Law Reform · Energy & Climate

EDO Qld’s submission on discount criteria for mining rehabilitation obligations

05 February, 2014

EDO Qld does not support the concept of offering discounts on financial assurance to mining and CSG proponents. Queensland should be ensuring that government risk is minimised as much as possible, otherwise the costs of rehabilitation are left to the public purse.

Read our full submission here.

There is an extraordinary number of abandoned mine sites in Queensland where the Environmental Authority (EA) holder has not fulfilled its rehabilitation obligations.

Mining and CSG operators (as EA holders) have an obligation to pay ‘financial assurance’ – akin to a bond – to the State Government, based on the likely costs that the Queensland Government may incur when taking action to rehabilitate or restore the environment after the mine stops operating. If the EA holder does not meet its environmental obligations, the Government can draw on the ‘financial assurance’ to pay for the rehabilitation. If a mine is abandoned and the EA holder has not paid financial assurance in full, or if the costs of rehabilitation exceed the amount set aside by the EA holder, the public ends up paying for mine rehabilitation through the public purse.

The Queensland Audit Office has suggested that Queensland has approximately 15,000 abandoned mine sites, with an estimated liability of Queensland of some $1 billion for rehabilitation costs. It is therefore important to ensure that the regulation of mining and resource activities provide adequate protection for the State from accruing further financial liability for abandoned mines. In the face of increasing costs to the State and the public, a conservative approach to environmental risk is warranted.

EDO Qld has provided recommendations to a targeted consultation on the criteria for EA holders wishing to obtain a discount on their financial assurance payments.  EDO Qld believes there are four main issues to be addressed in the proposed criteria to ensure reduced risk to the environment, the public, and the government:

  1. EA holders should show they have the financial capacity to meet their rehabilitation obligations as well as demonstrate positive environmental performance;
  2. All EA holders should be required to build up a history of full compliance with all conditions of their EA;
  3. Increasing enforcement and monitoring will reduce risk to government;
  4. Environmental Performance Criteria should require progressive rehabilitation, not be satisfied simply through payments towards research and development.

Environmental Defenders Office Queensland (EDO Qld) gives a strong legal voice to the environment when needed most.

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