SHCAG Pty Ltd v Hume Coal Pty Ltd

[2015] NSWLEC 122

Land and Environment Court

New South Wales

Medium Neutral Citation:	SHCAG Pty Ltd v Hume Coal Pty Ltd [2015] NSWLEC 122
Hearing dates:	25, 26, 27 March 2015 and 27, 29, 30 April 2015
Decision date:	04 August 2015
Jurisdiction:	Class 4
Before:	Pain J
Decision:	1. The amended summons filed in Court 29 April 2015 is dismissed. 2. Costs reserved.
Catchwords:	JUDICIAL REVIEW – challenge to assessment under Environmental Planning and Assessment Act 1979 of exploration licence enabling drilling of boreholes on private land under the Mining Act 1992 – statutory regime for gaining access to private land for exploration under the Mining Act – whether Minister complied with duty to examine and take into account environmental impacts as required by s 111 of Environmental Planning and Assessment Act – whether activity likely to significantly affect impact on the environment pursuant to s 112 of the Environmental Planning and Assessment Act
Legislation Cited:	Environmental Planning and Assessment Act 1979 (NSW) s 5, s 110, s 111, s 112 Environmental Planning and Assessment Regulation 2005 (NSW) cl 228(3) Evidence Act 1995 (NSW) s 136 Fluoridation of Public Water Supplies Act 1957 (NSW) Migration Act 1958 (Cth) Mining Act 1992 (NSW) s 29, s 31, s 138, s 140, s 141, s 142, s 143, s 152, s 155, s 252
Cases Cited:	Arnold v Minister Administering the Water Management Act [2014] NSWCA 386 Bailey v Forestry Commission of New South Wales (1989) 67 LGRA 200 Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 Brown v Coal Mines Australia Pty Ltd [2010] NSWSC 143; (2010) 76 NSWLR 473 Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure [2013] NSWLEC 48, (2013) 194 LGERA 347 Eurobodalla Fluoride Issues Inc v Eurobodalla Shire Council [2014] NSWLEC 182 F Hannan Pty Ltd v Electricity Commission of New South Wales (1983) 51 LGRA 353 Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442 Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38; (2013) 195 LGERA 229 Garrett v Freeman (No 4) [2007] NSWLEC 389 Gilbank v Bloore (No 2) [2012] NSWLEC 273 Guthega Development Pty Ltd v Minister Administering the National Parks and Wildlife Act (NSW) 1974 (1986) 7 NSWLR 353 Hoxton Park Residents Action Group Inc v Liverpool City Council [2011] NSWCA 349; (2011) 81 NSWLR 638 Hume Coal Pty Ltd v Alexander (No 3) [2013] NSWLEC 58; (2013) 194 LGERA 319 Kivi v Forestry Commission of NSW (1982) 47 LGRA 38 Maroun v Minister for Immigration and Citizenship [2009] FCA 1284; (2009) 112 ALD 424 Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 Minister for Immigration and Citizenship v SZIAI [2009] HCA 39, (2009) 259 ALR 429 Minister for Planning v Gray [2006] NSWLEC 720; (2006) 152 LGERA 258 Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Limited [2010] NSWLEC 48 Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365 Oshlack v Rous Water (No 2) [2012] NSWLEC 111; (2012) 189 LGERA 243 Parks and Playgrounds Inc v Newcastle City Council [2010] NSWLEC 231; (2010) 179 LGERA 346 Parramatta City Council v Hale (1982) 47 LGRA 319 Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 Queensland Conservation Council Inc v Minister for the Environment and Heritage [2003] FCA 1463 Telstra Corporation Ltd v Hornsby Shire Council [2006] NSWLEC 133; (2006) 67 NSWLR 256
Category:	Principal judgment
Parties:	SHCAG Pty Ltd (Applicant) Hume Coal Pty Ltd (First Respondent) New South Wales Minister for Resources and Energy (Second Respondent)
Representation:	Counsel: Mr R White (Applicant) Mr SB Lloyd SC with Ms JE Davidson (First Respondent) Mr RP Lancaster SC with Mr BK Lim (Second Respondent) Solicitors: Marylou Potts Pty Ltd (Applicant) Ashurst Australia (First Respondent) Crown Solicitors (Second Respondent)
File Number(s):	40998 of 2014

Judgment

Judicial review challenge to assessment of exploration licence under EPA Act

1. SHCAG Pty Ltd (SHCAG), the Applicant, challenges the decision of the New South Wales Minister for Resources and Energy (the Minister), the Second Respondent, to grant authorisation to Hume Coal Pty Ltd (Hume Coal), the First Respondent, to carry out coal exploration activities, specifically the drilling of boreholes, in the Southern Highlands of NSW. Exploration licences are issued under the Mining Act 1992 (NSW). The Minister must comply with the environmental assessment requirements in Pt 5 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) in processing any exploration licence that Part applies to.

2. These are judicial review proceedings in which the Court must determine if the Minister complied with the EPA Act as a matter of law. The Court is not empowered to consider the merits of the exploratory drilling program under challenge in these proceedings.

3. The following background facts are not in dispute. All approvals sought by Hume Coal and granted by the Minister have related to land the subject of Authorisation 349, a coal exploration licence for an exploration area located in the Sutton Forest, Exeter and Belanglo localities. On 6 May 2011 the Minister’s delegate approved phase 1 exploration activities for drilling of up to 120 boreholes. On 4 September 2012 the Minister’s delegate approved phase 2 exploration activities for the drilling of up to 90 boreholes. On 12 March 2013 the Minister renewed Authorisation 349.

4. On 7 March 2014 Hume Coal submitted the initial version of the “Hume Coal Phase 3 Exploration Activity Review of Environmental Factors” for phase 3 exploration activities to the Department of Trade and Investment (the Department), proposing the drilling of up to 90 boreholes. On 16 April 2014 Hume Coal submitted a Surface Disturbance Notice dated 15 April 2014 to accompany its application for proposed exploration activities. On 12 May 2014 the Minister’s delegate decided that the proposed exploration activities as they then stood, would be likely to have a significant impact on the environment, with the consequence that an environmental impact statement (EIS) would be required before those proposed exploration activities could be approved.

5. On 15 July 2014 Hume Coal submitted to the Department for approval by the Minister a revised “Hume Coal Phase 3 Exploration Activity Review of Environmental Factors (REF 3)” application for phase 3 exploration activities proposing the drilling of 25 boreholes.

6. On 4 August 2014 the Department wrote to Hume Coal to request information regarding Hume Coal’s community consultation to assist it in processing the pending phase 3 application. On 19 August 2014 Hume Coal provided reports on its community consultation activities to the Department.

7. On 26 August 2014 the Department wrote to Hume Coal to request that it make two changes to REF 3, include a specific date, and resubmit the document. Hume Coal submitted a further revised REF 3 to the Department on 29 August 2014. On 3 September 2014 the Minister’s delegate purported to approve under conditions 2 and 3 of Authorisation 349 the phase 3 exploration activities comprising 25 drill holes subject to numerous conditions set out in the licence, inter alia. This approval is the subject of challenge in these judicial review proceedings. SHCAG seeks a declaration that the approval dated 3 September 2014 is void and of no effect.

8. The proposed 25 boreholes are located on eight properties which together represent approximately 16% of the total area of Authorisation 349. Five of the eight directly affected landowners have provided affidavits in support of SHCAG’s application. They are Mr Alexander, Mr Martin, Mr Roche, Mr Pollicina individually and as a director of Fesen Pty Ltd. One of the eight properties is owned by Hume Coal. The drilling areas approved under phase 1 and phase 2 were not located on the properties of these landowners. The REF 3 refers to seven properties as it classifies the Pollicina and Fesen properties under the same property identification number.

9. On 25 March 2015 the Court went on a view of the five properties the subject of affidavit evidence in the proceedings and saw the general location of the proposed boreholes on each property. Twenty of the 25 proposed boreholes are located on these five properties, specifically, three boreholes on the Roche property, nine on the Pollicina and Fesen properties (three on the Pollicina property), six on the Fesen property, six on the Alexander property and two on the Martin property. The Court was also taken to the Koltai property where it was shown a cut and fill type road (Koltai Road), and a rehabilitated access track and borehole drill site. The Court was informed this road was built by Hume Coal at the request of the property owner. The Court travelled along Carters Lane. Maps used on the site became exhibit C.

Issues

10. SHCAG relied on the following three grounds of judicial review:

1. The Minister failed to examine to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity prior to approving the activity, contrary to s 111 of the EPA Act;

2. The Minister failed to take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity prior to approving the activity, contrary to s 111 of the EPA Act;

3. The Minister breached s 112 of the EPA Act because she approved the activity without first being furnished with an EIS as required by s 112(1).

11. While the grounds of review relate solely to the EPA Act it became clear in the course of the hearing that parts of the Mining Act concerning access to land arrangements may need to be considered. SHCAG submitted that the actual routes of the access tracks to the proposed boreholes had to be identified and their environmental impact assessed by the relevant Minister in order to comply with Pt 5 of the EPA Act and they were not. In the absence of agreement to allow access by landowners of the land on which Hume Coal wishes to drill (which they are under no legal obligation to provide at present), Hume Coal has not to date been able to precisely identify by ground truthing the most appropriate access routes to the proposed boreholes.

12. In opening oral submissions SHCAG submitted that it was necessary for Hume Coal to first seek access to private land under the access arrangements in Pt 8 Div 2 of the Mining Act in order to enter and determine where the access tracks should go before proceeding with the Review of Environmental Factors (REF) process designed to meet obligations for environmental assessment under the EPA Act. There are presently processes under Pt 8 Div 2 of the Mining Act in relation to land access by Hume Coal taking place, including arbitration, with landowners who gave evidence in these proceedings. These have not resulted in any final access arrangements on any of the relevant private land to date.

13. Alternatively, and primarily, in closing submissions SHCAG submitted that Hume Coal should have applied to the relevant Minister for a permit under s 252 of the Mining Act which would enable it to enter private property to do the necessary assessment of access tracks before proceeding with the REF process under the EPA Act. The interaction if any between the two statutory regimes in the manner contended for by SHCAG has not been identified in any case I am aware of. Both Respondents rejected these submissions and I infer the approach to arranging access to private land contended for by SHCAG has never been required by the Minister or the relevant department in any environmental assessment process for an exploration licence under the EPA Act to date.

Environmental Planning and Assessment Act 1979

14. Relevant sections of the EPA Act provide:

5 Objects

The objects of this Act are:

(a) to encourage:

(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,

(ii) the promotion and co-ordination of the orderly and economic use and development of land,

(iii) the protection, provision and co-ordination of communication and utility services,

(iv) the provision of land for public purposes,

(v) the provision and co-ordination of community services and facilities, and

(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and

(vii) ecologically sustainable development, and

(viii) the provision and maintenance of affordable housing, and

(b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and

(c) to provide increased opportunity for public involvement and participation in environmental planning and assessment.

Part 5 Environmental assessment

Division 1 Preliminary

110 Definitions

(1) In this Part:

activity means:

(a) the use of land, and

(b) the subdivision of land, and

(c) the erection of a building, and

(d) the carrying out of a work, and

(e) the demolition of a building or work, and

…

approval includes:

(a) a consent, licence or permission or any form of authorisation, and

(b) a provision of financial accommodation by a determining authority to another person, not being a provision of such financial accommodation, or financial accommodation of such class or description, as may be prescribed for the purposes of this definition by a determining authority so prescribed.

…

Division 2 Duty of determining authorities to consider environmental impact of activities

111 Duty to consider environmental impact

(1) For the purpose of attaining the objects of this Act relating to the protection and enhancement of the environment, a determining authority in its consideration of an activity shall, notwithstanding any other provisions of this Act or the provisions of any other Act or of any instrument made under this or any other Act, examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity

…

Division 3 Activities for which EIS required

112 Decision of determining authority in relation to certain activities

(1) A determining authority shall not carry out an activity, or grant an approval in relation to an activity, being an activity that is a prescribed activity, an activity of a prescribed kind or an activity that is likely to significantly affect the environment (including critical habitat) or threatened species, populations or ecological communities, or their habitats, unless:

(a) the determining authority has obtained or been furnished with and has examined and considered an environmental impact statement in respect of the activity:

(i) prepared in the prescribed form and manner by or on behalf of the proponent, and

(ii) except where the proponent is the determining authority, submitted to the determining authority in the prescribed manner,

…

Mining Act 1992

15. Relevant sections of the Mining Act provide:

Part 3 Exploration licences

Division 4 Rights and duties under an exploration licence

29 Rights under exploration licence

(1) The holder of an exploration licence may, in accordance with the conditions of the licence, prospect on the land specified in the licence for the group or groups of minerals so specified.

…

31 Dwelling-houses, gardens and significant improvements

(1) The holder of an exploration licence may not exercise any of the rights conferred by the licence over the surface of land:

(a) on which, or within the prescribed distance of which, is situated a dwelling-house that is the principal place of residence of the person occupying it, or

(b) on which, or within the prescribed distance of which, is situated any garden, or

(c) on which is situated any significant improvement other than an improvement constructed or used for mining purposes only,

except with the written consent of the owner of the dwelling-house, garden or improvement (and, in the case of the dwelling-house, the written consent of its occupant).

(2) The prescribed distance is:

(a) 200 metres (or, if a greater distance is prescribed by the regulations, the greater distance) for the purposes of subsection (1) (a), and

(b) 50 metres (or, if a greater distance is prescribed by the regulations, the greater distance) for the purposes of subsection (1) (b).

(3) A written consent given under this section is irrevocable.

(4) This section does not apply with respect to a dwelling-house, garden or significant improvement owned by the holder of the exploration licence or, if the holder is a corporation, by a related corporation.

(5) If a dispute arises as to whether or not subsection (1) applies in a particular case, any party to the dispute may apply to the Land and Environment Court for a determination of the matter.

…

Part 8 Authorities generally

Division 2 Access arrangements for prospecting titles

138 Application of Division

(1) This Division applies to the carrying out of prospecting operations under exploration licences and assessment leases (referred to in this Division as prospecting titles) on any land….

140 Prospecting to be carried out in accordance with access arrangement

(1) The holder of a prospecting title must not carry out prospecting operations on any particular area of land except in accordance with an access arrangement or arrangements applying to that area of land:

(a) agreed (in writing) between the holder of the prospecting title and each landholder of that area of land, or

(b) determined by an arbitrator in accordance with this Division. …

141 Matters for which access arrangement to provide

(1) An access arrangement may make provision for or with respect to the following matters:

(a) the periods during which the holder of the prospecting title is to be permitted access to the land,

(b) the parts of the land in or on which the holder of the prospecting title may prospect and the means by which the holder may gain access to those parts of the land,

(c) the kinds of prospecting operations that may be carried out in or on the land,

(d) the conditions to be observed by the holder of the prospecting title when prospecting in or on the land,

(e) (Repealed)

(f) the compensation to be paid to any landholder of the land as a consequence of the holder of the prospecting title carrying out prospecting operations in or on the land,

(g) the manner of resolving any dispute arising in connection with the arrangement,

(h) the manner of varying the arrangement,

(i) the notification to the holder of the prospecting title of particulars of any person who becomes an additional landholder.

…

142 Holder of prospecting title to seek access arrangement

(1) The holder of a prospecting title may, by written notice served on each landholder of the land concerned, give notice of the holder’s intention to obtain an access arrangement in respect of the land.

…

(3) The holder of a prospecting title and a landholder of the land concerned may agree in writing (either before or after the prospecting title is granted) on an access arrangement.

…

143 Appointment of arbitrator by agreement

(1) If, by the end of 28 days after the holder of a prospecting title serves notice in writing on each landholder of the holder’s intention to obtain an access arrangement, the holder and each landholder have been unable to agree on such an arrangement, the holder may, by further notice in writing served on each landholder, request them to agree to the appointment of an arbitrator.

(2) The holder of a prospecting title and each landholder of the land concerned may agree to the appointment of any person as an arbitrator.

152 Costs

(1) Each party to the hearing is to bear his or her own costs in relation to the hearing.

(2) The arbitrator’s costs in relation to the hearing are to be borne by the holder of the prospecting title.

(3) Payment of the arbitrator’s costs in relation to a hearing is, for the purpose of any security given by the holder of a prospecting title, taken to be an obligation under the title.

155 Review of determination

(1) A party to a hearing who is aggrieved by an arbitrator’s final determination (other than a determination referred to in section 147 (2)) may apply to the Land and Environment Court for a review of the determination.

…

(7) The decision of the Land and Environment Court on a review of a determination is final and is to be given effect to as if it were the determination of an arbitrator.

…

Part 12 Powers of entry and inspection

Division 2 Entry in other circumstances

252 Environmental assessment

(1) The Minister may, on the application of a person who proposes to undertake an assessment (for the purposes of this Act or the Environmental Planning and Assessment Act 1979) of the likely effect on the environment of the activities to be carried out under an authority or a mineral claim, grant a permit to the applicant to enter any land so as to enable the person to undertake the assessment.

(2) (Repealed)

(3) The holder of a permit under this section, and any employee or agent of the holder, may, in accordance with the permit:

(a) enter the land to which the permit relates, and

(b) do on that land all such things as are reasonably necessary to carry out the assessment to which the permit relates.

…

16. The Dictionary to the Mining Act states:

significant improvement means any substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure.

17. The parties agree and I directed pursuant to s 136 of the Evidence Act1995 (NSW) that this Court is not determining whether any structure is a significant improvement for the purposes of the Mining Act. References in the affidavit evidence to the term are to be read as “claimed significant improvements” (TS 163/36-164/15).

Evidence

18. A court book containing, inter alia, the Activity Approval for phase 3 exploration activities signed by the Assistant Director Environmental Operations on 3 September 2014 (Activity Approval), the Assessment Report for phase 3 exploration activity dated 29 August 2014 (Assessment Report) and SHCAG and the Respondents’ respective chronologies, was tendered. An evidence book comprising seven volumes was also tendered.

19. SHCAG’s primary evidence was made up of evidence book volumes 1, 2, 6 and volume 7 (but not including tab 97, 98 and 99) (exhibit B). In addition to different versions of the Assessment Report and the REF 3, exhibit B included the Department of Urban Affairs and Planning document entitled “Is an EIS required?” dated November 1996, email correspondence between SHCAG’s solicitor dated 7 March 2014 and associated email chain. Also included was the Department’s document entitled “Review of Community Submissions”. Exhibit B also contained the landholders’ affidavits, and the expert report of Dr Davies dated 29 August 2014 and his expert report in reply dated 16 March 2015.

20. Hume Coal’s primary evidence was made up of evidence book volumes 3 (exhibit 2), 4 and 5 (exhibit 1, also tendered by the Minister as exhibit 1A) and tabs 97, 98 and 99 of volume 7 (exhibit 3). Exhibit 2 contained, inter alia, Authorisation 349 dated 12 March 2013, which contained the relevant conditions at the time REF 3 was approved. Exhibit 3 was made up of the expert reports of Mr Doyle dated 9 March 2015, Mr Gardyne dated 8 March 2015 and Mr Richardson dated 9 March 2015 (tab 97, 98 and 99, EB vol 7).

Material before the Minister’s delegate

21. Exhibit 1/1A contained material that was before the Minister’s delegate at the time approval was granted, including the Assessment Report annexing, inter alia, the REF 3 and the Pt 5 determination under the EPA Act by Senior Inspector Environment of the Department with inspection date 1 August 2014 and evaluation date 29 August 2014 stating that the activity is not likely to significantly affect the environment and that no EIS is required. Also annexed to the Assessment Report was the Department’s summary of SHCAG’s submissions in a document entitled “Review of Community Submissions” and the Department site inspection report dated 25 August 2015. The site inspection report included photographs of a number of properties the subject of the REF 3 taken from public land.

22. Also before the Minister’s delegate was material concerning community submissions. Email correspondence between Hume Coal and the Department over the period 4-29 August 2014 concerned Departmental requests for additional information regarding stakeholder/community consultation, and amendments and subsequent resubmission of the REF 3 submitted 15 July 2014. Hume Coal’s documents entitled “Annual Community Consultation Report” for the year ending 23 November 2013 and “Interim Community Consultation Report” for the period from 23 November 2013 to 5 August 2014 also formed part of exhibit 1.

23. A letter from Mr Martin, convenor of SHCAG, to Mr Barry, the Director Environment Sustainability at the Department dated 24 April 2014 attached, inter alia, a document entitled “landholder property assessment”, a critique of Hume Coal’s revised REF 3 and a document entitled “Part 5 EP&A Assessment critique of Hume’s Appendix C”. The landholder property assessment identified the agricultural activity on the affected properties, claimed significant improvements existed and access issues for each landowner affected. An extract of the table Attachment 1 Landholder property assessment (p 2214, EB, vol 5) follows:

Landholder	Size of property	Agricultural activity – access issues	Map - % property upon which drilling could take place
Fesen Pty Ltd (Pollicina)	350 acres	Beef and lucerne crop Lucerne crop (significant improvement [s 31 Mining Act]) in paddock on Hume Hwy. No other access.	Yes 66% of property affected
Roche	160 acres	Eventing course for training and competition horse events. Access track wheel ruts will be a serious safety hazard for horses undertaking eventing courses on the property as in a gallop. Lucerne crop across paddock on Hume Hwy.	Yes 70% of property affected
Martin	105 acres	Truffles and lucerne crop across access paddocks, significantly improved driveway, gardens lining driveway.	Yes
Alexander	350 acres	Veal and oats crop. Significantly improved driveway, gardens lining driveway, 200m prescribed distance around house result in no access available to Hume.	Yes 80% of property affected
Pollicia	160 acres	Beef and lucerne crops. Significantly improved driveway, gardens lining driveway, 200m prescribed distance around house result in no access available to Hume.	Yes 66% of property affected

24. An email from the Department to Hume Coal dated 8 August 2014 (p 2290, EB vol 5) attached a letter from Mr Martin of SHCAG to the Minister dated 1 August 2014 outlining “key issues” of SHCAG’s concerns (this letter also produced at tab 32, EB vol 1 formed part of exhibit A, tendered by SHCAG). These concerns related to, inter alia, uncertainty regarding borehole locations, the resulting inability to assess cumulative impacts, the significant costs incurred by landowners in respect of access arrangements and the failure of the REF 3 to address cumulative socio-economic impacts. SHCAG also identified as a “key issue” Hume Coal’s misrepresentation of the level of community consultation it had undertaken, noting that Hume Coal’s statement that “scheduled update meetings are being held” was false. SHCAG and affected landowners were not invited and had no knowledge about a workshop Hume Coal claimed to have held with local landowners and farmers about the negligible impacts of its proposed mining project. An email from Hume Coal to the Department dated 22 August 2014 attached Hume Coal’s response to a number of the key issues and indicated that this SHCAG submission had been addressed in the Interim Community Consultation Report.

25. The letter sent by Mr Martin to Dr Blackmore, Director Environment Sustainability, dated 1 August 2014 was not included in the material before the Minister’s delegate (tab 33, EB vol 1). This letter formed part of exhibit A, tendered by SHCAG. It included material similar but not identical to Mr Martin’s letter to Mr Barry dated 24 April 2014, referred to above at par 23. Attachment 1 is a landholder property assessment report which provides more detail in relation to the Roche property of “Garden up drive way to principal place of residence. The Roches do not agree to noise levels exceeding that set out in Clause 15 AUTH349 2013”. Similar additional references to noise levels are also stated for Pollicina, Fesen Pty Ltd and Alexander. Attachment 2 is a critique of the revised REF 3 and contains additional comments about the landowners’ properties.

Authorisation 349

26. The instrument of renewal of Authorisation 349 contains the following relevant conditions:

EXPLORATION LICENCE CONDITIONS (COAL) 2012

DEFINITIONS

…

Category 1 prospecting operations means development to which clause 10(2) of the Mining SEPP applies.

Category 2 prospecting operations means:

Development of a kind described in clause 10(2) of the Mining SEPP but that is not exempt development because it will not take place on land that is described in clause 10(1);

Construction of an access way such as a track or road;

Excavations (including bulk samples) totalling less than 100 cubic metres;

Non-intensive drilling of boreholes;

Construction of water monitoring bores required in connection with prospecting operations; and

Seismic surveys.

Category 3 prospecting operations means:

Development, not being development to which clause 10(2) of the Mining SEPP applies, which is:

Excavation totalling more than 100 cubic metres, including bulk samples, but not if the bulk sample is permissible only with consent under the EP&A Act;

Intensive drilling of boreholes;

Shaft sinking or tunnelling; and

Any other prospecting operations not being Category 1 prospecting operations or Category 2 prospecting operations.

…

CONDITIONS

Prospecting operations permitted under this exploration licence

The licence holder may conduct Category 1 prospecting operations on the exploration licence area subject to the conditions of this licence.

…

Prospecting operations requiring further approval

The licence holder must obtain the Minister’s written approval prior to carrying out any of the following prospecting operations on the exploration licence area:

Category 2 prospecting operations; and

Category 3 prospecting operations.

The licence holder must comply with the conditions of an approval under condition 2 when carrying out those prospecting operations.

…

Environmental harm

The licence holder must implement all reasonably practical measures to prevent and/or minimise harm to the environment that may result from the conduct of any prospecting operations under this exploration licence.

…

Vegetation Clearing

Vegetation clearing and vegetation disturbance must be limited to the minimum extent necessary to facilitate the conduct of prospecting operations authorised by this exploration licence.

…

Roads and Tracks

Except where otherwise approved under condition 2, the licence holder must ensure that:

Existing roads and tracks are used in preference to constructing new roads and tracks;

The planning, design, construction and maintenance of unsealed roads and tracks is constructed generally in accordance with Managing Urban Stormwater: Soils and Construction, Volumn 2C, Unsealed Roads (DECC 2007) as amended or replaced from time to time; …

The licence holder must restrict the use of any unsealed road or track during wet weather to prevent damage to that road or track unless the road or track has been designed and constructed for use in wet weather.

…

Rehabilitation

All disturbance resulting from prospecting operations carried out under this exploration licence must be rehabilitated by the licence holder to the satisfaction of the Minister.

In rehabilitating the disturbance resulting from prospecting operations, the licence holder must ensure that:

all machinery, buildings and other infrastructure is removed from the area;

the area is left in a clean, tidy and stable condition

there is no adverse environmental effect outside the disturbed area;

the land is properly drained and protected from soil erosion;

the land is not a potential source of pollution;

the land is compatible with the surrounding land and land use requirements;

the landforms, soils, hydrology and flora require no greater maintenance than that in, or on, the surrounding land;

the land does not pose a threat to public safety; and

in cases where vegetation has been removed or damaged:

where the previous vegetation was native, species used for revegetation are endemic to the area; or

where the previous vegetation was not native, species used for revegetation are appropriate to the area; and

any revegetation is of an appropriate density and diversity.

The licence holder must ensure that all water land and wetland crossings that are disturbed during prospecting operations are rehabilitated such that the natural flow of water is unimpeded and bank stability is maintained to prevent erosion.

The licence holder must comply with any relevant guidelines issued by the Director-General in the rehabilitation of disturbance resulting from prospecting operations under this exploration licence.

…

27. The Minister granted Hume Coal approval for phase 3 exploration activities on 3 September 2014. The Activity Approval relevantly states:

ACTIVITY APPROVAL FOR PHASE 3 EXPLORATION ACTIVITIES

(AUTHORISATION 349, ACT 1973)

Pursuant to Conditions 2 and 3 of Authorisation 349, granted under the provisions of the Mining Act 1992, the titleholder is approved to conduct the Home Coal Phase 3 exploration activities comprising 25 drill holes, subject to the conditions set out below. These conditions relate specifically to this approval and are in addition to those attached to Authorisation 349. A breach of these conditions is an offence under the Mining Act 1992.

CONDITIONS

General

1.   The activity must be carried out in accordance with the:

“Hume Coal Project, Hume Coal Phase 3 Exploration Activity – Review of Environmental Factors, August 2014” (including all appendices), dated 29 August 2014; and

Conditions of this approval.

If there is any inconsistency between the above documents, the most recent document prevails to the extent of the inconsistency.

Approval Term

2.   The approval ceases to have effect 2 years from the date of this letter.

...   

Assessment report

28. The Assessment Report dated 29 August 2014 contained the following relevant sections:

1.   PROPOSED ACTIVITY

Hume Coal Pty Limited (Hume Coal) proposes to conduct a coal exploration program consisting of twenty five (25) drill holes within Authorisation 349, near Sutton Forest NSW. This program represents the third exploration program undertaken by Hume Coal within Authorisation 349 and is known as the Phase 3 Exploration Program. The exploration program is designed to further evaluate the coal resource in the area and to delineate geological structures which may be an impediment to any future mining proposal.

2.   BACKGROUND - DETERMINATION OF INITIAL APPLICATION FOR PHASE 3 EXPLORATION ACTIVITIES

Hume Coal submitted a previous application for Phase 3 Exploration Activities, which was received by the Division of Resources and Energy (DRE) on 12 March 2014. That application was for a total of 90 holes within Authorisation 349. Following assessment by DRE, the Director Environmental Sustainability determined on 12 May 2014 that the proposed activity was "likely to have a significant cumulative impact on the environment” and requested preparation and submission of an EIS if Hume Coal decided to proceed with the application.

Hume Coal subsequently decided to withdraw their application and to submit a new Phase 3 Exploration Activity Application for a reduced area (25 holes instead of 90). This is the application which is the subject of this review.

Section 4.11 of this assessment report includes further detail regarding assessment of cumulative impacts.

3.   REGULATORY CONTEXT

Hume Coal is the holder of Authorisation 349. Authorisation 349 was renewed on 12 March 2013 and includes the most recent Exploration Licence Conditions (Coal) 2012. The term of renewal of Authorisation 349 is until 23 November 2014.

Hume Coal has identified the proposed Phase 3 exploration activity as Category 3 prospecting operations in accordance with Condition 2 of Authorisation 349. Condition 2 requires the licence holder to:

obtain Minister's written approval prior to conducting Category 2 or 3 prospecting operations; and

submit a Surface Disturbance Notice, Review of Environmental Factors and an Agricultural Impact Statement for Category 3 prospecting operations.

A Part 5 determination is required in this case because the activity is not subject to Parts 3A or 4 of the Environmental Planning and Assessment Act 1979 and the State Environmental Planning Policy (Mining, Petroleum and Extractive Industries) 2007 does not define the activity as "exempt development".

In accordance with section 111 of the Environmental Planning and Assessment Act 1979, the Minister (or his delegate) as the "determining authority" is required to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity.

Where there is likely to be a significant effect on the environment, an Environmental Impact Statement (EIS) is required prior to the activity being determined. Following completion of the Part 5 assessment, and if the activity is considered to [sic] not likely have a significant impact on the environment, the proposed activity can be approved by the Minister in accordance with Condition 2 of Authorisation 349 granted under the Mining Act 1973.

The "Mining Act 1992 & Environmental Planning and Assessment Act 1979, Instrument of Delegation (Minister)", dated 30 November 2010, identifies that "Any condition of an authority....that confers or imposes a function on the Minister" is delegated to Delegate Categories E, J, K, L and M.

Delegate Category J includes the Manager, Environmental Operations (equivalent position is now the Assistant Director Environmental Operations) and the Team Leader, Environment - Wollongong (equivalent position is now the Manager & Principal Inspector Environment - Wollongong).

In accordance with the current Ministerial Delegation and ESU internal policy, the Assistant Director Environmental Operations is the delegated determining officer for this application.

4. ASSESSMENT SUMMARY

…

4.2   Activity Description

The proposed activity involves the drilling of up to 25 coal exploration boreholes from the surface to below the basal seam of the lllawarra Coal Measures. The primary target is the Wongawilii Seam which will be cored at each borehole. Some boreholes will be drilled from the surface to the base of the lllawarra Coal Measures, below the Woonona Seam. All boreholes will be subject to geotechnical evaluation and selected holes will remain as ongoing water monitoring bores by the installation of a piezometer.

The proposed activity is designed to target information gaps from the previous two drilling phases which will enable Hume Coal to sufficiently advance its conceptual mine planning. The REF provides an overall assessment of the activity. The key aspects of the activity include the following:

Drilling of up to 25 boreholes from the surface to below the Wongawilii Seam in order to target information gaps from the previous two drilling phases;

Drilling will primarily involve small diameter holes (100 mm) with larger diameter holes (200 mm) to be drilled at selected sites to obtain a larger sample of coal;

Drill pads will be 25 metres by 25 metres in size;

Each drill site will take up to 4 weeks to complete;

Drilling activity will occur within standard daylight hours (ie. 7am to 6pm on weekdays and 8 am and 1 pm on Saturdays, with landowner permission);

The activity will include improvements to existing access tracks and construction of minor additional tracks;

The activity will occur on six (6) private properties and one (1) property owned by Hume Coal; and   

The activity is proposed to occur over a 2 year time period.

4.3   Land Impacts

Each of the drill pads will require a maximum area of 25 metres by 25 metres. Existing access tracks will be used wherever possible and will be upgraded as required in negotiation with the landowner. The location of any new access tracks will be negotiated with the land owner and will be limited to paddocks and previously disturbed areas where no tree removal is required.

The precise total disturbance area of the activity is not specified but will likely be 1.56 hectares of drill pads (ie. 25 x 625 m2) plus additional access track installations. However, this total area will not be disturbed at the same time. The activity is understood to occur in a sequential fashion with progressive rehabilitation of disturbed areas prior to the commencement of a new drill site. Creek crossings will be avoided where these could have undue impacts. Topsoil disturbance will be kept to a minimum. Topsoil stripping will only occur around the immediate drill hole collar only [sic] (approximately 2m2 per drill hole).

Standard mitigation measures are proposed including limiting areas of disturbance, using conventional erosion and sedimentation techniques and completing rehabilitation of each drill pad as soon as practical at the completion of drilling.

No significant impacts to the land are expected as part of this activity provided disturbed areas are progressively rehabilitated in the manner outlined in the REF as described.

…

4.5   Rehabilitation

Hume Coal has committed to undertaking rehabilitation in accordance with each landowner's requirements. The REF also provides a general scope of the proposed rehabilitation activities at each site which can be broadly summarised as follows:

Rehabilitation activities will generally commence at the completion of drilling which is expected to take no longer than 4 weeks at each site;

Temporary access tracks and associated disturbed areas not required by the landowner will be ripped, seeded and fertilised following completion of drilling;

Following completion of track construction, the area will be re-instated to its original condition in consultation with the landowner;

Seed and fertiliser will be applied to all ground in the vicinity of the access track where surface grasses have been removed or bare patches are evident;

The drill site will be cleaned as necessary, harrowed to reduce compaction and sown.

The proposed rehabilitation methods outlined in the REF are considered satisfactory. The Department has conducted inspections of previous drilling locations completed by Hume Coal and the rehabilitation standard has been considered leading practice.

…

4.10 Social and Economic Impacts

The REF includes an assessment of the potential community impacts associated with the proposed exploration activity. A social and economic profile is provided for the Southern Highlands townships of Sutton Forest and Exeter; considered as the most likely communities to be impacted by the activity. The following impacts and mitigation measures have been identified in the REF:

negligible impact on roads, power, water, drainage, waste management, education, medical and social services;   

economic impact of the exploration activity (based on a 90 hole program) on agricultural viability would equate to less than $20,000 for the entire program or between $130 to $280 per / drill hole;

direct impacts on affected landholders will include loss of amenity, noise and dust emissions, inconvenience and the temporary loss of use of the land during drilling;

indirect impacts on landholders have been identified as effects on the availability of community services, property valuation and tourism; and

perceived impacts including perceptions and concerns related to any future mining proposal and the misperception that Hume Coal is permitted to explore for coal seam gas have been identified.

The REF makes a substantial attempt to identify and minimise the likely socio-economic impacts associated with this activity. This assessment included the results of a Hume Coal initiated workshop with consultants, landholders and local farmers to identify specific concerns related to the proposed activity. The REF makes it clear that some of the identified socio-economic impacts can be minimised using practical measures (for eg. dust and noise control), but other psychological considerations such as conducting exploration against the wishes of those opposed to mining activities are difficult to quantify and resolve.

4.11 Cumulative Impacts

Cumulative impacts are discussed in Section 12 of the REF. This revised application seeks to reduce the previously proposed cumulative impact level by moderating the scale of the activity. Specifically, the proposed changes include:

Reduce the number of exploration holes from 90 to 25;

Reduce the period of the program from 5 years to 2 years;

Reduce the number of properties affected from 16 to 6 (plus 1 owned by Hume Coal);

Limit the program to using 1 drill rig instead of up to 3 drill rigs;

Eliminate the option of utilising alternative hole locations to avoid unnecessary social impact;

Limit the number of holes on small acreage properties; and

Commit to not drilling holes sequentially on individual properties unless otherwise agreed with the landowner.

This exploration program is the only known exploration program in the area and no other notable drilling programs (possibly apart from isolated water bore installations) are known to occur.

Hume Coal has undertaken two previous exploration programs (Phase 1 and Phase 2) within Authorisation 349. However, exploration sites associated with Phase 1 and 2 have been progressively rehabilitated and the addition of the Phase 3 exploration is not likely to lead to a significant cumulative impact on the biophysical environment.

The cumulative socio-economic impacts associated with the original Phase 3 application which involved drilling 90 holes out of a nominated 150 borehole locations drilled over a 5 year period was identified as a concern. The revised activity application now consists of 25 boreholes over a two year period. This is considered to be a satisfactory reduction in the scale and intensity of the

activity such as to reduce potential cumulative impacts to a manageable level. A further reduction in the number of properties affected from 16 to 6 (plus 1 owned by Hume Coal) will serve to substantially reduce socio-economic impacts.

The revised activity application includes the use of a single drill rig rather than three proposed in the previous Phase 3 application. The use of one drill rig only will help to reduce the cumulative impacts of the program on traffic, noise, dust and water due to the reduced number and intensity of drilling. The low intensity drilling and reduced number of landowners affected gives DRE more confidence that the cumulative impacts are acceptable for the community and environment.

4.12 Community Consultation and Access Arrangements

Hume Coal operates a community consultation strategy with the intent of providing information to the community regarding the company's operations. The consultation strategy employs several consultation tools as follows:

Notification letters to landholders within 500 metres of a drill site, 14 days prior to works commencing

Quarterly newsletters

Media releases around community events

Community presentations and information days

Community surveys, fact sheets, websites and private meetings

Open door’ local office in Moss Vale

Hume Coal is aware of Sections 138 - 158 of the Mining Act 1992 as it relates to land access agreements and arbitration. Hume Coal has previous experience in obtaining land access agreements by both negotiation and arbitration. It is expected that a significant number of private landholders will be affected by this activity and Hume Coal will need to resolve land access issues in accordance with the relevant provisions of the Mining Act 1992 when undertaking land access negotiations and arbitration.

The REF also notes the operation of Section 31 of the Mining Act 1992 which precludes activities occurring within 200 metres of a principle place of residence or within 50 metres of a garden or significant improvement. This requirement is well documented throughout the REF.

…

5 CONSULTATION

5.1 Review by the Office of Agricultural Sustainability & Food Security

The “Hume Coal Exploration Project – Agricultural Impact Statement” was reviewed by the Office of Agricultural Sustainability & Food Security (OASFS) and a response letter was provided to DRE dated 29 July 2014. The OASFS has assessed the activity as a LOW risk to agriculture due to the following:

there is a definitive and strategic process to identify the drill hole sites;

the scale of exploration is limited to 25 holes in this instance to be done over about 2 years;

the level of commitment to the preparation, drilling set up and activity and decommissioning of the drill sites shows a genuine commitment to best practice in ensuring land is returned to full agricultural integrity within 12 months; and

no Biophysical Strategic Agricultural Land (BSAL) is identified in this area at a regional level.

OASFS recommends that future applications should consider a property level assessment for the presence of BSAL rather than reliance on broad-scale published maps.

…

5.2 Submissions from the Community

A total of four (4) submissions were received by DRE in relation to this exploration activity application (Appendix J). Three (3) were in support of the application and one (1) identified concerns and/or was unsupportive of the application. Issues raised in the unsupportive submission were subjected to further detailed analysis which is provided as Appendix I.

…

6 ASSESSMENT OF IMPACTS

An assessment of the significance of environmental impacts associated with the proposed activity was undertaken in accordance with the Department of Planning and Infrastructure guideline “Is an EIS required? Best practice guidelines for Part 5 of the Environmental Planning and Assessment Act 1979”. The results of this assessment are documented in the attached Part 5 Assessment Tables (Appendix G).

Based on the information provided in the REF and the assessment undertaken in the Part 5 Assessment Tables, the proposed drilling of up to 25 coal exploration boreholes has been determined as not likely to have a significant impact on the environment.

7. Appendices

A

Application form ESB-F01 – prepared by Hume Coal Pty Limited and dated 15 July 2014 (INW14/30036)

B

Covering Letter from Hume Coal Pty Limited dated 15 July 2014 (INW14/30033)

C

REF (including AIS) entitled “Hume Coal Project, Hume Coal Phase 3 Exploration Activity – Review of Environmental Factors, 29 August 2014” – prepared by International Environmental Consultants Pty Limited (INW14/36748)

(Note – the August 2014 version of the REF replaces the initial July 2014 submission (INW14/30035), changes were requested by DRE to correct two minor inaccuracies identified in the July 2014 version)

D

Surface Disturbance Notice dated 15 July 2014 – prepared by Hume Coal Pty Limited (INW14/30034)

E

Approval Letter – prepared by Senior Inspector Environment (OUT14/25514)

F

Activity approval procedure cover sheet – prepared by Senior Inspector Environment (INT14/69181)

G

Part 5 Assessment Tables – prepared by Senior Inspector Environment (INT14/76601)

H

Review of the AIS prepared by the Office of Agricultural Sustainability and Food Security and dated 29 July 2014 (OUT14/20813)

I

Review of Community Submissions – prepared by Senior Inspector Environment (INT14/79978)

J

Community submissions (MCV14/927#1)

K

Site Inspection Report from 1 August 2014 (INT14/80867)

…

29. The Review of Community Submissions (Appendix I to the Assessment Report) identified issues raised by SHCAG and comments made by the Department, in part as follows:

Issues Raised	DRE Comment
Confusion regarding the extent of the program. Is the approval for 25 or 70 holes?	The AIS prepared by Hume Coal has been prepared to account for the possibility of obtaining approval of a further 70 exploration holes within Authorisation 349. However, the exploration activity application and the supporting REF is only seeking approval for 25 holes. The 25 hole locations have been clearly identified in the REF. If approved, only 25 holes will be permitted to be drilled.
Previously drilled monitoring bores and coal exploration holes are ignored in the cumulative impact assessment.	Coal exploration holes previously drilled by Hume Coal have been referenced on the plan entitled “REF 3 Planned Locations”. DRE understands that Hume Coal promptly rehabilitates completed exploration holes where no further water monitoring installations are required. DRE does not consider that water monitoring devices installed following exploration activities are a significant cumulative impact consideration provided that they are installed and protected in accordance with NOW licencing requirements.
Authorisation 349 only permits “resource definition” not detailed mine planning.	DRE considers that Hume Coal is conducting exploration within the intent of Authorisation 349.
Landowners forced into costly arbitration process to gain land access.	Relates to the operation of Section 31 of the Mining Act 1992. Outside the scope of this review.
Cumulative socio-economic impacts have not been addressed.	Previously identified concerns regarding cumulative socio-economic impacts have been alleviated by a reduction in impact level and further description of the socio-economic environment of the Southern Highlands.
Issues related to land access and arbitration have not been addressed.	Relates to the operation of Section 31 of the Mining Act 1992. Outside the scope of this review.
The level of community consultation has been misrepresented.	Submission is concerned regarding the wording on page 2-18 of REF stating “Scheduled update meetings with Southern Highlands Coal Action Group and the local State Parliament member”. Hume Coal has clarified the wording on this page in a letter dated 22 August 2014. Consultation has been occurring with SHCAG members and members of parliament.
Workshop with local landowners and farmers did not include SHCAG and affected landowners.	In a letter dated 22 August 2014, Hume Coal explained that the workshop was designed to understand socio-economic impacts from other exploration programs in the locality. Landholders who had experienced previous exploration on their properties attended this workshop.

REF 3

30. The REF 3 provides the following general description of the proposed activity (p 1767, EB Vol 4):

2.3 Description of Activity

2.3.1 General

Hume Coal proposes to continue exploration drilling in A 349 with the approval or this Phase 3 REF. Drilling is expected to continue for a two year period, depending on the timing of landholder access agreements being secured and the availability of the drill rig. A total of 25 drill sites will be developed across the Authorisation.

Most boreholes will be drilled to the floor of the Wongawilli Seam, but some may extend further to the base of the underlying Illawarra Coal Measures, below the Woonona Seam.

The data obtained from the proposed drilling program will be used to update the current geological model with more detailed information relating [sic] the location of geological structures and anomalies, as well as coal seam roof and floor conditions. Existing data from the adjoining Berrima Colliery will also be used to correlate known faults and dykes which may extend into A 349. This model, together with geotechnical assessment of the strata immediately above the target seam, will be used to further develop and refine mining and planning studies.

Additional piezometers will be installed in a number of the bores to monitor groundwater levels and quality, to build on the existing groundwater monitoring network which is designed to assess the potential impacts from mining on the groundwater system.

31. Table 2.1 appears under the heading “Description of the Activity” (p 1768-69, EB vol 4). It identifies, among other things, the co-ordinates for the 25 potential drill site locations, a description of the property on which the borehole is to be located and an identification of the extent of the drilling impact. The proposed locations of the 25 boreholes are depicted graphically in Figure 2A (nominated drill site location) and Figure 2B (proposed drill sites and completed drill sites) (p 1764-65, EB vol 4).

32. The executive summary states that to date a total of 136 holes have been completed within the area of Authorisation 349 by Hume Coal, including rehabilitation and return to previous land use (p 1754, EB vol 4). Addressing the Department’s concerns with the initial version of the REF 3 submitted on 7 March 2014 for 90 boreholes, the executive summary to the REF 3 states (p 1754-55, EB Vol 4):

… Hume Coal has addressed these concerns by reducing the intensity of drilling. Following a review of the proposed final exploration phase Hume Coal has confirmed 70 holes would be required with a minimum of 25 holes drilled in the first instance. This drilling should allow Hume Coal to sufficiently advance its conceptual mine planning in order to support a development application to NSW Planning and Environment. This REF now covers only the drilling of the first 25 boreholes. Following the results of these holes, a separate approval would be sought for any remaining holes needed to complete geological and coal quality evaluations required for a mining lease.

33. It is common ground that the REF did not identify the actual locations of the proposed access tracks to the proposed drilling sites. The REF 3 relevantly states (p 1770-1, 1776, 1788-89, EB vol 4):

2.3.3 Site Selection Principles

The primary mitigation strategy relating to the activity is avoidance of impacts. Sites will be selected where:

Proximity to residences is greater than 200 m unless land owner agreement is obtained;

…

The drill site will be located near existing roads and tracks where practical;

…

In addition to the above criteria, sites will be selected in consultation with the landholder as outlined in the Land Access Agreement.

…

2.3.4   Site Preparation

Access

Access to drill sites will be via public roads and internal property roads and tracks. Landholders will be consulted regarding to [sic] access to drill sites and any access upgrades that may be required. Wherever practical, existing roads and tracks will be used. Access routes will be upgraded if they are unsafe, or to prevent erosion during wet weather. To minimise access distance or impacts, new gates may be installed in fences where necessary which may be removed on completion of drilling activities or left in place for ongoing access for groundwater monitoring or at the landholder's request. In some locations, where it is deemed suitable, vehicles will drive across grassed areas.

The nominated drill sites have been located to avoid the need for new creek crossings or any significant new track construction by utilising existing farm access roads…

Drill Site

Some surface disturbance may be required to establish drilling sites and for the construction and maintenance of access tracks where access does not already exist…

2.4 Access Track Construction and Maintenance

An access track is a track negotiable by vehicles necessary for the drilling program. Where possible existing access tracks will be used with upgrading of these tracks where required. Where new access is required, the location will be determined by the prevailing conditions and property owner preferences. The location of any new tracks will be discussed with each landholder, and will be limited to paddocks and previously disturbed areas where no tree removal would be required. New access tracks will generally be constructed with gravel being laid on the ground's surface, with cut and fill earthworks only where necessary to maintain stability.

…

2.9 Access Arrangements

Land Access Agreements between landholders and Hume Coal are required to be negotiated prior to accessing any private land for exploration drilling activities. The process of negotiation of an access agreement is provided in the NSW Mining Act 1992 (Mining Act). The process requires Hume Coal to notify a landholder in writing of its intention to obtain an agreement that would allow access. The notification process must include details of the exploration works proposed and an area over which access is sought. The actual site(s) of any drilling must also conform to the requirements of this REF, that is, avoid ecological harm and minimise environmental impact.

In addition, under Section 31 of the Mining Act, if any principal place of residence is located within 200 m of any proposed exploration drill site, occupier consent must also be obtained.

…

Landholders have the right to negotiate the inclusion of property management issues such as preferred access paths within paddocks, avoidance of paddocks with crops or when sensitive breeding activities are occurring, locations of any new tracks to assist in ongoing farm management, access to water and the like. Landholders also have the right to negotiate specific issues such as preferred hours of entry, revegetation works including type of pasture to be used, the type and location of any new gates or fencing that may be needed.

…

The following access protocols will be maintained for the drilling program:

∙ All traffic is to be confined to access tracks as far as practical;

∙ Where access is via open spaces, particularly in cultivated areas or pasture improved grazing land, care shall be exercised to ensure that minimum damage is caused to the surface by confining movement to the nominated route. Indiscriminate traffic in such areas is to be avoided. Unformed access tracks are shown on the plans provided to all drilling contractors and related personnel and usually follow fence lines;

∙ Access across paddocks, when permitted by the landholder, but not requiring constructed tracks will occur under conditions that will result in minimal damage to soils and vegetation within the paddocks such as avoiding use following heavy rainfall;

∙ The landholder is to be contacted prior to first vehicles entering the property. The landholder is to be advised of subsequent access requirements during the site establishment and drilling phases, as well as for ongoing access to piezometers;

∙ All gates to be left as found (open or closed) unless otherwise indicated by the landholder; and

∙ Transportation of any earthmoving equipment shall occur with the blade up unless involved in drill site preparation or access track construction.

34. Once the land access agreements have been negotiated and the precise location of the drill sites and access tracks confirmed, site specific assessments will occur by qualified ecologists and heritage consultants as required prior to any disturbance (p 1758, EB vol 4). Inspections will include the drill compound area, all access paths including existing and new tracks as well as nearby habitat areas (p 1756, EB vol 4).

35. In relation to borehole locations, the REF 3 states (p 1783, EB Vol 4):

… Environmental constraints and risk mapping has been utilised in the selection of the drill sites, each comprising an area with 100 m radius which avoid significant impacts to waterways, agriculture, residential receptors, vegetation, and cultural heritage sites. This, together with detailed site investigations prior to final precise site selection within this area, will ensure that borehole locations will have a negligible impact on the environment while still obtaining the necessary detailed geological information.

36. The site occupation for each hole will be approximately four weeks, although delays may occur due to wet weather or to accommodate specific landholder requests or farm management activities (p 1775, EB Vol 4). The proposed drilling works will result in temporary impacts which will be fully rehabilitated on completion (p 1757, EB vol 4). In its “Summary of Impacts and Conclusion”, the REF 3 relevantly provides (p 1878, EB vol 4):

The exploration program will cause short term environmental effects within the Hume Exploration area which will be effectively managed using the mitigation and management measures outline[d] within this REF. Short term impacts which will be caused by the minor disturbance from drill holes and access tracks are not considered significant. Hume Coal is committed to managing and monitoring the impacts of its exploration activities and fully rehabilitating the areas of disturbance caused by the program.

37. Table 2.2 in the REF 3 is a summary of the proposed measures to prevent, control and mitigate potential environmental impacts associated with the exploration activities (p 1776-1780, EB vol 4). Proposed measures include, inter alia, the avoidance of creek crossings where these could have undue impacts, minimisation of the use of access tracks during or following rainfall, the inspection of all drill sites and new access tracks by a qualified ecologist to delineate sensitive ecological features and avoid impacts, a 40 km/h speed limit will be enforced on all access tracks, or slower if requested by landowner, rehabilitation works are to commence as soon as practical following completion of works and that all new tracks to be properly constructed, stable and drainage installed.

38. Concerning environmental management of the physical and chemical impacts of the proposed activity, the REF 3 provides in relation to “Soils and Land Stability” that, inter alia, any gravel used at the drilling sites and access routes will be removed upon completion, unless requested by the landowner. Original topsoil will be spread over the disturbed area and restored with pasture vegetation in consultation with the landowner (p 1815, EB vol 4). Concerning surface water, erosion and sediment measures include, inter alia, maximisation of ground cover retention, no disturbance to nature/pasture grasses and soil where possible, the rehabilitation of drilling sites and access routes in a timely manner and inspection to ensure rehabilitation has been successful, and exposure and disturbance of ground surface will be limited where possible to minimise erosion (p 1817-18, EB vol 4). Concerning air quality, environmental management measures include, inter alia, the monitoring of dust emissions and the use of water carts on access tracks and at the drill sites as necessary (p 1829, EB vol 4). The activity will avoid the clearing of threatened ecological communities through the location of drill sites and access tracks in previously disturbed areas (p 1837, EB vol 4).

39. Section 12 of the REF 3 deals with cumulative impacts both broadly and specifically in relation to the cumulative impacts of noise, dust, visual, water, traffic, and ecological and archaeological impacts (p 1872-76, EB vol 4). The original phase 3 exploration activity involving up to 90 boreholes out of a nominated 150 borehole locations over a five-year period was determined by the Department to have the potential for significant cumulative impacts. The REF 3 revised the program to reduce the intensity of drilling by, inter alia, reducing the number of proposed boreholes to 25, the time to two years, limiting the number of boreholes on small property holdings and using one drill rig at a time. The reduction in drilling intensity has further reduced the potential for adverse impacts associated with the proposed exploration activities which individually are minimal, highly localised and temporary. The combined impact on the economy of the Southern Highlands is considered positive but small as the combined impact on agriculture will be fully compensated for as part of the land access agreements. Hume Coal is the only known company conducting exploration activities in Authorisation 349. It is sole holder of that licence. It is unlikely that the works will contribute to any other activities that could cause cumulative impacts in Authorisation 349 (p 1872, EB vol 4).

40. The specific environmental objectives include mitigating cumulative impacts by utilising only one drill rig at any one time (p 1767, EB vol 4). The REF 3 states that this approach will address cumulative impacts on individual and neighbouring properties as it will avoid the cumulative impacts of noise that attend using multiple drill rigs, avoid cumulative traffic impacts on local roads, reduce the intensity of activities at any given location and reduce the total area disturbed at any time. While some boreholes will be located in close proximity to each other, they will not be drilled at the same time (p 1873, EB vol 4).

41. Further references in the REF 3 are:

12.1 Assessment of Cumulative Impacts

… For this project, cumulative impact relates to the assessment of the previous Phase 1 and 2 programs and the potential for any additional exploration prior to or during mining. None of the private properties with proposed boreholes for the Phase 3 drilling activity have been subject to the Phase 1 or Phase 2 drilling activities. The property owned by Hume Coal, for which there is one borehole proposed, has previously been drilled on as part of the Phase 2 drilling activity (as shown in Figure 2B).

The first approved exploration phase involved 120 drill holes of which only 36 were drilled. The Phase 2 exploration program involved an approved 90 boreholes while the current proposal involves 25 boreholes. Although the total number of exploration holes within the Authorisation is approximately 300, Hume Coal has completed 136 to date. This combined with the proposed with the proposed Phase 3 program will bring the total to around 161 undertaken by Hume Coal. The remaining holes were completed in previous periods dating back to 1950s by previous explorers.

The number of future holes, in addition to the proposed Phase 3 activity is difficult to determine. Geological investigations will continue during detailed design as well as throughout any future mining activities. The intensity of this work however diminishes dramatically and tends to concentrate on specific geological structures or information gaps.

42. In relation to community impacts the REF 3 relevantly states (p 1843-1851, EB vol 4):

Community Impacts

7.1   Social and Economic Profile

…

7.2   Community Services and Infrastructure

…

7.3   Economic Impacts

The exploration for the Phase 3 drilling activity will occur on rural properties involved in low intensity grazing and lifestyle properties in an area focused on the central portion of the Authorisation. The proposed boreholes are located on 7 separate landholdings of which 6 will require land access agreements…

7.4   Landholder Impacts

There will be both direct and indirect impacts on land holders. The direct impacts relate to loss of amenity during the drilling program, noise and dust emissions, inconvenience and the temporary loss of use of the land subject to drilling. Direct impacts can be mitigated to some extent but the temporary loss of amenity and inconvenience falls under compensation.

The indirect impacts are impacts that may be caused by other associated or ancillary activities to the drilling either within or outside the area of direct impact and which may be reasonably foreseeable. Indirect impacts may include growth inducing effects and other effects related to changes in the pattern of land use, population density or growth rate and related effects on air and water and other natural systems. An example would be a project that causes increases in demand for social services such as housing, medical, electricity, sewage or education. As with direct impacts, indirect impacts can be positive, neutral or negative.

It is also important to understand perceived impacts within the community which may not relate to actual impacts but are nonetheless important community issues.

7.4.1   Direct Impacts

A workshop was held on 3rd July 2014 which included specialist consultants, land holders, and local famers to provide a means to access the social impact of the Phase 3 drilling project. The outcome of this process was the generation of a number of tables as outlined in the following sections. Table 7.2 identifies the direct impacts on individual properties. Direct impact is considered to be a function of how man holes are planned, how long it takes to drill them, whether the property is privately owned or owned by Hume Coal, accessibility and the impacts on adjacent properties, cumulative impacts and environmental factors all in relation to the size of the property.

[Table 7.2 identifies the estimated direct impacts during the proposed phase 3 drilling activity for the 7 properties the subject of the REF 3. In estimating the direct impact Table 7.2 gives scores for, inter alia, alternate access, impacts on neigbours, environmental factor and social impact. Relevantly, for the Alexander, Pollicina and Fesen, Roche and Martin properties the table indicates a duration of between 2 and 9 weeks, depending on the number of proposed holes. Table 7.2 identifies an alternate access score of 1 for the Alexander and Pollicina and Fesen properties, and scores of 2 and 3 for the Roche and Martin properties respectively.]

In determining the potential impacts on individual properties, the following factors have been considered in Table 7.2:

Alternate Access refers to entering a property via different directions. A score of 3 indicates only one access and from a less utilised road. A score of 2 indicates possible multiple entry locations. A score of 1 indicates access options from different roads of various utility.

…

Social Impact is considered to be a function of; how many holes are to be drilled, how long it takes to drill them, environmental and cumulative factors, whether the property is privately owned or owned by Hume Coal, whether the property has been subject to previous drilling by Hume Coal, accessibility and the impacts on adjacent properties and all divided by the size of the property.

The assessment also includes other mitigation factors such as using only one drill rig at a time to drill all holes. The hours of operation will be restricted to 7:00am to 6:00pm on private property, depending on Land Access Agreements or Arbitration Arrangements.

Each and every landowner has different aspects that will cause them to be or to feel impacted. These aspects include; having to go through the Land Access Arrangement or the Arbitration Process, concerns about strangers accessing or working on their property, simply being in the district, noise impacts (which are minimised through distance and the use of modern equipment), duration of the drilling program, opposition to coal exploration or mining in general. Some of these aspects are difficult to quantify and for some persons there is no amount of money that would compensation for the impact. Nevertheless, the process outlined above is an attempt to put a guide together in a dispassionate way, to what can be an emotive issue.

In order to categorise the social impact assessment in Table 7.2 and determine the level of impact on the nominated properties, various scenarios based on changes in drilling density were utilised to develop a range of categories as shown in Table 7.3. These impact categories range from Significant Social Impact with a direct impact ranking of 400 to negligible impact with impact rankings ranging from 4 to 0.4 [all of the social impact calculations for the properties the subject of REF 3 were below the impact ranking of 4].

…

7.4.3   Perceived impacts

These relate to any impact which is considered important to any particular land owner but which may or may not be real, measurable or related to the actual exploration drilling. These are often caused by personal beliefs, understanding or mis-information. Hume Coal has some experience in dealing with these issues since the commencement of the drilling program. In response, Hume Coal has developed a series of information packages for land owners which cover issues such as the design and installation of an exploration hole, the actual impacts on the groundwater from drilling and matters relating to future mining, the incorrect perception that Hume Coal is drilling for coal seam gas, and land access agreements.

Exploration drilling is similar in impact as the initial drilling of a water bore. As there are over 400 existing registered water bores in the Authorisation, such drilling activities are in fact relatively common and historically, the drilling and maintenance of water bores in the district have supported two local drilling companies. Despite this, there is still the perception that exploration drilling will cause adverse and/or new impacts on the social and natural environment. This is predominantly the result of the drilling being associated with a mining company as opposed to an existing landholder.

It is not possible to completely satisfy land owner understanding of real impacts versus perceived impacts when perceived impacts are grounded in opposition to any future underground mining proposal. Where this occurs it needs to be recognised but it is not a governing factor in the assessment and approval process.

43. The REF 3 contains the following appendices:

A      Neutral or Beneficial Effects

B      Environmental Check lists

C      Assessment of Activity Significance

D      Habitat Assessment

E      Agricultural Impact Assessment

F      AHIMS Search Results

G      Noise Assessment

H      Weed Guides

I      Material Safety Data Sheets

J      Compliance Check List

44. The Agricultural Impact Assessment (appendix E) (also referred to as the Agricultural Impact Statement (AIS)) dated July 2014 prepared by International Environmental Consultants Pty Limited provides an assessment of the potential impacts on agricultural resources within Authorisation 349 as a consequence of conducting the exploration program. The AIS states (p 1929, EB vol 5):

ES 1 Activity Overview

This Agricultural Impact Statement (AIS) assesses the potential impacts of exploration drilling on Agricultural Land within Authorisation 349 as shown on Figure 1. The exploration activities will be undertaken by Hume Coal as part of its ongoing assessment of coal resources within the Authorisation.

Hume coal commenced staged exploration in June 2011 with Phase 1 and 2 now complete. It is anticipated that a further 70 holes will be required to complete a detailed geological model and accurate JORC compliant resource model. This AIS has assessed the anticipated future 70 exploration holes which is defined in this report as the future exploration activity. This AIS has also assumed that each borehole will require an area of up approximately 625m2 for a period of less than 4 weeks. This timeframe includes initial set up, drilling and decommissioning. Set up does not typically involve earthworks as pad sites are only located on level ground to gentle slopes. On completion of drilling, which usually takes less than two weeks, the equipment is demobilised and any disturbed pasture is rehabilitated as soon as practicable.

For the purposes of this assessment, the combined impacts on agriculture have been assessed, that is, a total of approximately 4.4 ha of agricultural land being excluded from production for a period of 12 months. The 12 month period has been used as a conservative approach and assumes that every drill site will require complete pasture replacement. This has never occurred to date and in reality, drill sites are returned to production shortly after the completion of demobilisation.

45. In 1996 the Department of Agriculture assessed the land within Authorisation 349 as being moderately productive lands suited to improved pasture rotation. Steeper areas were classified as not being suitable for cultivation with low to very low productivity for grazing (p 1950, EB vol 5). Concerning Wells Creek, the AIS states that the creek bank has been largely cleared and there are sections that display slumping and erosion. Some sections have been fenced to exclude stock but in general it is in a moderate to poor condition (p 1952, EB vol 5).

222. The evidence of Mr Doyle and Mr Gardyne supports their opinion that the access tracks would not cause a significant impact on the environment (see par 63-85). Mr Doyle is Hume Coal’s exploration manager, a position that includes the supervision of all Hume Coal’s exploration activities from the planning, through to drilling, rehabilitation and the assessment of data gathered. He has over 35 years of experience in the coal industry, having worked in projects in New South Wales and Queensland. Much of this time has been spent in pursuit of exploration drilling activities for coal, with associated activities including landowner negotiations, siting of access tracks, rehabilitation of drill sites and authorising compensation for landowners. Mr Gardyne has more than 35 years of experience as a practising environmental scientist. For the past 20 years, he has worked as a self-employed consultant on the planning and construction of major construction projects, particularly linear infrastructure, with a particular focus on successful rehabilitation. This experience has included the preparation of Erosion and Sediment Control Plans for contractors working in the coal seam gas industry in Queensland and the Northern Territory.

223. According to Mr Doyle, Hume Coal would seek to minimise the use of gravel and upgrades to existing tracks may not be required. Access tracks on steeper slopes would be avoided in the first instance to locate more appropriate access, which would not require construction work or lengthy rehabilitation and is largely achievable based on the evidence of Mr Doyle and Mr Gardyne. Substantial infrastructure is not needed according to Mr Doyle due to the short term requirements of the access tracks. Hume Coal has a number of wet weather measures, which include standing down or delaying drilling activities, and using mud mats and gravel as identified in Mr Doyle’s evidence set out at par 67. Gravel not required by a landowner would be removed. Mr Doyle outlines the weight and use of the drilling equipment at par 74. In his opinion the impacts can be fully rehabilitated in a relatively short space of time.

224. The actual amount and potential for erosion is quite low in Mr Doyle and Mr Gardyne’s opinions. In Mr Gardyne’s opinion, the only waterway of any significance is Wells Creek, which has been and continues to be highly disturbed through clearing and grazing activities. It is necessary to take into account existing land impacts. Mr Gardyne considered that based on the size of the drill rig, grass would probably be compacted but there would not be a total disturbance. The REF 3 details rehabilitation measures to be applied in some detail and conditions 38-40 of Authorisation 349 also require specific rehabilitation measures to be undertaken. Mr Gardyne addressed concerns raised about access to boreholes in wet areas and considered that access could be achieved without significant harm.

225. Mr Doyle’s evidence addressed the concerns of Dr Davies and the landowners in relation to the Roche (HP362 and HP365 interference with equestrian events, HP357 wet ground and interference with equestrian events), Fesen (HP456, HP212PC, HP214PC and HP402 wet ground, HP202PC and HP295PC wet ground and interference with landholder use), Pollicina (HP253CH and 231PC wet ground, HP265PC requiring cut and fill), Alexander (HP351CH, HP352CH and HP345CH wet ground, HP048CH requiring cut and fill, HP245PC interference with use for cattle) and Martin (HP371 wet ground and HP374 wet ground and requiring a long access track) properties. Mr Doyle also gave his opinion that satisfactory access can be gained to HP346CH on the Alexander property, in respect of which Mr and Ms Alexander did not identify particular concerns (see par 68-73). The landowners’ concerns are identified in their affidavits summarised above at par 87-109. Mr Gardyne addressed concerns regarding a number of proposed boreholes in wet areas.

226. Concerning the Pollicina property, Mr Doyle did not consider that HP265PC will require cut and fill works as this can be addressed by relocating the borehole site within the 100 metre radius. Mr Doyle stated that access to HP231PC, HP253CH and HP265PC on his site inspection was satisfactory and that shorter access tracks may be available. Concerning the Fesen property, Mr Doyle’s evidence was that HP202PC and HP295PC could be relocated to address Mr Pollicina’s concerns that these proposed boreholes would interfere with his use of those paddocks. On his site inspection, Mr Doyle had no difficulty accessing HP402 or HP214PC, but stated that access via Mr Pollicina’s laneway would be more suitable. There could be a minor or moderate but not significant impact in accessing HP456 by crossing Wells Creek. This could be ameliorated by flattening ruts or avoided by accessing HP456 from the Pollicina property. Gate access to HP212PC would avoid wet ground. Mr Gardyne stated that gate access to HP212PC would address the need to cross the waterway. Crossing the waterway would not have a significant impact if crossed at a drier time or with temporary stabilisation. Access to HP456 is likely to be damp for much of the year and could be achieved by an all-weather crossing through the use of geofabric. To minimise impacts and rehabilitation costs, drilling may need to occur during a drier period. Mr Pollicina disputed whether access could be achieved through another property.

227. Concerning the Alexander property, Mr Doyle’s evidence was that relocation within the 100 metre radius would address the issue of use for cattle (HP245PC), avoid Wells Creek (HP345CH) and cut and fill works would not be required (HP048CH). Mr Doyle stated that based on his site inspection HP346CH and HP352CH were easily accessed and that the ground was dry and firm. Mr Gardyne stated that HP351CH and HP345CH could be relocated away from wet ground.

228. Concerning the Martin property, Mr Doyle stated that HP371 could be accessed via the main entrance and would recommend that mud mats be used. There would be minimal impact if mud mats were used in accessing HP374 in a dry period. Accessing HP374 in wet conditions could cause impacts requiring rehabilitation. Mr Gardyne stated that as access to HP374 crosses the overflow path from the main dam, wetter times may need to be avoided. A crossing could be effected and rehabilitated. Alternative access could also be negotiated.

229. Dr Roche gave affidavit and oral evidence concerning the physical impacts of accessing and drilling boreholes HP357, HP365 and HP362 on the Roche property (see par 105-109). In Dr Roche’s estimation, rehabilitation of HP357, located in the dressage arena, would take two to three years to return footing to current international standards. He is unaware of any dressage arena on which heavy vehicles and machinery have been used that has been successfully rehabilitated to international standards. In cross-examination, Dr Roche stated that if HP357 were relocated to the parking area it would not interfere with the eventing course. However, after an incident in which a truck was bogged in the parking area and caused damage to it, a decision was made that trucks could only go on the top side of the hill nearest to Kardinia Lane. A dam and swales were built in that paddock to try to dry it out, but this was unsuccessful. It was clear following the view by the Court and the evidence of Mr Doyle that HP357 can be moved from the dressage arena area to the parking area where a lesser degree of rehabilitation would be required compared to an eventing area. Mr Doyle considered the impacts of access and drilling in the carpark area would be negligible (see par 68). Mr Gardyne observed a firm rock foundation at the Wells Creek crossing and no significant turbidity created by the crossing of a light vehicle. He considered that the use of the parking area for equestrian activities would have a greater impact than the phase 3 program (see par 78).

230. Dr Roche stated that more direct access to HP365 would render between 15-20% of the cross-country course unusable for two to three years. Dr Roche does not consent to alternative methods of access, such as access across the show jumping warm up arena, which would render it unusable, or methods of access through low and wet areas. In cross-examination Dr Roche gave evidence that a concrete truck had accessed the Roche property from Kardinia Lane and that a water bore drill rig almost definitely accessed the property the same way. Such trucks did not always do damage to the course, it depended on the weather. Driving a truck down part of the course would render it “unusable for probably two years”. Part of the eventing arena in which a truck carrying hay that had entered the Roche property via Golden Vale Road was bogged, was not used for about a year and other areas of the track were used. Mr Doyle stated that an alternative access track could minimise travel through low and wet areas. Mud mats could also be used. Mr Doyle’s evidence was that there would be no significant impact issues bringing the drilling equipment onto the property via Kardinia Lane. Further, HP365 could be relocated next to the fence to minimise impact on the equestrian course (see par 69). Mr Gardyne considered that any impact of crossing a wet location in accessing HP365 could be managed by using the crossing when it is dry. This could be done at a certain time of the year or by the landowner dropping the level of the downstream dam (see par 78).

231. According to Dr Roche the proposed access to HP362 would render ten per cent of the course unusable for two to three years. In cross-examination, Dr Roche stated that there used to be a gate on the fence line bordering Golden Vale Road, which was accessed by trucks carrying hay. The paddock in which HP362 is proposed had been used for grazing cattle. Dr Roche stated that “it may be possible” to design a course avoiding the footprint of HP362, if it were confined to a 25 x 25 metre footprint, but that the borehole sites he had seen had a larger footprint. A location very close to the fence line bordering Golden Vale road is available within the 100 metre radius. In Mr Doyle’s assessment there would be no issues with drilling HP362 along the fence line and that any compaction from vehicle impacts would be easily rehabilitated (see par 70).

232. Given Mr Doyle’s considerable practical experience in undertaking the drilling processes the subject of his evidence and the phase 3 approval I accept his evidence that the concerns of Dr Davies and of the landowners of grazing properties can be adequately addressed. His views are supported by those of Mr Gardyne who considered that satisfactory arrangements can be made to minimise environmental harm when accessing wet areas. The Roche property has the most sensitive land use environmentally and economically. While it appears on the evidence of Mr Doyle that the physical impact would not be significant environmentally there remain potential economic issues concerning the use of the property which I will consider below.

233. Dr Davies is a practising environmental scientist, planner and academic researcher, who has experience working as a local government environmental planner and scientist reviewing general mining and related applications. He reviewed development applications for various activities including mining as a senior manager at a government authority. While I accept that Dr Davies is an expert in his field there are some difficulties with his approach to the evidence in this case. As already identified above in par 226 Dr Davies did not consider in any detail the ameliorative measures referred to by Mr Doyle.

234. Further difficulties with Dr Davies’ approach include that he criticised the REF 3 but that does not address the question required by s 112. Another difficulty is that the provision of alternative options for access contended for by Dr Davies includes specification of the expectations of landowners and their view of significant improvements. There is no obligation on landowners to provide such information in a Pt 5 assessment engaged in by a proponent under the EPA Act, and the determination of what is a “significant improvement” takes place under the Mining Act in the absence of agreement with a landowner. Further, there is an inherent tension in the approach advocated by Dr Davies and the legislative scheme in the EPA Act and separately the Mining Act. Condition 23 of Authorisation 349 and section 2.3.4 of the REF 3 “Site preparation” both require that as much as possible use will be made of existing tracks as a means of minimising environmental harm and these are binding requirements on Hume Coal. Dr Davies essentially adopted the landowners’ submissions that as claimed significant improvements include most or all access tracks which would not therefore be available to Hume Coal other new tracks should have been identified in the REF 3. Ultimately the extent to which existing access tracks can be used will be the subject of an arbitral determination (and if necessary determination by the Court) under the Mining Act in the absence of agreement. Requiring options to be identified in the REF 3 which are potentially more environmentally harmful appears counterintuitive. A further difficulty with that approach is that it assumes the precise location of a borehole but the present approval has built in flexibility for the location of boreholes to enable appropriate variation of access tracks in order to reduce their impact.

235. I accept Hume Coal’s submission that, based on the expert evidence identified above, the physical drilling of boreholes and making of access tracks are likely to have impacts that are short term for the properties used for grazing and cropping given the approach to construction and rehabilitation measures to be implemented. Accessing and drilling in appropriate weather conditions is obviously a key issue in reducing impact as Mr Doyle’s evidence attests to. Condition 24 of Authorisation 349 restricts the use of access tracks in wet weather if not suited to that use. Mr Doyle’s evidence extracted in par 67 refers to the efforts made to avoid drilling in wet weather and to deal with access across wet areas through the use of mud mats and gravel with the consent of a landowner. In the context of the REF 3, this means that the impacts do not exceed 12 months in effect (TS 349/37-39). The lack of specific detail of location and construction of access tracks when the ameliorative measures required to be implemented are identified does not lead to a conclusion that the activity would have a significant physical impact in the long-term meaning more than 12 months in the context of this activity.

Economic and social impacts

240. SHCAG submitted the economic and social impacts of the phase 3 program on the affected landowners and the local community were impacts I should examine because the community responses to the project form part of the public interest citing Bulga at [63]. The landowners’ concerns are more than a fear without rational or justified foundation which alone is not an amenity or social impact, Bulga at [63]. Their evidence of likely economic and social consequences of approval was based on the experience and costs of dealing with Hume Coal in arbitration under the Mining Act in current ongoing processes. Their evidence is more than an expression of subjective fear and concern. Their affidavit evidence also referred to concerns they had about the impact of the phase 3 program on the uses of their properties.

241. Hume Coal relied on reasons given already in relation to s 111 of the EPA Act as to why the social and economic impacts relied on by SHCAG concerning resisting access arrangements and arbitration under the Mining Act are not matters relevant to assessing any likely impact on the environment. Such matters have insufficient nexus to the “activity” to justify being characterised as being likely to significantly affect the environment for the purposes of s 112. The access arrangements under the Mining Act have been made by Parliament in a statutory scheme which provides for parties to bear their own costs but for the arbitrator for whom the holder of the prospecting licence pays (s 152 of the Mining Act). I have accepted those arguments at par 197.

242. Hume Coal submitted that reliance on broader fears and concerns of local residents about coal mining and CSG identified in Mr Martin’s affidavit of 18 February 2015 are not relevant. The mixed nature of the evidence of community concern about the impact of a future and unapproved coal mine and about CSG (which Hume Coal is not engaged in) with evidence of SHCAG’s opposition in the past and future is not probative of any relevant impact. No weight should be given to evidence of local residents’ concerns generally in considering the impact of the phase 3 program. There is no probative evidence to make findings of adverse social impacts of the drilling of 25 boreholes.

Finding on social and economic impacts

243. For reasons concerning statutory construction already stated in relation to s 111 the economic costs to landowners of opposing access arrangements under the Mining Act are not relevant to the assessment of the likely significance of environmental impact under s 112 of the EPA Act.

244. The landowners’ affidavits identify concerns about the impacts of the phase 3 program, such as possible damage to claimed significant improvements and interference with how they run their properties. Mr Alexander was concerned about impact on what he considered to be significant improvements such as fences, cattle laneways and the underground water reticulation system on his property. Mr Pollicina farms cattle and is concerned about the impact in conjunction with Fesen Pty Ltd of use of the affected paddocks on a rotational basis. He is concerned about claimed significant improvements such as underground watering systems being impacted upon. Mr and Mrs Martin graze cattle, grow lucerne and have a truffiere. They have made a number of improvements to the property, including the construction of a dam, a 800 metre driveway, and a house.

245. The economic costs relate in large part to concerns by landowners about impacts on the use of their lands resulting from the preparation and use of the access tracks and boreholes, the physical impacts of which I consider are not significant given the number of ameliorative measures available which include arrangements for wet weather and the flexibility afforded in the location of boreholes. Impacts on infrastructure such as water reticulation systems and fencing are also of concern, all of which are claimed as significant improvements. There is material in the REF 3 and the Assessment Report relevant to this topic, as cited in relation to s 111 (see par 194-195).

246. A key issue for all landowners is the timing of construction and drilling and subsequent rehabilitation of sites for up to one year. The Assessment Report identifies at sections 4.2 and 4.5 the period for drilling as being up to four weeks (see par 28). The REF 3 provides that site occupation for each borehole would be approximately four weeks, although delays may occur due to wet weather or to accommodate specific landowner requests or farm management activities (see par 36). The assessment undertaken in the AIS assumes that each borehole would require an area of up to approximately 625m2 for a period of less than four weeks (see par 44). Mr Doyle stated that the four week period per site is a conservative estimate for all activities, including drilling and rehabilitation (EB vol 7, p 2957). Mr Gardyne referred to an eight week period for the drilling program (see par 78) but that period is not supported by the other evidence referred to. The access arrangements under the Mining Act can include negotiation on the timing of access as well as the location of tracks and the provision of compensation where necessary for nuisance and inconvenience.

243. The property with the most sensitive land use environmentally and economically is the Roche property given its use for horse eventing which requires appropriate surface quality to ensure safe footing for horses and riders across most of the property. Dr Roche considered that two to three years’ rehabilitation of affected ground to the necessary standard would be required. In terms of economic cost Dr Roche’s affidavit referred to the Berrima Horse Trials competitions held in March, June/July and November and other events and activities held at the property throughout the year. Cancellation of any of the competitions would result in significant economic loss to his family and to the wider community of the Southern Highlands. Apart from footing safety, the principal safety issue identified was noise as horse training and eventing would not be able to take place within 400 or 500 metres of the source of the sound of the drill rig and associated activities, according to Dr Roche (TS 161/10-28).

244. As identified above, timing of access to and drilling on a property is one of the matters either agreed or arbitrated under the Mining Act. In other words, that is a matter which can be negotiated with Hume Coal under the Pt 8 Div 2 process. Hume Coal submitted that the drill rig is intended to be at each site for about one week with the remainder of the estimated four weeks intended for setup and rehabilitation. That site occupation for each borehole would be approximately four weeks is confirmed by the REF 3 and Mr Doyle’s evidence. I accept that given this evidence the timing for drilling on the Roche property could be arranged to minimise disruption to its use for eventing particularly the competitions in March, June/July and November held at the property.

245. In terms of individual boreholes and whether the disturbed areas requiring rehabilitation would impact on the use of the Roche property for horse eventing, HP357 can be moved from the dressage arena area to the parking area where a lesser degree of rehabilitation would be required compared to an eventing area. Mr Doyle considered the impacts of access and drilling would be negligible (see par 68). There would be no interference with the eventing course at this location. There may be disruption of eventing scheduling by drilling given the close proximity to the dressage arena. Timing can be negotiated with Hume Coal.

246. Access to HP365 via Kardinia Lane is one of many possible access routes according to Mr Doyle. Dr Roche considered this would potentially require access over wet areas. Mr Doyle stated that an alternative access track could minimise travel through low and wet areas (see par 69). The borehole could be located next to the boundary fence to minimise impact from ongoing rehabilitation on the equestrian course.

247. HP362 is intended to be located in a paddock which has been used at times for grazing. A location very close to the fence line bordering Golden Vale Road is available within the 100 metre radius. Mr Doyle’s assessment was there would be no issues with drilling HP362 “as planned along the fence line” and that any compaction from vehicle impacts would be easily rehabilitated (see par 70). In cross-examination Dr Roche agreed that parts of the course had been excluded on other occasions where areas required rehabilitation. His evidence was that up to 90% of the property was needed for eventing. The rehabilitation of the two boreholes HP365 and HP362 would potentially impact on some of the eventing course, particularly HP365. The siting of both boreholes very close to the fence-line would reduce any potential impact.

248. It is difficult to conclude on the evidence that drilling boreholes HP362 and HP365 would result in a substantial economic impact on the Roche property. To the extent there is disruption there is provision for compensation to be payable under the access arrangements in the Mining Act. Dr Roche is justifiably concerned about wider economic impacts in the community if fewer events are held on the property. This impact could be minimised for the reasons already stated.

249. In relation to rehabilitation time, as I understand Hume Coal’s submissions, confirmed by the terms of the phase 3 approval, if the REF 3 cannot be complied with a borehole is not permissible under the approval, a matter which can be negotiated under the Pt 8 Div 2 Mining Act process. If rehabilitation of the area around a borehole and access track would take more than twelve months to rehabilitate as Dr Roche attests is likely, that borehole could not be drilled. It appears from Dr Roche’s oral evidence that measures have been taken when a truck was bogged on one occasion to avoid that area of the property for twelve months. It is Mr Doyle’s evidence that it is very likely rehabilitation could occur within 12 months but there is no doubt the surface of the Roche property requires greater attention to rehabilitation outcomes than if it were used for grazing or cropping. I cannot conclude finally whether rehabilitation is achievable in twelve months in these proceedings nor is it necessary that I do so.

250. The social costs identified in Mr and Mrs Martin’s affidavits relate to community opposition to exploration activities and future potential coal mine or CSG projects. Mr Martin’s affidavit details the extent of community concern in relation to Hume Coal’s past and future activities (see par 94). Such concerns in the context of the limited activity of exploration in the phase 3 program are not irrelevant, contrary to Hume Coal’s submissions. The issue of opposition to mining activities is referred to in any event in both the REF 3 and the Assessment Report as being difficult to quantify and resolve, as discussed at par 194-195. Given that the phase 3 program is work preliminary to any decision about a coal mine in the Southern Highlands and not a proposal for an actual coal mine it is difficult to conclude that concern about a possibility is a significant impact in this case. As stated in Bulga such concerns and fears must be rational, as indeed they are. Unlike Bulga which was considering a specific coal mine extension in Class 1 proceedings, such concerns are less pressing in the context of this case.

Cumulative impacts

255. SHCAG submitted that the same cumulative impacts identified in relation to s 111 of the EPA Act, being the cumulative effects of the drilling activity as a whole, must also be considered under s 112 referring to Kivi v Forestry Commission of NSW (1982) 47 LGRA 38 Cripps J at 47.

256. I have considered the issue of cumulative impact already in the context of s 111 finding no basis for making a finding that the Minister had failed to examine and take into account any such impacts had been demonstrated. I found the impacts said by SHCAG to require consideration as cumulative did not arise from the phase 3 program at par 190. The same reasoning would apply also in relation to s 112 as there is no additional evidence to consider in relation to the s 112 ground.

Conclusion

257. In conclusion I consider no likelihood (meaning a real chance) of the phase 3 program significantly (meaning more than ordinarily, importantly) affecting the environment has been established by SHCAG. Alternatively, there is no threat of serious or irreversible damage to the environment if considered in the context of the precautionary principle. There is no need to consider the second condition precedent concerning scientific uncertainty. Ground 3 is not established.

258. As SHCAG has been unsuccessful its amended summons should be dismissed. Costs are reserved.

Orders

259. The Court makes the following orders:

1. The amended summons filed in Court 29 April 2015 is dismissed.

2. Costs reserved.

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Decision last updated: 05 August 2015