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Australia – Aboriginal Elder Fails In Federal Court Challenge To Olympic Dam Expansion Project.

 

31 May 2012

 

Legal News & Analysis – Asia Pacific – Australia – Environment 

 

 

  • BHP Billiton Olympic Dam Corporation Pty Ltd secured the Federal Environment Minister's approval for the Olympic Dam mine expansion project in South Australia in October 2011.
  •  The proposal was approved subject to over 100 conditions. 
  • Kevin Buzzacott, an Aboriginal Elder of the Arabunna Nation, applied to the Federal Court for review of the Federal Environment Minister's approval on the grounds that it contained a number of legal errors. 
  • The Federal Court dismissed the application on 20 April 2012. 
  • The decision by the Federal Court provides guidance on the assessment of large scale proposals under the EPBC Act, including:  the level of assessment required for how such proposals will impact the environment at large; and  the level of finality required of an approval granted by the Minister. 
  • Mr Buzzacott has filed an appeal against the decision. A hearing date is yet to be set.

 

Introduction

 

On 10 October 2011, the Federal Minister for Sustainability, Environment, Water, Population and Communities – the Hon. Tony Burke MP (Minister) granted approval under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) to BHP Billiton Olympic Dam Corporation Pty Limited (BHP) for its proposed expansion of the Olympic Dam copper, uranium, gold and silver mine and processing plant, including all associated infrastructure, in South Australia (proposal).

 

Under the proposal, BHP proposes a new open pit mine to lift ore production and new and expanded infrastructure including a waste rock storage facility and an expanded tailings storage facility which will operate simultaneously with the existing underground mine.

 

BHP projects that the proposed expansion would create more than 13,000 jobs and contribute over $45 billion to the economy in South Australia and nationally over the next 30 years.

 

The validity of the approval was called into question in a case recently heard by Besanko J in the Federal Court. Besanko J dismissed the case on 20 April 2012.

 

Challenge to the approval and the Minister's decision making process

 

The Minister's approval was granted following a joint assessment undertaken by the Federal, South Australian and Northern Territory Governments. The approval is subject to more than 100 conditions including a requirement to establish an offset area of about 140,000 hectares, biodiversity conservation, environment protection management programs and monitoring and reporting obligations.

 

Despite what the Minister described as "a thorough and rigorous assessment of the [proposal] including independent expert reviews and consideration of public comments received on the project's environmental impact statement," on 23 February 2012, Kevin Buzzacott commenced proceedings in the Adelaide registry of the Federal Court.

 

Mr Buzzacott, an Aboriginal Elder of the Arabunna Nation in northern South Australia, asked the Federal Court (Court) to review the Minister's approval and decision making process under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act

 

Relief sought

 

Mr Buzzacott asked the Court to order:

 

  • that the Minister's decision to approve the proposal be set aside; and
  • that the matter be referred back to the Minister for further consideration according to law.

 

Grounds for challenge and the Court's findings

 

Mr Buzzacott challenged the validity of the Minister's decision to approve the proposal on six grounds, only five of which were dealt with by the Court.

 

Those grounds and the Court's findings were as follows:

 

Ground 1

 

Mr Buzzacott's first ground of challenge was that the Minister's decision to approve the proposal left so much of the proposal (including the assessment of the environmental impacts of the proposal and the proposed measures to protect or mitigate impacts) to be defined by proposed plans and studies, yet to be prepared or undertaken, that:

 

a) the making of the decision was an improper exercise of the power conferred by sections 133 and 134 of the EPBC Act;

b) the making of the decision was not authorised by EPBC Act; and

c) there was no jurisdiction to make the decision because the Minister misunderstood the nature of the jurisdiction he was required to exercise.

 

Mr Buzzacott argued that the conditions imposed on the approval:

 

  • depended upon a determination to be made in the future and the effect of the conditions could not be seen until further processes were undertaken. The Minister's approval was therefore uncertain; and
  • required significant aspects of the proposal to be designed or determined at a later stage. The approval was therefore in effect provisional or preliminary.

 

Besanko J rejected these arguments and found that:

 

  • the extent or degree of certainty required in conditions in order for an approval to be valid depends on the statutory context. Proposals assessed and approved under the EPBC Act may be very substantial developments carried out over a very long period of time. The Minister can therefore impose conditions with sufficient flexibility to "embrace the best scientific practice at the time".
  • the Minister had not handed over power to determine the scope of the project to BHP, by reason of the conditions which required Ministerial review and approval of the environmental protection management program and the mining and processing technologies being used.
  • the Minister is required by the EPBC Act to have regard to the precautionary principle and this enables the Minister to approve a proposal notwithstanding that there is a lack of full scientific certainty or lack of information determined by an objective standard (applying Tracy J's decision in Lawyers for Forests Inc v Minister for the Environment, Heritage, Arts & anor (2009) 165 LGERA 203 and the Full Court's decision in Lawyers for Forests Inc v Minister for the Environment, Heritage, Arts & anor (2009) 178FCR 385).
  • the Minister's power to impose conditions under the EPBC Act is very wide and includes the power to impose conditions to manage the impacts of proposals, which is broad enough to encompass significant additions or variations to the approved action. The power to require monitoring or testing recognises that there are always risks to the environment, particularly with major developments, and that conditions or circumstances change. The operation of the approved action needs to recognise the risks and changing conditions and circumstances and adapt to them.

 

Ground 2

 

Mr Buzzacott's second ground of challenge was that the granting of the approval was an improper exercise of the power conferred by sections 103(1) and 133 of the EPBC Act because the Minister failed to take into account the impact of the proposal on the environment due to the above ground storage of mine tailings.

 

Mr Buzzacott argued that the evidence before the Minister indicated the tailings would remain radioactive for hundreds of thousands of years, yet the Minister restricted his consideration of the effects of the radioactive material to a period in the order of 10,000 years. He argued the Minister was required to consider the period from 10,000 years to hundreds of thousands of years on the basis that there is no temporal limitation in the EPBC Act.

 

Besanko J rejected this argument and held that:

 

  • the Minister did consider the long-term effects and impacts on the environment of the storage of tailings.
  • the Minister was not bound to consider the matter in the particular manner and extent argued by Mr Buzzacott. The relevant matter required to be considered is determined by reference to the EPBC Act and in this case, it was the "long-term effects of the storage of tailings". Both periods referred to are very long periods of time and to draw any distinction between them for the purpose of determining the relevant consideration would be artificial.

 

Ground 3

 

Mr Buzzacott's third ground of challenge was that the granting of the approval was an improper exercise of power because the Minister failed to take into account the impact the proposal would have on the environment due to the export of uranium.

 

Mr Buzzacott argued that the requirement for the Minister to consider the impact of the proposal on "the environment" is not confined by national boundaries and the "the environment" includes the environment outside Australia. As the export of uranium was a component of the project, the Minister was therefore required to assess the effectiveness of international measures in relation to nuclear security and safeguards as well as the probability of nuclear accidents and their likely seriousness. However, the Minister only considered these matters in the context of imposing conditions.

 

Besanko J rejected these arguments and found that:

 

  • the "matter protected" for the purposes of section 136(1) of the EPBC Act is the environment, and the word "environment" is to be interpreted as the environment in the Australian jurisdiction, or in and of the Commonwealth, unless a contrary intention appears.
  • in any event, the Minister had considered the impact the proposal would have on the environment due to the export of uranium, referring to (among other things) a report on the proposal in the context of the international nuclear fuel cycle.

 

Ground 4

 

Mr Buzzacott's fourth ground of challenge was that the granting of the approval was an improper exercise of the power conferred by sections 130(1) and 133 of the EPBC Act because:

 

a) the Minister failed to consider the conditions that were required to be imposed, or were likely to be imposed, under South Australian law for the taking of additional groundwater from the Great Artesian Basin (GAB); and

b) as a consequence of (a), the Minister also failed to consider the impact the proposal would have on the environment due to the continued and increased extraction of groundwater from the GAB (dealt with under Ground 5 below).

 

Mr Buzzacott argued that in granting the approval, the Minister had failed to consider existing conditions on water extraction under State water licences and under the Roxby Downs (Indenture Ratification) Act 1982 (SA) (Indenture Act) and the Roxby Downs (Indenture Ratification) (Amendment of Indenture) Amendment Act 2011 (SA) (Indenture Amendment Act).

 

Besanko J rejected these arguments and held that:

 

  • the existing conditions imposed under the Indenture Act were not conditions "imposed on the taking of the action". They were imposed on the existing development and "qualify or travel with the proposed development".
  • the Minister did consider the conditions likely to be imposed under South Australian law and that this was properly limited to conditions likely to be imposed under a law of South Australia in force at the time the Minister makes his decision. The Minister was not required to speculate about the passage of a law which contains conditions, or under which an instrument may be made or granted which contains conditions (referring to the Indenture Amendment Act).

 

Ground 5

 

Mr Buzzacott's fifth ground was that the granting of the approval involved an error of law because the Minister assessed the proposal on the basis that continued water extraction from the GAB for the purpose of the proposal was not within the scope of the action and did not require EPBC Act approval. He therefore failed to consider the impact of the proposal on the environment due to the continued and increased extraction of groundwater from the GAB. Mr Buzzacott also argued that the Minister did not consider the impacts of water extraction under existing approvals.

 

Besanko J rejected this argument and found that:

 

  • the Minister had in fact considered the extraction of water from the GAB, evidenced by, among other things, the Minister's decision to apply existing requirements on water extraction as conditions on the approval.
  • although the impacts of extraction of water from the GAB were not dealt with in the Minister's reasons in detail, the Minister was entitled to take into account the fact that there was an existing approval in place.

 

Besanko J accordingly dismissed the application and reserved the question of costs, to be determined on the basis of further submissions from the parties.

 

The decision is available in full at: www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2012/225.html?stem=0&synonyms=0&query=buzzacott

 

Actions

 

The judgment of Besanko J provides further guidance on:

 

  • the level of finality required of an approval under the EPBC Act where large scale, multifaceted proposals are assessed, approved and conditioned. The judgment shows that the conditioning power of the Minister under the EPBC Act is very wide and enables conditions to be imposed on approvals which: 

 

  • provide a level of flexibility to accommodate variations in best practice; 
  • enable the adaptive management of actions in response to changing risks and improved technology; and 
  • llow for significant additions or variations to approved actions.

  • the level of assessment required by the Minister when considering the impacts of a proposal on "the environment" rather than a specific matter protected under the EPBC Act. The judgment shows the Minister is confined to a consideration of the impacts on the environment in the Australian jurisdiction, or in and of the Commonwealth, unless a contrary intention appears. 
  • the level of particularity required when a decision maker is required to consider a relevant matter. The judgment shows that the level of particularity is determined by reference to the EPBC Act and not by reference to the particular facts of a case.
  • Mr Buzzacott has filed an appeal to the Full Federal Court against the decision of Besanko J. A hearing date has not been set.

 

 

For further information, please contact:

 

John Briggs, Partner, Ashurst

john.briggs@ashurst.com

 

Melissa Bice, Ashurst

melissa.bice@ashurst.com

 

 

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