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Standing Committee on Environment - 20/06/2014 - Streamlining environmental regulation, ‘green tape’ and one-stop shops

BENNISON, Mr Simon, Chief Executive Officer, Association of Mining and Exploration Companies

SHORT, Mr Graham, National Policy Manager, Association of Mining and Exploration Companies

[10:04]

Evidence was taken via teleconference—

CHAIR: The next witness is the Association of Mining and Exploration Companies. They are attending by phone as I understand. If we could have that hook-up put through and ready to go. Mr Bennison and Mr Short, are you on the phone?

Mr Bennison : Yes, we are.

CHAIR: I welcome the representatives of the Association of Mining and Exploration Companies to the hearing who are joining us from Perth via telephone. As we proceed, it would be really helpful if you could just say your surname or Mr Short or Mr Bennison before you start talking. That would assist us today. Although the committee does not require you to give evidence under oath I should advise you the hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the house. We have your written submission. Do you wish to make an additional short statement to the committee?

Mr Bennison : Yes, thank you. Thanks for the opportunity at late notice to appear before the committee. I apologise that we have not been able to appear in person before you. Having said that, and the fact that you have our submission before you, one of the key areas that the Association of Mining and Exploration Companies is focused upon is, in particular, the mid-tier production sector and also the exploration sectors. It is in light of a lot of recent decline over the last decade of greenfields exploration in particular, but also within the mid-tier mining section, that we express concerns over a lot of the federal red tape and duplication that occurs within the environmental approvals, so much so to the extent that a lot of our international competitiveness has been lost. Last year, in particular, we saw 67 per cent of capital raised in the greenfields exploration sector directed offshore to projects. This has been a growing trend and a worrying trend for us within Australia where one considers the need for new discoveries for the mines of tomorrow.

Our particular accent has obviously been in our submission on a one-stop-shop process and the bilateral development that has been going on over recent times. There are a number of aspects within the EPBC legislation that has concerned us, some of which has obviously already been discussed by previous organisations that have appeared before you. We are very much focused on trying to get those bilateral arrangements agreed upon by the states and by ourselves as a national representative body with significant interests right across Australia. Thanks Mr Chairman, that is really all the opening comments I would like to make.

CHAIR: Thank you. That is any further comments. Just going to questions, I know some committee members have a few questions about your submissions. Your key argument in your submission is that there has been an encroachment of the Australian government in recent years and duplication. I just wanted to ask, because you are saying that you are mid-tier providers, is time still the critical factor in the approval processes for your members? Is it time that is the biggest cost in the assessment and approvals process?

Mr Bennison : Pretty much so. It is obviously the duplication of a lot of processes that do go on at the state and regional levels, even at local government levels. There is not only just the time and cost factor associated with it, but that which results in duplication.

CHAIR: You have obviously made some recommendations about the one-stop shop, which we appreciate. You are also interested in the assessment and approvals process recommendations. Do you support things like statutory time frames and this concept we have been talking about this morning of risk management of the criteria and things that need assessing, not giving them all equal weight, meaning that individual factors could be given more or less weight depending on the nature of the project?

Mr Bennison : Yes, we are very much approving of statutory time frames. We have seen them in practice in state jurisdictions working very effectively. I think it gives certainty to both government processes and applicants. We are very much in favour of online tracking of approvals. The is proving to be very effective, particularly in Western Australia, where approvals are now being tracked across agencies. This is still a work in progress but there has been a significant shift in the efficiency and disciplines in the approvals process as a result of introducing online tracking. Proponents can pull up their application at any point in time, see what desk it is on and for what reasons. I think transition into this sort of efficiency in managing applications is certainly reflecting a much greater discipline that is resulting in cost savings to the industry.

CHAIR: You have got some recommendations in there about environmental offsets, including providing clearer guidance of what constitutes a significant impact. How would that process work to get to a clearer guidance?

Mr Bennison : This is a common problem across all jurisdictions. It is trying to get away from a subjective nature and interpretation by assessors in government agencies and putting some more rigour around the wording of what actually defines a significant impact and what is significant. We have been through that in some detail recently with the review of the whole offset policy within Western Australia. Something similar is now taking place in Queensland. It has enabled us to get some consistency across the agencies just as to what a significant impact represents and also the various strategies for mitigation and reduction of those impacts and how that can be interpreted by either assessors or the companies themselves.

CHAIR: Thank you. I am going to go to Ms Marino.

Ms MARINO: Thank you for presentation and for your submission. There are a couple of things I wanted to ask out of that. You touched on the issue of duplication and the state and federal overlap. I wonder whether you could provide examples for the committee that we could consider where this has actually happened, where there are clear examples of duplication?

Also, one of the issues you touched on quite significantly was that of conditions—you also mentioned that there can be duplications and versions of similar conditions applied at a state and federal level—the committee would also appreciate examples of this. I think one of the things that I found interesting in your submission was the request for an audit of past environmental offsets to ascertain whether their performance is delivering the desired outcomes. I would be interested in your expansion on that particular point, please.

Mr Short : If I can just jump in, in terms of the provision of examples, I think it would be fair to say that each and every application that goes before the federal agency and triggers the EPBC Act is potentially an example. In terms of describing the process, and if I can also just come back to the Chair's question regarding the timing, just to give you a feel for the timing, for a normal exploration licence, and this is based on Western Australian information, information that has been extracted by the Department of Mines and Petroleum in Western Australia shows that over the last 10 years it takes something like 542 days just to get an exploration licence over the line before they even start to get out there and get involved with their drilling program.

Once they have done that drilling program and hopefully they are successful, and obviously in many instances they are unsuccessful, they then lead in to the approvals process through the relevant agencies. In the case of Western Australia, for example, we have got the Environmental Protection Authority. Again, information that has been made publicly available, I think the EPA has a target of two years to get an approval through.

This is all relating to the state jurisdiction. If the EPBC Act happens to be triggered, and depending on at what stage the EPBC Act is triggered, if it is early in the process then you have two processes that are occurring both at the state level and one at the federal level. The same information is being provided both at the state level and at the federal level. Clearly, there is duplication straight away. In terms of the time line, if the EPBC Act happens to be triggered later in the process, obviously that means that the federal process starts later and therefore there is a further delay in getting the information through to the federal agency to finalise their assessment and approval processes.

Ms MARINO: I would be interested also in some of the mid-cap miners and the costs and time requirements that are placed on some of those entities.

Mr Short : By way of example, there is a major project that is happening in Western Australia at the moment that will hopefully start shipping iron ore next year. They obviously have a whole range of contractors in place. Obviously it is a large-scale project. They have contractors in place, they have a very detailed Gantt chart with hopefully a shipping date. They have offtake arrangements that have been organised with overseas buyers. This all becomes time critical—one week, two weeks—so any delays working backwards through the approvals process certainly has a major implication in many ways, not the least of which is issues such as liquidated damages in the event that time frames are not met. Obviously in some of the remote regions that some of these projects are being developed it makes it even harder to get contractors on site and have them available.

Ms MARINO: Just one final thing, one of the recommendations that you made was in using online application and tracking systems as tools to improve the process and also for the companies involved to be able to track the procedure. Would your actual individual companies support this? It is not just the wider adoption of information and other, is this a process that would certainly assist the proponents, but also those who are from the community or others who are concerned about environmental processes? Do you see that being able to deliver for both?

Mr Bennison : Absolutely. State agencies have undertaken as part of the program to implement online tracking to have components of it made quite transparent to the public. It is not to the extent where you can actually go into the application, but there are parts of the portal that allow you to see that the applications are in progress and see some of that progress at certain stages. This is not new but it is providing greater transparency than what was originally done. There is no question that industry is keen to see the expansion of online tracking right through the state agencies. It is not cheap. To put the software into play is fairly expensive, in the context of several million dollars, particularly across agencies. In some cases, it requires the changing of systems and a complexity integrating with various software programs. We think for the long term this is going to be a really worthwhile investment.

Can I also just make a comment? You talked about the audit of offsets. Yes, we have proposed that. We had a complexity in the current offset arrangements where the state and federal agencies cooperate on trying to net offsets off. So, if there is a federal offset under the EPBC, they usually contact the state agency and say, 'Look, we will impose this offset, what are you imposing on this project?' They net one offset against the other. The problem we are also having is that we have various calculators, both at a federal level and at the state levels, that are significantly different in certain aspects and we are looking at consistency that will fall out through the bilateral arrangement that will enable the states to develop offsets relevant to the regions. This is an important component because in many instances a one-size-fits-all offset arrangement is not applicable. What happens in the south of the country versus the far north, or in the Pilbara versus the Central Desert, can be quite different in the cost calculation, particularly with the costs of equipment and so forth and there has been considerable inconsistency.

We have also seen, as a result of that, various offsets imposed on a company that we believe are not relevant to the project. What companies and agencies are now trying to do is look at a collective arrangement, either in a trust fund or a governance group that is comprised of companies contributing, to set strategic research directions for particular offsets if they are to achieve a specific outcome relating to the offset. In some instances, obviously, offsets are selected that may not have relevance to the actual trigger of the EPBC, but all that process is being looked at in more detail at the moment, particularly in Western Australia. We are trying to make sure that the current offsets that have been set are there for the right reasons and are in a value that is relevant to the impact of the projects.

CHAIR: Thank you, Mr Bennison and Mr Short. If you have any examples of those offsets that were less than effective in particular which might be relevant for the committee that might be very helpful if you could provide those. We might finish there, gentlemen, because we have another set of witnesses here and we have a break coming up. I want to thank you very much for your attendance by phone here today all the way from Perth. We appreciate that. With that extra information, if you could just provide it to the secretariat that you may have been asked to provide. We will send you a copy of the transcript of your evidence, you will have an opportunity to correct any errors. Thanks for your time today.