REGULATION WITHOUT THE SCIENCE
The following are excerpts from Mineral Council of Australia (Victoria
division) submission for Victorian Planning System Ministerial Advisory Committee review
of the operation of the Victoria Planning Provisions and planning schemes - 31 AUGUST
2011
# note – mining is exempt from the planning provisions of the Planning &
Environment Act 1987 but under certain situations within the processing and
production streams of resource development, a planning permit is required
Blue text is from the Minerals Council. Other comments are from our community network
who like to question and challenge industry and government as to their reasoning and thought
processes behind some of their statements and ideals on how best to proceed with mining
expansion into populated areas of Victoria under further reduced regulations.
As you read on, you will see that we are entirely justified in campaigning for mining reform
on legislation and that it can only occur based on scientific facts, not beliefs.
2.1 Principles for reform
The MCA strongly advocates the principle of minimum effective regulation – specifically,
that the development of good regulatory process should be informed by the following
principles:

regulation should only be adopted in cases of demonstrated market failure, and
there should generally be an assumption that the open and transparent operation of
markets will lead to efficient outcomes; Are they saying that if market export values
decline, a licence holder is more likely to take shortcuts to reduce cost burdens and
increase profit margins at the expense of compliance. So much for their enduring
value concept.
This principle is based on the false assumption that ‘the market’ is efficient and operates
openly and transparently. There is plenty of research, especially following the GFC to
confirm that the market is anything but efficient. Players in the free market have also been
found not to be open and transparent and in many cases, corrupt and corruptible. Take for
example the recent court cases into Standard and Poors, the other ratings agencies and
Lehmann Brothers.
Secondly, the idea that regulation should only come into play AFTER market failure defeats
the whole purpose of regulation which is to prevent failure. It also usually means that
governments have to pick up the pieces on behalf of taxpayers and also, as we know,
individuals personally bear all the pain not only of the development impacts but also when
things go wrong.
Community Over Mining

regulatory approaches should not be used unless a clear case for action exists,
including an evaluation of why existing measures are not sufficient to deal with the
issue; A good example for this is the recent Esso incidents from Nov ‘12 – April
‘13. The only reason that EPA and WorkSafe Victoria have become involved is
because of community and media pressure. It has not been because both these
monitoring agencies were doing their job but rather because of their lack of
monitoring that the company has been found wanting with their processes. Esso’s
parent company is Exxon and they will most likely be the first ones who will bring
CSG to Gippsland so if they cannot manage a major hazards facility how can they
manage CSG development.
This principle misses the objective of regulation, which is to evaluate the measures the
company proposes to use to ensure that there isn’t a failure. What is interesting in the ESSO
case is that in spite of the EPA and WorkSafe Victoria regulations, a failure still occurred,
suggesting that the regulations are not strict enough. Furthermore, once an incident has
occurred, it is often too late to rectify the problem. Consider, for example, the Fukishima
nuclear explosion. The standards were inadequate and now the whole area is inhabitable.
Evaluating the situation post the disaster doesn’t do anything to repair the damage. Once the
water table is contaminated, there is no going back.

regulation should only be adopted after a range of policy options (including selfregulatory and co-regulatory approaches) have been assessed and found wanting;
Self-regulatory is the industry and co-regulatory is the monitoring agencies. It is the
job of EPA, Worksfe and DPI to do this as they have the statutory authority. If they
can’t do it who will.
This is quite absurd. See comments from above principle.

the regulation represents the greatest net benefit to the community; Look at what is
happening up north – lots of polluted waterways and methane emissions yet
industry cannot be held to account because no base line data was done to prove that
contaminate pollution is as a result of CSG development
If the regulation standards are inadequate or their application lax, then they are useless.

the regulation developed is the most efficient means of achieving the desired
outcome at least cost to government and industry; least cost has always been
allowed to be the driver of development but to effect the least amount of impacts on
the environment requires more resources on behalf of govt and industry – they are
not prepared to do this. A good example of poor regulatory controls to get the
desired outcome is the Morwell River diversion collapse. It is in a major flood
prone area near a major river system. The company was allowed to divert the river
on the least safest course and at the least cost to the company. Who determines the
priority of worth to that of efficiency over safeguards?
Efficiency needs to include taxpayer costs of reparation and the loss or lessening of
environmental and social capital when repair is attempted, bearing in mind that the repair job
is never as good as the original.
Community Over Mining

effective guidance is provided for both regulators and stakeholders to ensure that
the regulations are correctly implemented and monitored; So government are the
regulators who already have adequate statutory powers, however, it takes human
intervention to ensure that industry comply with their conditions and regulators that
they use these powers to ensure they do. Esso example has shown that they don’t
and it is only community and media pressure that has forced EPA and WorkSafe to
act. Is the community then the one to provide ‘effective guidance’?
mechanisms such as sunset clauses or periodic reviews are built into the legislation
to ensure that the regulations remain relevant over time; and
there is effective consultation with stakeholders at key stages of the development
and implementation of the regulation.


Effective consultation needs a clear definition and needs to be higher order, not just alerting
stakeholders to the development.
…..These principles are consistent with the Council of Australian Government
(COAG) National Reform Agenda which focuses on reducing the regulatory burden
across all three levels of government and the implementation of a range of measures
to ensure best-practice regulation making and review.
It is of great concern that the Abbott Coalition plan to reduce red and green tape should they
become government in September. We all know what happens when there is no regulation.
Only have to look to countries where there are low, or no, regulatory standards. Eg.
Bangladesh building collapse, pollution in China, and the many environmental catastrophes
perpetrated by foreign mining companies, including some of our own, eg. BHP, SANTOS to
name two, in third world countries. Then we have the James Hardie and CSR asbestos
scandals, Three Mile Island and Chernobyl, Exxon Valdez, Gulf of Mexico and the oil
leak/spill off Broome.
The minerals industry has two specific goals regarding reform to the P&E Act
(Planning & Environment:


to ensure regulation of the overall economy achieves desired outcomes efficiently
with minimum necessary direct control of economic agents by government
authorities; and
to ensure that necessary planning and environmental regulation of the minerals
industry is applied in the most economically efficient manner to achieve
identifiable outcomes without inhibiting innovation and continuous improvement
of business.
Sounds like open slather to me. In any case, CSG and other mining are exempt from the
Planning and Environment Act 1987 (VIC). And, really, these proposals are all about
companies making money with the least restrictions possible.
More recently MCA restated industry’s position to the Parliamentary Inquiry into
Greenfield Exploration Mineral Exploration and Project development in Victoria
which articulates the view of industry regarding the form and function of a Lead
Agency. This is summarised below.
Community Over Mining
The Minerals industry seeks a one stop shop for project approvals. That is, a single
agency charged with the authority to approve projects. Whilst such an agency would
be required to do an intense amount of work across all relevant agencies to reach a
whole of government position on a proposal, the proponent would only deal with the
one point in Government.
Such an approval requires a great deal of maturity by agencies who may feel
threatened by what they perceive to be a loss of their ‘agency’s control’ being
delegated to a single whole of government agency. However, it does mean that project
proponents are not required to ‘hawk’ their projects across all relevant agencies of
Government for approval, which is most inefficient and a disincentive to invest. Interagency differences in approach to the minerals industry and project approvals is a
significant disincentive to industry and therefore impacts on Victoria’s attractiveness.
And now we have the new Department of State Development, Business and
Innovation. The trouble with this is that they are proactive to mining and on CSG
Development. They will have to prove that they have enough monitoring resources to
prove an expanded industry can be responsible.
I tend to agree that there are problems with the multiplicity of agencies, which silo-ise
responsibilities. For example, you have the Catchment Management Authorities legally
charged with protecting the environment but they have no power over mining developments.
There are State Gov. policies on biodiversity, climate change, river health and sustainable
water but these can all be overridden by the Minerals Act. It was the Kennett Gov. that
changed the planning provisions to ‘facilitate’ development rather than protect the
environment and communities. And Matthew Guy has now proposed to further weaken the
planning provisions with his ‘anything goes’ approach. A whole of government approach that
assesses mining development proposals and their impacts in a holistic way would be better
than the current situation where the merits of proposals are only assessed on narrow
objectives, such as those listed below. To say that mining will lead to improved roads and a
port is dishonest because it doesn’t account for extra spending on roads maintenance and
repair (currently the largest portion of Council rates), the social impacts of more traffic,
environmental destruction, and the high taxpayer cost of a new port.
Where within Government such a Lead Agency is located needs further discussion.
There is merit in the functions being housed outside of portfolio agencies to ensure
that true whole of Government considerations are made. There must be statutory
recognition of the Lead Agency. There must also be deeming provisions that assume
consent in the absence of any Government agency decision within a prescribed
timeframe.
Surprise, surprise, now we have the new Department of State Development, Business
and Innovation. The trouble with this is that they are proactive to mining and on CSG
Development. They will have to prove that they have the science right, base line data
and enough monitoring resources to prove an expanded industry can be responsible.
It will also be incumbent on the Lead Agency to ensure that all conditions on work
plans are current and relevant. The work plan is the critical approval instrument
required to commence work – it details the approved actions. (If we go on what is
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happening up north, the government aren’t exactly doing things by the book nor are
they immune from influence)
.....Practically, decisions of the Lead Agency and approval of the work plan would be
the only instrument required, i.e. a whole of government authority.
This is where I am concerned with the only legal time that a community has input but
it is only to consider their concerns and address them and potentially place some
conditions on a project. This dept would promote mining over farming as even the
Nationals do not want to declare ‘no-go’ zones. They want to first identify their
extractive worth. In all of this we still will not have any scientific data to base
decisions on.
An expansion of mining in Gippsland, particularly CSG development, currently
comes with no strategic plan from the government but the Minerals Council have had
one for a few years.
The only benefits that the Government have been able to state are improved road
conditions and a port. These are also not guaranteed as the royalty aspect of CSG
development has not even been determined.
It goes without saying that the people should have a say at the very beginning of policy
development as to what they want for their communities and lives. Goes back to the problem
of consultation.
The Mineral’s Council (Victoria division) MCA, want CSG and other new
technologies to:
Action required:
The competitive positioning of Victoria in respect to Government charges, including
royalties, is fundamental if the state is to grow its minerals industry. Therefore, no
new royalties or additions to the current royalty regime are warranted, especially as
the Commonwealth proposes to introduce a mineral resources rent tax on coal and
iron ore.
The royalty holiday on gold must continue until its original intention is achieved,
namely the development of a strong and viable gold industry in Victoria.
Action required:


Support for the export of coal products is required as a prelude to private sector
investment.
Commitment to improved transport links between the Latrobe Valley and export
ports.
The key reason governments encourage mining is for the revenues. Cut the royalties and
MRRT and companies keep all the profits while the taxpayer sustains all the liabilities. It
should also be noted that the downturn in mining income due to lower commodity prices and
Community Over Mining
increased production costs has resulted in the failure of the MRRT to raise the money
predicted. Countries like Norway have very high taxes on oil and mining and their citizens
reap the benefits long into the future. The Howard Govt squandered billions of revenue
during the boom and now the boom has cooled, the Gillard Govt isn’t getting enough money
in to balance the books.
With increasing climate change, fossil fuel should be a dead industry. Were we a ‘clever
country’, we would now have a substantial renewable energy system in place, would be
fostering research into better sustainable technologies. This would help to transform our
economy from one dependent on drill and dig to one founded on creative technological
solutions for a post-fossil fuel world.
The minerals industry is one of the few industries in Victoria that has the potential to
invest significant capital into new projects in rural and regional Victoria that meet the
sustainable development principles and create long term well-paid jobs. There are not
enough drillers to currently fill the NE states so 457 visa contractors will fill positions
as well as a lot of cowboys already popping explosive down wells to frack.
Only the major companies have the money to invest in new ventures and even they are
pulling back on new investments because they are not cost-effective. Eg. Olympic Dam,
James Price Point, etc. Shareholders are now demanding that mining companies return capital
to shareholders and increase their dividends rather than take on too many risky ventures. As
for the minnows: they hope to get rich by selling their permits to others. Most don’t have the
enormous amounts of capital required to develop unconventional gas. Gina Rinehart may put
in a few million dollars but that is not going to be nearly enough. Even the big companies are
realising that unconventional mining is too expensive. There is news that China is already
heavily investing in renewable energy. Being a dictatorship, it doesn’t need to win the
approval of its people. It can mobilise huge resources for renewables.
China wants to be independent of having to import energy. It may also realise that it has no
future if it destroys its environmental and human health from pollution and massive climate
change, which are already affecting their economic wellbeing. I think they are smarter than
we think.
In reviewing the exploration and mining activity in Victoria compared to the other
Australian jurisdictions the key differentiator is the high proportion of private land
and the high population density. Victoria has three times the population density of the
next most populated state. This inevitably brings mining into the lives of rural and
regional Victorians and intensifies the need for mining companies to earn their social
licence to operate in addition to the legal licence; a challenge the minerals industry
accepts as consistent with its commitment to Enduring Value.
Appropriate regulation does not exist because not enough is known to make the desired
determinations on legislation requirements.
Government are ignorant to the truth.
Regulation without science cannot eliminate problems.
A Gippsland campaign group focusing on improving
community engagement with government & industry
for the benefit of our future
Website: www.communityovermining.org
Email: tracey_anton@hotmail.com
Mobile: 0407 924 003