Alert Digest No 10 of 2000
31 October 2000
Summary of Committee Comments

Mineral Resources Development (Amendment) Bill
Appendix 1 - Index of Bills Reported 2000
Appendix 2 - Committee Comments classified by Terms of Reference

Mineral Resources Development (Amendment) Bill

Introduced: 4 October 2000
Second Reading Speech: 5 October 2000
House: Legislative Assembly
Minister: Hon. S. Garbutt MLA with the Hon. K. Hamilton MLA.

Purpose

The purpose of the Bill is to –

  • amend the Mineral Resources Development Act 1990 (the Act) to –

(i) impose a cap on loss of amenity claims arising from mining operations;

(ii) enable the recovery of compensation for the use of Crown land in mining operations;

(iii) modify the operation of the "100 metre rule" in relation to the protection of significant buildings and sites;

(iv) modify the licence application process and the process for obtaining approval to start mining operations;

(v) ensure that the Act is consistent with the Native Title Act 1993 (Clth); and

(vi) generally improve the operation of that Act; and

  • make a consequential amendment to the National Parks Act 1975.

Content and Committee comment

Clause 2 provides that sections 1, 2, 60 and 70 come into operation on the day after Royal Assent. The remaining provisions come into operation on proclamation but not later than by 1 January 2002.

Clause 3 amends section 2(1)(b)(iv) inserting the words ‘and native title’. Section 2 in the objects section of the Act will provide that ‘the objectives of the Act are to establish a legal framework aimed at ensuring that just compensation is paid for the use of private and native title land.’

Clause 4 inserts new definitions including ‘low impact exploration’ and ‘native title land’.

Clause 5 inserts a new section 4A providing that in the case of any Crown land (other than wilderness Crown land) that is also native title land, for the purposes of the Act the land is to be considered to be native title land, not Crown land.

Clause 6 substitutes new sections 6(c) and 6(d) to clarify that certain land is not available for exploration, mining and searching. These are –

(c) land that is an Aboriginal area or place to the extent of the terms of a permanent declaration under section 10 or 21E of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Clth).

(d) land that is a permanent archaeological area under section 15 of the Archaeological and Aboriginal Relics Preservation Act 1972.

Clause 10 inserts a new section 8A allowing aerial surveys to be undertaken for the purpose of searching for minerals or preparatory to the search for minerals without holding authorisation under section 8 (offence to search for minerals or to do work without authority), however the provisions of section 116 then apply, requiring information to be furnished to the Minister. A document so furnished becomes the property of the Crown and may be open to public inspection when the licence ceases to be in force.

Clause 35 inserts new section 38AA-38AD.

New section 38AA deals with the requirement that a licensee must survey and mark out the boundaries of the land covered by the licence so that the boundaries of the area to which the licence applies are readily ascertainable by a person in the area.

New section 38AB provides that the Department Head may grant to a licensee, an authority to enter land if he or she is satisfied that the licensee has made reasonable attempts to obtain the consent of the owner or occupier and the applicant has been unable to contact the owner or occupier; or the owner or occupier has refused or failed to give consent. The Department Head must serve on the owner or occupier of land a copy of any authority that is granted to enter the land as soon as is practicable after the authority is granted.

New section 38AC a person who enters land under an authority must comply with any request made by the owner or occupier of the land to be shown a copy of the authority. The Department Head must, before granting an authority to enter land, require a licensee to provide a security against the risk of damage to the property of the owner or occupier of the land as a result of the licensee’s entry on to, or activities on, the land.

New section 38AE provides that a licensee must not enter any land, or carry out any surveying or marking out, unless the licensee is insured against any risk that might arise if the owner or occupier of the land were to sustain a personal injury as a result of the licensee’s entry on to or activities on the land.

Clause 40 amends section 42(2) to reduce the notice of commencement of work on mining licences from 21 to 7 days.

Clause 41 inserts a new section 42A providing that a planning permit is not required to vary an approved work plan that was approved in respect of work for which an EES (Environment Effects Statement) was prepared under section 42(7) of the Act, where after consultation with the Minister administering the Environment Effects Act 1978, the Minister is satisfied that the work will not cause any significant additional environment impacts.

New section 42A(3) provides that if the Minister is not so satisfied, the licensee is still not required to obtain a permit for that work if the Minister administering the Environment Effects Act 1978 directs that a report be prepared on the additional environmental impacts that the new work may have; and the report is made available for public inspection and comment for at least 28 days; and after considering any comments made during that period, that Minister submits an assessment of the report to the Minister; and the variation, in the form that it is approved by the Minister, substantially complies with any requirements recommended by that assessment.

The Committee received information from Mr David Lea, Executive Director of Minerals and Petroleum Division, Department of Natural Resources and Environment and a submission from the Coalition of Communities Against Open Cut Gold Mining in Victoria.

The Committee noted that in the new section 42A(3) where the Minister was not satisfied that any new work would not cause any significant additional environmental impacts there was a process whereby community involvement may take place through the requirement of a report and public inspection of that report within a specified time.

The Committee notes that it is less clear how there may be community consultation and/or an opportunity to comment on proposed variations to an approved work plan in the case of section 42A(2). That is, where the Minister (after consultation with the Minister administering the Environment Effects Act 1978) is satisfied that the new work will not cause any significant additional environmental impacts, the consultative process provided in 42A(3) is not applied.

On the material before it the Committee is unable to say whether the provision may constitute an undue trespass to rights and freedoms.

The Committee will seek further information from the Minister concerning the operation of section 42A(2).

Clause 44 substitutes a new section 44(6) of the 1990 Act providing for a deemed consent where a person or body whose consent is sought under section 44 (consent required for work on restricted Crown land or land under the control of a government agency) is not given or refused after 28 days. The provision does not apply to native title land.

Clause 45 amends section 45 dealing with the protection of buildings and sites, particularly archaeological areas as defined by the Archaeological and Aboriginal Relics Preservation Act 1972.

Clause 45(2) inserts new subsections (1A) and (1B) into section 45. The section is headed ‘Protection of buildings and sites’ subsection (1) providing that a licensee must not, except as provided by the exceptions in the section, do any work within 100 meters laterally or within 100 meters below – (i) a dwelling house; or (ii) a substantial farm building; or (iii) to (xiii) (being other structures, features or sites).

The new subsections as inserted provide –

(1A) Despite sub-section (1), a licensee may do any work prohibited by sub-section (1) (except work within the prohibited distances of the area relating to a site described in sub-section (1)(a)(xiiiŒ )) if the licensee is not required to obtain a permit for that work under section 42(7) or 42A.Ž

(1B) Sub-section (1A) applies regardless of whether the licensee has any of the consents referred to in sub-sections (2) and (4) .

Clause 46 substitutes a new section 46(1) providing that –

The Minister may authorise a licensee to do work within the area prohibited by section 45(1)(a)(i) to (x) or within 100 metres below that area--

(a) after considering the advice of the Mining and Environment Advisory Committee; or

(b) after consultation with the municipal council in whose municipal district an area is situated, and any community group or member of the community whom the Minister considers should be consulted about the proposed work.

The existing section 46 does not include paragraph (b) above.

In respect to the 100 meter rule the Committee notes the comments in the Second Reading Speech –

The 100 metre rule

Firstly, I would like to discuss the 100 metre rule under section 45. This currently provides that work may not be undertaken by a licensee within 100 metres of nominated structures without the approval of the owner, occupier, relevant person or agency. The Act also allows the Minister to approve such work to be done (section 46) after consulting with the Mining and Environment Advisory Committee (MEAC).

MEAC is a body comprising departmental officers, representatives of mining, farming and one person representing the environment.

This process has proven to be unwieldy and of little value, particularly where a mining proposal has been through a full public consultation process under the Environmental Effects Act 1978. This EES process will fully consider all the issues that need to be considered in assessing whether ministerial agreement to work within 100 metres will be given. The requirement to consult with MEAC is therefore an unnecessary duplication of process and it is proposed that in such a case the Minister does not have to consult with MEAC before considering whether to give approval for work within 100 metres.

Where a proposal to work within 100 metres of a mine has not undergone the EES process, the Minister must consult with MEAC. However, MEAC is not usually able to provide effective local community consultation and comment to the Minister. Consultation with the local community is desirable to ensure that all relevant issues are addressed.

Therefore, it is proposed that in such a case the Minister will consult with the relevant local government and affected members of the local community as an alternative to MEAC before making any decision. These changes will increase the opportunity for the community to provide input into decisions as well as improving the transparency and effectiveness of this section of the Act.

I would stress that where approval for exploration or mining occurs via either of these processes, the compensation provisions of the Act still apply.

The Committee notes the written submission and evidence given to it by the Coalition of Communities Against Open Cut Gold Mining in Victoria and the Minister’s comments in the Second Reading Speech and information given to it by Mr David Lea, Executive Director of Minerals and Petroleum Division, Department of Natural Resources and Environment.

The Committee notes that under new section 46(1)(b) consultation with community groups or members of the community may be at the discretion of the Minister. It is not apparent to the Committee whether the owners or occupiers of structures or land provided in section 45(1)(a)(i) to (v) would be consulted, have a right to make submissions or appeal against a Ministerial decision.

The Committee further considers that the proposed new section 46(1)(b) may make rights and freedoms depend upon insufficiently defined administrative powers within the meaning of section 4D(a)(ii) of the Parliamentary Committees Act 1968.

The Committee will write to the Minister to seek further advice.

Clause 55 inserts a new section 82(3) to provide that the Minister may, as a condition of returning a bond or bonds (for the rehabilitation of mining land) to a licensee or a former licensee, require that person to enter into a further rehabilitation bond if any land or part of the land to which the bond relates has not been rehabilitated, or requires further rehabilitation.

Clause 56 substitutes a new section 83(6) to provide that in making a decision to return a rehabilitation bond the Minister must take into account the possibility that some of the damage caused to the land by the licence Activities may not become evident for some time.

Compensation – Native Title

Clause 57 amends section 85 by inserting a new subsection (7) dealing with compensation. The clause ensures that the owner of native title land has the same rights to compensation as the owner of private land and that any compensation paid to a native title holder is on just terms where the person is entitled to compensation on just terms under the Native Title Act 1993 (Clth).

The clause also substitutes a new section 88(1)(a) including ‘native title land’ within the ambit of the dispute resolution provisions contained in section 88. Further a new section 88(3A) is inserted providing –

In determining how much compensation is due to a native title holder in any dispute concerning native title land, the Tribunal or Court must take into account any relevant amount that has been determined or agreed as compensation under the Native Title Act in relation to that land.

Clause 58 inserts a new section 85A to provide for compensation to be payable to the Crown or person holding a lease, licence, permit or other authority under an Act, for loss or damage to Crown land. If the Minister determines that compensation should be paid to a person, the Minister may increase the amount payable by up to 10% by way of solatium to compensate the person for intangible and non-pecuniary disadvantages for which compensation is not otherwise payable and that result from the approval or the carrying out of the work.

Clause 59 inserts a new section 88A dealing with determining disputes over compensation payable in respect of Crown land under the new section 85A. A person may apply to the Victorian Civil and Administrative Tribunal to review a requirement by the Minister under section 85A.

Limit to compensation

Clause 60 amends section 89 dealing with the limit on amount of compensation for loss of amenity. Previously there was no cap on the amount of compensation payable under this head of compensation for damages. The clause inserts a new section 89(3) providing –

The maximum amount of compensation that a court or the Tribunal may order to be paid under section 85(1)(e) (loss of amenity) is $10,000.

The Committee notes the comments in the Second Reading Speech –

Compensation for loss of amenity

Under the Act the holders of a mining licence must negotiate with the owners or occupiers of affected private land to obtain consent for the work to be undertaken. These negotiations generally lead to an appropriate level of compensation agreed between the parties. However, where an agreement cannot be reached there is recourse to section 85 of the Act, which lists what compensation is payable for and allows for compensation disputes to be heard by VCAT or the Supreme Court.

Section 85 of the Act allows for compensation for loss of possession of the whole or any part of the land; damage to the surface of the land; damage to improvement; severance of the land from other land; loss of opportunity to make planned improvements and any decrease in the market value of the land. As well as compensation for these impacts, compensation is also payable for loss of amenity, including recreation and conservation values under section 85(1)(e).

Loss of amenity allows for a landowner or occupier to claim for what is often subjective loss not otherwise compensated for by the Act. It also allows claims for compensation where it is claimed that adequate protection has not been achieved through the planning approvals process or by legislation such as the Environment Protection Act. It therefore provides an opportunity to claim compensation for the intangible losses that are often difficult to define.

It should be noted that when the compensation provisions were included in the MRDA it was proposed, in the relevant green and white papers, that they be closely aligned with the Land Acquisition and Compensation Act. The provisions in the MRDA relating to land purchase include a solatium of up to 10 per cent, and this aligns with the reference Act. However the Land Acquisition and Compensation Act does not include specific provisions with respect to loss of amenity. Indeed no legislation in Victoria has a similar provision.

The structure of the amenity provision means that any landowner or occupier can claim for loss of amenity even if they are a large distance from the mine. While there is some justification for some landowners and occupiers to be able to claim for loss of amenity, the nature of this provision exposes the mining industry to open-ended, potentially high-cost legal Actions to which no other industry is similarly exposed. Such an open-ended liability threatens the economic survival of mining companies even though they are operating completely within the conditions of their licence and approvals.

This is seen as a major disincentive to exploration and mining investment in Victoria. It should also be added that Victoria is the only state or territory with such a specific provision for compensation for loss of amenity, and mining is the only industry that faces such a legislative provision within Victoria. In other jurisdictions and for other industries within Victoria, such an Action would need to be taken under common law. The changes that are proposed do not affect the ability to raise a common-law claim against a mining company in Victoria. The Act must therefore be structured so that it does not become an open-ended threat to the very existence of the industry while still providing for adequate protection for individuals who are genuinely affected by loss of amenity.

A number of options were examined including:

  • removing the loss of amenity provision;

  • limiting loss of amenity compensation to situations where the mine operates outside agreed performance standards;

  • limiting liability for loss of amenity to a maximum prescribed amount per claim.

The first two options were not pursued as both would result in the elimination of claims for compensation for loss of amenity. The third option, to limit the maximum claim for loss of amenity, provides protection for the industry as well as allowing for genuine claims for loss of amenity.

A maximum value of $10 000 is appropriate to compensate for the loss of amenity. This takes into account the fact that compensation for other losses and damages is not limited. It also recognises that amenity issues such as noise, dust, vibration and working hours are controlled to levels set by the government to limit health and social effects. These limits applied in Victoria are as stringent as any applied elsewhere within Australia.

The government consultation paper proposed that compensation be limited to
$10 000. As expected, the mining industry sought the removal of the provision and community groups favoured retaining the provision without limiting the maximum claim. However, the government strongly believes that this proposal is the most effective means whereby open-ended liability for mining companies can be constrained while also providing for legitimate claims for loss of amenity.

The Committee notes the submission made by the Coalition of Communities Against Open Cut Gold Mining In Victoria and the comments of the Minister in the Second Reading Speech concerning the limitation on damages under the heading of ‘loss of amenity’. The Committee accepts that there are competing rights issues in such a limitation of damages and refers the question of whether such a limitation is an undue trespass to rights and freedoms to the Parliament for consideration.

[Refer also to the section 85 Constitution Act 1975 statement below].

Clause 61 inserts a new section 89A (Native title rights prevail) to provide that where the Act provides for processes which are similar to those which have applied under the Native Title Act 1993 (Clth), the processes provided in the Act do not apply.

Clause 63 substitutes a new section 93 concerning offence to obstruct an inspector etc. The new provision substantially increases penalty provisions and differentiates penalties between natural persons and corporations.

Clause 66 inserts a new section 111A to provide for default penalties to accrue for offences that continue after the conviction. The new provision for default penalties is used in a number of section substitutions and insertions used throughout the Bill [e.g. amended section 45(6), new section 38AE, amended section 8(1) ].

Clause 68 provides that any money received by the Minister on the sale of property under sub-section (4) (dealing with the sale of abandoned plant which becomes the property of the Crown) must if the cost of taking action under section 83(1) (Minister to carry out rehabilitation) in relation to any land covered by the licence exceeds the amount of the bond or bonds, be applied towards covering that cost and in any other case, be paid into the Consolidated Fund. The section only applies to plant abandoned on Crown land not on private property.

Clause 74 inserts Schedule 5 containing savings and transitional provisions consequent on the provisions in the Bill coming into force.

Clause 75 repeals the Mineral Resources Development (Amendment) Act 1993. The amending Act is spent and serves no further use on the Victorian statute books.

Clause 76 inserts a new section 32D(4) into the National Parks Act 1975 providing that –

(4) The property in minerals passes from the Crown to a person acting in accordance with any permission or authorization given under sub-section (2) when the minerals are separated from the land.

Section 32D deals with the power of the Secretary to declare designated gazetted areas, to authorise persons to fossick and or prospect in those areas (subject to restrictions or conditions).

The Committee also notes that no explanation is given in respect to clauses 75 and 76 in the Explanatory Memorandum. Whilst clause 75 appears to be self explanatory in that it repeals a spent amending Act, clause 76 makes amendments to section 32D of the National Parks Act 1975 and the reason for amending that Act should be provided to the Parliament for it’s consideration.

The Committee will seek clarification from the Minister.

Report to the Parliament pursuant section 4D(b)(i) and (ii) of the Parliamentary Committees Act 1968 concerning a repeal alteration or variation of section 85 of the Constitution Act 1975.

Clause 70 substitutes a new section 123 and declares that it is the intention of section 89(3), as inserted by clause 60, to alter or vary section 85 of the Constitution Act 1975.

Clause 60 is the limitation of compensation for loss of amenity referred to above.

The Committee notes the comments in the Minister’s section 85 statement in the Second Reading Speech and also the comments in that speech concerning compensation for amenity (see clause 60 above) –

I wish to make a statement pursuant to section 85(5) of the Constitution Act 1975 of the reason for altering or varying that section by the Bill.

Clause 70 of the Bill states that it is the intention of section 89(3) inserted by section 60 of the Mineral Resources Development (Amendment) Bill to alter or vary section 85 of the Constitution Act 1975.

Section 89(3) provides for a limit to the amount of compensation that a court or tribunal may order to be paid for loss of amenity to $10,000.

The Committee has examined the proposed section 85 Constitution Act 1975 clause and notes the Minister’s statement in the Second Reading Speech and accepts that the provision is consistent with the purposes of the Bill.

The Committee makes no further comment.

Committee Room
Monday, 30 October 2000

Footnotes
ΠAn archaeological site on the Heritage Inventory.


Section 42(7) deals with work permits for carrying out mining on land covered by a licence and provides that a licensee need not obtain such a permit where an environmental effects statement (EES) has been prepared under the Environment Effects Act 1978 and has been submitted to the Minister and the Minister has approved work to commence.
Ž See notes under clause 41 above.
 Subsections (2) and (4) refer respectively to consents by owners and occupiers of the land on which anything referred to in sub-section (1)(a)(i) to (v) is situated (i.e. dwellings, farms, factories, farm equipment and gardens and orchards).