Bills

Whyalla Steel Works (Environmental Authorisation) Amendment Bill

Standing Orders Suspension

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (11:02): I move, without notice:

That standing orders be so far suspended as to enable the introduction without notice of the Whyalla Steel Works (Environmental Authorisation) Amendment Bill.

The SPEAKER: An absolute majority not being present, ring the bells.

An absolute majority of the whole number of members being present:

Motion carried.

Introduction and First Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (11:04): Obtained leave and introduced a bill for an act to amend the Whyalla Steel Works Act 1958. Read a first time.

Second Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (11:04): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Bill I am introducing today will extend by a further 10 years the environmental authorisation provided to OneSteel Manufacturing Pty Ltd (i.e. OneSteel), a wholly owned subsidiary of Arrium Ltd, and the company operating the Whyalla Steel Works.

The purpose of the Bill is to amend section 15 of the Whyalla Steel Works Act 1958 to extend the environmental authorisation provided under the Environment Protection Act 1993 and insert provisions to allow Schedule 3 of the Act to be updated to reflect variations to the authorisation.

Under Schedule 3 of the Environment Protection Act, the company is licensed by the Environment Protection Authority (EPA) to 'undertake particular activities of environmental significance under Schedule 1 Part A of the Environment Protection Act 1993', subject to stipulated conditions. Arrium pays a licence fee to the EPA.

The Whyalla Steel Works Act 1958, formerly the Broken Hill Proprietary Company's Steel Works Indenture Act 1958, approves and ratifies an Indenture between the State of South Australia and OneSteel relating to the operation of its steel works in Whyalla.

The Whyalla Steel Works Act 1958 was previously amended in 2005 to include the addition of Section 15 – Company granted environmental authorisation under the Environment Protection Act 1993. The authorisation is due to expire on the 4th of November 2015 on the 10^th anniversary of the commencement of the section.

The initial environment authorisation granted by this Amendment provided OneSteel with regulatory certainty required to invest about $400 million to undertake Project Magnet. The implementation of the project resulted in significant environmental improvement such as the virtual elimination of the red dust problem which had bedevilled Whyalla for decades.

The success of Project Magnet provided Arrium with the confidence to further invest in its Whyalla operations including more than $1 billion to both expand the capacity of the Port of Whyalla and broaden its mining operations in South Australia to include the acquisition of Peculiar Knob.

The Whyalla Steel Works (Environmental Authorisation) Amendment Bill 2015 amends the provisions in the Whyalla Steelworks Act relating to the environmental authorisation by deleting 10^th anniversary and substituting 20^th anniversary so that the expiry will take place on the 4th of November 2025.

This amendment provides a 10-year extension of the environmental authorisation to continue to provide Arrium with the regulatory certainty required to continue to adapts its business model to the current low iron ore price environment and highly competitive steel market.

The Bill also inserts Section 20 to set out provisions for Schedule 3 of the Whyalla Steel Works Act to be updated to reflect variations in the environmental authorisation at the request of the Minister.

Since the environmental authorisation was granted to the company in 2005, Arrium/OneSteel has demonstrated an improved performance in its environmental obligations to the State.

In August, 2010, the Environment Protection Authority awarded OneSteel with an EPA Sustainability Licence to reflect its genuine commitment to reducing its impact on the environment through reduced reliance on the River Murray, improved energy and carbon efficiency, improved environmental awareness amongst staff and for promoting values and initiatives that actively engaged the Whyalla community.

OneSteel has agreed at an officer level that, during the 10-year extension to the authorisation provided by this Bill, it will work with the EPA so it can recommend to the company's Board that the operations at Whyalla transition to a normal EPA-issued licence.

Arrium is a major employer in South Australia with a workforce of 3,400 directly employed workers and directly employed contractors assigned to its steel, mining, recycling and support services businesses.

Exports of hematite through its Whyalla port and the manufacture of steel using magnetite sourced from the Middleback Ranges make Arrium one of the major industries not just in the Whyalla region but also the Upper Spencer Gulf and the State.

Arrium is a significant economic contributor to the State and the lynchpin for industry and investment in the Upper Spencer Gulf. The extension of its environmental authorisation and the continued regulatory certainty provided by this Bill will better enable Arrium to meet the challenges it now faces in a rapidly shifting market place.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Amendment provisions

These clauses are formal.

Part 2—Amendment of Whyalla Steel Works Act 1958

3—Amendment of section 15—Company granted environmental authorisation under Environment Protection Act 1993

This clause amends section 15(7) of the principal Act to extend the period the environmental authorisation remains in force until the 20th anniversary of the commencement of that section.

4—Insertion of section 20

This clause inserts new section 20 into the principal Act. The new section allows the Commissioner for Legislation Revision and Publication to revise Schedule 3 of the principal Act to reflect variations of the environmental authorisation set out in the Schedule.

Debate adjourned on motion of Mr Gardner.