level of regulation as "appropriate":

Certainly it [Ranger] is the most stringently regulated mine in the world, but that is a way of demonstrating to the Australian people that we are operating in an environmentally responsible way. It gives the Australian people the confidence that we are doing that (8 November 1996, 778).

Mr George Gauci, General Manager, Canning Resources Pty Ltd, told the Committee that so far as approvals for the Kintyre mine were concerned,

. . . there is no overlap. We will be providing an environmental review and management program to the state EPA for their approval, and that document will be an environmental impact statement for the federal EPA. Both these documents will be essentially the same.

. . . In fact, when we applied for approval to proceed with the project, we recommended that this project be given the highest level of assessment, which is ERMP [environmental review and management program] and EIS [environmental impact statement] (20 January 1997, 893).

In another expression of the industry view, the Minerals Council of Australia informed the Committee that:

The member companies of the Minerals Council of Australia accept the responsibilities and obligations contained in Commonwealth, State and Territory Governments' environmental regulations for mineral exploration and development. This applies to all mineral projects including the statutory requirements for uranium mining and milling (S 61, 14).

The Minerals Council of Australia also supported steps taken to harmonise and coordinate environmental regulation and management in Australia.

Other organisations making submissions to the Committee sought greater Commonwealth involvement. This view was strongly advanced in a joint submission from the Conservation Council of South Australia and the Friends of the Earth Nouveau. Critical of approvals secured by WMC Copper Uranium Division through South Australian processes for drawing water from Wellfield B for the Olympic Dam Operation, the submission recommended that "the Commonwealth Government review the Borefield B approvals with a view to a full Environmental Impact Assessment being undertaken on the location chosen after a public consultation process has occurred " (S 92, recommendation 6, 19).

The Committee's views on environmental impact studies relate only to preparation of environmental impact statements in relation to uranium mines which are only a very small proportion of the total. Other projects which are subject to environmental impact studies include large building developments and construction of the third runway at Kingsford Smith Airport, Sydney.

Although the Committee has concluded that there is little evidence of unnecessary overlap or duplication between Commonwealth and relevant state/territory authorities, it believes that there is scope for improvement in handling of proposals to mine uranium, and in subsequent evaluation of achievement of environmental goals. These recommendations of the Committee are contained in the concluding sections of this chapter.

Another criticism of the approval process focussed on the life of an approval. The Committee received several submissions criticising the decision to dispense with a fresh EIS in approving mining of Orebody #3 at Ranger on 15 May 1996. The Australian Conservation Foundation (ACF) stated that:

[e]nvironment groups have argued that the proposal should be subject to a new Environmental Impact Assessment. The key issues are differences from the initial EIS undertaken almost 20 years ago and the need to address outstanding issues relating to tailings and water management (S 81, 7-8).

The ACF then proceeded to criticise the February 1996 decision by the then Minister of the Environment, Senator John Faulkner, to approve an expansion of the copper/uranium mine at Olympic Dam without requiring an updated Environmental Impact Statement, notwithstanding that the proposed development fell within the initial approvals. According to the ACF:

At the time that John Faulkner approved the expansion: the State Parliament Committee established to investigate the leak from the Roxby tailings dam had not released its report; WMC had not consulted with the Arabanna people about the new borefield development; and there was neither satisfactory independent monitoring at the mine site or appropriate consultative mechanisms (S81, 8).

In fact, there had been consultations with Aboriginal people and, as a consequence of the confirmed approval, consultative mechanisms were reactivated.

The joint submission from the Conservation Council of South Australia and Friends of the Earth Nouveau contained a related criticism. It contended that the eventual approval in April 1996 to develop Borefield B to provide water for the Olympic Dam Operation did not reflect the proposal put before the public. According to the submission:

The above situation is the second known major instance where WMC has been given the necessary State Government approvals to significantly change a program after public environmental assessments have occurred. The first was the changes to the tailings dam system which resulted in the tailings leak (S 92, 19).

The two organisations believe these occurrences reinforce -

. . . the need for an independent monitoring body and a more active Commonwealth involvement in the environmental impact assessment process. An involvement which did not eventuate in this instance despite repeated requests by the environment movement (S 92, 19).

In fact, the case cited by the Conservation Council of South Australia and Friends of the Earth Nouveau regarding the Borefield B approval does not support their argument. The change to the proposal, to which they make reference, followed an assessment of the Survey and Assessment Report carried out by the Environmental Impact Assessment Branch of the South Australian Department of Housing and Urban Development.

For the purpose of establishing a monitoring network the Branch recommended in that assessment that the proposed designated area be expanded to the anticipated five metre drawdown contour. This does not constitute an expansion of the area of acceptable drawdown, nor does it change the acceptable impact. (Letter from WMC, 12 May 1997).

The broader questions are related to the criticism of the environmental impact process that the initiative is in the hands of a minister with a strong interest in promoting development. Only in limited circumstances is it obligatory for the Minister for Resources and Energy to refer a proposal to the Minister for the Environment.

A similar observation came from Friends of the Earth Sydney: they ask that a "no project" option should be a possible outcome of the environmental impact process (S 40, Part 2).

Friends of the Earth Sydney also criticised the expedition with which the process was conducted, in particular the speed with which it moved from final terms of reference to the draft environment impact statement. The Committee, while conscious that it is very rare for a public process to be criticised for the despatch with which it is executed, does not place great weight on these particular observations.

The Committee is not able to comment on the general force of most of these observations. Our conclusions relate only to their application to uranium mining and milling. They may be of some value in a review of environmental legislation announced in the "Saving our Natural Heritage" statement and the 1996 Budget statement by the Minister for the Environment.

Among the objectives of the review are improving the level of protection of the environment, eradicating legislative duplication between the Commonwealth and the States, promoting ecologically sustainable development and making approvals procedures more efficient and providing greater certainty in decision making (Roger Beale, Secretary, Department of the Environment, Sport and Territories to J.R. Nathrote, Secretary, Select Committee on Uranium Mining and Milling, 23 January 1997).

It is the Committee's view that uranium mining, where it is permitted, should only occur under the strictest conditions for the protection of the environment. Any new mine should be the high level clearance subject of, as observed by Mr George Gauci, General Manager, Canning Resources Pty Ltd, in evidence on 20 January 1997, quoted above.

The Committee's views on administrative arrangements for enhanced evaluation and accountability for achievement of environmental goals are set out at the end of this chapter.