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7 Jun 12
Implications of the Federal Government's decision to 'stop the clock' on assessment of the $6.4 billion Alpha Coal Project

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By Tim Hanmore (Partner)

On 5 June 2012, Federal Environment Minister Tony Burke took action under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), pausing the approval process for Central Queensland’s $6.4 billion Alpha Coal project. The project will be one of Australia’s largest mines if it proceeds.

This decision has potential implications for the assessment process for other projects, with the possibility that the agreement between Queensland and the Commonwealth relating to the assessment of environmental approvals could be suspended or cancelled. In the absence of the bilateral agreement, Queensland-based ‘controlled actions’ under the EPBC Act would have to go through separate State and Commonwealth approvals processes rather than the streamlined process under the agreement.

In this article, regulatory and approvals specialist Partner Tim Hanmore examines what this means both for Alpha Coal, which is forecast to create thousands of jobs and $83 billion in exports for the 30-year life of the mine, and the implications for the wider Queensland resources industry.

What this means for Alpha Coal

For the Galilee Basin coal mine and its proponents Hancock Coal and GVK, the approvals process is now paused until the Queensland Government supplies ‘further information’ (details of which are not yet known) to the Commonwealth.

The request by the Federal Government flows from the Queensland Coordinator-General’s conditional approval last week for the Alpha Coal Project. Mr Burke asked the Queensland government to reopen the approvals process because the assessments required under Federal law had not been completed. 

Minister Burke’s request for further information means that his time limit for making a decision on the project is paused until he receives the last of the requested information.

Minister Burke said the mine’s proponents were working directly with the Federal Government, but that he had ‘stopped the clock’ on the Alpha Coal Project because of the Queensland government’s actions.

Request for further information

The bilateral agreement between the Federal and State governments means some environmental approvals can be streamlined and performed by one level of government. Under section 132 of the EPBC Act, the Federal Environment Minister may request further specified information from the relevant State Minister about a controlled action under assessment. This information may also be requested of the proponent or another person if considered appropriate.

Specifically, in relation to the EPBC Act, the Minister has:

  • asked for further information from the Queensland government under section 132, and
  • initiated a formal consultation with the Queensland government regarding the bilateral agreement between Queensland and the Commonwealth under section 58.

Minister Burke has stated that the reason he has taken the above steps is that the Queensland government did not provide a satisfactory report to the Commonwealth government. He said the Queensland report did not provide him with sufficient information to make an informed decision about the project under the EPBC Act, expressing a lack of trust in the Queensland assessment process.

Specifically, the Minister blamed his move on a lack of information on run-off that would impact the reef and its wildlife.

What this means for the Queensland bilateral agreement

Minister Burke said he would notify the Queensland government that consultation about the Queensland bilateral agreement would be required. The consultation would take place under section 58 of the EPBC Act, which requires the Federal Environment Minister to consult with the relevant State or Territory where he believes that the State or Territory:

  • has not complied (or will not comply) with the bilateral agreement, or
  • has not given (or will not give) effect to the agreement in a way that accords with the objectives of the EPBC Act and promotes the discharge of Australia’s international obligations.

If Minister Burke remains unsatisfied as to these matters after the consultation, he may notify the Queensland Government that the agreement (or parts of it) is suspended or cancelled.

A strategic assessment

Minister Burke has already indicated that if the bilateral agreement is suspended, he would like the suspension to remain in force until the conclusion of a strategic assessment that is in process along the Queensland coast.

The strategic assessment is intended to examine the impacts of actions in the Great Barrier Reef World Heritage Area and the adjoining coastal areas. It is intended to enable a ‘big picture’ approach to protecting the area and to provide a basis for the Commonwealth and Queensland governments’ strategic planning. It comprises two agreements, entered into under the terms of section 146 of the EPBC Act in February 2012:

  • the first agreement is with the Great Barrier Reef Marine Park Authority and will cover the marine park, and
  • the second agreement is with the Queensland Government and will cover the 2,300km long coastal boundary of the marine park.

The assessment process is still in its early stages, with Draft Terms of Reference having been released and Final Terms of Reference currently being developed. The stated time frame of the strategic assessment is 12 to 18 months.

It is also important to note that under clause 3.7 of the two agreements mentioned above, the strategic assessment does not affect the application of the EPBC Act in the assessment area in relation to actions or activities already approved.

As to the likelihood of section 59 being invoked, Minister Burke said:

 ‘I don’t want to land in Section 59 territory but I’ll tell you I am seriously contemplating it.  ...I am considering suspending the bilateral agreement with Queensland until the strategic assessment has been concluded.’

 

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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