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Significant Changes to NT Mining Regulation.

13 December, 2011

 

Recent changes to mining legislation in the Northern Territory flag greater government intervention in, and oversight of, environmental failures in the territory's mining operations.

 

How does it affect you?

 

  • The Mining Management Amendment Act 2011 (NT) (the Act) introduces significant reforms to the Mining Management Act (NT) (the MMA) including increasing the role of the Department of Resources (DoR) through broader reporting of environmental incidents and the increased potential for the publication of incident investigation reports, with all its reputational consequences.

 

  • The Act, among other things:
    • enables the Chief Executive Officer (CEO) of DoR to require investigations of less-serious environmental incidents that do not result in material environmental harm (in addition to the current requirements for incidents causing material environmental harm);
    • allows the publication of reports by operators or mining officers following environmental incidents;
    • introduces new environmental offences and confirms the application of Part IIAA of the Criminal Code Act (NT) (the Criminal Code) to offences under the Act;
    • introduces an obligation for mining operations (on a mining lease) to undertake annual public environmental performance reporting.

 

  • Mine owners and operators in the Northern Territory should be aware of the new environmental offences the Act introduces, as well as increased notification and reporting requirements.

 

  • Based on our inquiries, the key provisions of the Act are likely to commence in July 2012, however, mine owners and operators in the Northern Territory should monitor the commencement of the Act.

 

Notification requirements for environmental incidents

 

The Act makes a number of definitional and structural changes to the current Division 4 of Part 3 of the MMA, the key result being a new requirement for mine site operators to notify the CEO of the DoR as soon as practicable after becoming aware of an environmental incident or serious environmental incident. This means that all environmental incidents causing environmental harm must be reported under the new regime. The second reading speech indicates that '[w]here a series of incidents were to occur, it would provide a clear indication for [DoR] that further scrutiny may be required in relation to inspections and/or approvals of MMPs [mining management plans].'* This comment signals that the DoR intends to take action or more closely scrutinise operations where there have been repeated incidents.

 

In addition to the existing requirement for an operator to investigate and report on a serious environmental incident, the Act establishes a discretion for the CEO to require an investigation and report on any 'environmental incident' (which causes environmental harm). It will be a strict liability offence not to report the incident, unless the operator has a 'reasonable excuse'. As yet, the DoR has not provided guidance as to what will constitute a 'reasonable excuse'.

 

The CEO will also have a discretion to publish a report into the incident by a DoR mining officer or mine operator, if it considers this to be in the public interest.

 

Similar to the MMA, a person commits an offence if they interfere with a place where a serious environmental incident has occurred without a DoR mining officer's permission. Importantly though, the Act removes the defence of taking action to prevent further environmental harm, meaning that a mining officer's permission must always be obtained before any action is taken with respect to a place where a serious environmental incident has occurred. This has the potential to delay efforts to prevent environmental harm following an incident.

 

Environmental offences

 

The Act replaces all the existing environmental offences in Division 3, Part 3 of the MMA with new (but similar) environmental offences. The most serious, or 'level 1', environmental offence (the equivalent of the current offence in section 27(1)) is to be defined in s26(1) and will state:

 

"A person commits an offence if:

(a) the person engages in conduct on a mining site; and

(b) the conduct results in:

(i) a contravention of an environmental obligation; and

(ii) serious environmental harm. "

 

A new s27(1) provides a 'level 2' environmental offence, which is identical except that it results in material environmental harm. Section 28 creates a 'level 3' offence, which is identical except that it results in environmental nuisance. While these 'new' offences do not contain an express 'fault' element, Part IIAA of the Criminal Code will apply to these offences and therefore provide the relevant 'fault' element.

 

New environmental offences are also included in the Act where the offender is 'negligent'. As in the case of current environmental offences under the MMA, if a prosecution is brought with respect to one of the offences set out in the Act, then the court will be able to use its discretion to find the person guilty of an alternate 'lesser' offence.

 

The Act repeals the statutory defence in s79 (reasonable diligence or compliance with an environmental protection objective or authorisation that fixed the maximum levels for a particular contaminant), however, the existing defence in s80 (conduct that is in accordance with a guideline or code) will remain in an amended form.

 

General offences

 
Releasing waste or a contaminant

 

The Act also introduces a new strict liability offence for a person who 'releases waste or contaminant that is from a mining site', where 'the release is not authorised by the relevant mining management plan' (MMP). This offence applies regardless of whether the discharge causes environmental harm and regardless of whether the discharge occurs on or outside of the mining site.

 
Criminal sanctions

 

Part IIAA of the Criminal Code (which includes provisions relating to criminal responsibility) will apply to all the offences contained in the amended MMA. Therefore, the amended MMA will be read in conjunction with the Criminal Code for the purposes of interpreting offences (such as determining any 'fault' elements or defences that may apply).

 

The Act amends the penalties for offences under the MMA. The most significant amendment is the substantial increase in the penalty for carrying on a mining activity without authorisation (from 1,250 penalty units (currently $171,250) to 25,000 penalty units (currently $3,425,000) for bodies corporate). Additionally, offences in relation to mining officers (eg the provision of false information) have changed.

 
Body corporate vs executive officer liability

 

A new 'Part 9' contains new offences, and restates existing provisions in amended form. When the Act commences, provisions relating to the liability of a body corporate for the actions of its directors, employees and agents will be repealed. Instead, issues of liability for a body corporate will be dealt with by provisions of Part IIAA of the Criminal Code. The Act also extends criminal responsibility for offences under the MMA to 'executive officers' of a body corporate. Currently, the MMA attributes responsibility to directors and those concerned in the management of the body corporate and provides statutory defences for director liability offences. This is amended by the Act, which removes the express statutory defences but creates a new 'executive officers' offence with additional elements that will make the offence more difficult to establish.

 

If the elements for establishing executive officer liability are proven, an executive officer can be liable for all offences committed by the body corporate, not just environmental offences, as is currently the case under the MMA (eg offences relating to dealings with mining officers). This amendment clarifies are existing provisions regarding the liability of individuals for their representatives and the liability of partners and managers of unincorporated associations.

 

Authorisations

 

The Act makes minor amendments to the process for granting and varying mining authorisations. Under the new process, any application must be accompanied by a MMP and, if the owner is not the operator, a notice stating the date on which the operator was appointed. There is a requirement for the Minister to approve the MMP; however, this is closely linked with granting authorisation. The Minister can approve the MMP and grant the authorisation, or refuse the MMP and refuse to grant the authorisation. This differs from the existing situation, under which the Minister determines an application for an authorisation by granting or refusing to grant the authorisation; however, given that applications under the current system must be accompanied by an MMP, there is unlikely to be a material change under the new system. Also, the penalty for carrying out a mining activity without an authorisation has substantially increased to $3,425,000 for bodies corporate (up from $171,250 under the current MMA).

 

The Act adds to the details that must be included in a MMP. For example it requires:

 

  • details of the mining interest held for, or associated with, the mining site; and

 

  • details of the ownership of the mining interest.

 

Additionally, the Act introduces a subtle change to the process for amending MMPs, requiring them to be submitted for the Minister's approval, rather than the Minister's acceptance.

 

Currently, an application can be made for the review of a refusal to grant an authorisation, a decision to vary, revoke or refusal to vary/revoke a condition of an authorisation, or a decision to claim on security. Under the Act, an application can also be made for the review of a decision to refuse to approve a MMP or an amended MMP.

 

Environmental mining reports

 

The Act creates a new statutory MMP condition relating to mining minerals (but not extractive minerals**). This condition requires the operator to provide an annual environmental mining report that is made available to the public. The environmental mining report will include details of an operator's environmental performance and must take into account:

 

  • the commitments given by, and the obligations imposed on, the operator for an environmental assessment under the Environmental Assessment Act (NT); and

 

  • the obligations of the operator under the relevant management system for the mining site.

 

Under the Act, the Minister will be able to impose additional conditions upon an authorisation regarding the requirement to make particular reports, or parts of reports, available to the public (although the Minister already has the power to do this).

 

Extended definition: mining activity

 

The Act amends the definition of 'mining activity' to include 'the construction, maintenance and use of infrastructure authorised by an access authority granted under the [new] Minerals Titles Act' (NT). While not prevented by the existing regime, the amendment clarifies the DoR's ability to impose rehabilitation security for mining activities that are not situated on mining tenure, such as mining site access roads.***

 

Conclusion

 

The Act signals the DoR's desire to become more involved in all manner of environmental incidents, giving it broad latitude to take action even where an incident is not 'serious' (but still involves a degree of 'environmental harm'). Further, the amendments create an ability for an operator to be prosecuted for unauthorised discharges that do not cause any harm. At this stage, the Northern Territory Government has not outlined the resources or support measures it will use to ensure that the DoR can effectively discharge its new administrative obligations and manage the increased incident reporting. Whether the DoR will have the required resources to effectively manage and deal with the number of incidents that are likely to be reported is yet to be seen.

 

While clarifying ambiguities in the existing legislation, the amendments also have the potential to create inefficiencies. These include the requirement to report all environmental incidents (not just those that have the potential to cause a significant adverse effect on the environment), the possibility for the Chief Executive Officer to direct an investigation of an environmental incident (even though material environmental harm has not occurred) and the requirement to get the mining officer's approval to interfere with a place where serious environmental incident has occurred to prevent further environmental harm.

 
Footnotes

*Legislative Assembly of the Northern Territory, 18 August 2011, Mr Vatskalis (Minister for Primary Industry, Fisheries and Resources).

**'Extractive mineral' under the MMA 'means sand, gravel, rocks or soil extracted, obtained or removed for a purpose other than:

(a) extracting, producing or refining minerals from the sand, gravel, rocks or soil; or

(b) processing the sand, gravel, rocks or soil by non-mechanical means.'

***Legislative Assembly of the Northern Territory, 18 August 2011, Mr Vatskalis (Minister for Primary Industry, Fisheries and Resources).

 

 

For further information, please contact:

 

Chris Schulz, Allens Arthur Robinson

chris.schulz@aar.com.au

 

Emily Gerrard, Allens Arthur Robinson

emily.gerrard@aar.com.au

 

Katherine Kirby, Allens Arthur Robinson

katherine.kirby@aar.com.au

 

 

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