EPBC Act amendments – a significant impact on the mining industry
The Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) is the Federal legislative framework that governs the protection and management of matters of national (and international) environmental significance.
Under Part 3 Division 1 of the EPBC Act there are eight matters identified as matters of national environmental significance:
Any action or activity that has, or is likely to have a significant impact on a matter of national environmental significance anywhere in Australia will be subject to the provisions of the EPBC Act including, but not limited to, the requirement to refer the matter to the Commonwealth Minister for Environment (or their respective delegate, the Department of Sustainability, Environment, Water, Population and Communities (SEWPAC)) for an environmental assessment.
Proposed amendments
On 1 November 2011 the Environment Protection and Biodiversity Conservation (Protecting Australia’s Water Resources) Bill 2011 (Cth) (Amending Bill) was introduced into Federal Parliament to amend the EPBC Act. One of the most prominent proposed amendments to the Bill includes section 24D, which provides that water resources will be regarded as a matter of national environmental significance requiring environmental assessment under the EPBC Act, but only in relation to mining operations.
Section 24D of the Amending Bill reads as follows:
A constitutional corporation, the Commonwealth or a Commonwealth agency must not take an action in the course of mining operations that has, will have or is likely to have a significant impact on the quality, structural integrity or hydraulic balance of a water resource.
Definition of mining operations
There has been much criticism from the resources industry as 'mining operations' is defined under the EPBC Act to include any activity that recovers or produces minerals (including petroleum or gas) including:
of minerals and also includes other related activities such as constructing towns and camps.
Further, the Amending Bill proposes to include a definition of 'water resources' which is defined as:
Who is affected?
The primary consequence as we see it, if the proposed definitions are introduced, is that all mining proposals may require referral under the EPBC Act due to the fact that a 'water resource' will be impacted as a result of 'mining operations'.
Further, the proposed definition of 'water resources' does not differentiate between high quality and low quality water resources or their respective ecological value. For example, a mining operation may involve the extraction of saline/dirty water from a stagnant creek for the purposes use in part of the mining process, which provides no ecological benefit to its immediate surrounding environment, nevertheless it may trigger the requirement to refer as the activity amounts to a significant impact on a 'water resource'.
Similarly, the Amending Bill has not provided any definition or guidance as to what constitutes a 'significant impact', which creates another level of uncertainty. In particular, whether the impact is viewed as quantitative or whether the impact is regarded as 'significant' in context of its surrounding environment.
New offences
The Amending Bill also proposes to introduce a suite of new offences, which could result in substantial penalties of up to $5,500,000 for an offence or seven years imprisonment.
Lavan Legal comment
On a literal interpretation, the Amending Bill, if passed, will certainly impact on all aspects of mining or petroleum exploration and indeed any incidental operation that would impact on groundwater.
If you would like to know more about the Amending Bill and its proposed amendments, please contract partner Craig Wallace on 9288 6828 / craig.wallace@lavanlegal.com.au or associate Shauna Mounsey on 9288 6745 / shauna.mounsey@lavanlegal.com.au.
Update on Water Services Bill
The Water Services Bill 2011 (WA) (Bill) and the Water Services Legislation Amendment and Repeal Bill, have introduced many key changes to water law in Western Australia. We have previously looked at the amendment to the definition of a water service, in our previous publications and propose to focus this advice on some of the other key changes including:
Ombudsman
The current position with regards to complaints and disputes requires customers to write to the Department of Water for assistance. However, the Department of Water does not have the power to require licensees to take action to resolve disputes.
Importantly, the new Bill creates a water ombudsman to ‘independently investigate and resolve disputes from customers affected by the provision of a water service’¹, this extends to disputes arising from the unreasonable refusal to provide a water service. Further, the ombudsman will have the power to make binding decisions to resolve disputes.
The water ombudsman is likely to be co-located with the energy ombudsman created under the Energy Coordination Act 1994 and the Electricity Industry Act 2004.
Under the Bill, the Economic Regulation Authority (Authority) cannot grant, transfer or renew a licence unless it is satisfied that the person or the licensee is a member of an approved ombudsman scheme or that the licensee will become a member of an approved scheme upon grant of the licence. It is also a condition of every licence that the licence holder comply with the decision or direction of the water services ombudsman.² This effectively ties the water licence holder into the ombudsman scheme and gives customers of water services the ability to approach the ombudsman with complaints and disputes.
Supplier of last resort
In addition to the introduction of a water ombudsman, the Bill includes a procedure for the appointment of a supplier of last resort. Essentially, the Bill will allow the Authority to appoint a backup water service provider in areas where it is considered that a water supplier is at risk of not providing a continuous service and to deal with situations where the water service provider is forced to exit the system. The power to appoint a supplier of last resort is on the grounds that water is an essential service for the community and it is important to minimise the risk of loss of water supply.
The Authority must seek expressions of interest from licensees prior to appointing a supplier of last resort which allows non-government water service providers to be eligible to be appointed as the supplier of last resort. The maximum length of appointment is two years which can be renewed and the supplier of last resort is likely to be compensated for its appointment.
The liability of the supplier of last resort is limited by the Bill and the supplier may also apply to the Minister to recover reasonable costs and expenses arising from acts or omissions of former licensees in the area of the condition of the works used when providing those previous water services.³
Disconnection and restriction of supply of water
The Bill also provides for a licensee to cut off, reduce the flow or refuse to connect the supply of water in certain circumstances. The provision prohibits the cutting off of water to an occupied dwelling, but allows disconnection in other circumstances.
In incidences such as in emergency, where accidents occur or where maintenance or repair is required, the licensee has some powers to interrupt, suspend or restrict water supply. The licensee must ensure that steps are taken to minimise disruption to water supply services.
Where the supply of a water service is interrupted, the Bill provides that the licensee is not liable for loss of damage from the interruption unless the interruption is the result of negligence or bad faith on the part of the licensee.
Summary
The creation of an ombudsman and provisions relating to a supplier of last resort are positive steps in creating consumer protection for customers as is the provision prohibiting the suspension of water to occupied dwellings. This article does not purport to summarise all amendments to the Bill, further articles addressing the other amendments will be publicised in due course.
For further advice on your obligations under the Bill and any of the matters related to Western Australia’s water service reform, please contract partner Craig Wallace (08) 9288 6828 / craig.wallace@lavanlegal.com.au or solicitor Anita Barnes (08) 9288 6802 / anita.barnes@lavanlegal.com.au.
Compensating landowners for ‘lifestyle’
On 12 January 2012, Edelman J of the Supreme Court of Western Australia delivered the judgment for the land compensation case of Lenz Nominees Pty Ltd v The Commissioner of Main Roads [2012] WASC 6. In doing so, Edelman J set out important principles for valuing land for compensation purposes following resumption for public purposes.
Facts of the case
On 26 July 2006, the Commissioner of Main Roads resumed approximately 14.5 ha of the Plaintiff’s rural property near Pinjarra for the purposes of the Perth-Bunbury Highway (Forrest Highway).
The Plaintiff’s farm covered approximately 123 hectares and was used for grazing purposes and contained a plantation of 901 pine trees. It was also in close proximity to Herron Point, a popular location for boating, camping and fishing.
Legal issues
The key considerations for the Court in assessing compensation payable were:
The value of land taken
The court heard evidence from a valuer for the Plaintiff, Mr Glenn Miller and two valuers called by Main Roads. The Plaintiffs' valuer and the Main Roads valuers had very different views on the highest and best use of the land. Mr Miller was of the view that the highest and best use was as a single lot with a farming and lifestyle use. The Main Roads valuers arguing that the best use was for farming with some potential for subdivision.
Edelman J found that ‘lifestyle’ factors assumed real significance in the assessment of the highest and best use of the resumed land. The lifestyle factors in this case included the desire of a purchaser to be near the beach, to have water views and to live in a property without loud traffic noise. Justice Edelman rejected Main Roads valuers evidence that an assessment of the highest and best use of the resumed land should be confined to its farming value and the potential for subdivision.
Justice Edelman concluded that the highest and best use of the resumed land was of a hypothetical purchaser who is an individual lifestyle investor, and who is also going to operate the resumed land as a fully operational farm.
Severance costs
Edelman upheld the claim for the loss due to severance of the land and in particular the claim for the loss of pine trees planted by the Plaintiffs on the resumed land. The pine trees were originally planted in order to block out noise from Forrest Highway and to create a sense of privacy. Upon the resumption occurring, the Plaintiffs had to plant new pine trees on the remaining portion of land in order to once again block out noise and create a sense of privacy. Edelman J held the proper measure of loss for this claim was the cost of replanting the pine trees due to the severing of the land taken from the remainder of the land.
Reduced value of remaining land
The Court also upheld an additional claim based on injurious affection to the rest of the owners' land. The Plaintiffs asserted injurious affection through the increased noise created by living adjacent to a busy highway. The Plaintiffs’ land was peaceful and tranquil before the resumption and before construction of the busy highway.
Justice Edelman accepted that the lifestyle uses of the remaining land had been severely blighted and made a substantial allowance for that blight.
Consequential loss
Compensation recoverable under the Act covers other consequential losses attributable to disturbance to the land arising from the resumption. Such consequential losses may include expenses for removal, disruption or reinstatement of business, halting building works in progress or fees for proposed works which can no longer be undertaken.
Edelman J held that none of the Plaintiffs’ claims for consequential loss were recoverable including a claim for anticipated future disturbance to farming activities, as the losses had not actually been incurred.
Conclusion
This case highlights that the most commonly contentious issue in compensation cases is the ‘highest and best’ use of land had for valuation purposes. The issue resolves upon which of the valuation opinion of valuers and supporting evidence of other experts are accepted by the Court.
In this case the Court clearly preferred the evidence of the Plaintiff’s valuer, Mr Miller over that of the Main Roads valuers. The Court consequentially made a substantial award over and above that assessed by Main Roads.
If you have any enquiries on land compensation matters, please contact partner Craig Wallace on 9288 6828 / craig.wallace@lavanlegal.com.au or consultant Brian McMurdo on 9288 6893 / brian.mcmurdo@lavanlegal.com.au.
A reminder for all property developers and land owners intending to develop in the near future, if you have land that contains habitat for the Graceful Sun Moth (as this is still a species protected under the Environment Protection and Biodiversity Conservation Act 1999) there is a limited window of opportunity in March 2012 to conduct the necessary surveys. If you have any queries in relation to the impact this species may have on your development please do not hesitate to contact Craig Wallace or Paul McQueen.
