Green light for mining and CSG, but at what cost to developers and the environment?


The NSW Government’s Strategic Regional Land Use Policy has been heralded as the strongest set of regulations around mining and gas extraction in the nation. But in reality it is a second-rate response which offers little protection to farmers and the environment and manages to add costs and delays to coal and CSG projects.

The NSW Government released the Strategic Regional Land Use Policy on 12 September to protect valuable agricultural land and water resources from the impacts of mining and coal seam gas proposals, and better balance competing land uses. 

It follows more than 16 months of consultation with farmers, landowners, councils and the resources industry.  More than 2,000 submissions were received in respect of the draft Policy released in March 2012. 

The reforms introduce a new hoop for mining and coal seam gas developers to jump through if they are proposing developments on Strategic Agricultural Land.

Strategic land is highly productive land that has unique natural resource characteristics (such as soil quality and reliable water access) or socio-economic value (such as high productivity, infrastructure availability and access to markets). To be Strategic Land, a site must satisfy the Strategic Land Criteria set out in the Regional Plans.

The Gateway

The new hurdle is a “Gateway assessment process” which involves an assessment by the Mining and Coal Seam Gas Gateway Panel of the impacts of mining and CSG proposals on Strategic Land.

All State significant mining and coal seam gas proposals on strategic land must now submit to this additional assessment. The only exceptions are where the developer can prove the site does not meet the criteria for strategic land or where proposal is an expansion of a mine or CSG project entirely within an existing lease area. 

Following the assessment the Panel issues the project proponent with a Gateway Certificate. The Certificate must be obtained before a proposal can proceed to the development application stage.

In considering the application for a Certificate, the Panel will assess the proposal against specific criteria set out in Regional Plans, including whether the proposal would significantly reduce the agricultural productivity of the site or impact productive industries in the region.

Surprisingly, the Panel can not refuse an application for a Certificate.  Instead, the Panel must issue the Certificate either unconditionally or subject to conditions; in the latter case the proponent must address these conditions during the development application process. 

Under the earlier draft Policy released for public comment, it was proposed that the Panel would be able to refuse issuing a Certificate.  This change represents a significant watering down of the Gateway process and provides more certainty to mining proposals.  It also raises questions about the role of the Gateway and whether it adds any value to the assessment process or merely duplicates the assessment that will be undertaken during the development application stage. 

What is clear is that the Gateway will cause further delays for the granting of planning approvals to mining proposals because it adds another level of bureaucracy and assessment.  The extent of these delays is unknown however, considering the State will run out of gas in 2017, any additional delays have obvious implications for the looming gas shortage and, consequently, gas prices.  

Does the Policy strike the right balance?

Nationals’ Leader Andrew Stoner described the Policy as “the strongest and most comprehensive set of regulations around mining and gas extraction in the nation, if not the world”.  However, farmers and environmental groups have condemned it for failing to quarantine agricultural land from mining activities and adequately protect water resources. 

Coal and CSG industries are just as upset, complaining about the compliance costs and the inevitable delays in approving projects.  The fact that stakeholders from opposite ends of the spectrum are equally unhappy has led NSW Premier Barry O’Farrell to infer the Policy has got the balance right.    

The draft Policy released for public comment imposed far more stringent requirements on the coal and CSG industries than the implemented Policy.  As such, the impacts on these industries could have been much more significant. 

While adding costs and causing further delays to the delivery of coal and CSG resources through the introduction of the Gateway, in practice these reforms simply bring forward the consideration of the environmental impacts of Mining Proposals, but they also duplicate the assessment process. 

Importantly, the Policy does not establish “no-go zones” that prohibit mining and CSG proposals. This allows the Panel and the consent authority to consider the impacts of a proposal on a case by case basis.   

The Policy’s release has ended the NSW Government’s moratorium on the use of fraccing and the issue of exploration licences.  Since then, renewals for 22 outstanding exploration licences have been granted to mining companies including Santos, AGL Energy and Metgasco. 

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The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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Louise Camenzuli

Partner. Sydney
+61 2 9210 6621