MINERALS COUNCIL OF AUSTRALIA VICTORIAN DIVISION

VICTORIAN ENVIRONMENT PROTECTION: PROPOSED REGULATIONS AND ENVIRONMENTAL

REFERENCE STANDARD

31 OCTOBER 2019

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ................................................................................................................. 3

2. MCA ADVOCACY AND ENVIRONMENTAL STEWARDSHIP ....................................................... 5

3. KEY ISSUES .................................................................................................................................... 7

4. ENVIRONMENTAL REFERENCE STANDARD – EXPOSURE DRAFT ...................................... 15

5. ENVIRONMENT PROTECTION REGULATIONS – EXPOSURE DRAFT ................................... 17

6. FURTHER INFORMATION ........................................................................................................... 22

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1. EXECUTIVE SUMMARY

The Minerals Council of Australia Victorian Division supports the Victorian Government’s new approach to environmental protection, which is outcomes based and prevention focused.

MCA Victoria welcomes the opportunity to comment on the Victorian Environment Protection Authority (EPA) draft subordinate instruments including the Regulations and the Environment reference standards (ERS) proposed to apply from 1 July 2020.

The Victorian minerals industry is committed to operating in a sustainable manner. This means protecting the environment, investing in communities, delivering socio-economic benefits and facilitating regional development. Maintaining its social licence to operate is a priority for Victoria’s minerals industry.

MCA Victoria advocates for public policy and operational practices that are safe, profitable, innovative, environmentally and socially responsible and attuned to its communities’ needs and expectations.

This submission raises concerns that, if not addressed, may create unintended consequences, additional costs and/or duplication of effort for the Victorian minerals industry as it seeks to comply with the state government’s new environmental protection regime.

These concerns are presented for Victorian Government consideration in three separate sections contained in the submission. The first outlines a series of key issues that cut across the subordinate legislation provided for public consultation. These include:

• Duty to manage contaminated land and implications for legacy issues

• Clarity of regulatory boundaries between EPA and the Earth Resources Regulator (ERR) branch within the Department of Jobs, Precincts and Regions (DJPR)

• Referrals policy and processes

• Third Party objections

• Supporting guidance material, and

• Duplication of requirements.

The second and third sections contain specific commentary on details and requirements contained within the draft ERS and the proposed regulations respectively.

MCA Victoria requests that the Victorian Government consider and address the issues and recommendations raised in this submission prior to release of the final subordinate legislation required to support the July 1 2020 commencement of the new Victorian environment protection laws.

Recommendations: Key Issues

• EPA should distinguish between historical legacy issues versus current or future potential contamination generated by current operators in the proposed regulations and/or guidance material

• EPA must work collaboratively with ERR, industry and other stakeholders to ensure avoidance of duplication of requirements between regulators

• The distinction between regulatory boundaries between the EPA and ERR must be clear to ensure that no overlap exists for operational and financial assurance requirements under the new environment protection regime

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• Amend regulation 22(2)(a) to reflect no prohibition of mineral development

• EPA advice and conditions should reflect regulatory boundaries

• Amend EPA and ERR Memorandum of Understanding to reflect time frames for provision of advice

• EPA should amend regulations or develop additional guidance to provide clarity regarding the definition of “unreasonably and adversely affected”

• EPA should clarify the suite of available and relevant guidance material to ensure organisations can meet obligations and comply with new laws and regulations

• EPA must consult with co-regulators and the Victorian minerals sector to ensure ongoing operational and reporting requirements are non-duplicative

• Amend EPA and ERR Memorandum of Understanding to ensure ongoing operational and reporting requirements are non-duplicative

• Compliance and enforcement activity should be coordinated across relevant regulators

Recommendations: Environmental Reference Standard – Exposure Draft

• That government consider the concerns raised in Section 4 regarding the ERS and amend or clarify the ERS and/or supporting documentation accordingly.

Recommendations: Environment Protection Regulations – Exposure Draft

• That government consider the concerns raised in Section 5 regarding clarifications and/or amendments to the regulations and/or supporting documentation.

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2. MCA ADVOCACY AND ENVIRONMENTAL STEWARDSHIP

2.1. About the MCA

The Minerals Council of Australia is the peak industry organisation representing Australia’s exploration, mining and minerals processing industry, nationally and internationally, in its contribution to sustainable development and society. The MCA’s strategic objective is to advocate public policy and operational practice for a world-class industry that is safe, profitable, innovative, environmentally and socially responsible and attuned to its communities’ needs and expectations.

MCA Victoria represents the interests of member companies operating, exploring and providing services to the minerals industry within the state of Victoria.

MCA member companies are signatories to Enduring Value – The Australian Minerals Industry Framework for Sustainable Development.1 Enduring Value articulates the mineral industry’s commitment to sustainable development, and is based on the globally recognised International Council on Mining and Metals 10 Principles for Sustainable Development.2

Principle 4 of Enduring value requires members to implement risk management strategies based on valid data and sound science. Principle 6 articulates requirements for continual improvement in environmental performance, while Principle 7 necessitates contribution to conservation of biodiversity and integrated approaches to land use planning. Principle 8 focuses on product stewardship, and considers the facilitation and encouragement of responsible product design, use, re-use, recycling and disposal of products. Enduring Value is supported by the MCA Water Policy3, the MCA Land Stewardship Policy4, and the MCA Biodiversity Offsets Policy5.

2.2. Environmental Stewardship

Across Victoria and the rest of Australia, the minerals industry continues to be actively engaged in the practical and effective integration of environmental, social and economic aspects of resource development. Earning and maintaining a social licence to operate and the practical implementation of sustainable development principles are defining features of modern mining operations. Key features of the Australian mineral industry’s approach to environmental management include:

• Land: Around 0.6 per cent of Australia’s land mass is currently under mining lease or licence. The operational footprint of mining occupies less than 0.1 per cent of Australia’s land mass. The industry is committed to ensuring mined lands are available both for alternative land uses concurrently with mining (including for biodiversity conservation) and to support alternative post-mining uses (including agriculture).6

• Water: A high-value, low-volume water user, mining accounted for 3.7 per cent of Australia’s water consumption in 2016-17.7 Mining operations seek to utilise low quality water not suitable for other industrial uses (including hyper-saline waters and primary-treated sewage) and to maximise the reuse efficiency of each water unit on site.

• Biodiversity conservation: The industry’s approach to biodiversity assessment and management centres on prevention and management of biodiversity impacts from mining and the identification of opportunities to enhance biodiversity conservation. The minerals industry

1 Minerals Council of Australia, Enduring Value Framework , 2015 2 International Council on Mining and Metals, ICMM 10 Principles, ICMM, London May 2003 3 Minerals Council of Australia, Water policy, MCA, February 2012 4 Minerals Council of Australia, Land stewardship policy, MCA, October 2012 5 Minerals Council of Australia, Biodiversity offsets policy, MCA, October 2014 6 Minerals Council of Australia, Environmental Management, viewed October 7 2019 7 Australian Bureau of Statistics, Water Account, Australia, 2016-17, water use tables, ABS catalogue no. 4610.0, Table 3, released 26 February 2019

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has contributed to the recovery of a number of threatened species and provides extensive data and resources to national biodiversity research.8

To illustrate Victorian industry achievements, examples of successful/leading practice in environmental management are provided in the case study below:

Case study: Contributing to nature conservation and rehabilitation across the communities in which we operate

Mandalay Resources’ Costerfield Operation is partnering with local conservation volunteers to rehabilitate degraded farmland opposite the mine’s evaporation ponds. Mandalay Resources purchased the 3.7 hectare site in 2015, and is working with local community representatives and environmental volunteers to design and develop community wetlands. A planting day in September 2017 was attended by more than 40 local volunteers – some travelling more than 150 kilometres to participate.9

EnergyAustralia’s rehabilitation program at Yallourn Mine is more than 20 years old. Planned final landforms include grasslands, woodlands and wetlands, as well as a pit lake interconnected with local rivers. 25,000 Strzelecki gums have been planted in drainage corridors and floodplain areas which contributes to habitat for locally significant koala populations. Within a constructed wetlands development, over 140 bird species have been recorded over the past decade.10

The aim of Fosterville Gold Mine’s rehabilitation plan, which is still quite broad as the mine is in full operational mode, is to return sites to a similar vegetation function and structure as existed prior to mining. If the new landform is significantly different, then the species selection will be appropriate for the final landform rather than what existed previously. The mine aims to return areas of native forest back to self-sustaining conditions while increasing the amount of indigenous species and linking biodiversity corridors where possible.11

8 Minerals Council of Australia, Environmental Management, viewed October 2019 9 Bendigo Advertiser, Volunteers put down roots in wetland, Bendigo Advertiser, 12 September 2017 10 Latrobe Valley Express, Koala plan gets thumbs up, 26 July 2018; Yallourn Mine Sustainability Report 2015-2016; EnergyAustralia Yallourn Social and Environmental Performance 2017 11 MCA Publication Mine Rehabilitation August 2018

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3. KEY ISSUES

Six key issues have been identified through review of the proposed environment protection regulations and ERS which have potentially adverse implications for the Victorian minerals industry. These issues include:

• Duty to manage contaminated land and implications for legacy issues

• Clarity of regulatory boundaries between EPA and ERR

• Referrals policy and processes

• Third Party objections

• Supporting guidance material, and

• Duplication of requirements

Each is outlined in detail below, and recommendations to address the concerns have been provided.

3.1. Duty to manage contaminated land and implications for legacy issues

The EPA website states:

If you occupy or control land, you have a duty to manage and minimise contamination from all activities, whether or not you caused the contamination. This could mean:

• notifying EPA as soon as you discover contamination • minimising risks • cleaning up or controlling contamination • taking simple precautions to prevent access to contaminated land.12

Mining operations often occur on or near land that was mined historically. In some instances, historical operating and environmental practices, under laws in place at the time, created long-term detrimental environmental impacts on or near these sites. These impacts, or legacies, are not the result of the current mining activities which are being undertaken. Examples of legacy issues that may exist on mining sites within Victoria include historic shafts, scats stockpiles and remnant tailings dating up to 160 years old. Many mining companies voluntarily address legacy issues however they are not obliged to do this by law.

The proposed regulations and ERS provide limited guidance regarding how the duty to manage contaminated land and the general environmental duty will be applied to these types of legacy issues, particularly where they exist on a current mining, exploration or retention licence. There does not appear to be a duty on other landowners/users where mining legacy issues occur (i.e. public land, agricultural land) thus setting up a system that treats stakeholders differently.

The term “legacy” is not defined in the Environment Protection Act 2017 (EP Act 2017) or the proposed regulations.

The Impact Assessment for the proposed ERS references the Chief Scientist findings ‘Development of new objectives to cover legacy and emerging contaminants’, and the need for the EPA to undertake additional work ‘to assess other guidance or state of knowledge’.13 MCA Victoria would welcome the opportunity to work with EPA to articulate expectations and develop industry appropriate guidance for the management of legacy issues in a mining context.

Furthermore, under the Mineral Resources (Sustainable Development) (MR(SD)) Regulations enacted on 1 July 2019, the Victorian minerals industry is subject to new rehabilitation requirements. Guidance for these requirements is still being developed by ERR. It is important that any cross-over

12 Environment Protection Authority Victoria (EPA), Managing contaminated land, viewed 21 October 2019 13 Department of Environment, Land, Water and Planning (DELWP) and Environment Protection Authority Victoria (EPA), Impact Assessment Proposed Environment Reference Standard, 2019

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between EPA expectations and MR(SD) regulatory requirements be identified to ensure no duplication of operational requirements and/or financial assurance/bonds occurs for future mineral development also. MCA Victoria encourages government to work collaboratively with ERR, industry and other relevant stakeholders (including Cultural Heritage Victoria – particularly in cases where specific management of legacy issues conflicts with the cultural value of historical artefacts and structures) to ensure avoidance of replication.

It is essential that the regulations, guidance and the approach adopted for the management of risks associated with legacy sites be industry specific. If a company is required to manage contaminated land that it did not contaminate, there may be unintended consequences which the EPA has not considered. These include, for example, the excising of land parcels from future licence applications which in turn restricts future mineral discovery, or existing licence relinquishment on land that was historically mined. This potentially results in reduction of rehabilitation of known legacy issues, in addition to cultural values or where management of risks will create or transfer risks elsewhere.

Recommendation: EPA should distinguish between historical legacy issues versus current or future potential contamination generated by current operators in the proposed regulations and/or guidance material.

Recommendation: EPA must work collaboratively with ERR, industry and other stakeholders to ensure avoidance of duplication of requirements between regulators.

3.2. Clarity of regulatory boundaries between EPA and ERR

The distinction between regulatory boundaries between the EPA and ERR must be clear to ensure that no overlap exists for operational and financial assurance requirements under the new environment protection regime.

3.2.1. Financial assurance implications

In Victoria, the MR(SD) Act 1990 requires exploration, retention and mining licence holders to rehabilitate land in accordance with any rehabilitation requirements contained in the approved work plan, licence conditions or specific codes of practice. In addition, Section 80 of the MR(SD) Act 1990 requires a licensee to enter into a rehabilitation bond for an amount determined by the Minister.14

In calculating the amount of financial assurance required for a particular operation, companies are typically required to use the standard state government calculator. These funds are intended to cover the full cost of rehabilitating mine sites by third parties post-production.

In addition, there are strict financial assurance requirements for companies buying or selling a mine. When a lease/licence is transferred from one operator to another, a bond may be increased or decreased based on government assessment of risk, which may include the capability and prior environmental performance of the new owner.

It is imperative that the Victorian minerals industry does not bear duplicative costs associated with potential overlap in financial assurances required by the EPA and ERR.

In addition, it is important that government understands that companies incur costs in providing financial assurance. The provision of large cash-based security bonds can impact a company’s borrowing capacity and unnecessarily tie up company cash resources that would otherwise be available for rehabilitation work and other improvements. Bank guarantees, while generally having relatively low servicing costs – a percentage of the principal – can cost companies tens of millions of dollars each year to maintain when bond are large. When setting assurance levels, these issues must be taken into consideration.

14 Earth Resources, Victorian State Government, Rehabilitation Bonds, viewed 10 October 2019

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MCA Victoria advocates that, per clause 220(2)(c) of the EP Act 2017, the government consider a broader range of acceptable forms of rehabilitation bonds that provide appropriate levels of cover at lower cost to industry. This includes, for example the use of surety/insurance bonds.15

3.2.2. Provision and acceptance of EPA advice

As a referral agency, the EPA can provide advice regarding conditions to ERR for consideration. For advice pertaining to issues that occur within the licence boundaries, ERR should consider, but not be compelled to accept this advice.

This autonomy is particularly important with the introduction of the ERS. Numerous references are made throughout the documentation released for public comment noting that the ERS is not a compliance standard, but that it must be considered as a decision-making tool:

Although it is not a compliance standard, the Act requires the Authority to consider this ERS when assessing development, operating and pilot licences.16

The ERS is not a compliance standard. There is no direct requirement for a duty holder to protect, uphold, meet or achieve the standards it describes. It simply provides an authoritative, scientifically-informed benchmark that may be factored into decisions where consideration of such a benchmark may be important, relevant or helpful.17

Recommendation: The distinction between regulatory boundaries between the EPA and ERR must be clear to ensure that no overlap exists for operational and financial assurance requirements under the new environment protection regime, and is defined below:

• ERR regulates within the licence boundary (Mining Licence, Exploration Licence or Retention Licence)

• EPA regulates outside the licence boundary

• EPA potentially regulates inside the licence boundary for certain issues where an EPA license or permit has been granted (i.e. water discharge to a water course on licence or water discharge to an aquifer on licence)

3.3. Referrals policy and processes

As a referral authority, it is imperative that the EPA adhere to appropriate timeframes when responding and providing advice to ERR.

The MR(SD) Act 1990 stipulates the following timeframes for approval:

• Exploration and prospecting licences must be granted or refused within 90 days of application being accepted18

• Mining and retention licences must be granted or refused within 120 days of application being accepted19

• Workplans must be approved, require changes or refused within 28 days of lodgement20

MCA Victoria advocates that if no response is provided by the EPA within timeframes that adhere with these MR(SD) requirements, it is deemed that the EPA has no comment on the referral, therefore ERR can continue with its approval timeframes. It is also critical that the EPA be appropriately resourced to ensure internal staff are both capable and knowledgeable in order to provide sound advice within the legislated timeframes.

15 Victorian Government, Environment Protection Act 2017, p. 235 16 Environment Protection Authority Victoria (EPA), Environment Reference Standard (ERS) - Exposure Draft, 2019, p. 3 17 Department of Environment, Land, Water and Planning (DELWP) and Environment Protection Authority Victoria (EPA), Impact Assessment Proposed Environment Reference Standard, 2019, p. 19-20 18 Victorian State Government, Mineral Resources (Sustainable Development) Act 2018, Section 25 (2) (a), p. 64 19 Victorian State Government, Mineral Resources (Sustainable Development) Act 2018, Section 25 (2) (b), p. 64 20 Victorian State Government, Mineral Resources (Sustainable Development) Act 2018, Section 40A, p. 118

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The proposed EPA requirements for ERR response timeframes are considered appropriate (15 days plus a further 32 days for comments).21 However, the regulations should be amended to address the fact that mineral development is not prohibited by the planning scheme (refer to regulation 22(2)(a)) and that any conditions provided by the EPA must be off-lease (22(3)(b)). In addition, stop the clock provisions are not explicit, and should be made known to ensure procedural transparency.

The current Memorandum of Understanding (MOU) between the EPA and ERR must be updated to reflect these requirements.

Recommendation: Amend regulation 22(2)(a) to reflect no prohibition of mineral development.

Recommendation: EPA advice and conditions should reflect regulatory boundaries per Section 3.2.2.

Recommendation: Amend EPA and ERR Memorandum of Understanding to reflect time frames for provision of advice.

3.4. Third Party objections

Victoria’s EP Act 2017 allows for review of decisions by third parties relating to issuing of development licences and removal of suspensions to operating licences. Third parties can object on grounds of unreasonable and adverse effects based on financial, physical or personal interests.22

MCA Victoria agrees that judicial review processes are important to safeguard interests and to protect rights of genuinely affected individuals. MCA Victoria also understands the EPA and other agencies, as part of the state’s whole-of-government regulatory regime, act on behalf of the public.

However, the minerals industry is concerned that the current regulations remain silent regarding what “unreasonably and adversely affected” actually means. The minerals industry has significant experience regarding third parties instigating appeals through courts systems as a way to delay and disrupt projects. Significant disruption and nuisance claims can undermine the ability of a business to operate effectively and efficiently. The test for third parties must be narrow (limiting appeals only to those with potential to be materially impacted) and vexatious claims must be immediately dismissed. Timeframes for considering whether an objection is likely to have merit and can therefore proceed must be short and strictly adhered to. Further objections on the same issue by different objectors must be dismissed.

Additional guidance or regulation, particularly relating to vexatious claims, is warranted.

Recommendation: EPA should amend regulations or develop additional guidance to provide clarity regarding the definition of “unreasonably and adversely affected”.

3.5. Supporting guidance material

Victoria’s State Environmental Protection Policies (SEPPs) have provided clarity regarding requirements for environmental management and performance to the mining industry since their inception in the 1970s.23 While the SEPPs themselves are policies, not regulatory requirements, they are often referenced in mining work plans.

MCA Victoria understands that the proposed ERS adopts and consolidates almost all its environmental values (previously beneficial uses), indicators and objectives from the current SEPPs. MCA Victoria also acknowledges that the proposed ERS is not a compliance standard, and that there is no direct requirement that stems from the ERS for a duty holder to protect, uphold meet or achieve the standards it describes.24

21 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 40-41 22 Victorian Government, Environment Protection Act 2017, p. 401-402 23 Engage Victoria, State Environment Protection Policies (SEPPs), viewed 21 October 2019 24 Department of Environment, Land, Water and Planning (DELWP) and Environment Protection Authority Victoria (EPA), Impact Assessment Proposed Environment Reference Standard, 2019, p. 19

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The ERS sets out environmental standards that the environmental protection framework seeks to achieve or maintain. Other aspects and functions of SEPPs, including definition of roles, responsibilities and compliance obligations are not incorporated into the ERS. Risks are addressed under the GED and other duties, and residual risk management and control is exercised through the proposed Regulations, Obligations of Managers of Land or Infrastructure (OMLIs) and guidance.25

The ‘guidance’ referred to above is essential for companies to appropriately interpret the proposed subordinate legislation.

MCA Victoria understands that SEPPs will still be available as guidance material. However, in some instances, the SEPPs may remain as a ‘primary’ source of guidance, in other instances, they may be superseded.26

SEPPs and WMPs will no longer have a formal role once the new EP legislation comes into effect (intended to come into effect on 1 July 2020). They will, however, continue to contribute to the state of knowledge on relevant risks and risk control measures that they address and will, whilst they remain relevant to each risk, support the operation of the duties under the new EP legislation.27

The EPA must provide clarity regarding what new guidance exists, what new guidance is still to be developed, what existing guidance will be retained, and what existing guidance will be removed. Without a complete suite of materials, and a clear understanding of the information contained therein, the industry’s ability to effectively respond to the new environmental protection regime will be compromised.

The following three examples are provided to government to highlight the need to address this issue regarding complexity of guidance.

Case study: Air quality

Air quality guidance currently used by the Victorian minerals industry includes the following key documents:

• State Environment Protection Policy – Ambient Air Quality (SEPP AAQ) • State Environment Protection Policy – Air Quality Management (SEPP AQM) • Protocol for Environmental Management-Mining and Extractives Industries (PEM) • Recommended Separation Distances for Industrial Residual Air Emissions - Guideline

The ERS has adopted air quality metrics that align with the SEPP AAQ. However, the air quality metrics contained within the SEPP AQM and the PEM have not been translated into the ERS. These metrics differ from the SEPP AAQ because they address different environmental impacts. In addition, the ERS is silent on issues relating to dust deposition. The differences for particulate matter, which are not insignificant, are highlighted below.

Environmental Indicator SEPP AAQ SEPP AQM

PM10 50 µg/m3 60 µg/m3

PM2.5 25 µg/m3 36 µg/m3

According to Deloitte’s Regulatory Impact Statement: Proposed Environment Protection Regulations (RIS), the SEPP AQM ‘will cease to have effect when the EP Act 1970 is repealed’ but ‘would continue to form the ‘state of knowledge’ and as such, business would be likely to be highly aware of their obligations to minimise or eliminate the emission of Class 3 substances’.28 The RIS contains no reference to the retention of SEPP AAQ as part of the ‘state of knowledge’.

25 Department of Environment, Land, Water and Planning (DELWP) and Environment Protection Authority Victoria (EPA), Impact Assessment Proposed Environment Reference Standard, 2019, p. 23-24 26 Dru Marsh - Senior Legal Policy Officer, EPA Victoria, Environment Institute of Australia and New Zealand Seminar: Revolutionising Victorian Environmental Law – implications of the draft Regulations and Environmental Reference Standard, 10 October 2019 27 Deloitte, Regulatory Impact Statement (RIS) - Proposed EP Regulations, August 2019, p. 26 28 Deloitte, Regulatory Impact Statement (RIS) - Proposed EP Regulations, August 2019, p. 184

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The Victorian minerals industry is concerned that without inclusion of the SEPP AQM standards into the ERS, decision makers within EPA will assume that the ambient air quality metrics are the only appropriate goals available. As the particulate matter requirements contained within the SEPP AAQ are substantially lower than those in the SEPP AQM and PEM, this presents significant compliance concerns for the sector which must be addressed.

In the absence of clarity, the Victorian minerals industry seeks confirmation that it is appropriate to continue operating using the SEPP AQM as critical guidance.

Case study: ERR Imported Materials Management Guideline

ERR, like the EPA, develops guidance to assist industry in both complying with legislation and implementing best practice. ERR’s Imported Materials Management Guideline is one example that is currently referred to by the Victorian minerals industry.29 The document is 29 pages long, and provides guidance for managing materials imported into sites for rehabilitation and/or materials recycling. It also lists permissible uses of materials, respective regulators and management requirements.

Specifically, it references eight related guidelines and industry standards that must be read in conjunction with the ERR guidance. Seven of these are EPA documents.

• Industrial Waste Fact Sheet (EPA Publication No. 1624) • Industrial Waste Resource Guidelines – Solid industrial waste hazard categorisation and

management (EPA Publication No. IWRG631) • Industrial Waste Resource Guidelines – Soil hazard categorisation and management (EPA

Publication No. IWRG621) • Industrial Waste Resource Guidelines – Waste Categorisation (EPA Publication No.

IWRG600.2.) • Classification for Drilling Mud (EPA Publication 2015/205) • Designing, Constructing and Operating Composting Facilities (EPA Publication No. 1588.1) • Acid Sulfate Soil and Rock (EPA Publication No. 655.1)

Until this associated reference material is updated to reflect new requirements, industry may be exposed due to potentially conflicting or out-of-date information.

Case study: Noise

Noise guidance currently used by the Victorian minerals industry includes the following key documents:

• State Environment Protection Policy – Control of Noise from Industry, Commerce and Trade (SEPP N-1)

• Noise from industry in rural Victoria (NIRV)

The proposed ERS and associated Noise Protocol have incorporated elements from SEPP N-1 and NIRV. The RIS notes that:

… while the current SEPP N-1, SEPP N-2 and Residential Noise Regulations will no longer be enforceable with respect to civil penalties, the state of knowledge established under these policies and regulations will continue to inform duty holders’ management responses with respect to the emission of noise. 30

In addition, EPA advice provided to MCA Victoria noted that the Noise Protocol is contained within regulation, and as a result, “trumps” SEPP N-1.31

The standards outlined in the Noise Protocol differ from those in the ERS. The ERS outlines night and day indicators and objectives for five different land use categories. Sensitive receptors near mining

29 Earth Resources Victoria, Imported materials management guideline, 2017 30 Deloitte, Regulatory Impact Statement (RIS) - Proposed EP Regulations, August 2019, p. 205 31 Dru Marsh - Senior Legal Policy Officer, EPA Victoria, Environment Institute of Australia and New Zealand Seminar: Revolutionising Victorian Environmental Law – implications of the draft Regulations and Environmental Reference Standard, 10 October 2019

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operations would potentially be category IV, and the ERS notes a night objective of 35 dB(A) and a daytime objective of 40 dB(A).32 The Noise Protocol differs from the ERS. Section 2.7 clause (35), contains a range of limits based on the sensitive receptor zone category, and includes an additional category compared with the ERS.33

Limit dB(A) Day Evening Night

(35)a 45 38 33

(35)b 51 46 41

(35)c 56 51 46

(35)d 46 41 36

ERS 35 Not available 40

This highlights the potential for confusion when interpreting noise requirements based on the ERS, the regulations, and the guidance material available.

In addition, it is imperative that conditions set by the EPA remain specific to individual sites, and that these limits continue to be negotiable. Currently, noise conditions for individual organisations vary, based on specific requirements at each location, as illustrated in the table below.

Limit dB(A) Day Evening Night

Example 1 55 50 45

Example 2 54 46 42

Example 3 51 46 41

Example 4 50 44 39

Example 5 46 41 36

Example 6 45 42 36

Example 7 45 38 33

Recommendation: EPA should clarify the suite of available and relevant guidance material to ensure organisations can meet obligations and comply with new laws and regulations.

3.6. Duplication of requirements

Victoria’s new environmental protection regime overlaps with the Victorian Occupational Health and Safety Act 2004. It is therefore imperative that these two regulators work together to ensure that regulatory effort and compliance activity is not duplicated, or in conflict with one another.

This approach to minimising regulatory burden must also be applied to any potential areas of cross-over between the EPA and ERR. One area of immediate concern relates to administrative reporting requirements. Efforts to streamline and reduce regulatory burden and duplication must be prioritised.

In addition, any duplication of compliance and enforcement activity, for example where there is existing overlap in laws administered by ERR, EPA and WorkSafe Victoria, must be minimised. MCA 32 Environment Protection Authority Victoria (EPA), Environment Reference Standard (ERS) - Exposure Draft, 2019, p. 12-14 33 EPA, Noise limit and assessment protocol - Draft for consultation, September 2019, p. 11

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Victoria advocates for consolidated site visits with relevant co-regulators when assessing and/or auditing the same issue (for example geotechnical hazards, dam construction, dangerous goods etc.).

Other jurisdictions, for example Queensland, have minimal overlap between regulators. This should be Victoria’s goal.

Recommendation: EPA must consult with co-regulators and the Victorian minerals sector to ensure ongoing operational and reporting requirements are non-duplicative.

Recommendation: Amend EPA and ERR Memorandum of Understanding to reflect this approach and ensure ongoing operational and reporting requirements are non-duplicative.

Recommendation: Compliance and enforcement activity should be coordinated across relevant regulators.

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4. ENVIRONMENTAL REFERENCE STANDARD – EXPOSURE DRAFT

As noted earlier in this submission, MCA Victoria understands that the proposed ERS adopts and consolidates almost all its environmental values (previously beneficial uses), indicators and objectives from the current SEPPs. MCA Victoria also acknowledges that the proposed ERS is not a compliance standard, and that there is no direct requirement that stems from the ERS for a duty holder to protect, uphold meet or achieve the standards it describes.34

It is imperative that government ensure that exemptions, variations and exceedances are still possible when the ERS is being used as a decision making tool for the development of licence conditions. It is also essential that the EPA sets conditions within its regulatory scope, and does not duplicate requirements that exist with other regulatory bodies, particularly in relation to on-licence activities regulated by the Earth Resources Regulator.

Minerals sites operating under ERR approvals referencing and/or varying SEPPs must remain valid and only when operations materially change should EPA and the site review the standards.

The following commentary is provided for EPA consideration on specific components of the ERS.

Recommendation: That government consider the concerns raised below regarding the ERS and amend or clarify the ERS and/or supporting documentation accordingly.

4.1. Part 2 - Air

As noted in the Air Quality Case Study in Section 3.5, the ERS is silent on the SEPP AQM and the PEM.

The Victorian minerals industry is concerned that without inclusion of the SEPP AQM standards into the ERS, decision-makers within EPA will assume that the ambient air quality metrics are the only appropriate goals available. As the particulate matter requirements contained within the SEPP AAQ are substantially lower than those in the SEPP AQM and PEM, this presents significant compliance concerns for the sector which must be addressed.

In the absence of clarity, the Victorian minerals industry advocates for EPA confirmation that it is appropriate to continue operating using the SEPP AQM as critical guidance, including referencing the SEPP in relevant work plans.

In addition, the ERS references the National Environment Protection (Ambient Air Quality) Measure (NEPM (AAQ)). This document is currently under review, and it is anticipated that recommendations will be taken to the federal government in April 2020 at the earliest. Any changes to the NEPM (AAQ) and resulting implications for the ERS will need to be carefully considered by government to ensure that jurisdictional application is consistent with the intention of the standard.

4.2. Part 3 - Noise

The proposed ERS standards, as they pertain to noise, are a substantially new reference tool that applies to assessment of the ambient acoustic environment. The impact statement notes that the regulations will set regulatory obligations for duty holders to ensure compliance with relevant noise limits and operating times. The Noise Protocol is an incorporated document to the regulations, setting out methodologies used to calculate specific noise limits for compliance obligations and the control of noise from premises with defined noise sensitive receptors. 35

MCA Victoria welcomes the specific variations for mines contained in Section 5 of the Noise Protocol.36

34 Department of Environment, Land, Water and Planning (DELWP) and Environment Protection Authority Victoria (EPA), Impact Assessment Proposed Environment Reference Standard, 2019, p. 19 35 Department of Environment, Land, Water and Planning (DELWP) and Environment Protection Authority Victoria (EPA), Impact Assessment Proposed Environment Reference Standard, 2019, p. 36, 55 36 EPA, Noise limit and assessment protocol - Draft for consultation, September 2019, p. 14

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As noted in the Noise Case Study in Section 3.5, the information contained in the ERS differs from the Noise Protocol. This has the potential to cause confusion and the differences should be made clear. For example, do the ERS day and night requirements apply equally across weekdays and weekends? Similarly, do the Noise protocol day, evening and night requirements apply equally across weekdays and weekends?

4.3. Part 4 - Land

The ERS has adopted many of the standards from the State Environment Protection Policy (Prevention and Management of Contamination of Land) (SEPP PMCL).

MCA Victoria is concerned that the ERS is silent regarding the status of soils that contain naturally occurring background levels of specific substances in exceedance of NEPM values. Are these soils classified as contaminated waste because they exceed the thresholds, despite the fact that they are naturally occurring? If so, has consideration of the movement of such soil from one location to another occurred? This should be clarified, either in the ERS, regulations or guidance. This issue reiterates the need for the EPA to negotiate conditions with industry that address specific, individual circumstances.

In addition, the ERS does not specifically refer to the Industrial Waste Management Policy (Waste Acid Sulfate Soils) which is currently referred to by the Victorian minerals industry for management of potentially acid forming waste. In the absence of clarity, the Victorian minerals industry advocates for EPA confirmation that it is appropriate to continue operating using the policy as critical guidance, including referencing the policy in relevant work plans.

4.4. Part 5 - Water

The ERS has adopted many of the standards from the State Environment Protection Policy (Waters) (SEPP Waters), but does not include other aspects from the SEPP including rules and obligations, and measure for the management of risks.37 Other examples of additional EPA guidance that inform industry management of risks associated with water include:

• EPA Victoria Sampling and Analysis of Waters, Wastewaters, soils and wastes38 • Groundwater Sampling Guidelines39

As addressed in other parts of this submission, it is essential that this excluded information be adequately addressed in the regulations and/or EPA guidelines to support the General Environmental Duty.

In the absence of clarity, the Victorian minerals industry advocates for EPA confirmation that it is appropriate to continue operating using the SEPP Waters as critical guidance, including referencing the SEPP in relevant work plans.

37 Department of Environment, Land, Water and Planning (DELWP) and Environment Protection Authority Victoria (EPA), Impact Assessment Proposed Environment Reference Standard, 2019, p. 69 38 EPA, Sampling and analysis of waters, wastewaters, soils and wastes, 2009 39 EPA, Groundwater Sampling Guidelines, 2000

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5. ENVIRONMENT PROTECTION REGULATIONS – EXPOSURE DRAFT

MCA Victoria provides the following commentary for EPA consideration of specific components of the proposed Environment Protection Regulations.

Recommendation: That government consider the concerns raised below regarding clarifications and/or amendments to the regulations and/or supporting documentation.

5.1. Chapter 2 – Contaminated Land

5.1.1. Division 1 – Prescribed notifiable contamination

The EP Act 2017 specifies that notifiable contamination is either contamination that is prescribed, or where not prescribed in regulations, contamination that would be likely to cost more than $50,000 to remediate.40 The proposed regulations outline prescribed notifiable contamination.41

This is a change in approach from current practice for notification. MCA Victoria welcomes this change, and requests that government confirm that any notifications for remediation which is not prescribed and costing less than the $50,000 outlined in the Act be voluntary.

5.2. Chapter 4 – Waste

5.2.1. Part 4.2 – Industrial waste and priority waste

Regulation 62 relates to the classification of soil sourced on-site from contaminated land. As noted in Section 4.3, the regulations do not specify how soil containing naturally occurring levels of substances above NEPM limits should be classified. It is recommended that government provide clarity on this issue.

Industrial waste is defined as waste arising from commercial, industrial or trade activities or from laboratories, or prescribed waste.42 Schedule 1 of the proposed regulations states ‘activities discharging or depositing mining or extractive industry wastes solely to land, and that are in accordance with the Mineral Resources (Sustainable Development) Act 1990’ are excluded as a prescribed permission activity.43 MCA Victoria advocates that mining-related industrial waste, including but not limited to tailings, waste rock, overburden and waste soil, generated and managed within the operating boundary, be exempt from the industrial waste requirements outlined in Part 4.2 of the proposed regulations. It is recommended that government provide clarity on this issue.

If not exempt, MCA Victoria requests further consultation with EPA to ensure the Victorian minerals industry is able to comply. To illustrate this, a sample of concerns for the management of contaminated soil under proposed requirements is provided below.

Snapshot: Contaminated soil classified as Category D

Issue 1: If Category D contaminated soils can no longer be applied as clean fill, this may increase both effort and cost to manage these soils if they have to be removed from site.

Issue 2: The ‘project site’ definition within which Category D soils can be stored and re-used should be broadened to include multiple titles or multiple different types of tenure, provided that the storage purpose is connected to reflect the scale of materials that mining operations may generate.

Issue 3: The five year duration period for a Category D storage permit may not be sufficient duration for a mining project with a long life, and should be negotiable on a case-by-case basis.44

Issue 4: The Waste Disposal Categories – Characteristics and Thresholds document does not include 40 Victorian Government, Environment Protection Act 2017, Part 3.5 clause 37, p. 66 41 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 29-34 42 Victorian Government, Environment Protection Act 2017, p. 34 43 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 214-215 44 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, Regulation 30(c) and Schedule 1 Item 25 p. p. 52, 207

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fill material upper limit concentration thresholds for a number of contaminants, including per- and poly-fluoroalkyl substances (PFASs).45 The document should provide for fill material upper limits, or if no standard upper limit is considered appropriate, have regard to background levels. In practice, this would allow for disposal as clean fill if PFAS in the waste soil is no higher than background PFAS at the disposal site.46

5.2.2. Exemption of tailings from EPA regulation

MCA Victoria’s review of the proposed Regulations and ERS indicates that tailings will remain exempt from EPA involvement and regulation as it is generated on licence and managed via the MR(SD) Act 1990. The EPA was requested to confirm this interpretation of the proposed subordinate legislation is valid.

The EPA has confirmed this understanding, and provided the following information via email on 9 October 2019.

The generation of tailings is not regulated through EPA development licence or operating licence, because it is covered by MRSD Act 1990, nor is management of tailings within site boundaries because it is also covered by MRSD Act 1990. However, water discharges into the environment would be regulated through EPA development licence and operating licence.

MCA Victoria appreciates receipt of this advice, and requests that government include this advice in any relevant guidance or supporting documentation being developed to support the draft subordinate legislation.

5.3. Chapter 5 – Environmental Management

5.3.1. Part 5.2 – Air

The proposed regulations outline requirements for complying with the National Pollution Inventory (NPI).47 It is essential that the regulatory requirements stipulated in the proposed regulations not result in additional effort or reporting burden for industry. It is important for EPA to be aware that the NPI is currently under review. The MCA made a formal submission to this review, which is available for EPA consideration.48 The final report and associated findings will not be released until 2020 or 2021. Any outcomes of the review which amend the NPI may necessitate changes to be incorporated in the draft regulations.

5.3.2. Part 5.3 – Noise

The proposed regulations outline requirements for complying with the Noise Protocol.49 The proposed regulations, and the Noise Protocol itself, appear to be silent on a number of issues raised by MCA Victoria in early consultation held with the EPA and Deloitte in February 2019. These issues are noted again for EPA consideration:

• The proposed regulations and the Noise Protocol appear to be silent regarding NIRV (Noise from Industry in Regional Victoria) guidelines. To ensure consistency of application across the state, MCA Victoria advocates for the broad limits set in NIRV to be included in regulation. Other instruments (not the NIRV), will continue to regulate approval for mining and variations in terms of setting noise limits at sites.

• The ability to obtain noise variation permissions around exceedances in terms of volume and duration must be considered on a case by case basis, rather than having prescribed formulas contained within regulations that may not address specific industry requirements.

45 PFASs are a group of manufactured chemicals used in a range of household products, some industrial processes and some types of fire-fighting foam 46 Environment Protection Authority Victoria (EPA), Waste Disposal Categories – Consultation draft, September 2019 47 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 115-122 48 Minerals Council of Australia, Submission on Review of the National Pollution Inventory, 9 August 2018 49 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 126

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• Understanding background noise limits is often difficult, and can be particularly so when industry existed in a location prior to urban encroachment. This issue must be considered by the EPA when establishing conditions.

• Noise Limits/Durations standards are specified within the Noise Protocol. However additional clarity is requested regarding how variations can occur.

5.3.3. Part 5.4 – Water

The proposed regulations are silent regarding how the EPA will authorise emergency storage and discharge of water per the EP Act 2017, clause 157, page 180 (previously Section 30(A)).50 The only reference provided in the proposed regulations is in relation to fees associated with applying for authorisation of emergency storage or use of waste.51

Currently, operators can seek permission for approval to release only after a flood event has happened. This approval process needs to be immediate and should be reflected in the proposed regulations.

Government should consider the suitability for Victoria of Queensland’s Temporary Emissions License system, which can be applied for in either anticipation, or as a result, of an applicable event. This could be, for example, discharges to water when flood waters are due to reach the operation within hours or days. Decisions must be made within 24 hours of receipt of the application.52 Alternatively, some sites have been granted pre-approval for emergency storage and discharge if certain conditions are met. The advantage of these options is that discharge can be planned for, managed for appropriate times and minimise breach or potential structural failure of water holding facilities. This pre-approval process could be made available for all operators.

5.4. Chapter 6 – Environmental audits and financial assurances

5.4.1. Part 6.2 – Financial assurances

Proposed regulation clause 163 outlines risk assessment criteria that should be considered in relation to financial assurance.53

As discussed in Section 3.2.1, it is crucial that mining companies operating in Victoria not be required to pay multiple financial assurances for the same risks under two different Acts (the EP Act 2017 and the MR(SD) Act 1990). As discussed in Section 3.2.1, the regulatory boundaries between the EPA and ERR must be firmly adhered to so that duplication does not occur.

5.5. Chapter 7 – Enforcement

MCA Victoria advocates that the Government adopt an education approach to enable business to achieve compliance and that a hierarchy of enforcement approaches be applied when administering the proposed regulatory requirements for environmental protection.

5.6. Chapter 8 – Fees

5.6.1. Part 8.8 – Other fees – Better Environment Plans

The EP Act 2017 refers to Better Environment Plans.54 From the relevant sections of the Act, including the definition provided, it is not clear whether or not this is a compliance requirement, or a voluntary plan that can be provided to the EPA. Nor is it clear what must be included.

The proposed regulations provide information on the fees associated with submitting and amending a better environment plan, but are silent regarding why a plan would be required, what should be

50 Victorian Government, Environment Protection Act 2017, clause 157, p. 180 51 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 179 52 Queensland Government, Department of Environment, Temporary emissions licence guideline, October 2015 53 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 161 54 Victorian Government, Environment Protection Act 2017, Part 8.2, p. 198-205

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included, and who it should apply to.55 The RIS does not provide any additional information to further understand Better Environment Plans.

The EPA website notes that Better Environment Plans are ‘voluntary agreements that allow the EPA to formally accept an innovative way of complying with the Act’, and that the EPA ‘will support you to understand when a Better Environment Plan can be proposed and how to design the plan’ and that these will undergo EPA assessment and approval.56

The MRSDA requires mining work plans include an environmental management plan. Industry does not seek to have this duplicated.

MCA Victoria recommends that the EPA provide clarity on this issue regarding relevance to the Victorian minerals industry.

5.7. Chapter 10 – Savings and transitionals

5.7.1. Part 10.2 – Permissions

The proposed regulations allow for transitional provisions in order to translate old permissions into the new EPA categories. The EPA may amend old permissions within 12 months of commencement of the new EP Act and associated regulations.57

It is imperative that the process of converting/translating existing permissions into the new environment protection framework is effective, and that all existing permissions are “grandfathered” appropriately in the twelve months following the introduction of the Act and proposed regulations. Companies should not have to go through full public consultation and objection processes for any translated permissions, and government must not apply new requirements retrospectively.

Significant infrastructure and equipment is purchased to enable a site to comply with a range of requirements, including specific environmental management risks. Ad hoc changes to requirements can result in significant financial costs, often without material improvement in outcomes.

It is also essential that the new permissioning regime allow for exemptions, variations and exceedances on a case-by-case basis.

It is crucial that government consult with individual companies when undertaking this process.

5.8. Schedule 1

MCA Victoria requests that the following items contained in Schedule 1 of the proposed regulations be clarified and/or amended to ensure that duplication of regulation, including operational requirements and imposition of fees, does not occur between the EPA and ERR.

Item Summary Issue

7

and

8

A05a (Landfills excluding municipal landfills serving <5000 people)

and

A05b (Municipal landfills serving <5000 people)

The relevant descriptions in column 3 for items 7 and 8 note that landfills used only for the discharge or deposit of mining or extractive industry wastes are excluded from Schedule 1. It is recommended that the EPA articulate that this exclusion also incorporates tailings storage facilities and waste rock dumps. This relates to advice received from the EPA as noted in Section 5.2.2 regarding the exemption of EPA involvement in tailings regulation given it is dealt with via ERR under the MR(SD) Act 1990.

13 A09a (Waste tyre Large mining vehicle tyres can weigh up to 7000kg and measure

55 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 179-180 56 Environment Protection Authority Victoria (EPA), What the new Act means for Victorian businesses, viewed 21 October 2019 57 Environment Protection Authority Victoria (EPA), Environment Protection Regulations - Exposure Draft, 2019, p. 185-192

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and

14

storage – large)

and

A09b (Waste tyre storage – small)

almost 4 metres in diameter. Accordingly, the trigger for prescribed permission activities to store more than 40 tonnes of waste tyres could be triggered by holding six used tyres on site.

Where possible, the mining industry seeks to repurpose end-of-life tyres during operations, for example in the construction of safety barriers along roads. Given the isolation of many mine sites, approved alternative disposal methods or storage for cost effective bulk transportation occurs. Often old tyres are stockpiled whilst awaiting collection to authorised waste repositories or recycling centres.

The EPA should exclude mine-related end of use tyres from this Schedule.

54 G04 (Bulk storage) Mining operations often have bulk storage for hydrocarbon compounds including petroleum products or oil. These are regulated by both ERR via the MR(SD) Act 1990 and WorkSafe via Victoria’s Occupational Health and Safety (OH&S) and Dangerous Goods laws.

Any additional regulation via the EPA, in the form of extra conditions or fees, will be duplicative and hence this requirement should be excluded for mining operations.

63 I01 (Primary metallurgical)

For Victorian mining operations that smelt ore or ore concentrates to produce metal, these activities are regulated by ERR through the MR(SD) Act 1990.

Any additional regulation via the EPA, in the form of extra conditions or fees, will be duplicative and hence this requirement should be excluded for mining operations.

64 I02 (Metal melting) For Victorian mining operations that melt metal in furnaces with a design rate of at 2 tonnes per hour for non-ferrous foundries,, these activities are regulated by ERR through the MR(SD) Act 1990.

Any additional regulation via the EPA, in the form of extra conditions or fees, will be duplicative and hence this requirement should be excluded for mining operations.

74 L02 (Contaminated sites – on-site soil containment)

Concerns regarding clarity for managing contaminated soils has been raised throughout the submission, specifically in sections 3.2 (regulatory boundaries), 4.3 (naturally occurring background levels) and 5.2.1 (classification).

Further consideration of these issues by the EPA is recommended.

75 L03 (Tunnel ventilation systems)

MCA Victoria requests that the EPA confirm that this item relates to public infrastructure, not ventilation systems associated with underground mining operations which are accessed via tunnels and are already regulated under both the MR(SD) Act 1990 and Victoria’s OH&S laws.

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6. FURTHER INFORMATION

To request further information in relation to this submission please contact:

James Sorahan, Executive Director Minerals Council of Australia Victoria james.sorahan@minerals.org.au

Lorna O’Connell, Manager – Policy and Research, Minerals Council of Australia Victoria lorna.o’connell@minerals.org.au