Alert

Who does this affect?

Principally the coal mining industry, but also other industries with large greenhouse emissions profiles.

What do you need to do?

Ensure the potential environmental impacts from greenhouse gas emissions are investigated as part of regulatory approval processes. Anticipate that third parties and regulators may seek to impose conditions on approvals requiring greenhouse emissions to be offset.

Author
Matthew Austin  
Special Counsel

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David Bell  
Partner
T +61 7 3244 8051

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Sydney
Dominic Bortoluzzi  
David O'Donnell  

Melbourne
Louis Chiam  
Stephen Davis  

Perth
Laurence Iffla  

Brisbane
Matthew Austin  

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The Queensland Government has introduced to Parliament urgent amendments to the Mining and Other Legislation Amendment Bill, which will guarantee Xstrata’s Wollombi coal mining operations in central Queensland. The amending legislation is in response to a successful Court of Appeal challenge by the Conservation Council over the adequacy of the Land and Resources Tribunal’s hearing of an objection concerning the impact of greenhouse gas emissions from a proposed mine expansion. The proposed amendments validate the approvals given for the mine expansion. This means that when the Bill is passed, the Court’s ruling that the recommendations of the Tribunal be set aside, and the matter be remitted for re-hearing, will no longer have effect.

Despite this matter being resolved, there remains a risk that third parties will again seek to have greenhouse offset conditions imposed in future approvals for mining projects in Queensland. If mines are forced to offset greenhouse gas emissions, this could have serious financial implications for the mining industry.

Background

Earlier this year, proceedings were commenced in the Court of Appeal by the Conservation Council following the Tribunal’s recommendation that the mine expansion be approved without any of the conditions sought by the Conservation Council to avoid, reduce or offset likely greenhouse gas emissions from the mining, transport and use of coal from the mine. On appeal, the Court was asked to consider a number of grounds of appeal but did not need to decide all grounds as a procedural error of law was found to have been made by the Tribunal.

In a judgment handed down on 12 October 2007, the Court of Appeal found the Conservation Council had been denied natural justice as it had not been given the opportunity to respond to the Tribunal’s consideration of a key report which critiqued the Stern Review. The Tribunal considered this critique after the conclusion of the hearing but before making its recommendation to approve the mine expansion. Click here to view a copy of the Court of Appeal’s decision.

Following the Court’s decision, Premier Anna Bligh said that the State will legislate to overturn the Court ruling which, “on a legal technicality, could have stalled the Mine’s further development”. The Premier is concerned to “safeguard our reputation as one of the best and most reliable producers of coal in the world” and “to let the court decision stand would risk our biggest export industry”.

What does it mean for you?

It is important to note that the Court of Appeal’s decision simply deals with a procedural matter and does not consider whether under the relevant legislation, it is possible to impose conditions on mining projects requiring greenhouse gas emissions to be offset. The amending legislation does nothing to clarify this issue.

It is likely that third parties will again seek to have offset conditions imposed in future approvals for mining projects in Queensland. In addition, any litigation involving the power to impose conditions may also cause substantial delays in obtaining approvals.