Underground Water Impacts: Queensland Miners Face New Regulatory Process

What you need to know

• The Queensland Government introduced the Environmental Protection (Underground Water Management) and Other Legislation Amendment Bill 2016 (Qld) on 13 September 2016.
• The Bill is aimed at finalising some of the key aspects of the water reforms commenced in 2014 under the Newman Government. 
• The provisions of the Bill relating to underground water are aimed squarely at the mining industry and will apply to both new and existing operations.  They confer new underground water rights and obligations and institute new approvals processes and changes to existing ones.
• For some scenarios the changes could add to process risks and uncertainties as well as timeframes and cost.

What you need to do

• Mining companies operating in Queensland will need to understand the new rights, obligations and processes proposed in the Bill and factor them into their present and future approvals strategies where mining will impact groundwater.

On 13 September 2016, Queensland's Environment Minister introduced the Environmental Protection (Underground Water Management) and Other Legislation Amendment Bill 2016 (Qld) (the Bill) aimed at finalising the Palaszczuk Government's position on some of the key aspects of water reforms commenced in 2014 under the Newman Government.  

We focus only on the Bill's provisions relating to new underground water management.  

Background

The Bill shows for the first time where the State Government has finally landed on controversies surrounding some of the previous Government's water reforms, which had been passed in 2014 but had not yet commenced. 

Subject to parliamentary committee processes, the new legislation is likely to commence between now and 6 December 2016.

The new process and who will be affected

The underground water changes contained in Part 5 of the Bill are only of direct relevance to the Queensland mining industry.  They are not relevant to the oil and gas industry.

At a rudimentary level, we see any groundwater-impacting mining development generally falling into one of three scenarios.  Which scenario will apply depends on what stage a particular mining development has reached - in terms of current approvals processes - by the time the new legislation comes into effect.  

A reading of the Bill will leave many perplexed, particularly as it largely amends legislation which then amends other existing legislation.  We have distilled the net effect of the Bill on existing legislation and have identified three scenarios to help mining companies determine what the changes will mean for them.

Our three scenarios are outlined below.  

Scenarios showing how the Bill may apply  

Scenario 1: Advanced developments 

New greenfield and brownfield extensions to existing mining operations which have not yet secured water licences to authorise the taking of or interference with groundwater, but are nevertheless well advanced in terms of approvals processes as follows:

• already have an environmental authority; or 
• already  lodged an application for an environmental authority; or
• already part of a project which the Coordinator-General has notified as a Coordinated Project.

Process 

To secure authorisation to take or interfere with groundwater under this scenario, the mining company will need to apply for and obtain a new kind of licence - an Associated Water Licence - through the following process:

• the mining company will have to prepare and submit an application for an Associated Water Licence (to whichever department will be responsible for administering this part of the new legislation);
• the department may issue requests for information about the application;
• the mining company will have to publicly notify the application including inviting members of the public to make submissions;
• the department will evaluate the application and the submissions according to nine specified criteria;
• the department will make a decision to grant or refuse the application (and will have broad condition-setting power in relation to decisions to grant); and
• the mining company and submitters will each be able to seek review of the decision by the department (internal review) or the Land Court (external review).

Insights 

Applications for groundwater-related water licences which are submitted now but remain undecided when the new legislation comes into force will be dealt with under the new Associated Water Licence process.

Once an Associated Water Licence is granted (after all rights of review and appeal are exhausted) the mining company can rely on the general rights of mining lease holders to impact groundwater under the Mineral Resources Act 1989 (Qld) (MRA). (See Scenario 3 below.)

However, if the decision to grant the Associated Water Licence is challenged, the mining company will nevertheless be able to rely on its Associated Water Licence from the date it is granted to commence groundwater-impacting activities (subject to any stay order the challenger may seek and obtain from a court).

As with any other mining company relying on the new groundwater rights in the MRA, the licence holder will not need to be concerned with the Water Act 2000 (Qld) requirements relating to underground water impact reporting and baseline assessments.  Agreements with bore holders are expressly deemed to be Make Good Agreements and the mining company is deemed to have complied with obligations to undertake a bore assessment. 

Because the Associated Water Licence processes will only be relevant for a period of time, the process provisions will sit in the transitional provisions chapter of the Water Act.  We understand that there may only be some 30 cases that meet the circumstances of this first scenario, so the Associated Water Licence process will only be relevant for a limited (though unspecified) time.

Scenario 2: Less advanced developments 

New greenfield and brownfield extensions to existing mining operations where an environmental authority application (or an application to amend an existing environmental authority) has not yet been lodged and no water licence issued for groundwater impacts.

Process 

Applications for environmental authorities will face adjusted processes, eg:

• new content requirements for environmental authority applications (and for applications to amend environmental authorities);
• new types of groundwater-specific conditions which can be imposed on environmental authorities; and
• new opportunities for conditions to be adjusted by the Department of Environment and Heritage Protection post-approval in certain circumstances.

The new legislation will adjust existing processes, with the adjustments focused on the extent of the mining operation's groundwater impacts and the broader environmental consequences of those impacts.

Insights 

In time, this is the process most mining companies must follow where their developments (greenfield or brownfield extensions) will impact on groundwater.

However, the new process arrangements in this scenario will not apply to applications for environmental authorities (or amendment applications) lodged before the new legislation commences.

Once a mining company completes the modified environmental authority process, and before it impacts groundwater, it will need to meet the Water Act requirements relating to underground water impact reporting and baseline assessments.  The additional time, cost and risk associated with these process elements will need to be taken into account.

Scenario 3: Business as usual 

Mining operations which have no need to secure water licences for groundwater impacts or have already secured water licences to authorise groundwater impacts.

Process 

Mining operations which have no need to secure water licences for groundwater or have already secured water licences to authorise the taking of and interference with groundwater will not need to follow any new approval processes under the Bill.  For them, it will be business as usual.

What will have altered though, is the fact that their rights to take or interfere with groundwater will stem from earlier water licences as well as the new underground water rights which will be conferred on all holders of mineral development licences and mining leases through the MRA (once the legislative package takes force).  
For companies in this category, the only steps that will need to be taken are:

• they will be required to measure volumes of groundwater taken (or estimate them if the 'take' is through evaporation) and report that to the department; and

• they will need to advise the department once the company starts exercising its underground water rights.

Insights 

Companies in this category who are taking or interfering with groundwater will not need to be concerned with the Water Act requirements relating to underground water impact reporting and baseline assessments.

However, any future greenfield or brownfield developments which will have new impacts on groundwater will fall within the second scenario above and face the new processes outlined there.

The text of the Bill and its Explanatory Notes can be found by following these links:

• Environmental Protection (Underground Water Management) and Other Legislation Amendment Bill 2016

• Explanatory Notes

The provisions of the Bill relating to issues in this Alert can only sensibly be read in conjunction with the following for which links are also provided here:

• Water Reform and Other Legislation Amendment Act 2014

• Water Legislation Amendment Bill 2015

• Mineral Resources Act 1989

• Water Act 2000