Endocoal Limited v Glencore Coal Queensland Pty Ltd and Department of Environment and Heritage Protection
[2014] QLC 54
•16 December 2014
LAND COURT OF QUEENSLAND
CITATION: Endocoal Limited v Glencore Coal Queensland Pty Ltd and Department of Environment and Heritage Protection [2014] QLC 54 PARTIES: Endocoal Limited
(applicant)v Glencore Coal Queensland Pty Ltd
(respondent)and
Chief Executive, Department of Environment and Heritage Protection
(statutory party)FILE NOS: MRA711-13
EPA712-13DIVISION: General Division PROCEEDING: Application for mining lease and objections; objections to application for environmental authority, and objections to conditions included in the draft environmental authority DELIVERED ON: 16 December 2014 DELIVERED AT: Brisbane HEARD ON: 21, 22, 23, 25 July 2014
4 December 2014HEARD AT: Brisbane MEMBER: PA Smith ORDERS: 1. I recommend to The Honourable The Minister responsible for the MRA that MLA 70452 be granted, subject to the insertion of a special condition into the Mining Lease that Endocoal enter into a make good agreement with Glencore, within either 12 months of the grant of MLA 70452 or before commencement of mining activities, whichever is the sooner.
2. I recommend to The Honourable The Minister responsible for the EPA that the amended EA as set out in Exhibit 25 be granted, subject to amendments being made consistent with Attachment 1 to these reasons.
CATCHWORDS: Mining – application for mining lease – objections – functions and powers of Land Court – statutory criteria in considering grant – Mineral Resources Act 1989 (MRA) ss 268, 269
Mining – application for environmental authority – objections – functions and powers of Court – Environmental Protection Act 1994 (EPA) ss 217, 219, 222, 223
Mining – Mineral Resources Act 1989 and Environmental Protection Act 1994 – different and competing objects
Mining – application for mining lease – whether some water issues can fall under MRA and EPA
Mining – application for mining lease – application of precautionary principle – EPA
Mining – make good agreement – whether applicant and objector should be ordered to enter into agreement as a condition of the mining lease
Environmental Authority – whether EA should be outcome based or prescriptive
Environmental Protection Act 1994
Environmental Protection (Greentape Reduction) and Other Legislation Amendment Act 2012 No. 16
Mineral Resources Act 1989
Water Act 2000
Water Reform and Other Legislation Amendment Act 2014Associated Minerals Consolidated Ltd v Wyong Shire Council (1974) 2 NSWLR 681
Boothey v Boothey (1997) BC9700784
CMR of Police v Eaton (2013) 294 ALR 608
De Lacey & Anor v Kagara Pty Ltd (2009) 30 QLCR 57
Donovan v Struber & Ors (2011) 32 QLCR 226
Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (No. 4) [2014] QLC 12
Savimaki & Ors v Sunshine Coast Regional Council [2013] QLC 33
South Australia v Tanner (1988-89) 161 CLR 166Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth – Brisbane Co-Op Ltd & Ors and Department of Environment and Resource Management [2012] 33 QLCR 79
APPEARANCES: P Ambrose QC for the applicant
DG Clothier QC with R Anderson for the objector
A Ireland for the statutory partySOLICITORS: Clayton Utz for the applicants
Allens for the objector
Background
The applicant Endocoal Limited (Endocoal) is proposing to develop an open cut coal mine, which it has given the name of Meteor Downs South (MDS). To achieve this goal, Endocoal lodged Mining Lease Application 70452 (MLA 70452) on 29 April 2011. At the same, time, Endocoal also applied for an environmental authority for MDS. Draft Environmental Authority EPML00559513 (EA) subsequently issued.[1]
[1]The core reference for the information contained in this summary is the Mining Registrar’s report (Exhibit 26) as well as the submissions of each party.
MLA 70452 is located approximately 30 km south-east of Springsure. Endocoal proposes the extraction of approximately 1.5 million Run of Mine (ROM) tonnes of low ash export grade thermal coal per annum.
A term of 15 years is sought for MLA 70452. At the time of the original application, MLA 70452 covered an area of 1,607 ha. Actual extraction of coal is expected to take eight to nine years, with the balance of time required for preparatory works and rehabilitation.
As Mr Ambrose QC for Endocoal has pointed out, in terms of other Central Queensland coal mines, MDS is not a large operation.
Certificates of Application and Public Notice were issued to Endocoal on 3 October 2013.
Following public notification, Glencore Coal Queensland Pty Ltd (Glencore)[2] made objections to both MLA 70452 and the EA.
[2]Note that Glencore was previously known as Xstrata Coal Queensland Pty Ltd.
In light of the objections lodged, it is the Land Court’s task to hear and determine the objections to MLA 70452 pursuant to the provisions of the Mineral Resources Act 1989 (MRA), as well as the objections to the EA under the Environmental Protection Act 1994 (EPA), and to then make relevant recommendations to the respective Ministers for each piece of legislation.
Glencore’s objections initially related to the inclusion of restricted land in the MLA as well as impacts on a water supply known as Naroo Dam. Following a change in the mining program, the issues relating to restricted land are no longer in issue. The central issue is therefore Naroo Dam.
Glencore operates the Rolleston Coal Mine (RCM) which neighbours the proposed MDS. RCM is ML 70307.
RCM is a large scale coal mining operation, much larger than the proposed MDS. Further, Glencore has advanced plans to substantially increase the size of the RCM. It has already made application for additional mining tenures. MLA 70415 is particularly relevant in this regard.
Glencore uses Naroo Dam as a source of potable water for its RCM mining operations. It is concerned that MDS will have a substantial impact on Naroo Dam and therefore on RCM.
At its highest, Glencore submits that neither MLA 70452 nor the EP should be granted due to the nature of impacts on RCM.
Alternatively, Glencore seeks a condition that, in the event both MLA 70452 and the EA are granted, there be a requirement for Endocoal to make good the water Glencore loses from Naroo Dam because of the MDS mining operation, and also that special conditions be added to the EA.
Both Endocoal and Glencore have assisted the Court by providing summaries of their respective positions. The summaries clearly bring the issues in the case into focus.
Endocoal in its summary has this to say:
“2. Summary
Authorisation for Naroo Dam
2.1Glencore's objections centre around the impacts of mining on MLA 70452 on Naroo Dam, which Glencore says, and it is accepted as correct by Endocoal, is used to support its RCM operations that are adjacent to MLA 70452. In particular, Glencore say that they use Naroo Dam as a potable water source for the RCM accommodation village (the majority of which is located off the RCM lease being ML 70307).
2.2As a threshold issue, there is a serious question as to whether Glencore currently has the appropriate authorisation to use water from Naroo Dam for that purpose. For the purpose of these proceedings, Endocoal has proceeded on the basis that Glencore does have an appropriate authorisation to take water form Naroo Dam, however this issue must be determined without doubt for the purposes of implementing any make good condition. That is not a matter for these proceedings.
Impacts properly assessed
2.3Glencore assert that mining on MLA 70452 will have a significant impact on the surface water and ground water inflows to Naroo Dam, and the quality of water in Naroo Dam. Glencore also assert that such impacts have not been properly assessed, and are too uncertain for the grant of MLA 70452 to be recommended by the Court. It is clear that what Glencore really seeks to know is what are, in each year of operation, the measured impacts of the operation. This is obviously unreasonable. The information of, for example, the sediment runoff in year 5 of operations, is not possible to know in advance of year 5. In any case, that figure is not the impact on Naroo Dam. The impact is sediment runoff, and the degree of impact is capable of measurement within the proper bounds of scientific modelling (for example by using likely rainfall).
2.4It is proper to acknowledge that the likely impacts are, for example, quantity and quality of runoff into the receiving environment (generally not only in relation to one part of that receiving environment) and, as is conventional, to model the worst and likely scenarios and describe the measures to mitigate those impacts. This is precisely what Endocoal's experts have done.
2.5Glencore are seeking to require Endocoal to collect further long term data prior to mining, however, Endocoal's position is that there is already an important set of existing data in relation to Naroo Dam, and ultimately it is the quality (rather than quantity) of data that is important. The project on MLA 70452 involves a relatively a small system that can be studied intensely over a short period of time, where the new data can be informed by the existing long-term dataset. Endocoal's position is that new data can be collated during mining in accordance with the recommendations of the experts.1 [(1) Refer to transcript of proceedings on 22 July 2014, page 2-55, lines 15 to 35, evidence of Mr Roads, where he states that Endocoal does not need any more data to identify the extent of the impacts of surface water issues prior to mining commencing. Also refer to Exhibit 6 - Joint Expert Report to the Land Court by Dr Noel Merrick and Mr John Bradley, paragraph 2.6(f) and (g) and Exhibit 24 - Further statement of evidence of John Bradley dated 18 July section 2(a). Both experts agree that trigger levels be set after 12 months of data has been collected, but that it is only necessary to collect 6 months of data before commencement of excavation below the water table, provided that bores are installed and monitoring commences prior to the next wet season. Mr Scott and Mr Tarlinton make similar statements about data being collected following the grant of the mining lease (Transcript of proceedings on 23 July 2014, page 3-66, lines 1 to 15, evidence of Mr Scott, and page 3-62, lines 30 to 45).]
Extreme positions taken by Glencore
2.6 Glencore's witnesses have consistently adopted extreme positions as to:
(a) the level of importance that Glencore and the RCM places on Naroo Dam as a water supply; and
(b) the impacts mining on MLA 70452 will have on Naroo Dam, in an effort to persuade the Court that MLA 70452 should not be granted. Glencore's experts say that mining on MLA 70452 will have catastrophic consequences for Glencore and the State of Queensland. However, the evidence has shown that the importance of Naroo Dam as a water supply to the RCM has been greatly overstated by Glencore (particularly given that Glencore does have viable alternative supplies of water), and that the extreme positions about the potential impacts of mining on MLA 70452 are highly unlikely to occur.
Adoption of expert recommendations and make good commitment
2.7Despite Glencore's assertions, the ground water and surface water experts have largely agreed as to the possible extent of the impacts, with only some disagreement about worst case scenarios which the experts agree are unlikely to occur. These, and other experts (particularly in relation to rehabilitation including erosion and sediment control), have made certain recommendations to ensure that the actual impacts are assessed and minimised during mining operations.
2.8Certain recommendations by Glencore's experts relating to rehabilitation seek to persuade the Court or DEHP to return to a prescriptive regime rather than one which is currently adopted and which is outcome based.2 [Transcript of proceedings on 23 July 2014, evidence of Mr Tarlinton, page 3-61, lines 25 to 45 where DEHP’s current position is outlined.] The EA conditions are designed to prescribe outcomes to be achieved to avoid general environment harm. Particular impacts upon an individual person/company, in this case Glencore, are properly dealt with by a specific make good condition, not general EA conditions designed to protect various environmental values.
2.9Endocoal is committed to implementing many of the practical recommendations made by the relevant experts including through implementation of the various plans and management strategies required in the draft EA.
2.10Although, based on the evidence, there are very good arguments that no make good condition is required in this case including because:
(a) Glencore may not have a current or future entitlement to the water;
(b) Glencore's evidence is very unclear as to past, current and future uses of the water (which makes it difficult to design any make good condition unless in the most general of terms);
(c) the dam is likely to run out of water without mining on MLA 70452 occurring;
(d) Glencore clearly have alternate supplies of water; and
(e) arguably impacts on water are more appropriately dealt with under the Water Act 2000 (Qld) as submitted by DEHP,
if the Court is minded to impose such a condition, Endocoal has indicated its willingness to make good any impacts caused by such mining on the quantity and quality of water in Naroo Dam, which Glencore would otherwise be entitled to take had operations on MLA 70452 not occurred. Given that Endocoal agrees to make good impacts, it is in Endocoal's interests to ensure that such impacts are minimised.
2.11Glencore suggest that Endocoal may not have the ability to make good such impacts, but there are a long line of authorities that require an assumption to be made that a ML/EA holder will comply with the conditions of those authorities.
No good reason for refusal of MLA 70452 and EA
2.12Endocoal submits that it has met the requirements of the MRA and EP Act with respect to the grant of MLA 70452 and the EA.3 [Exhibit 1 – Affidavit of Darren Noel Walker Sworn 12 March 2014, paragraphs 21 to 75. Also refer to paragraph 5 regarding the applicability of the Environmental Protection (Greentape Reduction) Act 2012 (Qld) to the EA application.]
2.13DEHP also considers that the EA adequately protects the relevant environmental values, and that the EA conditions are appropriate.
2.14In the above circumstances, in Endocoal's submission, there is no good reason for MLA 70452 and the EA not to be granted.
Glencore’s summary is as follows:
“SUMMARY
1.The circumstances of this proceeding are unique.
2.The applicant (Endocoal) proposes to develop and operate an open cut coal mine to be known as Meteor Downs South (MDS). Should it proceed, MDS will be in close proximity to Naroo Dam which, since October 2012, has been known by Endocoal to be the source of raw water for potable supply in connection with a neighbouring and much larger mine, the Rolleston Coal Mine (RCM)1 [Ex 22 para 38]. Endocoal has designed MDS such that water from spoil dumps and industrial areas will drain into Naroo Dam. In the experience of Mr Scott, a geochemist with over 42 years experience in relation to coal mines, that is unprecedented2 [As identified below, Mr Walker’s experience is to the same effect. No other witness suggested anything that contradicted Mr Scott’s experience.]
3.It is clear on the expert evidence before the Court that MDS will have adverse impacts on Naroo Dam. The areas of controversy in relation to that evidence relate principally to the extent of the impacts. On the evidence before the Court, those areas of controversy exist only because Endocoal has not done the work to determine the impacts with reasonable certainty. Principally, it has not collected adequate data in relation to stream flow in the Naroo Dam catchment, water quality in relation to that stream flow or Naroo Dam or soil or overburden characteristics. There is no explanation (or excuse) for this.
4.In the submission of the respondent (Glencore), these are good reasons why the Court should recommend against both MLA 70452 and the draft Environmental Authority (EA). Whether or not this may delay MDS3 [There is no real evidence of this. Endocoal has said that it intends to commence the construction of MDS as soon as a mining lease is granted: ex 1, para 29. It even told the Commonwealth in May 2014 that the initial stage of construction was expected to commence in mid 2014 even though the trial of this proceeding had been set down for July 2014 and therefore no recommendation had been made by the Court: ex 27, section 2.6.1.1 (p.29). Endocoal has also said that its parent company (U&D Coal Ltd) has the necessary funding to establish MDS: ex 1, para 38. But the statement of technical and financial capabilities was deliberately omitted from ex 1 and there is no supporting evidence for this statement. The evidence suggests that detailed planning is on hold pending the grant of a mining lease and, moreover, that U&D Coal Ltd is in dispute with its major shareholder over whether a capital contribution of approximately $50m must be refunded]
5.If the Court were minded to recommend in favour of the MLA and draft EA, it should also recommend stringent conditions. It is not to the point that goal based conditions may currently be in vogue within the Department. The Court is not bound by the approach of the Department. The very reason this process exists is to provide independent oversight over MLAs and draft EAs. There is no inconsistency between stringent conditions and the relevant goals in this case as stringent conditions can only assist the achievement of those goals. In any event, an appropriate response to the unique circumstances of this case does not set a precedent against which other cases will likely be judged.
6.In considering these matters, it is necessary to bear in mind the manner in which this proceeding comes to the Court.
7.Inexplicably, in support of its application for an EA, Endocoal caused to be prepared, and then provided to the Department as the basis for its assessment, an environmental management plan (EMP)4 [The EMP is ex DNW8 to ex 1. The EMP includes a Surface Water Assessment Report from WRM (Mr Roads) dated May 2013 (Appendix A), a Baseline Groundwater Study from Coffey Environments dated 21 December 2012 (Appendix B) and a Soils and Overburden Assessment Report from GSS Environmental dated March 2013] that did not recognise Naroo Dam for its most important purpose. This is because Endocoal did not tell its consultants about its most important purpose5 [Mr Roads agreed it was a material thing to be told and said he was unaware of it until after objections were lodged (T2‐43/15). The objections are dated 28 November 2013: exs 10 & 11.]
8.The EMP was prepared by reference to a very different initial development plan (IDP) that plainly involved significant impacts on Naroo Dam6 [These included the loss of approximately 87% of the catchment for Naroo Dam, the draining of mine affected water into Naroo Dam and the mining of part of Naroo Dam. Mr Walker suggested these matters may not have a significant impact on Naroo Dam. The fact that Endocoal has changed its IDP as it has demonstrates the lack of merit to that suggestion]. The IDP that Endocoal now relies on7 [Ex DNW19 to ex 1] was only provided in Endocoal’s material in this proceeding and, to the extent the impacts of it have been assessed, that has only occurred in this proceeding. The assessment has not involved the preparation of any revised EMP, the assessment of the proposed amended EA8 [Ex 25. Mr Tarlinton was asked in cross‐examination whether the department had any concerns about ex 25. He rightly responded that it would need to be assessed] by Mr Tarlinton or, apparently, the submission of the IDP under the Mineral Resources Act 1989 (MRA). What is has involved is the use of the Court’s processes (including the use of Glencore’s experts) to attempt to do what should have been done long ago.
9.By reason of the changed IDP, some of Glencore’s objections (and particulars of objections) are no longer relevant. Examples include objections in relation to the inclusion of restricted land in the MLA, the mining of restricted land and in relation to inhibiting access to Naroo Dam. However, Glencore’s objection that the MLA will have adverse impacts on the quality and quantity of water in Naroo Dam remain valid.”
Although the statutory party did not provide a summary of its submissions, this was because its submissions[3] were relatively short. The following extracts explain the position of the statutory party:
[3]Those as amended as at 31 July 2014.
“Applicant’s mining proposal
5.The applicant’s application dated 29 April 2011 and environmental management plan dated 3 May 2013 were received and assessed by the Department of Environment and Heritage Protection (‘the Department’). That assessment is set out in the Affidavit of Samuel Edward Tarlinton (exhibit 23) and further detailed in the Department’s assessment report (exhibit 36).
6.Following assessment in compliance with the Environmental Protection Act 1994 (‘EP Act’), the Department issued a draft EA on 29 July 2013. The position of the Statutory Party is that the conditions proposed in the draft EA were reasonable, necessary and desirable to deal with the impact of the mining activities as provided for in the applicant’s application documents.
7. As detailed in paragraphs 77-88 of exhibit 1, the applicant has proposed changes to its project which are reflected in a revised Initial Development Plan (IDP) and mine water management system. Those changes are subsequent to the issuing of the draft EA2.
8.The applicant tendered a marked up version of the draft EA (‘the marked up EA’) (exhibit 25) in the proceedings. The applicant contends that the marked up EA accommodates the changes to its project.
9.It is important to note that the changes in the marked up EA are not substantive. They consist of amendment to the approved plans and schedules 2 and 3 to reflect changes in the location of infrastructure rather than changes to any content requirements of conditions in the draft EA.2 [The department considers that the changes constitute a minor change and therefore a new application is not required]
10.In consideration of the changes detailed in paragraph 7 and the evidence in the proceedings, the department has reviewed the marked up EA. For the reasons outlined below, the Statutory Party considers that the marked up EA is appropriate and that no more (or less) stringent conditions are necessary. Accordingly, the Statutory Party submits that the Court should recommend to the Minister that the marked up EA be issued.
Impacts to Naroo Dam - interaction between the EP Act and the Water Act 2000
…
14.The Statutory Party submits that the Court can be satisfied that impacts, being, changes to the yield of water from MLA70452 resulting from
theany take of and/or interference with water caused by the Applicant’s proposal can be effectively dealt with:
a.by the monitoring requirements imposed in the marked up EA (which do not differ from the draft EA originally issued);
b.the water licence process that the Applicant must go through (including possible appeal/s to this Court) in respect of groundwater inflows to the mining pits; and
c.by the current water legislative framework3 [The interference and take of overland flow water is permissible under section 20(1)(g) of the Water Act 2000 and section 110(2)(d) of the Water Resource (Fitzroy Basin) Plan 2011. As per section 110(1) of the Water Resource (Fitzroy Basin) Plan 2011, section 110 limits overland flow water that may be taken under section 20(2)(b) of the Water Act 2000. Therefore, the Water Act 2000 and subordinate legislation has specifically considered and provided authorisation for the take and interference of overland flow associated with mining activities in the Fitzroy Basin] in respect of the take and interference of overland flow.
Water Quality
…
17.The Statutory Party submits that the impacts on water quality can be effectively dealt with by the water quality limits included in the marked up EA.
Rehabilitation
18.Evidence was adduced in these proceedings in respect of the adequacy of rehabilitation conditions, specifically the requirements in the marked up EA pertaining to slopes of the rehabilitated landform.
…
20.In respect of both slope and longitudinal drainage gradient, Mr Tarlinton gave oral evidence that:
a.based on his departmental and personal experience 12 degrees and 2% can be achieved;
b.12 degrees and 2% are at upper ends of the spectrum, in other words they are a maximum reference point; and
c.the Department is concerned with the rehabilitation outcome which is consistent with the Department’s current practice of imposing outcome based conditions – in that respect the relevant outcome is the achievement of a stable landform.
21.Therefore, the applicant must rehabilitate to a stable landform regardless of the specified maximum slopes. Accordingly, the Statutory Party submits that the rehabilitation conditions as contained in the marked up EA are achievable and appropriate.
Sufficiency of data
…
23.The position of the Statutory Party is that there was sufficient information provided in the application and the environmental management plan to assess the application and issue a draft EA.
24.Further, there are conditions in the marked EA (which do not differ from the draft EA originally issued) which require further and ongoing monitoring.
Conclusion
25.The Statutory Party respectfully submits that the Court should recommend to the Minister that the marked up EA be issued because:
a.the applicant’s application was properly assessed in accordance with theEP Act; and
b.conditions were included in the draft EA and relevantly, those conditions remain in the marked up EA, that are necessary and desirable and that appropriately deal with the impacts that will be caused by the Applicant’s proposal.
It is often said that a picture is worth a thousand words. Certainly, in this case, a diagram showing the location of Naroo Dam in relation to the respective mining tenements is particularly helpful. I thank the parties for providing the following to the Court:
The Hearing
Both the MRA and EPA matters were heard together. Evidence in one matter was taken to be evidence in the other matter.
It should also be noted that the statutory party was only a party to the EPA proceedings.
Oral evidence was heard from 21-23 July 2014, and oral submissions were heard on 25 July 2014. The parties also provided written submissions, and further submissions to take into account further submissions by the statutory party regarding the operation of legislation relating to water. The further submissions by Endocoal and Glencore were extensive.
The hearing resumed on 4 December 2014 so that the parties could make further submissions on the impact of the Water Reform and Other Legislation Amendment Act 2014 (Water Reform Act).
As at 4 December 2014 the Water Reform Act had been passed by Parliament[4] but had not been proclaimed into force. As at the date of delivery of these recommendations, the Water Reform Act has commenced in part, but those parts impacting on mining tenures and water have not commenced.
[4]On 26 November 2014.
Endocoal was represented throughout the hearing by Mr Ambrose QC, instructed by Clayton Utz.
Glencore was represented by Mr Clothier QC and Mr Anderson, instructed by Allens.
The statutory party was represented by Ms Ireland, a legal officer with the Department of Environment and Heritage Protection.
Oral evidence was given during the hearing by the following:
· Darren Noel Walker, General Manager, Resource Development, U & D Mining Industry (Australia) Pty Ltd, called by Endocoal;
· Gregory Kenneth Roads, Civil Engineer, WRM Water and Environment Pty Ltd, called by Endocoal;
· John William Bradley, Principal Hydrogeologist, JBT Consulting Pty Ltd, called by Endocoal;
· Rodney Peter Masters, Technical Discipline Executive (Land Assessment Rehabilitation and closure, water and land engineering, computer aided design and geographic information systems), SLR Consulting Australia Pty Ltd, called by Endocoal;
· Lindsay Grant Ford, Mining Engineer, Glencore, called by Glencore;
· Stephen John Downes, Water Infrastructure Manager, Glencore, called by Glencore;
· Kenneth John Dixon, Environment and Community Manager, Glencore, called by Glencore;
· Dr Noel Patrick Merrick, Hydrogeologist, HydroAlgorithmics, called by Glencore;
· Anthony Marszalek, Civil Engineer, Gilbert & Associates Pty Ltd, called by Glencore;
· Terrence Andrew Short, Agricultural Scientist, La Tierra Pty Ltd, called by Glencore;
· Samuel Edward Tarlington, Manager of Mining, Mackay, Department of Environment and Heritage Protection, called by the statutory party
· Peter Alexander Scott, Senior Principal Geochemist, O’Kane Consultants Pty Ltd, called by Glencore.
In making these recommendations, I have taken into account all of the evidence presented in this case, and have considered and taken into account all of the submissions of each party. These recommendations refer to the salient points, but not all of the material, which I have considered.
The statutory framework
In considering many MRA and EPA objections in the past, I have considered in great detail the relevant legislation. Although what follows is largely taken from Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (No. 4),[5] it is appropriate to again refer to the legislation in detail.
[5][2014] QLC 12.
There is a rather complex statutory framework underpinning these matters, which involves the MRA, the EPA and the Water Act 2000 (Water Act).
As Endocoal’s MLA 70452 is made pursuant to the MRA, it is appropriate to consider that legislation first.
MRA
Pursuant to s 268 of the MRA, the Court is required to conduct a hearing into the application for the grant of the mining lease and the MRA objections. Section 268 relevantly provides as follows:
“268 Hearing of application for grant of mining lease
(1) On the date fixed for the hearing of the application for the grant of the mining lease and objections thereto, the Land Court shall hear the application and objections thereto and all other matters that pursuant to this part are to be heard, considered or determined by the Land Court in respect of that application at the one hearing of the Land Court.
(2) At a hearing pursuant to subsection (1) the Land Court shall take such evidence, shall hear such persons and inform itself in such manner as it considers appropriate in order to determine the relative merits of the application, objections and other matters and shall not be bound by any rule or practice as to evidence.
(3) The Land Court shall not entertain an objection to an application or any ground thereof or any evidence in relation to any ground if the objection or ground is not contained in an objection that has been duly lodged in respect of the application. …”
Section 269 of the MRA then goes on to relevantly provide:
“269 Land Court’s recommendation on hearing
(1) Upon the hearing by the Land Court under this part of all matters in respect of an application for the grant of a mining lease, the Land Court shall forward to the Minister—
(a)any objections lodged in relation thereto; and
(b)the evidence adduced at the hearing; and
(c)any exhibits; and
(d)the Land Court’s recommendation.
Note—
For other relevant provisions about forwarding documents, see section 386O.
(2) For subsection (1)(d), the Land Court’s recommendation must consist of—
(a)a recommendation to the Minister that the application be granted or rejected in whole or in part; and
(b)if the application relates to land that is the surface of a reserve and the owner of the reserve has not consented to the grant of a mining lease over the surface area, the following—
(i) a recommendation to the Minister as to whether the Governor in Council should consent to the grant over the surface area;
(ii) any conditions to which the mining lease should be subject.
(3) A recommendation may include a recommendation that the mining lease be granted subject to such conditions as the Land Court considers appropriate, including a condition that mining shall not be carried on above a specified depth below specified surface area of the land.
(4) The Land Court, when making a recommendation to the Minister that an application for a mining lease be granted in whole or in part, shall take into account and consider whether—
(a)the provisions of this Act have been complied with; and
(b)the area of land applied for is mineralised or the other purposes for which the lease is sought are appropriate; and
(c)if the land applied for is mineralised, there will be an acceptable level of development and utilisation of the mineral resources within the area applied for; and
(d)the land and the surface area of the land in respect of which the mining lease is sought is of an appropriate size and shape in relation to—
(i) the matters mentioned in paragraphs (b) and (c); and
(ii) the type and location of the activities proposed to be carried out under the lease and their likely impact on the surface of the land; and
(e)the term sought is appropriate; and
(f)the applicant has the necessary financial and technical capabilities to carry on mining operations under the proposed mining lease; and
(g)the past performance of the applicant has been satisfactory; and
(h)any disadvantage may result to the rights of—
(i) holders of existing exploration permits or mineral development licences; or
(ii) existing applicants for exploration permits or mineral development licences; and
(i)the operations to be carried on under the authority of the proposed mining lease will conform with sound land use management; and
(j)there will be any adverse environmental impact caused by those operations and, if so, the extent thereof; and
(k)the public right and interest will be prejudiced; and
(l)any good reason has been shown for a refusal to grant the mining lease; and
(m)taking into consideration the current and prospective uses of that land, the proposed mining operation is an appropriate land use.
(5) Where the Land Court recommends to the Minister that an application for the grant of a mining lease be rejected in whole or in part the Land Court shall furnish the Minister with the Land Court’s reasons for that recommendation.”
The objects of the MRA are also relevant. They are set out in s 2 as follows:
“2 Objectives of Act
The principal objectives of this Act are to—
(a)encourage and facilitate prospecting and exploring for and mining of minerals;
(b)enhance knowledge of the mineral resources of the State;
(c)minimise land use conflict with respect to prospecting, exploring and mining;
(d)encourage environmental responsibility in prospecting, exploring and mining;
(e)ensure an appropriate financial return to the State from mining;
(f)provide an administrative framework to expedite and regulate prospecting and exploring for and mining of minerals;
(g)encourage responsible land care management in prospecting, exploring and mining.”
EPA
It should be noted at the outset that the EPA has undergone significant amendment, and that those amendments directly relate to the objection process under the EPA. The significant amendments commenced on 31 March 2013.[6] For the purposes of this decision, s 683 of the EPA (as currently enacted) provides that the previous provisions of the EPA, under former Chapter 5, apply. Accordingly, the provisions which relevantly commenced on 31 March 2013 are to be ignored. All further references in this decision to the EPA will be to those provisions from the former Chapter 5 of the EPA.
[6]See Environmental Protection (Greentape Reduction) and Other Legislation Amendment Act 2012 No. 16.
The object of the EPA is important. Section 3 of the EPA provides as follows:
“3 Object
The object of this Act is to protect Queensland’s environment while allowing for development that improves the total quality of life, both now and in the future, in a way that maintains the ecological processes on which life depends (ecologically sustainable development).
4How object of Act is to be achieved
(1) The protection of Queensland’s environment is to be achieved by an integrated management program that is consistent with ecologically sustainable development.
(2) The program is cyclical and involves the following phases—
(a)phase 1—establishing the state of the environment and defining environmental objectives;
(b)phase 2—developing effective environmental strategies;
(c)phase 3—implementing environmental strategies and integrating them into efficient resource management;
(d)phase 4—ensuring accountability of environmental strategies.
(3) The relationship between each of the phases is shown in the figure appearing at the end of this Act.
(4) Phase 1 is achieved by—
(a)researching the state of the environment, including essential ecological processes; and
(b)deciding environmental values to be protected or achieved by consulting industry, government departments and the community.
(5) Phase 2 is achieved by—
(a)developing environmental protection policies that, among other things—
(i) decide environmental indicators; and
(ii) establish ambient and emission standards for contaminants; and
(iii) require waste management, including waste prevention and minimisation; and
(iv) advise on management practices; and
(b)promoting environmental responsibility and involvement within the community.
(6) Phase 3 is achieved by—
(a)integrating environmental values into land use planning and management of natural resources; and
(b)ensuring all reasonable and practicable measures are taken to protect environmental values from all sources of environmental harm; and
(c)monitoring the impact of the release of contaminants into the environment; and
(d)requiring persons who cause environmental harm to pay costs and penalties for the harm.
(7) Phase 4 is achieved by—
(a)reviewing the results of human activities on the environment; and
(b)evaluating the efficiency and effectiveness of environmental strategies; and
(c)reporting publicly on the state of the environment.
5Obligations of persons to achieve object of Act
If, under this Act, a function or power is conferred on a person, the person must perform the function or exercise the power in the way that best achieves the object of this Act.
6Community involvement in administration of Act
This Act is to be administered, as far as practicable, in consultation with, and having regard to the views and interests of, industry, Aborigines and Torres Strait Islanders under Aboriginal tradition and Island custom, interested groups and persons and the community generally.”
As I said in the Land Court decision of Donovan v Struber & Ors:[7]
“[14]The objects of the EP Act are vastly different from the objects of the MRA. While the key object of the MRA is to facilitate the mining of the State’s resources, s.3 of the EP Act states that the object of that Act is to protect Queensland’s environment while allowing for development that improves the total quality of life, both now and in the future, in a way that maintains the ecological processes on which life depends (ecologically sustainable development).
[15]Section 4 of the EP Act provides for an integrated management program, which involves implementing environmental strategies and integrating them into efficient resource management. Accountability is an important element, while s.8 defines ‘environment’ and s.9 defines ‘environmental value’. Section 14 defines ‘environmental harm’ and how it may be caused by an activity. Section 15 defines ‘environmental nuisance’ as unreasonable interference or likely interference with an environmental value caused by:
(a) noise, dust, odour, light; or
(b) an unhealthy, offensive or unsightly condition because of contamination; or
(c)another way prescribed by regulation”
[7](2011) 32 QLCR 226.
Section 14 of the EPA refers to environmental harm:
“14 Environmental harm
(1) Environmental harm is any adverse effect, or potential adverse effect (whether temporary or permanent and of whatever magnitude, duration or frequency) on an environmental value, and includes environmental nuisance.
(2) Environmental harm may be caused by an activity—
(a)whether the harm is a direct or indirect result of the activity; or
(b)whether the harm results from the activity alone or from the combined effects of the activity and other activities or factors.”
The right to make an objection under the EPA is set out in s 216. The objection may be about the EA Application, the draft EA for the application, or a condition included in the draft. Glencore did not object about the draft EA for the application.
The decision that this Court makes in hearing the EPA objection is governed by s 222, which relevantly provides as follows:
“222 Nature of objections decision
(1) The objections decision for the application must be a recommendation to the EPA Minister that—
(a)the application be granted on the basis of the draft environmental authority for the application; or
(b)the application be granted, but on stated conditions that are different to the conditions in the draft; or
(c)the application be refused.
(2) However, if a relevant mining lease is, or is included in, a significant project and, under section 210, Coordinator-General’s conditions were included in the draft, any stated conditions under subsection (1)(b)—
(a)must include the Coordinator-General’s conditions; and
(b)must not be inconsistent with a Coordinator-General’s condition.
…”
Another important section to be considered by this Court is s 223 of the EPA. That section provides:
“223 Matters to be considered for objections decision
In making the objections decision for the application, the Land Court must consider the following—
(a)the application documents for the application;
(b)any relevant regulatory requirement;
(c)the standard criteria;
(d)… ;
(e)each current objection;
(f)any suitability report obtained for the application;
(g)the status of any application under the Mineral Resources Act for each relevant mining tenement.”
It is via the mechanism of s 223 that the “precautionary principle” comes into play. As I stated in De Lacey & Anor v Kagara Pty Ltd:[8]
[8](2009) 30 QLCR 57. Note paragraphs incorrectly numbered in The Reports as [172] – [176].
“[174]‘Standard criteria’ (see s. 223(c) above) is defined in Schedule 3 of the EP Act in part as follows:
‘ “standard criteria” means–
the principles of ecologically sustainable development as set out in the ‘National Strategy for Ecologically Sustainable Development’; and . .. . .’
[175]Further in Schedule 3 of the EP Act, “National Strategy for Ecologically Sustainable Development” is defined as follows:
‘ “National Strategy for Ecologically Sustainable Development” means the ‘National Strategy for Ecologically Sustainable Development’ endorsed by the Council of Australian Governments on 7 December 1992.” ’
[176]The National Strategy for Ecologically Sustainable Development of December 1992 contains the following statement of Australia’s goal, core objectives and guiding principles for the Strategy:
‘The Goal is:
Development that improves the total quality of life, both now and in the future, in a way that maintains the ecological processes on which life depends.
The Core Objectives are:
• to enhance individual and community well-being and welfare by following a path of economic development that safeguards the welfare of future generations
• to provide for equity within and between generations
• to protect biological diversity and maintain essential ecological processes and life-support systems
The Guiding Principles are:
• decision making processes should effectively integrate both long and short-term economic, environmental, social and equity considerations
• where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation
•the global dimension of environmental impacts of actions and policies should be recognised and considered
• the need to develop a strong, growing and diversified economy which can enhance the capacity for environmental protection should be recognised
•the need to maintain and enhance international competitiveness in an environmentally sound manner should be recognised
• cost effective and flexible policy instruments should be adopted, such as improved valuation, pricing and incentive mechanisms
•decisions and actions should provide for broad community involvement on issues which affect them
These guiding principles and core objectives need to be considered as a package. No objective or principle should predominate over the others. A balanced approach is required that takes into account all these objectives and principles to pursue the goal of ESD.’
[177]From the precautionary principle perspective, the key is the second bullet point to the guiding principles in the paragraph above, which sets out in a lengthened form what is currently referred to as the precautionary principle – that is, ‘where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.’”
Water Act 2000
Depending upon the manner in which any interaction between the Water Act and the MRA and EPA is viewed, consideration of water issues is either irrelevant to the present proceedings (the view essentially expressed by Endocoal and the statutory party) or is fundamental to the proceedings and a matter which can properly be addressed in the current proceedings (the view expressed by Glencore).
This issue was the subject of significant parts of the reasons in President MacDonald’s decision in Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth – Brisbane Co-Op Ltd & Ors, and Department of Environment and Resource Management,[9] as well as my decision in Hancock.
[9](2012) 33 QLCR 79.
Following amendment of the statutory party’s submissions in this matter, this issue has also become subject to lengthy submissions by Endocoal and Glencore.
The further submissions by Endocoal are well researched and detailed. They seek to persuade me to come to a different conclusion to what I did in Hancock and to what President MacDonald found in Xstrata.
In the interests of keeping some sort of control over the final number of paragraphs in this decision, I will not delve into the details of Endocoal’s submissions on the Water Act. Suffice it to say that I am not convinced that I should change from my position in Hancock.
In fact, I find myself in the position of agreeing with the summary of Hancock in this regard set out by Glencore in its submissions of 12 August 2014, as well as Glencore’s other comments in those submissions relating to the interaction of these matters with the Water Act. I expressly adopt Glencore’s submissions of 12 August 2014, paragraphs 1–55, into these reasons, and set them out in the following paragraphs.
Summary regarding Water Act issue
On 31 July 2014, the statutory party filed an Amended Outline of Submissions. The statutory party’s amended outline contains minor changes to its submissions to the effect that impacts relating to the “take of water by other users … are matters that sit outside the EPA Act”, are instead “matters which would be considered in the assessment of an application for a water licence under the Water Act 2000” and are matters that “can effectively be dealt with” under (amongst other things) the Water Act 2000.[10] The statutory party’s amended outline does not go substantially beyond what it has already submitted to the Court.
[10]Statutory Party’s Amended Outline, paras 11-14.
In purported reply to the statutory party’s amended outline, Endocoal has filed 7 pages of submissions and provided 34 pages of annexures. Endocoal’s submissions are not submissions in reply to the minor amendments contained in the statutory party’s amended outline. They are further submissions that, for example, contend for the first time that this Court cannot consider issues relating to taking or interfering with water under the Mineral Resources Act 1989 (MRA) or impose conditions relating to those matters. The further submissions represent an attempt by Endocoal to fundamentally change its position in relation to such matters.
The Court does not accept Endocoal’s further submissions.
First, they are not in reply to minor amendments contained in the statutory party’s amended outline and represent a fundamental change of position by Endocoal. To do otherwise is to permit Endocoal to reopen its case without any application being made for it to do so.
Secondly, even if I were minded to embark upon the merits of Endocoal’s further submissions, the submissions contained in them are flawed and no good reason is advanced as to why I should not follow the previous decisions in Xstrata[11] and Hancock.[12]
[11]Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth – Brisbane Co-Op Ltd & Ors and Department of Environment and Resource Management [2012] 33 QLCR 79.
[12]Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (No. 4) [2014] QLC 12.
Endocoal’s Further Submissions are not Reply Submissions
In its original outline, the statutory party appropriately confined itself to submissions in relation to the draft EA and the Environmental Protection Act 1994 (EP Act), noting that it is not a party to the MRA proceeding.[13]
[13]Statutory party’s outline, para 3.
The statutory party made submissions to the effect summarised above. Those submissions were more about the appropriateness of considering “take” issues under the EPA rather than the Court’s lawful entitlement to consider and respond to those issues. The statutory party stated that the Court can be satisfied that impacts on the yield of water from MLA 70452 resulting from any take and/or interference caused by Endocoal will be effectively dealt with through a combination of monitoring conditions in the environmental authority, through the water licensing requirements under the Water Act for groundwater inflows to the MDS mine pits and the current water legislative framework for the take and interference with overland flow. That is, the statutory party encouraged the Court to leave these matters largely to regulation under the Water Act, rather than address them in its considerations of the environmental authority.
Importantly, the statutory party did not make any submission: (1) that the Court’s previous decisions in Xstrata and Hancock were wrongly decided and that the Court should not follow them;[14] or (2) about the consideration of “take” and “interference” issues under the MRA.
[14]The fact that the statutory party referred in paragraph 14(a) of its amended outline to the conditions of the environmental authority as one matter that effectively addresses “take” reinforces that it was not submitted that “take” issues are legally irrelevant.
The statutory party’s amended outline does not go substantially beyond what it has already submitted to the Court. The principal changes are:
(a) To confine the submission in paragraph 14(b) to groundwater inflows, thus recognising that only impacts in relation to those flows will be subject to an assessment processes under the Water Act.
(b) To make the submission in paragraph 14(c) in relation to overland flow by reference to s 20(1)(g) of the Water Act, thus recognising that impacts in relation to those flows will not be subject to an assessment process under the Water Act.[15]
[15]As submitted below, the submissions in paras 12 and 13 of the statutory party’s amended outline now need to be read subject to the acceptance in para 14(c) that there will be no assessment in respect of interference with overland flow.
The statutory party’s amended outline still does not make any submissions about the matters referred to in paragraph [56] above.
Endocoal’s further submissions go well beyond responding to the minor amendments contained in the statutory party’s amended outline. They argue that the Court does not have jurisdiction to consider impacts associated with the taking or interference with any water on third party users (such as Glencore in this case) when making its recommendations regarding the grant of mining leases or environmental authorities.[16] Endocoal also specifically submits that the Court does not have the power to impose a make good condition on a mining lease or an environmental authority.[17]
[16]Endocoal’s further submissions, para 6.1(c).
[17]Endocoal’s further submissions, para 3.5.
That is, Endocoal now argues that the Xstrata and Hancock cases were wrongly decided by the Court and should not be followed. This is the first occasion that Endocoal has raised such an argument.
Endocoal makes the extraordinary suggestion that this is consistent with its position before the filing of its further submissions by referring to a passing comment it made in its original written submissions in paragraph 2.10(e)9. That paragraph reads "Although ...arguably impacts on water are more appropriately dealt with under the Water Act 2000 (Qld), as submitted by DEHP" (emphasis added), before going on to state in the same paragraph that if the Court is minded to impose a make good condition, Endocoal has indicated a willingness to make good any impacts caused by such mining on the quality and quantity of water in Naroo Dam.
That statement is a far cry from the argument that Endocoal now makes in its further submissions that the Xstrata and Hancock cases were wrongly decided and the Court has no ability to consider water impacts or impose a make good condition. It is a position also inconsistent with:
(a) Endocoal's position as advised by Endocoal to Glencore on 18 June, approximately one month before the hearing in this case;[18]
(b) The evidence of Mr Darren Walker, who repeatedly asserted that Endocoal would accept an obligation to make good the impacts of the MDS project on Naroo Dam, and indeed was at pains to point out that it was volunteering such a condition as a proposed "solution" to the impacts the MDS project would have on Glencore's water supply at Naroo Dam;[19]
(c) The evidence of Mr Roads that to the extent the MDS project has an adverse impact on water quality in Naroo Dam, Endocoal should be responsible for making good that impact by meeting any increased treatment costs;[20] and
(d) Endocoal's previous submissions in this matter,[21] which specifically included acknowledging and accepting the decisions of this Court in Xstrata and Hancock.
[18]Exhibit DNW-3 of Exhibit 2 (being the Affidavit of Darren Walker dated 4 July 2014). The fourth paragraph of the correspondence reads: “… We note that the ultimate position of the Land Court in those cases was that it did not agree with the arguments run by Glencore/Xstrata and Hancock, at least to the extent that such arguments meant that the Land Court could not consider the impact of mining activities on water supplies. The Court determined in both cases that the impact of mining activities on water (groundwater in those cases) was a matter that could be considered by the Land Court, and in respect of which the Land Court could make recommendations. In both cases, the Land Court made a recommendation about the proponent making good impacted water supplies.” The letter went on to state: “.. on the assumption that the Land Court in this case follows its previous decisions, attached are draft make good conditions that our client is prepared to have imposed as conditions of either the mining lease or environmental authority”.
[19]See, for example, Exhibit 2 paragraphs 2, 6, 9, 11, 12, 14 and 16. See Transcript at T 1-21/5-20, T 1-22/5, T 1-22/25; T 1-24/20, T 1-69/30, T 2-5/10, T 2-9/25, T 2-9/40-45 and T 2-10/45 – T 2/11-1.
[20]See, for example, Exhibit 7, (Joint report of Mr Roads and Mr Scott), section 2.1 where Mr Roads agrees Endocoal should be responsible for any increase in treatments costs required due to the adverse water quality impacts in Naroo Dam that will be caused by the MDS project. See also Exhibit 8 (Joint report of Mr Roads and Mr Marszalek), section 2.8.
[21]Applicant’s written submissions filed on 25 July, particularly paragraph 7(3) and footnote 104; also paragraphs 7(a), 7(k), 2.8 and 2.10.
Endocoal has sought to use its right of reply to the minor amendments contained in the Statutory Party's Amended Outline as an opportunity to fundamentally change its position. This is in circumstances where the Statutory Party's Amended Outline raises nothing new about this issue. The legislation and the Xstrata and Hancock cases that Endocoal now raises in its reply to change its position were all well known in advance of the hearing and the filing of submissions in this matter.
If Endocoal were permitted to fundamentally change its position, the impacts for these proceedings and the related compensation proceeding will be substantial. Glencore’s case is that the MDS project will have at least some adverse impacts on the water in Naroo Dam, due to interference it will cause with overland flow and groundwater. These impacts relate to the quantity and quality of water in Naroo Dam. Endocoal in its original submissions sought to argue these were not a reason for refusal of the MDS mining lease and environmental authority, as Endocoal would make good such impacts.[22] Endocoal has also attempted to respond to criticisms of its assessment of impacts on Naroo Dam and the resultant uncertainty of the extent of those impacts, on the basis the Court should take sufficient comfort that the impacts, whatever they might be, would be made good by Endocoal.[23]
[22]See, for example, applicant's written submissions filed 25 July, paragraphs 6.2(h), 6.6(a)(iv), and 6.6(d)(ii).
[23]Applicant's written submissions filed 25 July, paragraph 7(a).
Endocoal's position has now changed such that it says it cannot be required to make good such impacts at all in consequence of these proceedings, and further that the Court cannot even have regard to them. In respect of overland flow, the effect of its position is that the impacts can never be assessed and, therefore, can never be the subject of appropriate conditions.
Apart from the impact that Endocoal’s new position has on the credibility of its previous claims that it is willing and able to make good all impacts and has been reasonable in its dealings with Glencore, the fundamental change of position by Endocoal seeks to directly impact the way in which the parties have conducted their cases before the Court and the submissions that have been made to the Court to date in relation to the merits of the dispute. In particular, it will lead to a reopening of Endocoal's previous submissions to the effect that impacts do not constitute a basis for refusal because they will be made good. There must be finality to litigation.[24]
[24]Savimaki & Ors v Sunshine Coast Regional Council [2013] QLC 33 at [28], citing the decision of the Full Court of the Supreme Court of Western Australia's decision of Boothey v Boothey (1997) BC9700784 at page 4 where Ipp J stated:
“In my opinion, the making of further submissions after completion of oral argument is a practice which, ordinarily, should not occur. As a general rule, after oral argument has concluded and judgment has been reserved, counsel should not be free to file written submissions advancing fresh or supplementary arguments. Such a course delays the delivery of judgment, results in additional costs, is often unfair to other parties, and is generally alien to our appeal system which is based on written outlines of argument before and oral argument during the hearing. It is well known that at times, such as when the oral addresses have not bee [sic] completed before the allotted time, or when a point has unavoidably taken counsel by surprise, or when a new issue arises unexpectedly, leave will be given to counsel to make further submissions in writing, but these are exceptional circumstances.”
The Merits of Endocoal’s Further Submissions
I now turn to consider the merits of Endocoal’s further submissions.
The Hancock decision
In Hancock the Court concluded that s 235(3) of the MRA must be strictly applied.[25]
[25]Hancock at [117].
I held that s 235(3) applied to circumstances where mining involves the “taking and using of water, including the diversion of a watercourse, and perhaps, arguably, the diversion of underground water, but not to the interference with the flow of underground water under s206(1)(b) of the Water Act”.[26]
[26]Hancock at [117].
I further commented that it would not be sensible for the Court to be permitted to consider the question of any consequences which flow from interference with groundwater, but not consider any aspect or consequence which arises from the taking or diversion of groundwater.[27]
[27]Hancock at [121].
I determined that both the MRA and Water Act can regulate the same subject matter, concluding that the MRA and Water Act each have different purposes, each of which is capable of being fulfilled.[28] I also noted that this did not necessarily represent a duplication in procedure, as the applicant for a mining lease is capable of applying for a water licence and therefore it was within the control of the mining lease applicant to also apply for any necessary water licence at the same time and have all matters heard together.[29]
[28]Hancock at [126].
[29]Hancock at [127] to [130].
The basis of the decision was that nothing in the relevant legislation prevented the Court from considering issues relating to taking and interfering with water under the MRA and the EPA and, arguably, interfering with water would not be dealt with under the Water Act in any event.
Endocoal submits that the Court in Hancock decided that “a miner as part of its authorised activities under its mining lease, could interfere with the flow of underground water as an activity associated with or arising from the mining without an authority under” the Water Act.[30] That submission misstates the effect of the decision.
[30]Endocoal’s further submissions, para 2.1.
In paragraphs [105]-[111] of its reasons, I considered s 20(4) of the Water Act and concluded that “it only applies to the diversion of water in a watercourse and not to any aspect of underground water”. I was left in “no doubt” that should the mining activities involve the take or use of underground water, an authority under the Water Act is required. At para [120] I considered that it was “at least arguable” that a miner could interfere with water without an authority under the Water Act. However, I did not express any concluded view about that issue. Ultimately, without expressing such a view, I concluded that I could consider the impact that the authorised mining activity had on groundwater generally: paras [135]-[136]. It is therefore wrong for Endocoal to treat the decision in Hancock as being based on the firm conclusion that interference with groundwater by a miner does not require an authority under the Water Act. It was based on the more general proposition that the activities authorised under a mining lease and environmental authority would have impacts on groundwater and could therefore be considered.
The decisions in Xstrata and Hancock are recent decisions of the Court which address the very issues about which Endocoal made further submissions. They are based upon the same legislation as the Court is currently considering and are relevantly indistinguishable. Given this, the Court should not depart from them unless persuaded that they are clearly wrong. Nothing in Endocoal’s further submissions does that.
Water Act as a “Code”
Endocoal's further submissions argue that the Water Act is a "code" for the interference with and taking of water, and therefore the Court cannot have any regard to any water impacts in making its recommendations regarding the mining lease and environmental authority applications.
This same issue was effectively considered and addressed in Hancock. I recognised that there was a tension between the licensing requirements of the Water Act on the one hand and the positive pronouncement in s 234(1) of the MRA on the other as to what the holder of a mining lease was entitled to do, with actions such as excavating mining pits potentially having the necessary consequence of interfering with groundwater. I concluded, after considering the Privy Council decision in Associated Minerals Consolidated Ltd v Wyong Shire Council[31] and the High Court decisions in South Australia v Tanner[32] and CMR of Police v Eaton[33] that each of the MRA and the Water Act have different purposes, each of which were capable of being fulfilled, and therefore the Court could have regard to water impacts caused by a proposed mining project in making its recommendation on the mining lease application and the environmental authority.[34]
[31](1974) 2 NSWLR 681.
[32](1988-89) 161 CLR 166.
[33](2013) 294 ALR 608.
[34]Hancock, paras [124] to [126].
Nothing in Endocoal’s further submissions casts doubt on the conclusions in Hancock. In particular, the fact that a licence or other approval may be required under the Water Act in respect of particular activity does not constitute the Water Act as a code in respect of that activity. It is commonly the case that a particular activity is regulated by one or more Acts with the consequence that more than one authorisation to conduct the activity is required. The fact that authorisation under one Act is required does not mean that authorisations under the other Acts are not required. Each authorisation is necessary but not sufficient.
Section 235(3) of the MRA and s 808(1) of the Water Act say no more than this. The effect of s 235(3) is that a mining lease is not of itself sufficient to authorise the diversion or appropriation of water if an authority under another Act is also required. The effect of s 808 of the Water Act is that an authority under that Act is required to take or interfere with water. Whether or not interference with water is within the ambit of s 235(3), s 808 is simply a particular manifestation of what s 235(3) expressly contemplated, namely that some additional authority may be required in respect of some activities that affect water. Section 808 does not say that if authority is granted under the Water Act, then a requirement for an authority under any other Act is unnecessary.
In the present case, the activity that will take or interfere with water is the construction of the mine. That activity cannot occur without a mining lease under the MRA and an environmental authority under the EPA. In the circumstances of this case, at least in relation to the pit construction, it may also require any authority under the Water Act. The effect of s 235(3) of the MRA is that a mining lease is a necessary, but may not be a sufficient, authority to conduct that activity just as the effect of s 808 may be that a licence under the Water Act is a necessary, but not a sufficient, authority to conduct it. All relevant authorisations are required. That does not mean that any of them is a code in the sense used by Endocoal.
For Endocoal to make good its submission on this point it needs to point to some express or implied provision to the effect that issues relating to taking or interfering with water are irrelevant considerations under the MRA and the EP Act. It does not point to any express provision. Nor does it advance any rational argument to the effect that such a result is necessarily implicit in the provisions of the Water Act.
The considerations to which the Court must have regard under the MRA and the EPA are extremely broad. They do not contain any limitation of the kind suggested by Endocoal and no legitimate process of statutory construction could result in them being read down. Further, as I pointed out in Hancock, the activities conducted under the authority of a mining lease will have consequences not regulated by an authority under the Water Act. In the present case, they will include water quality issues as well as long term issues associated with the mining of the pits. This reinforces why no relevant limitation can be implied.
Historical analysis of the language used in s 235(3) of the MRA
Endocoal's further submissions rely heavily on the history of s 235(3) of the MRA (and the legislation that preceded it) and the evolution of the State's water legislation. It asks that in interpreting s 235(3) of the MRA the Court should focus on the history of the section and other legislation to give effect to a purpose that is unstated in the words of the section itself.
However, all Endocoal's analysis reveals is that once the holder of a mining lease was entitled, under authority of that lease, to divert or appropriate water for its own use without any further approval under the water legislation – i.e. a mining lease holder could effectively "take" water, such as it might require for its mining operations. The legislature then decided to change that position so that in order to divert or appropriate water (i.e. "take" water) through mining activities, a mining lease was a necessary but not sufficient requirement and a separate approval under the water legislation was required. This is apparent from the extraneous material attached to Endocoal's further submissions, such as:
(a) The 8 March 1973 Hansard extract which states amending legislation was "… to clarify beyond doubt that applications for and granting of water supplies for mining purposes are to be dealt with by the Irrigation and Water Supply Commission …" (emphasis added);
and
(b) The 23 March 1973 second reading speech extract which states "… following proclamation of the Mining Act 1968-71, the Mines Department ceased to deal with application for water supplies for mining purposes. The Department has suggested the desirability of ensuring this fact is made clear … It was agreed … this objective could be achieved by an amendment of the Water Act. A saving clause protecting any rights to divert or appropriate water pursuant to any Act related to mining granted prior to the commencement of the proposed amendment, is included." (emphasis added).
This point is not contentious. It was recognised in Hancock that a separate licence is required under the Water Act to take water.
Endocoal asks the Court to assume the legislature intended to "update" the language of s 235(3) to change the words "divert" and "appropriate" to read "interfere" and "take". However, the legislature has not made this change, and as I found in Hancock "interference" with water is arguably something different to diverting, taking or appropriating water.
This Court in its decisions in the Xstrata and Hancock cases has given the words in s 235(3) of the MRA their ordinary grammatical meaning. There is no reason to now depart from that approach in this case and give them a different meaning.
Overland Flow
Unlike the Xstrata and Hancock cases, in this matter the Court must give consideration to a circumstance where activities authorised under any mining lease will interfere with overland flow.[35] It is common ground that Naroo Dam is fed by overland flow water. Impacts, or potential impacts, on both the quality and quantity of overland flow that feeds into Naroo Dam are in issue.
[35]"overland flow" includes water flowing over land after rising to the surface naturally from underground – Schedule 4 Water Act 2000.
Section 20(1)(g) of the Water Act permits a person to interfere with overland flow water. Section 808(2) provides it is not an offence to interfere with overland flow water without an approval under the Water Act.
All that these provisions say is that an approval under the Water Act is not required to interfere with overland flow. However, Endocoal’s further submissions seek to attribute a far broader meaning to them. Endocoal submits that “no separate authorisation is now required under the Water Act, or indeed any other Act, in relation to an interference with overland flow” (emphasis added).[36] In footnote 19, Endocoal suggests that this is also the position adopted by the statutory party in its amended outline. However, the statutory party’s amended outline does not contain any submission to the effect that authorisation is not required under any other Act in relation to interference with overland flow.
[36]Endocoal’s Further Submissions, para 5.2.
By making its broad submission, Endocoal asks the Court to give ss.20(1)(g) and 808(2) of the Water Act a meaning that they simply do not have. That is not a permissible process of statutory construction. The plain and ordinary meaning of ss 20(1)(g) and 808(2) of the Water Act is that an approval under that Act is not required to interfere with overland flow. It is not that an approval under another Act for regulated activities that interfere with overland flow is not required. To take the present case, that would mean that a mining lease is not required to the extent that the proposed works interfere with overland flow. Indeed, Endocoal’s submissions accept that ss 20(1)(g) and 808(2) were not intended to have the effect that approvals under other applicable legislation are not required.[37] And the explanatory notes referred to in paragraph 5.3 of Endocoal’s further submissions do not support its contention because they refer only to the absence of a need for another authorisation under the Water Act. They do not at all indicate that the intention was that authorisation was not required under activities regulated by other Acts.
[37]Endocoal’s Further Submissions, paras 5.1-5.2.
The effect of Endcoal's further submissions is that the impacts of interference with overland flow caused by mining activities will never be assessed or conditioned. This is because Endocoal states the Court has no jurisdiction to consider the impacts to overland flow water under the MRA or EPA when deciding whether to recommend a mining lease and environmental authority for grant, and the Water Act permits the impacts “as of right”.
This is an illogical result and it cannot be the legislature's intention that the impacts of interference with overland flow would never be assessed or regulated. The dam in question here is currently the sole source of drinking water for the Rolleston Mine's workforce. But what if the dam in question provided water supply for the local town? Based on Endocoal's submission, the mine's impact on the town's water supply, caused by interference with overland flow, would be irrelevant and could not be considered in approving the mining lease application and environmental authority, nor would it otherwise be considered under the Water Act. It would just happen, without any checks or balances or an ability to consider the impacts. That cannot have been intended.
These matters demonstrate the incorrectness of Endocoal’s submission that no separate authorisation is required under “any other Act” in relation to an interference with overland flow. It also demonstrates the incorrectness of Endocoal’s submission that there is a clear expression of intention from the State that interference with overland flow "does not require further regulation". The sections do not say that at all. In particular, they do not say that a Court or government authority should not consider the impacts on overland flow of proposed developments, including mines, when deciding whether to issue other approvals.
In my view the correct position is as follows. On the basis that interference with overland flow does not require an approval under the Water Act, s 235(5) has no possible application because it only applies where “any Act provides that water may be diverted or appropriated only under an authority granted under that Act”. On this basis, the Water Act does not so provide and, pursuant to s 235(1), it is the mining lease that authorises the activities that result in the interference. Plainly, an authorisation in the form of a mining lease is required in respect of those activities.
As authorisation is required under the MRA, in the form of a mining lease, to conduct the activities that will interfere with the overland flow, the considerations to which the Court must have regard are those identified in s 269(4) of the MRA. Those considerations are broadly stated. They include adverse environmental impacts caused by the proposed operations (s 269(4)(j)), prejudice to the public right and interest (s 269(4)(k)) and whether any good reason has been shown for a refusal to grant the mining lease (s 259(4)(l)). There is no legitimate basis for limiting the content of these considerations simply because a separate approval for interfering with overland flow is not required under the Water Act.
Indeed the absence of an approvals process under the Water Act points strongly to the need to have an assessment at this stage. As there is no approval required under the Water Act to interfere with overland flow water, no assessment process of the impacts of overland flow will be undertaken at a later stage. This seems to be accepted by Endocoal. To the extent that paragraphs 12 and 13 of the statutory party’s amended outline state that impacts on the take of overland flow are matters that will be considered in the assessment process under the Water Act, in my view they are wrong and do not take account the changes made to paragraphs 14(b) and 14(c) of its amended outline. Those changes are to the effect that there will only be such a process in respect of groundwater and will not be such a process in respect of overland flow. Therefore, the only opportunity for such an assessment to be undertaken, and for effect to be given to that assessment, is in connection with the MRA proceeding.
If anything, because of the interference with overland flow, and because no further licence or approval is required under the Water Act for Endocoal to cause such interference, there are even stronger reasons in this case than there were in Hancock for me to consider the potential impacts of such interference in making my recommendations about the mining lease and environmental authority.
Groundwater
For completeness, for the reasons already set out, there is no reason why I should not follow my decision in Hancock and have regard to groundwater impacts of Endocoal's proposed mine on Naroo Dam in making recommendation regarding the mining lease and environmental authority applications.
Conclusion on the Water Act issue
There is no reason to distinguish this case from the Court's decisions in Xstrata and Hancock, and neither Endocoal nor the statutory party has sought to do so. If anything, the additional consideration of interference with overland flow in this case makes it an even more compelling case than Xstrata and Hancock itself for the Court to have regard to these water impacts in making recommendations on the mining lease and EA.
I consider it appropriate to follow the decisions in Xstrata and Hancock in this case and have regard to the adverse impacts that the MDS project will have on Naroo Dam, and the resultant impacts on the Rolleston Mine, in making my recommendation about the MDS mining lease and environmental authority, including in the context of making any decision on conditions of those approvals.
Naroo Dam
As can be seen from the summaries of the positions of the parties already referred to, this case primarily relates to Naroo Dam, including issues as to the quality and quantity of inflows of water into Naroo Dam, the dams reliability in times of drought, and the extent to which Glencore utilises the water stored in Naroo Dam.
Naroo Dam was constructed by previous owners of the land on which it is located for agricultural purposes approximately 40 years ago, and holds approximately 745 mega litres when full.[38] The dam is located on land owned by Glencore. As the diagram set out early in these reasons shows, Naroo Dam is overlaid by three mining tenements, being Endocoal’s MDS MLA 70452 in the western part, Glencore’s MLA 70415 (part of the RCM expansion) in the centre and Glencore’s RCM ML 70307 to the east. The constructed dam wall for Naroo Dam lies within ML 70307, and the water ponds behind the dam wall through the relevant part of MLA 70415 and then on to the relevant part of MLA 70452.
[38]See Exhibit 21 paragraphs 12 and 13.
As Glencore points out at paragraph 22 of its primary submissions, it is no answer to Glencore’s objection merely to say that it had access to a back-up supply of water capable of treatment and use as a potable supply. As Glencore asserts, the point of the objection is that MLA 70452 puts at risk the RCM’s primary source of the water required to ensure its functionality. As I have already indicated, this is overstating the matter somewhat, but nevertheless Glencore should not be in a position whereby it is required to adopt risk merely to accommodate neighbouring mining activities.
Glencore strongly asserts in paragraph 23 that it does not consider a make good arrangement by itself is a substitute for a proper assessment of the impacts of mining on Naroo Dam, including a substitute for the proper collection of data and assessment of that data. For this reason, Glencore asserts that the applications should be refused, and says that to do otherwise is to give support to the proposition that an applicant need only give a commitment to make good in order to secure a mining lease, in circumstances where the potential impacts of a proposal are not fully understood.
Glencore quite properly submits that the assessment of the application for the EA was dependent upon the information provided with the application (and subsequently) by Endocoal, and that that information did not include details as to the use that Glencore makes of Naroo Dam. Accordingly, the environmental management plan (EMP) was assessed, and the draft EA was provided without reference to Naroo Dam as a source of water for potable usage. Significantly, the EMP has not be revised in view of the new Initial Development Plan (IDP) and there has been no direct assessment of the application for the EA on the basis of the new IDP.
As Glencore submits in paragraph 38 of its primary submissions:
“This is not really a case in which expert opinion coincides, or is necessarily divided, about the final impacts the mining proposal is expected to have upon the RCM. In many respects, the evidence is notable for its inability to reach firm conclusions. Endocoal’s response to this is that any risk is manageable and is being assumed by it in the form of a make good obligation. That is neither correct nor to the point. Proper risk management only follows proper risk assessment and it is in fact Glencore that Endocoal risks affecting.”
Glencore’s submissions then turn to issues of rehabilitation, erosion and sediment control.
As Glencore points out, the draft EA in condition H, Schedule 4 provides that slopes of overburden dumps can be constructed up to 12°, which is approximately 20%. Glencore properly points out that the first question that divided the expert opinion in this case is whether 12° is likely to be achieved in the vertosol soils experienced at MDS. Glencore relies heavily on the expert evidence given in this regard by Mr Short. As well as his oral evidence, his expert evidence is contained within Exhibit 15, Exhibit 17, and a joint expert report which is Exhibit 9. As Glencore notes, Mr Short is an agricultural scientist with 20 years experience in the mining industry predominantly in Queensland and predominantly working in black vertosol soil typical to that found at Meteor Downs. Mr Short’s evidence is that vertosol soils are highly erodible, and that evidence is supported by the studies by Sheridan et al. (2000) and Ahmad and Mermut (1996) and Hayes’ Stanley (2013), Freebanirn and Wockner (1986) and Carroll et al. (2010).
Glencore points out that Endocoal relies upon data derived from the Revised Universal Soil Loss Equation (RUSLE) which was developed approximately 30 years ago based on data from agricultural slope angles of less than 10% in the USA. Glencore submits that RUSLE significantly underestimates actual erosion rates in mine site rehabilitation in Central Queensland, relying upon Mr Short’s experience, his evidence, and his reference to the other authors as set out above. Glencore submits that care needs to be taken when using the RUSLE model in another geographical region with different soil types and that, at best, the results of RUSLE in the Central Queensland mining context is no more than an indication.[42]
[42]T 3-53/25.
I agree with Glencore’s submissions that RUSLE should be used with caution. I also accept in this regard the evidence of Mr Short and, adopting a precautionary approach, I agree with Glencore’s submission that reference to 12° in the EA should be removed in this regard and replaced with 9°. In my view, this is not only consistent with the precautionary approach as required by the environmental legislation; it is also a sensible requirement for proper mining operations, given the nature of the soils present. Further, Endocoal has provided no evidence or reason as to why it will be hindered in its operations by a condition which limits the slopes of rehabilitated landforms to 9°.
Before concluding this point, I should note that expert evidence regarding this issue was of course also given by Mr Masters on behalf of Endocoal. In making my finding that 9° slopes are more appropriate than 12° slopes, although that finding is against the evidence of Mr Masters, I note that Mr Masters by his own admission does not have experience in the Bowen Basin and is not therefore as conversant with the conditions in the Bowen Basin as Mr Short. A precautionary approach demands that a careful approach should be taken in this regard, and that careful approach requires favouring of Mr Short’s evidence over that of Mr Masters.
Neither am I persuaded otherwise by the evidence of Mr Tarlington. Mr Tarlington was of course called by the State of Queensland to support its assessment and issuing of the draft EA. His evidence[43] was that a 12° slope is at the upper end of the spectrum in terms of rehabilitated landforms in Queensland and that such a slope is both achievable and will protect the environmental values downstream from the site. Importantly in my view, Mr Tarlington agreed with the proposition put to him by Mr Clothier that generally the approach of the department is that prevention is better than cure: you put in place the strategies to avoid the relevant impacts first.[44]
[43]T 3-58 L 4-7.
[44]T 3-61 L 3-5.
Glencore then turns to the second area of dispute between Mr Short and Mr Masters, that being the longitudinal slope gradients of contour banks.
In essence, the contest between Mr Short and Mr Masters is that Mr Masters’ view is that the gradients in the contour banks should be greater than 1%, whilst in Mr Short’s view the gradients should be less than 1%. During his oral evidence, Mr Masters stated that the contour banks should be at least 1.2%.[45] Mr Masters went on to state that anything less than that is problematic with regard to issues like swell factor.
[45]T 2-65 L 29.
Mr Short in contrast had this to say:[46]
“Its been my experience over many years now that contour banks, particularly when constructed in spoil associated with the Rangal Coal Measures should be avoided. It should be avoided because they will fail. They will fail not necessarily because of sediment build up in them. They’ll fail because the material the banks themselves are constructed out of is inherently highly erodible.”
[46]T 3-51 L 37-41.
On balance, and taking into account Mr Short’s experience in Central Queensland, and adopting a precautionary approach, I am more inclined to accept the approach taken by Mr Short than that of Mr Masters.
Glencore’s submissions next turn to the issue of groundwater. These submissions are found at paragraphs 80 and following of Glencore’s primary submissions. As Glencore points out, it relied upon expert groundwater evidence from a hydrogeologist, Dr Merrick, while Endocoal also relied upon evidence from a hydrogeologist, Mr Bradley. Their respective reports are set out in Exhibits 5, 6, 12, 18 and 24.
As Glencore submits, the hydrogeologist experts agree on many matters. They agree in relation to groundwater that MDS will cause less groundwater to flow into Naroo Dam, with the potential for groundwater inflow to cease entirely and that there will also be a loss of dam water through seepage. As Glencore rightfully submits, and as I have previously indicated, those circumstances have the potential to cause Naroo Dam to run dry.
Glencore submits at paragraph 88 that if MDS is approved, it ought to be on the conditions as agreed in the joint expert report, that is that prior to the commencement of mining, groundwater monitoring bores must be installed; their data collected and analysed to enable a baseline water balance to be prepared; and trigger levels set, the breach of which would cause an investigation to be undertaken into the reason and probably causative factors. I agree.
Glencore’s submissions next turn to issues relating to water quality. They point out that Mr Scott, who is an experienced geochemist with over 42 years practical experience specialising in mine waste assessment and management, mine water assessment, remediation and management, acid and metallifous drainage assessment and management and mine closure, was the only geochemist to give evidence in the proceedings. As regards Mr Scott’s evidence, Glencore forcefully submits as follows:[47]
“Mr Scott stated that in his considerable experience, he has never seen a mine design where it was proposed that run-off from mine disturbed areas would be directed into a dam used as a potable water source (Exhibit 14, paragraph 4.1(b)), as Endocoal has proposed to do in relation to Naroo Dam. Mr Scott further stated that in his opinion it would be unusual for a regulator to approve for this to occur, and that best practice mine site water management design is to ensure water run-off from mine disturbed areas would not be directed to a potable water source (Exhibit 14, paragraph 4.1(b)). Mr Scott’s opinion on this issue is uncontradicted, and no other expert witness gave evidence of any example of such a situation ever being planned or approved.”
[47]Paragraph 91 of Glencore’s primary submissions.
Expert Roads to the contrary, called by Endocoal, indicated that he considered sufficient information was available to define a range of potential impacts of the MDS project on the water quality of Naroo Dam.[48] Importantly, however, Mr Roads freely admitted during cross-examination that he is not a geochemist and that he is not in a position, from a geochemical perspective, to identify what is an adequate level of investigation and assessment.[49]
[48]Exhibit 7, paragraph 3.1, page 3.
[49]T 2-48 L 10-14.
Clearly, the geochemical evidence of Mr Scott is uncontradicted. I accept it in its entirety and all of Mr Scott’s recommendations and words of caution that flow in respect thereof.
Glencore’s submissions next turn to the issue of water quantity. As Glencore’s submissions point out, it relies upon expert evidence in this regard from Mr Marszalek, whilst Endocoal relies on the expert opinion of Mr Roads. The relevant reports are contained in Exhibits 3, 8, 13 and 16. Glencore’s submissions go on to make it clear that in their view the expert evidence as to the impact on water quantity is not certain. In this regard, I agree that there is some doubt as to the overall impact on water quantity that the MDS project will have on RDS in general and Naroo Dam in particular. However, as Glencore also submits, what is certain is that there will be an impact on the water quantity in Naroo Dam caused by the MDS project. Again, I agree. As Glencore note at paragraph 107 of their submissions, the evidence shows that there will be a notable increase in the probability of a shortfall in Naroo Dam over a 9 year period whether the Meteor Creek model or the Bootes Creek model are used. The Meteor Creek model forecasts a decrease in reliability of 7%, or an additional 100-191 days in 9 years, whilst the Bootes Creek model predicts a decreased reliability of 10%, or an additional 191-236 days in 9 years.
It is clear enough to my mind, based on the expert evidence of Roads and Marszalek, that the existence of the MDS project will impact on the water quantity in Naroo Dam. I am in no doubt that, in light of this, there should be a special condition applied to MLA 70452 if it is granted that Endocoal enter into a make good agreement with Glencore as to the loss of quantity of water that will be held by Naroo Dam as a consequence of the MDS project.
Before leaving the submissions by Glencore as regards water quantity, it is worth noting an agreed position as set out by Roads and Marszalek in their joint report[50] as regards monitoring. Roads and Marszalek had this to say:[51]
“We agree that the Draft EA conditions appear to have been developed from now outdated MDS project plan, including monitoring points in dams which are no longer proposed as part of the project. We agree that the additional monitoring proposed in the Statement of Evidence by Anthony Marszalek is reasonable.”
[50]Exhibit 8.
[51]Ibid at 2.9.
It is indeed an unusual aspect of this matter that the draft EA as approved by the statutory party is not in fact the draft EA that either the statutory party or Endocoal contend for, but rather the amended EA as set out in Exhibit 25. This of course has occurred as a consequence of the new IDP by Endocoal.
Make good condition
Having considered all of the evidence and submission in this matter, I am in no doubt that it is appropriate to condition the grant of MLA 70452 on the condition that Endocoal and Glencore enter into a make good agreement with respect to the impact that the MDS project will have on the water supply in Naroo Dam, from both a quantity and quality perspective.
Endocoal through Mr Ambrose QC has raised concerns that requiring agreement to be reached between Glencore and Endocoal as to the terms of a make good agreement could be the equivalent of allowing Glencore a virtual veto of the MDL project, simply by failing to reach agreement with Endocoal on the terms and conditions of the make good agreement. It is certainly not my intention that the requirement to enter into a make good agreement should be used as any form of veto by either party.
In my view, this issue can be easily resolved. Section 363 of the MRA sets out the substantive jurisdiction of the Land Court. I note in particular s 363(2)(e) that relates to any matters arising between MLA tenure applicants or holders and owners of land in relation to prospecting, exploration or mining. It is my clear view that should the parties Endocoal and Glencore be required by a special condition of MLA 70452 to enter into a make good agreement, and should those parties fail within a reasonable commercial timeframe to reach agreement as to a make good agreement, then either party could make urgent application to the Land Court under s 363 of the MRA to have the Land Court resolve that dispute. I am also in little doubt that should it emerge that either party be shown to be unmeritorious in its negotiations for a make good agreement, appropriate remedies would be available by way of the ordering of costs by the Land Court.
Although Endocoal and Glencore have provided the Court with their respective suggestions as to the terms of any make good agreement, in my view both parties should be left to negotiate as between themselves the appropriate terms of the make good agreement, taking into account of course the relevant findings in this decision. However, by way of fundamental principle I agree with the submissions of Glencore that the make good agreement must be such as to require Endocoal to make good any adverse impact it causes on the quality or quantity of water in Naroo Dam as a consequence of the MDS operation.
I also agree with Glencore that the make good obligation should not be limited to a certain volume of water or water used for certain purposes, such as potable purposes. Further, the make good agreement should address the impacts of the MDS project post the conclusion of mining on the MDS project.
An outcome based or prescriptive environmental authority
Mr Tarlington, who was called by the statutory party, gave evidence as to the nature of the form of drafting undertaken by the statutory party of EAs in recent times, being what were referred to as outcome based EAs rather than prescriptive EAs.[52]
[52]See T 3-61 L 18 and T 3-62 L 2, and in particular T 3-61 L 20.
I understand and accept the general reasoning adopted by Mr Tarlington as to the approach taken by the statutory party in drafting relevant EAs, particularly in circumstances where precise details as to mining programs change from time to time. However, it is my view that, due to the unique aspects of this matter, a certain degree of prescriptiveness is required in the draft EA to increase certainty as to the operation of the EA, particularly from the perspective of Glencore.
I also note that, in the main, the experts support amendments to the draft EA by the addition of further conditions, some of which may be viewed as more prescriptive than the outcome based attitude normally adopted by the statutory party. Clearly, in my view, the system adopted by the statutory party should be flexible enough to apply more detailed conditions when the peculiar circumstances of a particular case warrant it. This is such a case.
I accept the evidence of Mr Tarlington that in his view he has sufficiently analysed the amended draft EA as set out in Exhibit 25 to enable to him to support that amended draft EA as the draft EA for the Endocoal project. To that I would simply add that the amended draft EA in Exhibit 25 should be further amended by the inclusion of conditions consistent with those set out in the attachment to the respondent’s submissions which is marked as Attachment 1 to these reasons.
In my view, Attachment 1 is consistent with my findings relative to the expert evidence submitted in these proceedings.
MRA section 269(4) considerations for MLA 70452
When considering Endocoal’s application for MLA 70452 and the MRA objections thereto, the Court must at all times be cognizant of the provisions of s 269 of the MRA. In particular, s 269(4) sets out various considerations that the Court must take into account in making a recommendation to the Honourable the Minister. I will consider each of those elements of s 269(4) separately. My views with respect to each element of s 269(4) are based on the assumption that the MDC operates in accordance with the latest IDP provided to the Court.
Before turning to the individual elements of s 269(4) of the MRA, it is essential to understand that, to save repetition, I will not repeat the analysis which I have already undertaken with respect to the MRA objections. However, I must stress that, in considering each of the criteria relevant to s 269(4) I have taken into account and considered the relevant MRA objections made in this matter.
Assistance in considering the requirements of s 269(4) of the MRA has been obtained from Exhibit 1, Mr Walker’s first affidavit, as well as Exhibit 26, the Mining Registrar’s report.
Section 269(4)(a) – Have the provisions of the Act been complied with?
On 3 October 2013, the Mining Registrar, Emerald, issued a Certificate of Application. The Mining Registrar can only issue the Certificate if satisfied that Endocoal is eligible to apply for the mining lease and has complied with the requirements of the MRA with respect to the Application.[53]
[53]See s. 252 of the MRA.
In my opinion, there is sufficient evidence of compliance with the provisions of the MRA in respect to this Application.
Section 269(4)(b) – Is the land applied for mineralised or are the other purposes for which the lease is sought appropriate?
I am in no doubt from the evidence presented on behalf of Endocoal that the land applied for is mineralised in that it contains significant quantities of coal.
Section 269(4)(c) – If the land applied for is mineralised, will there be an acceptable level of development and utilisation of the mineral resources within the area applied for?
Having considered all of the evidence presented in this matter, I am satisfied that Endocoal currently believes that it will be able to operate a profitable mining operation.
The material before me shows an appropriate development and utilisation of the mineral resources within the area applied for, taking into account the restrictions imposed by restricted land.
Section 269(4)(d) – Is the land and the surface area of that land in respect of which the mining lease is sought of an appropriate size and shape?
The material before me appears to indicate a MLA of an appropriate size and shape in light of the proposed mining operation, taking into account other mining tenures.
I am satisfied that the requirements for this criterion have been met.
Section 269(4)(e) – Is the term sought appropriate?
The term sought for this mining lease is 15 years. This period allows for an operational extraction mine life of nine years whilst also allowing sufficient time for pre and post mining requirements, including rehabilitation.
Section 269(4)(f) – Has the applicant the necessary financial and technical capabilities to carry on mining operations under the proposed mining lease?
Mr Walker explained the financial and technical capabilities of Endocoal this way:[54]
“37.Since the lodgement of MLA 70452, the Applicant became wholly owned by U&D Mining, which is wholly owned by U&D Coal.
38.U&D Coal is a company listed on the Australian Stock Exchange, which has the necessary funding to establish the Meteor Downs Project and a strong team with both international and Australian resource development experience.”
[54]Exhibit 1 paras 37 and 38.
Although no detailed financial information relating to U&D Coal has been provided, I am satisfied that the requirements of this criterion are met.
Section 269(4)(g) – Has the past performance of the applicant been satisfactory?
With respect to this criterion, Mr Walker said that:[55]
“39.U&D Coal currently has one of the largest exploration tenement holdings in the Bowen Basin. I refer to paragraph 3 of this affidavit.
40.The Applicant is in compliance with the terms of EPC 1517 (the pre-requisite tenure for MLA 70452).
41.On or about 31 August 2012 the Applicant was issued with a notice from DNRM directing the Applicant to remedy a breach of the conditions of EPC 1517 as a result of a the Applicant having reached agreement in ‘in-principle’ for a conduct and compensation agreement with an owner of land who subsequently sold the land without the knowledge of the Applicant. The issue was promptly addressed by the Applicant, and resolved to the department’s satisfaction.
42.The Applicant has not been issued with a show cause notice under the MR Act (or the EP Act) in relation to EPC 1517, or any other tenement held by the Applicant.”
[55]Exhibit 1 paras 39-42.
I note that what Mr Walker says is inconsistent with the applicant’s Land Court Form 9.[56] However, I accept Mr Walker’s explanation for this given during his oral evidence.[57]
[56]See Exhibit 1, DNW 12 and Exhibit 26.
[57]T 1-16 L 14-1-16 L 16.
I am satisfied that the past performance of Endocoal has been satisfactory.
Section 269(4)(h) – Will any disadvantage result to the holders of existing exploration permits or mineral development licences or existing applicants for exploration permits or mineral development licences?
As Mr Walker pointed out:[58]
“43.There are no existing holders or applicants for exploration permits or mineral development licences over the area of MLA 70452.
44.As mentioned at paragraph 10, at the time of lodgement of MLA 70452, an application for ATP 756 overlapped the area of MLA 70452. As at the date of this affidavit, ATP 756 remains under application. The Revised IDP at section 6.1 contains an assessment of the impact of development on MLA 70452 on the development of petroleum resources from the land. The Revised IDP concludes that the proposed Meteor Downs South Coal Project will not significantly impact on possible future development of petroleum resources.”
[58]Exhibit 1 paras 43-44.
I agree with Mr Walker.
Section 269(4)(i) – Do the operations to be carried on under the authority of the mining lease conform with sound land use management?
As is clear from my decision thus far, I am not satisfied that the development of MDS in terms as proposed by Endocoal in its application conform with sound land use management as regards Naroo Dam.
However, provided that MLA 70452 is conditioned to require a made good agreement with Glencore, and that amendments to the EA in accordance with Attachment 1 are made, then the impacts on Naroo Dam can be appropriately accommodated.
Section 269(4)(j) – Will there be any adverse environmental impacts, and if so, the extent thereof:
There are certainly environmental concerns regarding the development of MDS, which is why I am recommending a precautionary approach be undertaken.
Providing that MLA 70452 is conditioned to require a make good agreement with Glencore, and that amendments to the amended EA in accordance with Attachment 1 are made, then in my opinion adverse environmental impacts of MDS can be appropriately dealt with.
Section 269(4)(k) – Will the public right and interest be prejudiced?
It is clearly in the public interest to ensure that any mining on MDS does not impact Naroo Dam in a way such as to put the full operation of RCM into any doubt (which could see royalty revenue to the State from RCM fall). However, development of MDS will also see a revenue royalty stream to the State, which is in the State’s interest.
On balance, provided that MLA 70452 is made subject to a condition requiring a make good agreement, and that the amended EA is further amended as recommended, the public interest favours the grant of MLA 70452.
Section 269(4)(l) – Has any good reason been shown for a refusal to grant the mining lease?
Reasons have been shown by Glencore for a refusal to grant the mining lease.
However, as previously indicated, reasons have also been established by Endocoal to support MDS through the granting of MLA 70452.
For the reasons already given, and on the proposed conditions to the ML and the EA, on balance I am satisfied that MLA 70452 should be granted.
Section 269(4)(m) – Is the proposed mining operation an appropriate land use taking into consideration the current and prospective uses of the land?
The materials show that the project is for the extraction of a valuable resource in accordance with the environmental processes.
My concerns relate to impacts on Naroo Dam and therefore to the follow-on impacts to RCM.
On balance, and with the proposed conditions, I am satisfied that the proposed mining operation is an appropriate land use of the application land.
Conclusion
The foregoing reasons make the orders that I propose clear. Both MLA 70452 and the amended draft EA should be granted, but subject to conditions.
Accordingly, I have decided to recommend to The Honourable The Minister responsible for the MRA that MLA 70452 be granted, subject to the insertion of a special condition into the mining lease that Endocoal enter into a make good agreement with Glencore, within either twelve months of the grant of MLA 70452 or before commencement of mining activities, whichever is the sooner.
I have decided to recommend to The Honourable The Minister responsible for the EPA that the amended EA set out in Exhibit 25 be granted, subject to amendments being made consistent with Attachment 1 to these reasons.
Orders
1. I recommend to The Honourable The Minister responsible for the MRA that MLA 70452 be granted, subject to the insertion of a special condition into the Mining Lease that Endocoal enter into a make good agreement with Glencore, within either 12 months of the grant of MLA 70452 or before commencement of mining activities, whichever is the sooner.
2. I recommend to The Honourable The Minister responsible for the EPA that the amended EA as set out in Exhibit 25 be granted, subject to amendments being made consistent with Attachment 1 to these reasons.
PA SMITH
MEMBER OF THE LAND COURT
Attachment 1
1
4
5