Thursday, 17 August 2023

Bills

Mineral Resources (Sustainable Development) Amendment Bill 2023

Second reading

Debate resumed.

Adem SOMYUREK (Northern Metropolitan) (12:50): I rise in support of this important piece of legislation. It is an important piece of legislation because it provides a regulatory framework. It is a step in the right direction of providing a regulatory framework that will allow our important mineral resources sector to be able to prosper, to grow and to unlock its potential. The mining industry has potential certainly to drive economic growth; it has potential to drive jobs and export growth. With the global transition to renewable energy, the demand for critical minerals, which Victoria has in abundance, is set to skyrocket. The minerals are essential for the production of batteries and turbines and solar panels as the world moves towards a more sustainable future, and Victoria is perfectly placed to take advantage of that. It is important that we do unlock the potential of another sector of our economy.

Let us have a look at the last 14 years or so of the Victorian economy and the Australian economy. We paid the price during the resources boom for not diversifying our economy enough. We were a manufacturing state. Sure, we had a big services industry too, but a lot of our employment came from the manufacturing sector. When the Australian dollar reached 111 US cents in about July 2011, our manufacturing base was completely polarised. We had job losses every day in the media. We lost a lot of our heavy industry. We could not have imagined losing some of the industries that we lost. I have got to say, looking at it from this vantage point, losing some industries has made Victoria much more efficient – we are allocating our resources much more efficiently – but there are some industries we just should not have lost, such as the auto manufacturing industry. It was arrogance from Joe Hockey that caused the auto industry to leave Australia’s shores. You cannot play chicken with an industry that is courted throughout the world, and that is exactly what Joe Hockey did. That is a salutary reminder to any politician, particularly to this Premier: do not be arrogant, because it is costly. At the end of the day, it is costly to the people of Victoria and Australia. I will get back to why the auto industry remains an important industry – it would have been a very, very important industry at the moment – a little bit later on.

When we were in opposition, the Labor Party at that point had some very, very hardworking shadow ministers with great vision who went out and looked at ways that we could diversify our economy. We came out with a bunch of policies that, if we were elected to government, we were going to produce higher up the value chain to identify sectors which were sectors of the future and industries of the future. Clearly what we saw during that period of the two-speed economy was that we could not compete with low-cost economies in the region. We had to play to our competitive advantages, which meant we had to produce higher up the value chain. We had our competitive advantages there in that we have got a well-skilled and educated workforce. We have got second-to-none innovation infrastructure in Victoria, built by the Bracks–Brumby governments. It sort of died a little bit with the Baillieu–Napthine governments, and it has not been invested in by this government. This government has become a one-trick pony, and we will be paying the price if this government does not wake up to the fact that we need to keep investing in our innovation infrastructure.

I talked about the auto industry before. The auto industry is not like the other heavy industries that we lost. At that time we were emotionally invested in some of the industries that we lost, but the auto industry truly was a strategic industry. It would have been very important now, because the auto industry – building a car – requires a lot of innovation and a lot of technology, and the innovation and the technologies that stem from building a car help right across the economy and the sector. We lost a lot of firepower in terms of innovation by losing the auto industry.

We always knew the Australian dollar was going to come down. The big auto companies asked for payroll tax holidays, for example, knowing that the Australian dollar was going to come back, so they could actually sell the fact that the Victorian government and the Australian government were interested in the auto industry and really did want it to remain here. Well, it has gone, and that has hurt this state a lot.

What our reliance on our manufacturing sector showed us is that when things go wrong we need to make sure that we have got a diversified economy. That is why this bill is very important. There is a lot of untapped potential in the mineral resources sector, and any bill or any government policy that gets out of the way and provides a regulatory framework to allow the sector to grow is good. That is what this bill takes one step towards doing.

In terms of consultation, this government does not consult. It just does not consult, and that is from the man at the top. This is a guy that does not consult his cabinet, does not consult his caucus. He makes decisions in the shower in the morning, or the mad king makes decisions by sitting on the crown each morning. That is just the way it is. We are going to have to live with that, and hopefully, if he goes soon, the Labor Party caucus will press the reset button on how government should be done in this caucus. But we cannot stop policy being implemented or bills being passed because this government does not consult. It just does not consult. The state needs to keep going.

Yes, there are some people accusing the government of not consulting on this, and it probably has not consulted anywhere near enough. But that is just the way of the world with Daniel Andrews, and we are going to have to cope with it until he leaves sometime in the near future, I am informed. With all that, this is a good bill. It is a bill that is overdue, and I commend the bill. I will not be supporting any amendments to the bill.

Sitting suspended 12:58 pm until 2:04 pm.

Jacinta ERMACORA (Western Victoria) (14:04): I speak on the Mineral Resources (Sustainable Development) Amendment Bill 2023, and as we all know mines and quarries play a pivotal role in Victoria by bolstering the economy, aiding population growth, economic advancement, infrastructure advancement and the path towards net zero emissions. These resources are essential for constructing the new homes, roads, rail systems and public facilities required to accommodate the growing population, which is particularly significant for regional Victoria.

Our mineral sands and gold reserves – which were very ably referred to by Ms Bath earlier as $6 million worth of gold in this chamber, mined in Victoria, no doubt – along with the ongoing mining operations and exploration industries contribute approximately $6.3 million to the Victorian economy annually, consisting of 3.2 per cent of the state’s industrial output. This represented 30 per cent of economic growth in the 2021–22 financial year. The $23 billion construction industry in Victoria benefits from the 535 quarries producing $786 million worth of materials annually, not to mention the industries’ contributions towards Victoria’s transition to sustainable energy through critical minerals.

The importance of the mineral and extractive industries cannot be understated, which brings me to why this bill is integral to ensuring Victoria continues to benefit while providing a modern fit-for-purpose regulatory framework that considers community safety, environment and cultural heritage. The bill seeks to amend the Mineral Resources (Sustainable Development) Act 1990, known as the MRSD act, which is a key act for regulating Victoria’s minerals and extractive industries. The primary aim of the original act was to promote economically viable mining and extraction while aligning with the state’s economic, social and environmental goals. However, as with all legislation that is more than 30 years old, the MRSD act is outdated, overly complex and prone to misinterpretation. This has led to applications taking an inordinate amount of time to be approved or varied, therefore slowing the supply of an essential resource. This results in slower expansion of infrastructure due to a lack of materials and a subsequent increase in the cost of materials. This also slows the pace of economic growth.

This bill plans to overhaul the regulatory system to enable a prosperous mining and extractive industry at the same time as ensuring communities have their say, environmental restoration is strengthened and risk is assessed in a modern, fit-for-purpose way. This means that low-risk activities will no longer be burdened with the same regulatory weight as higher risk, complex activities. This will be achieved through a modernised work approvals process by rewriting the existing obligations to operators to lodge a work plan and replacing it with a statutory duty to minimise the risks of harm.

The bill will also simplify the regulatory framework by making the approvals process more flexible. The framework involves implementing a risk tier system, where applications are assessed on a standardised basis from the outset. There will not be any need to review the risk tier unless a significant change occurs or the regulator identifies a review is necessary. This will open the door for greater transparency for operators, who can follow the regulations and guidelines with more clarity. In the past, approval was granted at a fixed point in time. This meant that the mines and quarries could operate for years under the same conditions their original work plan approved even though over time environmental, cultural and community attitudes changed. By implementing the risk tier system, the bill aims to implement a statutory burden that must be complied with by operators throughout the life of the project, and the introduction of a risk tier system allows for a proportionate level of compliance depending on the scale and risk of the operation. Whilst all operators must meet the same high standards of compliance, because of the diversity of operations the level of regulatory burden varies. For example, higher risk operations will have more stringent regulations through specific fit-for-purpose licence conditions and greater compliance obligations, while lower risk operations will need to comply with a simpler code of compliance.

From the perspective of the community, this transparency allows for greater input when responding to proposed works and having their say about how they may be impacted by the operation. It removes any perceived secrecy around the requirements that operators must comply with. Transparency is always in the community’s best interest. The community benefit of this bill is significant. The reforms are specific in their intention to increase community engagement and the transparency of the approvals process. It gives the community a chance to have a say at an earlier stage. This earlier engagement process is of the utmost importance as surrounding communities are often impacted by or care about the work of the mining industry.

In the past, the first step of technical approval took place behind closed doors. It was then forwarded to the relevant local government for approval through their planning scheme prior to the completion of the technical work. This gave councillors the impression that an enormous amount of work had already been done and that they really perhaps only needed to rubber stamp it, or, the opposite impression, they felt obliged to rubber stamp it because the technical work supported the application. This is where the change will occur with this act. It will bring these two processes out into the open and parallel to each other where communities can have their say at the earlier technical phase as well. Once this bill becomes law, these processes will become, as I said, parallel to each other, providing better involvement for communities and other stakeholders and more transparency at the earlier stages.

I do understand that concerns have been raised in the community in relation to the low-impact exploration. There have certainly been emails in my inbox. The government is committed to maintaining low-impact exploration in its current form. The bill is not intended to change that. We do have to work through how the process will work to mirror the current process. In practice the regulator may decide to adopt a simplified approach and apply that more flexibly in terms of the type of exploration covered by the new code. These matters will be explored during the transition and implementation phase in consultation with industry, the Crown land minister and landowners.

I want to stress that the amendments will not change the scope of the risks that operators will be required to consider, such as public safety, environment, infrastructure and land and property impacts. The operators will still be obliged to identify the risks and implement strategies to minimise and/or eliminate the risks in order to operate under a licence. The government worked hard in drafting this bill to protect the successful components of the current act while cutting unnecessary red tape. This involved a rigorous consultation process which involved the broader community, environmental groups and traditional owner groups over a number of years.

Despite the removal of the work plan process, the government has made sure to include consequential amendments to the Aboriginal Heritage Amendment Act 2016, the act that manages and protects Aboriginal cultural heritage, to ensure that the cultural heritage management plan requirement process is maintained. The CHMP will be tied to the risk tier determination process which is required before the work is undertaken. It strengthens protections for Aboriginal heritage through a continued consultation process with traditional owners in the same way as I raised earlier – throughout the operations rather than just in the initial stages like the former work plan provided for.

Protection of Aboriginal sites is a serious commitment of the Andrews Labor government. It is vital that we avoid what happened in Western Australia. As I am sure you are all aware, the Juukan Gorge was famous for being the only inland site in Australia with evidence of continuous human occupation for over 46,000 years. The cave had significant archaeological and cultural significance and was regularly used. Sadly, the cave was obliterated by Rio Tinto in May 2020. This is a sad case of a board that was based overseas and federal cultural heritage legislation that was full of holes. Despite the board having full knowledge of the significance, they utilised one of the federal legislative loopholes and blew it up. This is what you get with old, outdated legislation and a former federal government that placed a higher priority on pillaging the landscape for profit than respecting the deep significance of the Juukan Gorge for the Puutu Kunti Kurrama and Pinikura peoples. I have not been there so I cannot pronounce them correctly, but I would like to show them the respect that they deserve. Rio Tinto’s blasting of the site was to gain a measly $130 million worth of iron ore and was actually legal at the time, but it was certainly morally bankrupt. Under these changes in this bill with the consequential changes in the Aboriginal Heritage Act 2006, scenarios like the Juukan Gorge cannot happen in Victoria.

I also want to address the benefit of this bill for the environment and our net zero emissions goal. The reforms in this bill will enable more efficient production of resources that are crucial to manufacturing of renewable energy infrastructure and technologies. Additionally, the construction industry needs materials to repair and build key infrastructure to protect our communities against the impacts of climate change, such as floods, bushfires and rising sea levels. But of course I know the matter that is of most importance to many people here today maybe is, ‘Can I still fossick and prospect recreationally?’ Of course – just do not go near certain rivers and streams which will be specified in regulations after a review of the current publicly available list by the department.

Victoria relies on its mining industry not just economically but also for its supply of key ingredients for renewable and emerging technologies. Like other industries, mining needs to be accountable to the environment, to communities and to First Nations people. We rely on our mining industry to be legitimate in the way that it operates. Without community and environmental confidence, it will be difficult to meet the demands we as a society place on the products they provide. By increasing local availability of these key resources, Victoria can take advantage of an established critical mineral industry which would boost our economy as global demand for our resources grows. This bill succeeds in crafting a newer, cleaner and more transparent regulatory framework for the mineral extraction industry, and I commend it to the house.

Nicholas McGOWAN (North-Eastern Metropolitan) (14:19): I rise today to speak on this bill, and I think it is important that in doing so I also give voice to those people who perhaps do not have a voice here at present. On 1 August in fact I raised a question in this place in respect to the consultation around this particular bill. When I did that, I did it on behalf of local constituents of mine in my electorate, coming from Boronia, Doncaster, Ringwood North, Eaglemont, Montmorency, Wantirna, Ringwood East, Bayswater, Burwood East, Eltham, Heathmont, Chirnside Park and Mitcham. Since that time, however, I have received quite a large number of further concerns and letters – some of them form letters, others articulate, precise – all of them with one thing in common, and that is they are appalled at this government’s lack of consultation. By that I mean public consultation, not stakeholder consultation necessarily. So that becomes an emerging theme for this somewhat chaotic government in its, I hope, dying days. We have seen this already of course with the closure of the forestry industry. We have seen this of course with the upheaval of the gaming industry and the changes declared and made overnight, presumably without half of the caucus knowing about this prior. We have seen this in terms of the cancellation of the Commonwealth Games; we need not cover that ground. We have also seen this of course with the overnight banning of gas in new homes in Victoria.

I suppose also what concerns me personally is the sort of gobbledegook language employed by this bill – and that is intentional. It is something I have railed against for many years. That is to say that this is not law by legislation; rather, it is law by regulation. The great difficulty I have with that is the devil is in the detail. I have seen this over very many years in this place. It is a tactic many governments have used. They give very little detail to begin with, and we all have to just trust with good faith that the regulations, the codes of conduct, the guidelines – God forbid, the guidelines – actually reflect the intent of the bill itself. And of course if anyone has any problem that, well, you have got to go to court. So there we are. What an absolute something-or-other show; I will not use the word this place. But that is usually what we end up with.

I have some very serious concerns in this regard that this chaotic government yet again is without actual proper consultation. I have listened to the speakers today. Each one of them has stood up and referred to consultation and tried to water those claims down, but in actual fact even when you read the second-reading speech in the other place of the Minister for Energy and Resources, it is very clear that very little or none has been done. In fact, they intend to do it after the bill becomes an act. Well, what an ultimate insult to the people of Victoria. That is to say, ‘We’ll have the law first, then we’ll talk to you about it.’ That is not consultation, that is a farce. That is a complete, complete disregard for public input and complete contempt for the people of Victoria, I would say.

I thought I would do justice to at least two of my constituents by reading their letters aloud, because, while I do not necessarily agree with all their views, nor do I necessarily agree with what they say in their entirety, I think the gist of what they say is healthy and good for democracy. One in particular says:

Dear Mr McGowan

I am writing to bring to your attention the proposal to re-vamp the Mineral Resources (Sustainable Development) Act, 1990 and to highlight some of the major concerns and issues with this that need to be addressed.

It is distressing that a number of people are basing their understanding of the proposed changes on the content of the speeches in Parliament. These do not accurately portray the proposed changes, nor reflect their impact. For example, the claim that the changes will lead to greater transparency in the process is not supported, nor is the assertion that community consultation and engagement will be improved. The proposed changes to the legislation need to be read in conjunction with the original Act to understand how appalling the proposal is for all the stakeholders involved (with the exception of mining and quarrying companies).

As a landholder within Kalbar’s (now re-badging itself as Gippsland Critical Minerals) proposed mineral sands mine project area, I have first-hand experience of the inadequacies of the current regulatory framework, as well as of the lack of integrity, appalling conduct and poor judgement of mining companies. I have taken the trouble and time to read and study both the current Act and the proposed changes, and the latter will make the situation worse rather than better. In summary:

• There has been no regulatory impact statement released on the proposed changes.

• There has been no facility for public comment on the proposed changes; it appears the only “stakeholders” consulted were the mining industry and not landholders, community or interested and expert organisations.

• The removal of the requirement to submit work-plans makes any attempt to evaluate a proposed project’s impacts impossible. How can a project’s impacts be assessed when there is no detailed description of the actual works?

• Evaluation of proposed projects will become the responsibility of planning departments. This is likely to be delegated to a local government level. Neither the planning department nor local government has the expertise to evaluate the complex and multi-faceted range of impacts of mining proposals. If delegated it leaves approval decisions in the hands of unqualified and inexperienced staff, in an environment where personal connections and influence are often a higher priority than a project’s merit. This is not a suitable situation for the evaluation of highly complex projects where the impacts are multiple, interactive, broad-reaching and often long-term and subtle.

• Penalties are imposed for breaches of the Act; however multiple breaches may be considered (and penalised) as a single breach [12E(1) Multiple Offences]. This means that it is more economically favourable to breach the act than it is to comply. Rio Tinto’s destruction of the Juukan Gorge is a clear case in point. The proposed changes actively encourage companies to break the law.

• Although the requirement for “rehabilitation plans” remains, the penalty for a failure to rehabilitate is trivial. A one thousand penalty unit fine (equivalent to $192,100) [Part 6 Duty to Rehabilitate Land] is minor slap on the wrist compared with the hundreds of millions of dollars required to rehabilitate a mine site. The proposed changes actively encourage companies to break the law.

• There is no requirement for stakeholders or local communities to have input into the rehabilitation plan. Landowners are required to be “consulted”, but their input can be simply ignored by the project proponents. “Consultation” by mining companies is generally just stating what is going to happen (and the landowner has to “get over it”).

• Rehabilitation plans generally focus on making the site “look OK”, and are not based on function. Farming is about a practical functioning landscape – no soil subsidence, top-soil depth, good fertility (as measured by soil tests), active biology in the soil, appropriate pasture species … The natural environment requires good ecosystem functions, active and diverse soil biology, appropriate mix of vegetation species and ages, habitat … Neither mining company staff nor the Earth Resources Regulator’s staff are qualified or experienced to assess rehabilitation.

• Many worked-out mines in Victoria are in “Care and Maintenance” mode. This is a mechanism by which mining companies leave mines un-rehabilitated and indefinitely defer the rehabilitation costs under the pretence that the mine will become viable again in the future (e.g. Iluka’s Douglas mineral sands mine). The proposed changes to the legislation do nothing to close this much-used loophole.

• The majority of the “controls” on the mining companies are based on “self-assessment” and information provided by the proponent. The multiple failures of judgement and “self-assessment” by mining companies throughout Victoria’s history prove that this is an unreliable basis on which to place our landscape, environment, waterways and communities’ safety. A case in point: Kalbar’s self-assessments of risk were revealed by the EES process to be extremely faulty on 49 grounds.

• The “Human Rights” of the mining companies have been addressed (according to the Minister’s statement). However there has been no consideration of the Human Rights of impacted landholders, communities, the environment or local businesses. These stakeholders’ human rights are violated regularly under the current regulatory framework with no repercussions to the mining companies (e.g. right to privacy), and will continue to do so under the proposed changes.

• At a meeting between our business partners, the Director of ERR and the Head of DELWP’s Assessment Department the question was asked as to which department was responsible for ensuring mining companies told the truth. Disturbingly the answer provided was “Neither, and it doesn’t matter because it will come out in the EES.” How will the Head of Department assess a project’s level of risk when the proponent is not required to provide truthful and accurate information? How can we trust the “self-assessment” of organisations not required to be factual, and where there is a history of misleading information (as evidenced in The Fingerboards EES reports)? Not many mines undergo the EES process to be subject to a high level of scrutiny. Not many communities can afford the legal and technical costs to defend themselves from unprincipled companies and inappropriate proposals.

• There is no check by the issuing authority on the landscape and local communities prior to the approving of a licence as to whether mining is appropriate or possible within that environment, e.g. proximity to intensive food production industries, availability of water, soils highly prone to erosion, proximity to sensitive/vulnerable ecologies …

• The proposed changes are intended to reduce “red-tape” and make it easier for junior mining companies to become established without onerous regulatory oversight. Our local community’s experience of Kalbar has clearly demonstrated that the junior minor companies lack technical expertise, long-term commitment to a locale and community, financial resources to repair any damage they cause, and respect for the local communities, landholders and the environment. These junior mining companies require very high levels of oversight as they are prone to take shortcuts through ignorance, lack of finances or in the name of expediency.

• Transparency of decision making processes and mining company approvals will be totally lost. At present interested parties can obtain a copy of the approved work-plan and observe whether activities are in compliance. With no work-plans there is no means for a third party to assess whether activities are appropriate, whether risks have been considered and mitigated, and to what degree “where practicable” has over-ridden community and environmental safe-guards.

• The definitions of “where practicable” and “minimise” are very vague and leave large loop-holes for project proponent. Who defines what is “practicable”, when risk has been “minimised” and based on what data?

• While planning applications require a description of the activity to be undertaken, this is provided in very general terms. Frequently “the devil is in the detail” which can only be determined from highly detailed descriptions of the activity, i.e. work plans.

• The information available to the public in a planning application is more concerned with where the works will be undertaken than with what will be undertaken. This leaves communities in ignorance and in danger.

• Most of the actual detail is to be provided in a yet-to-be-written Code of Conduct. It is impossible to fully assess the impact of the proposed changes without a copy of the proposed Code of Conduct; in essence approval is being sought for a blank cheque.

• Reliance is being placed on an “expert regulator”. The highly damning Victorian Auditor General’s report into mine rehabilitation casts doubt on all levels of the current regulator’s competence, technical skills and administration. Giving a dubious regulator more responsibility is ludicrous.

Victoria’s history –

and I can continue on here –

has been strongly influenced by the gold-rush of the 1850’s. This has left us with a legacy of dangerous mine-shafts, rivers and the Gippsland Lakes contaminated with mercury, soils in some areas so contaminated with toxic heavy metals that home-owners cannot safely grow vegetables (according to a report by Federation University’s Department of Practical Ecology), the ongoing sagas of mining company bankruptcies (e.g. the Benambra and Bendigo mines), and mines left in “Care and Maintenance” to avoid rehabilitation costs (e.g. Douglas mineral sands mine in Western Victoria). We are now experiencing a “Critical Minerals” gold-rush; will we not learn from the damage caused by the past?

I respectfully respect that you:

• Ask for full public input into the proposed changes –

I think I have done that –

• Request that communities, landowners and the environment be provided with more rights and better safeguards –

that I support –

and

• ask for the current proposed changes to be scrapped.

Well, that remains to be seen, and sadly on my side of politics we do not have the numbers. But nonetheless, I finish:

The proposed changes to the Mineral Resources (Sustainable Development) Act, 1990 … are a betrayal of communities, landowners and the environment. The fact that the legislation is being rushed through in record time with no public consultation shows its proponents are aware the changes would not withstand public scrutiny.

Yours sincerely …

and I will withhold the name but happily provide that to anyone who cares to ask. I think that summarises the concerns.

What I should make clear, as I said from the outset, is while I do not necessarily concur with some of the assertions, I think what is evident from that is that particular individual put a great deal of detailed thought and consideration into their remarks and very, very, very many of them – in fact too many of them – have merit. Yet again we have come to this place for this entire week to use our time, sadly when we do not have the numbers – and politics is a numbers game – when things like this can be rammed through and we here have no truthful visibility of what is going to take place, because the legislation is, as I said, legislation by regulation, not law by legislation. The sad reality is the unforeseen consequences of this bill could be stark.

I look forward to asking some questions in the committee stage, because I think that is at least where we can try and get some answers to the questions that are being posed by some of my constituents and some of the questions that I also have, but I should also put on the record that I am not anti-mining. That would make me a complete hypocrite. I live like everyone does, and I like to fly my planes, I like to drive my cars and I like to use the products that we all gain from the mining sector. But what I think is abundantly clear both from the comments I have read out loud today and also my own sentiment is that we want that to be done in a way that is safe and we want that to be done in a way that is responsible. Perhaps most of all we want that to be done in a way that is sustainable for our environment so we are not causing immense damage – well, not only immense damage, we are not causing damage – to the environment to the extent that is humanly possible. If all we do is keep taking from the environment and damaging it, at some place, at some time that will all catch up with us and we will wonder why.

David ETTERSHANK (Western Metropolitan) (14:33): I rise to speak to the Mineral Resources (Sustainable Development) Amendment Bill 2023 on behalf of Legalise Cannabis Victoria. I thank Mr McGowan for his thoughtful contribution. I think that was terrific; thank you. We want to start by acknowledging that the Victorian economy benefits hugely from the mining industry. According to 2021 data from the Minerals Council of Australia the value generated by this industry in Victoria is in excess of $1 billion, including $152 million in wages and salaries, over $300 million in purchases of goods and services and almost $50 million in state government payments. However, to put this in some perspective, that $1 billion is roughly the size of the illicit cannabis market in Victoria on an annual basis, which to date has not been considered worthy of regulation, merely prohibition. But I digress. I shall return to my subject, to whit, the mining industry.

Beyond this financial benefit, minerals and extractive resources provide necessary materials for housing, construction, renewable energy infrastructure and manufacturing, but there are also well understood and multifaceted negative impacts associated with resource extraction – climate change, deforestation, pollution, the loss of biodiversity, displacing people from their homes, dividing communities and damaging people’s health, to name but a few.

To exemplify this point we can look at any state in Australia, because directly or indirectly so many of our nation’s people have suffered some form of harm from the consequences of mining gone wrong. By way of example, let me just share two words that have been repeated in this chamber on multiple occasions: Juukan Gorge. To expand their iron ore mine in WA, Rio Tinto blasted caves that showed 46,000 years of continual occupation and gave a 4000-year-old genetic link to present day traditional owners. They did this despite regular meetings with traditional owners and regulators prior to that happening, prior to that blast going ahead. So I guess I share Ms Ermacora’s distress at what happened there, but I draw a very different conclusion from that.

Closer to home we see Fosterville Gold Mine’s inability to self-assess risk having disastrous impacts on Axedale and Goornong farming and urban communities. We see it in mine worker injuries and deaths, in noise pollution, in dust emissions, in acid mine water drainage, in heavy metal contamination, in degraded groundwater quality and in earth tremors. With this well understood, we must pay very close attention to this attempt to streamline approval processes and self-regulation for this industry. We have heard from community groups, concerned constituents and many other members of the public primarily from regional and rural settings sharing an array of concerns on this bill. I think we share Mr McGowan’s experience in that regard.

We have, I guess, three major concerns with this bill: the new self-assessment model, the regulatory role of councils and the ambiguity of further regulations. First, in respect to self-assessment, this bill removes the requirement for the Earth Resources Regulator’s statutory endorsed work plan and replaces it with a manifestly less prescriptive regulatory model. Under the current process, a work plan would generally outline the proposed activities to be undertaken, and it functions as a repository of information relating to matters such as environmental management, community engagement, health and safety, reporting obligations and more. The government makes very valid criticisms that the current processes employed by the Earth Resources Regulator lack transparency, and we endorse that concern. But if you want to enhance transparency, you can pull back the blinds, you do not need to bulldoze the wall. The proposed new model will include a self-assessment process and a duty to minimise risk to the environment and people from mining activities. That is a given. Applicants, however, will assess how much risk their mine poses to the environment and to the community and then decide for themselves how they will manage those risks before jumping directly to planning permissions and bypassing the work plan stage. This means that any pushback or appeals process on a self-assessment and council’s decision on it will not be aided by a work plan endorsed by the Earth Resources Regulator.

Further, under this model there is a clear incentive to under-report and self-assess in the lower range. A self-assessment of low risk means that miners can commence work according to a code of compliance and will not need to prepare a rehabilitation plan to be approved by the department. I want to come back to rehab in a minute. We have heard stories from stakeholders that speak to just how problematic a self-assessment regulatory approach to this industry will be. We heard, for example, the story of a landholder that informed a mining company that the ground was too waterlogged for exploration activities. The mining company’s risk assessment was that this was not a problem and they insisted on access. The result was extensive and permanent damage to the land in question from the 20-tonne drilling rig, which became bogged and had to be dug out no less than 15 times. We understand the government believes that the existing process is unnecessarily costly and inefficient, creating delays and adding cost to industry, but why risk rushing such environmentally sensitive applications through when the consequences of getting it wrong are so severe? We should be seeking every opportunity to identify risk well in advance of a final approval being issued.

Turning now to our second point of concern, under this new process councils will become responsible for approvals for planning permission, with the Minister for Planning as the referral authority. Councils will have to assess the environmental hazards, the health risks and a complex range of long- and short-term impacts. Basically, they need to assess both the direct and indirect impacts on community, environment and business. They are to do this without a work plan and have to rely on an applicant’s self-assessed risk plan. They are to do this without technical, geological or environmental expertise and resources – something that is essential to properly assess mining applications. Now, this is just a little bit bizarre. If we are to believe what we have heard of proposed changes to the building planning framework, this government does not trust local councils to approve the building of a block of flats, but apparently it considers them competent enough to approve extraordinarily complex mining projects. I mean, the mind boggles at this inconsistency.

Further compounding these concerns is the requirement for councils to provide ongoing monitoring to enforce compliance with the new duty in the scheme for an unwritten but not legally binding code of compliance. Let us remember that we will have rate-capped councils doing this. One must ask: with what money and with what highly skilled technical human resources will they be doing this? There is a real concern that these changes could burden councils and inadvertently lead to less due diligence and less evidence-based decisions. It is then even more perplexing that the government has said that these reforms will not significantly change the role of councils in respect of mining and extractive industries. We understand that assurances have been provided by the government to the opposition proposing a comprehensive period of consultation, including with local government, but we have not sighted that, so please forgive me if I do not feel particularly reassured.

The government also said that the Earth Resources Regulator will continue to be a lead regulator for the industry, although how this relationship with councils will operate in the future remains entirely unclear. Mr McGowan rightly referred to the importance of rehabilitation plans as part of the mining process, but we know from previous Victorian Auditor-General reports reporting specifically on the question of rehabilitating mines that historically this regulator has repeatedly failed in its role to ensure that land is progressively rehabilitated and returned to premining or better conditions. The government has foreshadowed further changes to the Victorian planning provisions, local planning schemes and related documents to clarify the process for this decision-making, which will be subject to community consultation. We welcome this community consultation, but the gap we see in this bill between legislation and regulation appears to be a mountainous one.

I concur with Mr McGowan: we have also been inundated with calls for further community consultation on both regulation and implementation, and we would like to see the government listen to those calls. I would say these are not your classic short-form bulk emails. These are really well thought through and considered letters from primarily rural and regional constituents.

We believe that consultation should happen first and then this bill should be brought back to this place. That is why we will not lend our support to this bill at this time. One of Legalise Cannabis Victoria’s pillars is ‘Save our planet’, and this principle is front and centre in our deliberations on this bill. So to this end, we will be supportive of proposed amendments that will encourage greater consultation with local governments, environmental organisations and regional communities likely to be impacted by mining and exploration. Broad consultation, transparency and accountability are important, and we do not want to settle for less.

Sonja TERPSTRA (North-Eastern Metropolitan) (14:46): I rise to make a contribution on this bill, the Mineral Resources (Sustainable Development) Amendment Bill 2023. I will quickly just give a brief overview of the bill. I have had the benefit of listening to Mr Ettershank’s contribution and Mr McGowan’s and others today. So just to perhaps address some of the concerns that have been raised, the bill will essentially improve the management of risks associated with minerals and extractive operations by replacing the existing obligations on operators to submit and comply with a work plan specific to each operation with a primary duty to eliminate or, if not possible, to minimise the risks of harm so far as reasonably practicable. It will also simplify and improve the flexibility of the regulatory framework by streamlining approvals to commence works after or concurrent with the time the right to the mineral or stone is granted. It will also strengthen community confidence in minerals and extractives operations by establishing a risk-based framework to provide consistency and transparency in the way that decisions are made and that regulatory activities are undertaken. Importantly, these reforms do not change the scope of risks that this act seeks to mitigate – risks to public safety, the environment, infrastructure, land and property – but instead modernise and strengthen the approach to managing those risks. So it is not a magic wand – it does not wave a magic wand and take all those risks away – but it is attempting to address and perhaps streamline some of the ways in which those risks are managed.

Currently operation risks in mining and quarrying operations are largely managed through work plans, and we have heard a lot of discussion about work plans here in the chamber. Each site has its own individual work plan, with over 1200 work plans lodged with the Earth Resources Regulator (ERR). Work plan proposals receive a statutory endorsement from the Earth Resources Regulator, which operates as an internal preapproval step prior to planning permission and final approval of the work plan. This is unique to planning applications by the mining and quarrying industry, and it is unnecessary and costly and inefficient, creating delays and adding cost for industry without providing any benefits to communities.

The statutory primary duty will form the basis for a new outcome-focused, risk-based regulatory framework to drive high standards of performance, best practice and a simpler approval process for industry and the community to understand. With this reform community input will be the first step before a new project can be approved via the planning process. The Earth Resources Regulator will continue to input into this application to ensure a site is safe and minimises environmental impact.

The regulatory details that support how the duty model operates will be developed over a four-year period before the reforms take effect in 2027. The development of the regulatory details will be open to community input and subject to public scrutiny to ensure communities can have their say on how the industry is regulated. Penalty units, including jail time, will be strengthened to ensure that industry operates at the highest standard, consistent with community expectations.

In regard to some of the criticism that has been raised during the debate that we are in fact scrapping oversight and transparency requirements, this is not the case. In fact the introduction of the standard statutory duty and further subordinate instruments, codes of compliance and standards not only improves regulatory consistency between sites but provides clear visibility to the community of the compliance obligations that industry must meet.

The duty provides a default constant obligation to manage risk regardless of it being identified in advance, and importantly it ensures that the standard that industry must meet can evolve and strengthen over time as new controls become available. With the same duty for every site across the state the regulations become simpler to enforce, and this frees up additional resources for compliance, increasing government oversight of mining and quarrying operations. The bill also expands the Earth Resources Regulator’s enforcement options, increasing the maximum penalties available under the act for instances of non-compliance with statutory duty. This includes jail time for aggravated offences. It is very clear that this bill will drive high standards of performance, best practice and a simpler approval process for industry and community to understand, strengthening oversight for projects.

Directly from clause 38AAG of the bill:

The holder or former holder of a licence must, before carrying out any work under the licence, apply to the Department Head for a determination of the risk level for that licence.

The bill requires new operators to carry out an initial self-assessment of risk when applying for a risk tier determination by the ERR. That self-assessment will be based on prescribed criteria and information, but ERR will make the final determination of the risk tier. If someone is wanting to create a new minerals mine or quarry, their risk tier is assessed and ultimately determined by the regulator.

In terms of the environmental assessment, the forms do not change the Minister for Planning’s ability to require projects with potentially significant environmental impacts to be assessed through an environment effects statement process. This does not change. As we have seen previously and are continuing to see, all the new mineral sand mining projects currently being progressed in Victoria have been referred for an EES.

The government consulted widely with local government, industry and the broader community, including representatives of traditional owner groups, environmental justice advocates and landowners, during the development of this bill over a number of years. The bill purely creates the enabling framework for transitioning to a duty-based model, every aspect of which will be set in regulation, codes, standards and guidance material. These will be subject to a public consultation process before they come into effect in 2027 so industry and community can have confidence in the standards set.

I just want to go into a bit more detail about the duty-based model, which better protects the environment, as I was talking about. I know there was some discussion in the chamber earlier about this. As I was saying, some people think that the model will not provide an appropriate ongoing framework. In fact I guess the criticisms are that it is going to be a model that will provide less protection. The statutory duty incentivises industry to continually mitigate environmental risks that arise from mining and quarrying before those risks manifest, as I said earlier, but it will shift the focus from administrative compliance to addressing live risks. So again it is an ongoing duty as opposed to perhaps one that might be at a point in time. Unlike a work plan, which represents a commitment to addressing risks identified at a single point in time unless the work plan is varied, the statutory duty is a standalone perpetual duty that encourages a more dynamic approach to risk management to address any emerging risks and evolving expectations. It also gives greater operational control to licence and work authority holders to innovate to manage emerging risks.

As I said, sometimes risks evolve over time. They are not static, and they can change and are often dynamic. We think introducing this duty-based model gives more of an incentive to act to continually mitigate those risks. The reforms also incentivise industry to operate safely through the threat of significantly greater penalties. As I said, we are increasing those penalties, and that correlates to the potential harm caused, unlike the penalty for a breach of a work plan, which does not scale according to the harm caused.

Further rehabilitation plans and bonds will be preserved to ensure rehabilitation is completed, with additional requirements for the regular review of plans and improved flexibility to vary plans after a licence of authority has ceased. This will enable rehabilitation to be varied where necessary to produce better environmental outcomes regardless of whether a licence or work authority has ceased. The new regime will require a supporting approach to compliance and enforcement, which will be considered during the implementation of the reforms.

In terms of the bill and how it contributes to climate action and energy transition goals, the reforms that are being introduced are expected to enable more efficient production of materials essential for manufacturing, renewable energy technologies and infrastructure needed for the global transition to net zero and to achieve Victoria’s renewable energy aspirations and enable delivery of the government’s climate change objectives, net zero emissions by 2045 and interim targets. I note in Mr McGowan’s contribution earlier he talked earlier about how he likes to drive his car, he likes to fly his planes and all these sorts of things, and the bottom line is so much of what we do in life does relate to our use of minerals and other resources that we get from the ground. But we recognise that there are ways in which we can perhaps do things better. Introducing some of these duty-based obligations and ongoing obligations to look at how we can mitigate climate action and improve our energy transition goals forms part of the rationale for improving this bill and introducing changes to this regime.

Extractive materials are also needed to construct and repair critical infrastructure and built assets to mitigate and respond to the impacts of climate change, from flooding and bushfires to coastal inundation. Renewable energy technologies such as energy storage, batteries, solar, wind and zero-emission vehicles are mineral-intensive, and shortages in mineral supply can impact the speed and scale at which these technologies are deployed. Victoria has globally significant mineral sands deposits containing demonstrated resources of titanium, zirconium and rare-earth elements as well as further opportunities for copper, antimony, high-purity alumina and silica. Increased local availability of critical minerals would support the manufacture of technology and infrastructure, with an established Victorian critical minerals industry also having the potential to help meet future global demand. Whilst I know there has been criticism of this bill in the chamber, we see that some of these reforms are necessary. Whilst we need to streamline any regulatory environment, we know that it is important to ensure that there is a robust framework to ensure that our environment is protected from the impacts of mining.

When will these changes commence and come into force? As I said, these will come into force in 2027, but the reforms will change the process – the ‘how’ if you like – for managing the risks associated with mining and extractive operations. The scope of the risk regulated – which is the ‘what’ ‍– to the environment, to members of the public or to land, property or infrastructure will be unchanged. The most noticeable change will be the introduction of the statutory duty, as I have spoken about, which will require licensees and work authority holders to minimise and eliminate risks associated with mining and extractive industries as far as reasonably practicable. As I have said, this will replace work plans lodged by individual operators. The planning permission process administered by local councils will become the start of the work approvals process. After planning permission is granted, operators will still need regulatory approvals from the ERR before commencing works, including determination of the risk tier for the operations, approval of rehab plans and lodgement of a rehabilitation bond.

As the reforms create a more streamlined and less individualised system, the focus of regulation will shift from the approvals process to compliance and enforcement of the statutory duties, strengthened by greater penalties. As you can see, there is a robust framework that is being proposed by the introduction of these reforms. We think it strikes the right balance between allowing mine operators to do what they need to do and ensuring environmental protections by allowing appropriate enforcement and the penalties to be increased should there be any breaches of the framework. I commend this bill to the house.

Ingrid STITT (Western Metropolitan – Minister for Early Childhood and Pre-Prep, Minister for Environment) (15:01): I thank all members for their contributions on this important bill. The bill does ensure that our regulatory system is better able to meet the increasing demands for our resources while strengthening protections for community and the environment. The bill will, as many of my colleagues have said, improve the management of risks associated with minerals and extractive operations by replacing the existing obligations on operators to submit and comply with a work plan specific to each operation with a primary duty to eliminate or, if not possible, to minimise the risk of harm so far as is reasonably practicable. These are concepts that we are familiar with in other legislative frameworks.

It will also strengthen community confidence in minerals and extractive operations by establishing a risk-based framework to provide consistency and transparency in the way that decisions are made and that regulatory activities are undertaken. Importantly, these reforms do not change the scope of risks that the Mineral Resources (Sustainable Development) Act 1990 (MRSD) seeks to mitigate – risks to public safety, the environment, infrastructure, land and property – but instead modernises and strengthens the approach to managing those risks.

The current legislation is difficult to understand. It is inflexible and is part of the broader framework which sees industry subjected to very lengthy delays, overlapping regulatory requirements and risks that are inconsistent with decision-making. The overlapping regulatory scope and requirements lead to additional costs and delays for industry operators and erosion of social licence and community trust in the regulatory process.

I note that there have been a number of items raised during the debate which I just want to take a bit of time to address in summing up. I think that the Greens are a little guilty of trying to whip up angst in communities about this issue, saying that the first someone will hear about a new project is when they start digging. Not only is this completely false but it does show somewhat a misunderstanding of the bill. Under the reform community input will now be the first step before any new project can be approved via the planning process. The Earth Resources Regulator will continue to input into this process to ensure a site is safe and minimise environmental impacts. As other speakers have noted, the current process of statutory endorsement is unique to planning applications by the mining and quarrying industry, and currently projects can receive statutory endorsement with little or no community input. Now this will happen first, ensuring communities can have a say in where these developments should go.

Some have made the incorrect assertion that this is somehow a reduction in regulation and oversight of the resources industry, and that is incorrect. The introduction of the standard statutory duty and further subordinate instruments, codes of compliance and standards and the like not only improve regulatory consistency between sites but provide clear visibility to the community of the compliance obligations the industry must meet. The duty provides a default constant obligation to manage risk, regardless of it being identified in advance. Importantly, it ensures that the standard that industry must meet can evolve and strengthen over time as new controls become available.

With the same duty for every site across the state, the regulations become simpler to enforce and free up additional resources for compliance, increasing government oversight of mining and quarrying operations. This bill also expands the Earth Resources Regulator’s enforcement options, increasing the maximum penalties available under the act for instances of non-compliance with the statutory duty. This includes jail time for aggravated offences. It is very clear this bill will drive high standards of performance, best practice and a simpler approval process for industry and community to understand, and that will in turn strengthen oversight for projects.

There have also been a number of assertions that companies can self-assess their risk, and this is simply not accurate. I will quote directly from new section 38AAG of the bill:

The holder or former holder of a licence must, before carrying out any work under the licence, apply to the Department Head for a determination of the risk level for that licence.

The bill requires new operators to carry out an initial self-assessment of risk when applying for the risk tier determination by ERR. That self-assessment will be based on prescribed criteria and information, but ERR will make the final determination of the risk tier.

There have also been a number of contributions in relation to consultation. The government consulted widely with local government, industry and the broader community, including representatives of traditional owner groups, environmental justice advocates and landowners, during the development of the bill over a number of years. The bill purely creates the enabling framework for transitioning –

Nicholas McGowan interjected.

Ingrid STITT: On a point of order, Acting President, the government has given a commitment to the opposition that I, as the minister responsible for taking this bill through the committee stage, will put these commitments on the public record. I would ask you to remind Mr McGowan that I should be able to do that so that the record is clear.

The ACTING PRESIDENT (John Berger): Minister Stitt to continue, please.

Ingrid STITT: Thank you very much. As I was saying, the bill purely creates the enabling framework for transitioning to a duty-based model, every aspect of which will be set in regulation, codes, standards and guidance material. These will be subject to a fully public consultation process before they come into effect in 2027 so that industry and the community can have confidence in the standards set.

Specifically in regard to local government, workshops were held with the Municipal Association of Victoria, local government professionals, along with a number of local governments with a spread across the regional and metro council areas, and those with mining and quarrying operations. These include the Bass Coast, Benalla, Moorabool, South Gippsland, Cardinia and Wyndham, and these workshops were held in January and February of 2022.

The role of the councils will not change significantly in respect of the mining and extraction industries because of the reforms. That is, councils will become involved in the works approval process at an earlier stage, but Earth Resources Regulator will continue to be the lead regulator of the resources industry and responsible for enforcing compliance with the MRSD act. ERR will be made a determining authority in relation to planning permissions, receiving referrals of applications for mining and quarrying planning permission and specifying conditions to be included in any subsequent permit issued. If ERR is not satisfied with the proposals, then councils will need to refuse the permit. ERR’s role, like that of other referral agencies, contributes relevant technical and regulatory expertise to assist councils in assessing and making their approval decision and informs the nature of any conditions that are attached to the permit. It does not place any additional burden on local government.

The operation of this model and how it interacts with local government will be worked through in detail alongside local government throughout many consultation processes. The government plans to undertake a comprehensive consultation process with LGAs, stakeholders, industry and community groups on the development of the regulations that underpin this bill across the four years leading to the bill coming into effect in 2027. The government has already committed funding in the 2022–23 state budget to begin the consultation process.

The bill ensures our regulation is better able to meet the increasing demands of our resources while strengthening protections for community and the environment. It will reduce the cost of important materials we need to build the new infrastructure and new housing across the state. It will help place Victoria firmly as a key player in the renewable energy supply chain by helping to responsibly unlock our critical mineral potential. It increases transparency and community input by removing opaque and confusing licensing systems and replacing them with a clear statutory duty to remove or, if not possible, to minimise the risk of harm so far as reasonably practicable. It means our regulatory system is better able to keep up with the high standards expected of it. And it does not weaken regulations, it strengthens them. I commend the bill to the house.

Council divided on amendment:

Ayes (8): Katherine Copsey, Moira Deeming, David Ettershank, Sarah Mansfield, Rachel Payne, Aiv Puglielli, Georgie Purcell, Samantha Ratnam

Noes (29): Matthew Bach, Melina Bath, John Berger, Lizzie Blandthorn, Georgie Crozier, David Davis, Enver Erdogan, Jacinta Ermacora, Michael Galea, Renee Heath, Ann-Marie Hermans, Shaun Leane, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nicholas McGowan, Tom McIntosh, Evan Mulholland, Harriet Shing, Adem Somyurek, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Sonja Terpstra, Gayle Tierney, Rikkie-Lee Tyrrell, Sheena Watt

Amendment negatived.

Council divided on motion:

Ayes (29): Matthew Bach, Melina Bath, John Berger, Lizzie Blandthorn, Georgie Crozier, David Davis, Enver Erdogan, Jacinta Ermacora, Michael Galea, Renee Heath, Ann-Marie Hermans, Shaun Leane, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nicholas McGowan, Tom McIntosh, Evan Mulholland, Harriet Shing, Adem Somyurek, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Sonja Terpstra, Gayle Tierney, Rikkie-Lee Tyrrell, Sheena Watt

Noes (8): Katherine Copsey, Moira Deeming, David Ettershank, Sarah Mansfield, Rachel Payne, Aiv Puglielli, Georgie Purcell, Samantha Ratnam

Motion agreed to.

Read second time.

Committed.

Committee

Clause 1 (15:22)

David DAVIS: I have a number of brief comments I want to make on this purposes clause, and then I have a specific question I want to ask the minister. I just want to begin by saying I note the minister has made a number of comments in the summing up and those comments in part relate to the agreement of the Minister for Energy and Resources to write to the Shadow Minister for Energy and Resources David Hodgett laying out the commitment to consultation, which I read into the chamber earlier in the day, so it is on the record. I thank the minister for that letter and the Minister for Environment in the chamber here for agreeing to reiterate some of those points in her summing up.

I do want to reiterate, too, on the record that it is my belief that we would not have got to that position if there had not been across the chamber an understanding that there did need to be enhanced consultation, and I pay tribute to Dr Mansfield’s work there too in ensuring that there was across the chamber, other than I might say the government, an understanding that the consultation had been seriously short, seriously inadequate, and there was the case of the multiple reasoned amendments. In the event Mr Hodgett, our shadow, came to an agreement with the minister and those commitments were made, but I do not believe that would have occurred without the support of others in the chamber.

In my contribution I draw attention to what I would say is broader than this bill, which is a developing trend, and indeed a developing trend around the Westminster world, that bills would come through establishing a head of power and then a set of regulations underneath it, rather than prescriptive and clear powers, rules and arrangements in the legislation itself.

It is a developing debate around the world as to whether this is the ideal way to go, and there are obviously arguments for and against. But at the same time I put on record my inherent caution about establishing heads of power with large regulatory powers. This is not intended to be critical directly of the minister, the current minister. There are other criticisms I would make of her, and they would relate to her office and matters in the northern suburbs, but that is a separate point. This is not intended as a criticism of her, because when we make legislation of this type it has got to be, as it were, foolproof for any minister. A future minister might have quite a different view from the current minister and might not honour some of the commitments that have been made.

The first question I have for the minister is: do these commitments stand no matter who the minister may be? That is the first question. And the second question is related to that. If this framework is established, the regulations will be produced, hopefully with the consultation commitments honoured. I want to know that the regulations are disallowable in the normal way.

Ingrid STITT: Thanks, Mr Davis for your question. Yes, those commitments around the consultation will stand. That is because we have given that commitment and placed it both on the record in the form of a letter from the minister to the relevant shadow and also on the record in the Legislative Council. But the bill does create that enabling framework for transitioning to a duty-based model, and the details of that will be set out in the regulations and other subordinate instruments. So of course there will be that further consultation with stakeholders to carry out the design and develop those details following the passage of the bill as part of the regulatory impact assessment process. In terms of your question about whether the regulations would be disallowable in the normal manner, yes, they would be.

Sarah MANSFIELD: Just with respect to consultation that has taken place in the development of this legislation, a number of members referred to several years of consultation with a broad range of groups. Are you able to tell us specifically who the government consulted with in developing this legislation?

Ingrid STITT: I will take a bit of time to go through that to make sure that it is fully appreciated that there has been extensive consultation. The Department of Energy, Environment and Climate Action consulted with stakeholders within the state government, with local government, with industry and with the broader community, including representatives from traditional owner groups, environmental justice advocates and landowners during the development of this bill. That has been over a number of years. So there were extensive consultation processes that took place in 2021 and in 2022.

The engagement with industry focused on the four main peak industry bodies for the minerals and extractives industries. That was the Minerals Council of Australia, representing the larger mining operators; the Association of Mining and Exploration Companies, which is the smaller miners; Cement, Concrete and Aggregates Australia, which is the larger quarries; and the Construction Material Processors Association, which is the small to medium-size quarries. Consultation also took place with several specific industry bodies.

The government – I think I mentioned this in my summing up – provided briefings to representatives from local government, the Municipal Association of Victoria (MAV), the catchment management authorities, representatives from registered Aboriginal parties who expressed interest in hearing more about the reforms and some environmental and landholder groups.

In terms of local government, there were a number of workshops that were held. I have already gone to them, but for the purposes of the committee stage I will repeat them. It was the Municipal Association of Victoria and the Local Government Professionals Inc., along with a number of local governments in both regional and metro council areas that have mining and quarrying operations in their municipalities: Benalla, Bass Coast, Moorabool, South Gippsland, Cardinia and Wyndham. The Department of Energy, Environment and Climate Action and Resources Victoria engage regularly with local government on a number of issues, and feedback over a number of years on how resources projects are approved has informed the bill. There were workshops held in January and February 2022, where councils raised concerns about the transition and how they will be supported during this, and the details of this will be worked through with every local government very closely over the next four years as we develop the subordinate legislation that sits under this framework. The council’s role, as I think I have already indicated, will not change significantly in respect of mining and extraction industries because of the reforms.

In terms of what the consultation on the regulation process will look like, the government will undertake a comprehensive consultation process with LGAs, stakeholders, industry groups and community groups on the development of regulations that underpin the bill. As you are aware, the bill will be developed over a period of four years, with the bill coming into effect in 2027. That will include workshops with stakeholders including LGAs, industry, environment advocates and community groups. There will also be opportunities for full public consultation and input to inform the regulations, and the 2023–24 state budget has provided funding to create the regulations, including the consultation program. We will be starting this process in the coming weeks and will be getting on with it as soon as this bill passes this place.

Sarah MANSFIELD: Thank you for that response. Are you able to tell me specifically which environmental groups were consulted?

Ingrid STITT: Environment Victoria was consulted. We did approach Environmental Justice Australia to provide input into the new legislation, but they chose not to take part in the consultation process. We hope that they will choose to be involved in the process over the coming years to develop the regulations.

Sarah MANSFIELD: You mentioned a number of councils that were involved in the consultation and the MAV. We have heard from a large number of councils who have mining occurring in their municipalities who were not aware of the proposed changes to the legislation. Were all local governments who have mining in their municipalities consulted as part of preparing this legislation?

Ingrid STITT: One of the key peak bodies for local government was part of our consultation process, including those workshops I mentioned – the Municipal Association of Victoria, which represents a majority of councils in the state and regularly disseminates information to its members. I have cited the particular councils with mining and quarrying operations that were consulted – Benalla, Bass Coast, Moorabool, South Gippsland, Cardinia and Wyndham. But as I have indicated, Dr Mansfield, there is a consultation process that will be undertaken between now and 2027 which will give another opportunity for our LGA stakeholders to be fully involved in the development of the subordinate legislation, including the regulations. We understand that that is going to be a really important process because we need to ensure that local government understand the new framework that we are creating here.

Sarah MANSFIELD: Just on local government, the proposed amendments suggest that local councils will assess the planning permit applications without the benefit of an endorsed work plan or a work plan variation document. What evidence does the government have to demonstrate that all Victorian local governments have the required expertise and capacity to assess planning applications without this information?

Ingrid STITT: Thanks, Dr Mansfield. The bill will remove statutory endorsement, which is a process unique to planning applications made by the mining and quarrying industry, and the statutory endorsement process has been criticised as kind of a closed process that essentially provides that preapproval of a work plan before a permit is issued. Under the reforms that we are presenting to the chamber today, councils will instead be able to deal with these applications in the same way that they would deal with any other permit application, so taking into account the views of relevant referral agencies when making a decision to approve or not approve or approve the permit with conditions is something that they are very familiar with because it is in keeping with the way in which they process a number of other sorts of approvals within local government.

As the determining referral authority, the Earth Resources Regulator will review an operator’s planning application against the Mineral Resources (Sustainable Development) Act (MRSD) requirements and statutory duty obligations. If the ERR – it is a bit of a tongue twister, that; we will have to come up with a better acronym – is not satisfied with the proposals, then council must refuse the permit. There is going to be that agency oversight there, so removing the statutory endorsement and treating those applications in the same way as other permit applications will also ensure that there is that more open and transparent engagement with the community about how the sites are managed, and it is much more transparent using that framework.

Sarah MANSFIELD: Just to be clear, are you saying that councils will not actually need any special expertise to assess mining applications because they are somehow not any different to the regular applications for a permit that they might otherwise be involved with assessing?

Ingrid STITT: What I would say, Dr Mansfield, is that it will not really radically change the way in which councils would be required to deal with any of these applications because there will be that referral agency oversight.

Sarah MANSFIELD: Just further to that, then, will councils require any additional resources to undertake this work, and if so, has any provision been made for councils with respect to these resources?

Ingrid STITT: Dr Mansfield, because they will be relying on the expertise of the ERR, it is the same process as now. If you do not mind, I just want to check with the box, because this is something that would be subject to the consultation that is being undertaken over the next period.

The ERR are responsible for that expert advice to councils, so we do not believe that this will result in any additional burden on council resources, but of course all of these issues will be, I am sure, thoroughly ventilated during the four-year consultation that will be undertaken to develop those subordinate legislation.

Sarah MANSFIELD: The bill proposes to remove the requirement for mining operators to submit a work plan. Approved work plans are the only document currently that the community could access ‍– they have to pay a $30 fee – but they detail the mining and quarrying projects. This is the only way they can access it without request under the Freedom of Information Act 1982. Has the government considered the implications of removing community access to information about mining projects?

Ingrid STITT: Dr Mansfield, I am going to take my time to debunk some of the misinformation around this issue, because this is not how the bill will operate. With this reform the community input will now be the first step, before new projects can be approved via a planning process. This brings the quarrying and minerals projects into line with any other development. Earth Resources Regulator still continue to be the lead regulator for mining and quarrying operations, and currently work plan proposals receive a statutory endorsement from ERR, which kind of operates as an internal preapproval step prior to planning permission and final approval of the work plan. This occurs before the project enters the planning process, so this means that projects can actually receive statutory endorsement under the current system with little or no community input. So one of the key aspects of this bill is that the community input will be the very first step. This increases the transparency and consultation, and it also ensures that communities will know about a project looking for approval far earlier than they find out about it now. That is the way in which the bill will operate. The community consultation occurs up-front as part of that framework.

Sarah MANSFIELD: Thank you for providing that clarification. Has the government conducted a legislative impact assessment on this bill?

Ingrid STITT: Dr Mansfield, the bill sets out the framework, but the subordinate legislation is what will underpin the framework, so there will likely need to be a regulatory impact statement (RIS) associated with the regulations that are developed through that process.

Sarah MANSFIELD: Will that be publicly available?

Ingrid STITT: Yes, and it will be conducted in the normal way.

Sarah MANSFIELD: The Victorian Auditor-General’s Office released a report in 2020 on the Earth Resources Regulator and the rehabilitation of mines, and VAGO found that the Earth Resources Regulator was failing at every level – oversight, regulation and enforcement. A duty-based system relies on a proactive, thorough regulator in order to monitor compliance and enforce the law. Why did the government choose a duty-based system, considering the Earth Resources Regulator’s poor history of enforcement according to VAGO?

Ingrid STITT: This is a similar framework to that which operates under the EPA legislation. It is a general enduring duty. Historically ERR have been criticised as not performing their functions to enforce statutory requirements. We acknowledge that the reforms do constitute a significant change to the framework and the regulatory approach, but moving from a regime that is largely based on ERR carrying out approvals to one where the industry have the flexibility to manage their operation in accordance with proportionate outcome-based regulations, reviewing and notifying the regulator of changes that impact risk, is not a concept that is new. It is a very well established framework under both, for example, the Occupational Health and Safety Act 2004 and also, as I have already mentioned, the Environment Protection Act 2017. So we think that actually this will mean that there are enhanced community safety and environmental outcomes, because that general duty is enduring and it does give the opportunity for continuous improvement as risk mitigation systems develop over time. So it is not a static system. It is one which, with that general duty, we think will enhance both the operations of the industry but also the regulatory oversight by ERR.

Sarah MANSFIELD: I guess my question was: given the ERR’s poor record on enforcement and oversight and given that they have now got a greater responsibility to provide that oversight and enforce compliance because of that duty-based system, what is going to be done to improve their performance when it comes to compliance and oversight? I note that there are a number of penalties there and there was commentary from some other MPs about the potential inadequacy of those penalties, but regardless of the adequacy of the penalties, someone has to be able to detect non-compliance and enforce the law. The ERR have a poor record with this, so how can we have confidence that they will be able to undertake that role, which is particularly important in a duty-based system?

Ingrid STITT: The regulator will be supported to prepare for this change, and there will be a workplace capability and capacity review that will be undertaken in the second half of the transition period. The results of that review will be implemented to ensure that the regulator has the appropriate staffing, resources and skills and the appropriate structure to efficiently and effectively operate and enforce the new regulatory framework. That is very similar to the kind of capacity review and support that have been provided to other government agencies who have had similar legislative reform of this nature.

Sarah MANSFIELD: Minister, you referred earlier to the establishment of a general duty being quite similar to what is currently operating under the Environment Protection Act. I am interested in what evidence there is about the effectiveness of that duty in the Environment Protection Act in actually minimising or eliminating risk of harm to the environment or human health. How well is that working under the Environment Protection Act?

Ingrid STITT: Well, I do not know that we have come armed with the stats from the EPA. Perhaps you can ask me a constituency question about that or raise an adjournment matter about that, Dr Mansfield, and as the minister responsible for the EPA I would be very happy to provide you with that information.

The first part of your question related to moving to a duty-based model and how that would better protect the environment; I think that is the nub of the issue you were trying to get to. The statutory duty does incentivise industry to continually mitigate environmental risks that arise from mining and quarrying work before those risks manifest, because the duty applies to the operator. There is a very similar system in environment protection legislation. By shifting the focus from administrative compliance through having a plan to compliance around mitigating risk against that duty, it represents a commitment to address risk identified at a single point in time when you are talking about a work plan, and the statutory duty is standalone and it is perpetual. It encourages a more dynamic approach to risk management to address those emerging risks and evolving expectations. We believe that this is a much more rigorous system for compliance.

Sarah MANSFIELD: Our understanding is that the trigger for an environment effects statement to be conducted depends on the level of risk that the applicant feels applies to their project, with low-risk applications not triggering the requirement for an EES. Does that potentially create, I guess, something of an incentive to understate the risk of a project?

Ingrid STITT: Dr Mansfield, the reforms do not change the Minister for Planning’s ability to require projects with potentially significant environmental impacts to be assessed through the EES process. DEECA will continue to work closely on any potential future legislative changes to the EES process as it relates to mining and quarrying. In the meantime the department will also consider the opportunities to improve interactions with the EES regime through non-legislative means during the implementation of the works approval reforms.

Sarah MANSFIELD: That probably goes to my next question, which was really about some of the feedback we have had from a variety of groups, including environmental groups and councils, that have expressed concern about the current EES process, particularly with respect to mines. Given the anticipated expansion of minerals mining throughout the state, they are particularly worried about the triggers and the process itself and do not believe that it is adequate to protect the environment and the communities. You mentioned that this may be up for review, but can you expand on that a bit more? As part of the consultation that you have outlined for this particular piece of legislation going forward, will that include a review of EES triggers and processes?

Ingrid STITT: Thank you for the question, Dr Mansfield. We do not think that it is appropriate to require an EES for every new exploration mining and quarrying operator. That would be disproportionate to the risk of environmental harm. It would create a significant burden in terms of both administration and cost for both government and industry, and it would effectively result in a decline in new exploration mines and quarry operations in Victoria. We do not intend to impact the industry in that way. But as I have already indicated in my previous answer, these reforms do not change the Minister for Planning’s ability to require from the projects with those potentially significant environmental impacts an EES process to be undertaken by the proponent.

Sarah MANSFIELD: How will that risk be determined? You said that with projects with significant environmental risk the minister may require an EES to be performed, but who determines how much environmental risk is posed by a project?

Ingrid STITT: I am trying to be helpful, but this question is really outside the scope of this bill. It is a matter that sits with the Minister for Planning. There is no intention in the scope of this bill to change the current systems other than that we have indicated we will continue to work closely to try to make sure that those systems are aligned as best as possible.

Bev McARTHUR: Minister, why do you insist on pursuing legislation by regulation?

Ingrid STITT: Mrs McArthur, I do not actually accept the assertion contained in your question. We are not doing that. We are setting a framework in place that will have subordinate legislation to support it, which is not uncommon in these sorts of policy areas.

Bev McARTHUR: But if the members of Parliament and the community and the stakeholders in industry cannot see what you are actually proposing in detail, how is it right that you legislate in this manner?

Ingrid STITT: I think, Mrs McArthur, how I would respond to that is I would take you to the undertakings that the government has given about the consultation which will occur with not only the community but industry and stakeholders across the board, including local government and other organisations with an interest in these matters. This is not unusual, and the subordinate legislation, including the regulations, will be developed in the usual manner. To your point about how you will know, you will know because there will be that community and industry consultation process, and there will be an opportunity for significant input over the period of time that we have available to us before the legislation commences, which is in 2027.

Bev McARTHUR: Nevertheless this Parliament will not be the overriding body over the detail of the legislation. And yes, we are familiar that this is how the process is working under this government, and it really does appear to be not acceptable. But you have mentioned the word ‘consultation’, so I will go to a question on that: how much consultation has been done with existing holders of work authorities?

Ingrid STITT: Just, cheekily, to respond to your previous comment, your colleague Mr Davis did ask me about whether regulations would be disallowable in the normal manner, and my answer was yes, so it is important to remind you of that, I think. I have indicated to you that there have been consultations with a number of the peak industry bodies for mineral and extractive industries. I am happy to repeat the list if you would like me to, Mrs McArthur. We have already consulted, and intend to continue to consult, with the Minerals Council of Australia, which represents the larger mining operations; the Association of Mining and Exploration Companies, which covers the smaller mining companies; Cement, Concrete and Aggregates Australia, which is the larger quarries; and the Construction Material Processors Association, small to medium-sized quarries. And we have also consulted with a number of specific industry bodies. Of course when the consultation process begins for development of the subordinate legislation, there will be an opportunity for both peak bodies and individual companies with an interest in these matters to have their say.

Bev McARTHUR: I am pleased to hear that we can disallow your regulations. How many of these work authorities are held by small to medium enterprise businesses in this space?

Ingrid STITT: I know I have got that somewhere, but just bear with me, Mrs McArthur. As at 11 July 2023 there were 832 work authorities, but only 455 were operating.

Bev McARTHUR: How will the skills in assessing work authorities be transferred from Earth Resources Regulator?

Ingrid STITT: It will not.

Bev McARTHUR: Will councils be given any additional funding when these provisions are enacted? I think Dr Mansfield has raised that, but can you be specific?

Ingrid STITT: I am not in a position to really say at this point. But what I can say, Mrs McArthur, as I have already placed on the record, is there will be additional consultation that is undertaken with our councils, but the role of councils will not change significantly in respect of mining and extractive industries as a result of these reforms. The removal of the statutory endorsement will mean that planning permit decisions will be administered in the usual manner for councils, something they are very familiar with, and administered by the responsible authority. I think that it is fair to say that we believe that the impact on local councils will be minimal at best, and there will be, as I have said, the opportunity for councils to continue to have input into the design of the subordinate legislation that will sit under the framework that we are debating today.

Bev McARTHUR: But, Minister, isn’t a key change in this legislation the transfer of the application process to local government as the first step? That is the major change, isn’t it?

Ingrid STITT: Mrs McArthur, we are not giving councils a regulatory role. They will just be responsible for making the planning decision. The regulation will continue to sit with the regulator, so there will be no change in the way in which you are describing it.

Bev McARTHUR: Thank you, Minister, for your answer. That seems odd, I must say – but anyway. Will the Earth Resources Regulator team within DEECA receive less funding?

Ingrid STITT: I do not believe so, Mrs McArthur, but that is not within the scope of this bill that we are debating in any event. We do not anticipate that there will be any changes to the level of resources available for the regulator.

Bev McARTHUR: If there is no actual saving of effort here, aren’t we just shuffling the deckchairs on the Titanic given the impending shortages of staff in this space?

Ingrid STITT: No, we are not, Mrs McArthur. This is about creating a legislative framework which is modern and fit for purpose and based on risk mitigation. We are actually about improving the statutory regulation of this industry, so I do not accept the assertion contained in that question.

Bev McARTHUR: Minister, why is it, then, that you are taking the powers of planning away from councils in relation to renewables – and in certain cases, it appears, housing planning – but giving it back to councils in the area of extractive industries?

Ingrid STITT: I think you are conflating a number of different issues there, Mrs McArthur. We are not changing councils’ role or powers in relation to the matters that are before us in this bill.

Bev McARTHUR: Minister, has a review been undertaken into work plans – that is, extractive industry statutory endorsement – where it has worked and where it has not worked, together with the reasons, prior to the decision being made for their removal?

Ingrid STITT: Mrs McArthur, we are bringing this reform to the Council, through the Parliament, because we have the view, as do a large number of people associated with this industry or who have an interest in these matters, that the current framework is outdated, complex and difficult to understand. We are unashamedly bringing forward reform that is more modern and fit for purpose, based on an enduring duty that operators need to comply with. That is not an unusual step, and these reforms I think represent a significant improvement in the way that these industries will be regulated.

Bev McARTHUR: What is the current backlog in applications for statutory endorsement?

Ingrid STITT: Mrs McArthur, I am advised that there has been a body of work undertaken to reduce the backlog, and I am advised that there are still a small number of applications on foot but that the backlog has been largely cleared.

Bev McARTHUR: Would you be able to give us the detail of that?

Ingrid STITT: I do not have that here, but I can see whether or not we might be able to provide some further information, Mrs McArthur, and take that on notice.

Bev McARTHUR: Minister, why not insist that the Earth Resources Regulator meet set performance criteria for statutorily endorsed work plans?

Ingrid STITT: Because the proposal before us today, Mrs McArthur, is to change the system from those work plans to a more modern, fit-for-purpose framework based on a general duty.

Bev McARTHUR: I go back to the council issue, Minister. Where is the evidence for reducing unnecessary cost and delay by transferring the burden for the framework on to local government associations?

Ingrid STITT: Sorry, I could not hear the last part of the question.

Bev McARTHUR: Where is the evidence for reducing unnecessary cost and delay – because you say you are streamlining the whole process, so the evidence that would tell us the cost and delay will be reduced – by transferring the burden for the framework on to local governments?

Ingrid STITT: Mrs McArthur, we do not believe that there is an additional burden. So that is the answer to your question.

Bev McARTHUR: So will councils be required to consider the state’s best interest, given the shortage of supply of certain development-critical materials in the extractive industries space?

Ingrid STITT: I think you may be getting into areas that are going to be the subject of further work, but please let me just check with the box and I will come back to you.

No change for local government.

Bev McARTHUR: If a council, for crass political reasons, does not want to approve an application in its backyard, how will the state intervene?

Ingrid STITT: Mrs McArthur, the reforms will not alter the process of local councils seeking the views of potentially affected properties during the planning permit application process, so there will still be that framework. Local councils are accountable to their communities, as you would know very well, and councillors are elected officials, so it is expected that council will take into account their community’s concerns and any relevant objections when considering any type of planning permit application, not just for a quarry or a mine of course. Ultimately council is empowered to determine planning applications and must do so in accordance with the Planning and Environment Act 1987.

Bev McARTHUR: Well, we all know that is not how it actually works. Let us look at another scenario where a council has a quarry of its own. Who assesses that?

Ingrid STITT: Mrs McArthur, it does not change the obligations on the council when it comes to applying the planning framework. I think I see where you are going with all of this, but there is no kind of shadow play going on here. There will be no change from the way in which councils currently process planning permits and they are required to adhere to the relevant legislation, and of course decisions can have appeal rights, as you would be well aware.

Bev McARTHUR: So can we be assured that these changes to this legislation will ensure we get more applications approved in a more timely fashion so we can have more extractive industries operating and more mines operating? Can you assure us of that?

Ingrid STITT: Well, we believe, Mrs McArthur – and I am sure you will be fully signed up to this ‍– that removing the statutory endorsement process will significantly reduce the burden on industry and costs and delay. We believe that removing the need for an approved work plan and adopting a duty-based regulatory framework gives operators much greater flexibility. Over the long term the reforms are also expected to decrease the administrative and compliance burden on industry due to the increased uptake of things such as codes of compliance and standards. This is about improving the regulatory process. It is about taking the burden away from industry and minimising delays to applications.

Bev McARTHUR: Minister, we know that current appeals on planning permits reaching VCAT often rely on the Earth Resources Regulator’s ticked-off statutory approval of the work plan. In this new system, how do you envisage applicants will demonstrate to VCAT that they have achieved the right level of compliance? Doesn’t it actually make it harder?

Ingrid STITT: Well, that will be a matter for that applicant.

Clause agreed to; clauses 2 to 135 agreed to.

Reported to house without amendment.

Ingrid STITT (Western Metropolitan – Minister for Early Childhood and Pre-Prep, Minister for Environment) (16:21): I move:

That the report be now adopted.

Motion agreed to.

Report adopted.

Third reading

Ingrid STITT (Western Metropolitan – Minister for Early Childhood and Pre-Prep, Minister for Environment) (16:21): I move:

That the bill be now read a third time.

Motion agreed to.

Read third time.

The DEPUTY PRESIDENT: Pursuant to standing order 14.28, the bill will be returned to the Assembly with a message informing them that the Council have agreed to the bill without amendment.