MINING (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. D.W. RIDGWAY (Leader of the Opposition) (16:38): I rise on behalf of the opposition to speak to the bill. As members will be aware, of course, this is a reform of the Mining Act that the minister spoke about prior to the election. Of course, it is the same minister so we are dealing with it first up in this chamber.

The opposition welcomes the review of the Mining Act. It was initially the Mining Act of 1971, as I read from the bill. It has been amended over the years, and notwithstanding the way the minister and the Premier twist a number of the facts about mining (and I know that you are amazed and astonished that they would skew the facts) I suspect that it is probably one of the few areas in South Australia's history that has enjoyed bipartisan support. In fact, I have a couple of banners in my office that show the chronological history of the department of mines and energy and now PIRSA, and it is quite amazing the number of ministers from all political persuasions who have had a significant impact on the industry. As I said, it has been widely supported by both sides of politics. Certainly, we know that the greatest mine in South Australia was opposed by the current Premier when it was in its infancy. In fact, the Premier has had a change of heart, and it is very convenient for him to do that.

The Hon. P. Holloway interjecting:

The Hon. D.W. RIDGWAY: The minister said, 'Ever since he's been in parliament,' but he did his level best to stop it when he was not in parliament. People are entitled to change their mind. The Premier changes his mind, and the Treasurer loses his mind and forgets things every now and again. I think many former Liberal governments have a legacy of supporting the growth of mining in South Australia. The Liberal Party was the first to provide exploration incentives through the targeted exploration initiative in South Australia, later rebadged as PACE by the Labor Party.

The Hon. P. Holloway interjecting:

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The minister is out of order.

The Hon. D.W. RIDGWAY: I would check those facts. The minister said it was something that happened in 1992. There would not have been much money put into it, because you lost most of it in the State Bank. Nonetheless, if that is the case, again, it shows bipartisan support.

Some time ago I found on the PIRSA website a document entitled, 'South Australia's mining projects pipeline'. This document listed prospects, projects and operational mines and indicated those that had received PACE funding. Interestingly, the documents show that only one of the then nine operational mines had received PACE funding. This was certainly interesting for a government that in the past has said that its encouragement of exploration amounted to 10 operational mines.

I recall in one of my two estimates periods, as the mineral resources shadow minister, that the budget announced that the highly successful PACE program, at $22.5 million over five years, would be extended with an additional $8.4 million over another two years until at least 2010-11. However, taking into account additional funding and the program extension, the annual funding actually decreased from $5.6 million a year to $3.5 million. The decrease in the average spending did not reflect the success of the program.

In 1999 the then Liberal government established the mining industry task force, which recommended amongst other things the setting of targets for both mineral resource exploration and mining activity. These targets were accepted by that government (the Liberal government) and continue to be the targets for the state Labor government. With the success of mineral resource exploration, a number of new mines have opened or are in advanced planning stages.

Premier Rann has stated that the mining success is not due to natural forces but to his government's survey work and encouragement of exploration. In 2008 he stated that this was supported by the fact that only four mines were operational when they came to government and now there are 10. What he did not mention is that many of these operators received their first exploration licences under the previous Liberal government.

The minister would be aware that there is a significant time frame between application for exploration licences and the commencement of mining operations as a result of the exploration. Nevertheless, the opposition supports this long-awaited amendment bill with a number of changes to the legislation and a great deal of modernisation, which is needed to support this quickly changing and growing sector.

Rather than talk any longer in general terms about the mining industry, I will table a number of amendments on behalf of the opposition and I would also like to address the amendment bill and put a number of questions on the record for the minister to answer when he sums up.

Clause 4 redefines the term 'mining operator'. I indicate that the opposition will be seeking to amend this definition as the industry is concerned that the person on the ground of the mining operation may not always be the tenement holder. In the definitions, a 'mining operator' means the holder of a relevant mining tenement. Of course, members would be aware that people might have a mining tenement, but they may not always be the operator of the mine; so, we will be looking to move an amendment to that.

Also in clause 4, which amends section 6—Interpretation, in subclause (9), after subsection (3) of section 6, new subsections (4), (5) and (6) are added to define 'environment'. Our assumption is that, by defining the environment in this way, they can then just use the word 'environment' elsewhere in the act. It sort of makes sense, but paragraphs (c) and (d) talk about 'existing or permissible land use' and then 'public health, safety or amenity'. Our understanding was that some of these things would have already been dealt with by the Occupational Health and Safety Act and, I suspect, the act under the environment minister for existing or permissible land use. So, I would like an explanation as to why they have been rolled into this particular amending clause.

Further on, clause 7 inserts a new section, 'Special declared areas'. I ask the minister how he sees the main purpose of this new section and how he sees it will work. The opposition will be seeking an amendment to deal with the minister's accountability in terms of reasoning to declare a particular area a special area, and we feel that those reasons should be documented and made public. Subsection (8) of the new section provides:

(8) A declaration under subsection (1) will expire at the end of the period of 2 years from its date of operation unless it is extended for a period or periods, not exceeding 2 years at a time, by further notice, as published by the Minister in the Gazette.

I will deal with it later, but we will be looking to amend this to allow it to be treated as a regulation, so that new subsection (8) provides that it can be extended by the minister. We think that these extensions should be treated as regulations, that the minister should signal his decision to parliament and that it should be a disallowable regulation or instrument. So, the minister can declare a special area but, when he comes to extend it for a period of up to two years, he has to table the reason for doing so and the extension will be disallowable by the parliament, as we do with regulations.

Clause 8 talks about the appointment of authorised officers. As far as the opposition understands, this seems to reflect the Petroleum Act. We are seeking clarification on why new section 14 is so broad. It provides that the minister is able to appoint anyone to that position, which one would think is reasonably specified. I further indicate the opposition will be moving to amend this section so that any appointment of a person outside the minister's agency must have a specific purpose for the appointment and, given some of the powers of authorised officers, it seems fitting that they are only given to the right people. We will also be seeking to make sure that these appointments are gazetted. I would like some clarification from the minister on new subsection 14(1), which provides:

(1) The Minister may, by instrument in writing, appointment a Public Service employee to be an authorised officer under this Act.

In a lot of cases with mining operations (in fact, a lot of operations of government, but certainly in this case) you would need some expertise to be an authorised officer—undoubtedly, if you are operating under this act and discharging some of the duties of authorised officers.

It seems to be very broad that somebody, who might be very capable in their chosen profession of working for the government with a particular skill set, could find themselves becoming an authorised officer and then not having the appropriate skills to deal with the job at hand. So, I would certainly like some clarification as to why the minister thinks that virtually of the 97,000 public servants we have could be appointed to be an authorised officer under this bill.

Further on, in clause 8, under production of records, it provides:

(1) This section applies to records relating to mining operations.

(2) A person who has possession or control of a record to which this section applies must, at the request of an authorised officer—

(a) produce the record for inspection by the authorised officer; and

(b) answer any questions that the authorised officer reasonably asks about the record.

Maximum penalty: $10,000 or imprisonment for six months

(3) An authorised officer may retain records produced under this section for the purpose of making copies of them.

I think we can all accept that the authorised officer may need to make copies of these records. However, it does not say how long the authorised officer can hold them. If they are records of a mining or business operation and the person providing the records is not able to provide a copy on the spot and the authorised officer takes them away, how long can records be retained? It seems to be a little open-ended. Maybe it could indicate that 72 hours or seven working days might be a reasonable time frame to allow the authorised officer to copy the records and return them. I indicate that, if we do not receive a satisfactory answer, we may look to amend this clause.

The opposition agrees with a lot of the amendment bill, and I will not cover it in any great detail. Our next query relates to clause 16, granting of exploration licence. As far as we can see, previous subsection 28(7) basically provides that the minister cannot grant a licence if she or he had given a public undertaking that such an action would not be taken. Why amend the section to allow the minister to take actions contrary to his or her public statements? It does not really make a lot of sense.

Clause 17 relates to the application for an exploration licence, and the amendment is quite strange. It provides:

(1a) If—

(a) an exploration licence has expired or been cancelled or surrendered; or

(b) part of the area of an exploration licence has been reduced,

an application for a corresponding licence may not be made during a succeeding period specified by the minister by notice published in a manner and form determined by the minister.

Can the minister explain what he is trying to do with this measure, because it is somewhat confusing. Perhaps the minister can give us some examples to clarify how he sees this amendment working.

The next clause I turn my attention to is clause 19, which relates to the term and renewal of exploration licences. The industry has indicated that it has some concerns in relation to this, and those concerns are shared by the opposition. In simple terms, the amendment to section 30A(6) provides that the minister reserves the power to change the contract of an exploration licence. Clause 19 provides:

The minister may, on renewing an exploration licence, add, vary or revoke a term or condition of an exploration licence.

An exploration licence is like a contract. A mining contractor gets an exploration licence, and they go out and explore. If the minister varies the licence at any time, it is like varying the contract, and we are a little concerned about that. If you look at contract law, where else in contract would these kinds of powers be reversed? In what circumstances would they be used?

This clause is repeated throughout the bill in relation to various licences and leases. Certainly, if we do not receive a satisfactory answer, we will consider looking at some amendments. If we receive a reasonable explanation from the minister, we would probably be quite happy with that. However, it does seem a little strange.

I would next like to comment on clause 23 of the government's bill. Again, it is about the granting of a mining lease and our concern, again, is that it enables the changing or revocation of 'any term or condition imposed by the Minister' and can 'impose any term or condition considered appropriate by the Court'. It appears in section 9; however, it makes sense, given that the lease has a 21 year term. We would still question its application to exploration licences and retention leases, given they only have a five year period. To actually change something mid-term, especially if you have a mining lease—a mining operator's whole operation is set up with a set of terms and conditions that they are happy with—that the minister can change, then clearly that would cause some concern for industry and for the opposition, notwithstanding that a mining lease has a 21 year period, whereas an exploration lease only has a five year period.

Clause 26 is also of concern. This amends section 39 of the act regarding rights conferred by lease, which speaks about the sale of waste materials produced as a result of mining operations. The question is how you would treat the profits from those particular activities, which I assume are rock, rubble or some by-product of mining that may well be road making material—it might actually be sensible for that to be used.

However, we are not quite sure how the profit would be attributed. If we are unfortunate enough to have this super profits tax imposed upon us, would those profits from the sale of those products be included in the mining operations general profits, or would they be treated as extractive industry profit? I think there needs to be some clarification. The opposition supports the sale of other products from within a mine, but the industry needs to have some clarification of how those profits would be treated. They are not part of the mining royalties, so would they be part of the mining gate price profit or extractive industries? Do they pay into an extractive industries rehabilitation fund? There is a whole range of questions posed by that particular amendment.

Clause 27 talks about the suspension or cancellation of the lease. Can the minister clarify section 41(5), which provides:

The Minister may, as a result of an appeal to the ERD Court, reinstate a mining lease to a date that coincides with the initial date of a cancellation or suspension, or such later date as may appear to the Minister to be appropriate in the circumstances.

I would like some clarity on that. I indicate that the opposition will be seeking an amendment to the otherwise untouched section 54 about compensation. We would like to see an additional component of compensation possible under the act that would be payable to a landowner in relation to certain negotiations and disputes. This would be repeated in section 61 to allow a landowner to have some compensation for legal costs.

I have been approached a number of times as a member of this place and a former farmer by farmers who have had rights of entry for exploration served on them by mining companies. It is a quite daunting time if you are a small farmer. In one case a farmer had the notice served on him right at the beginning of seeding time. He had three months to respond, but of course there are significant costs. You have to get legal advice and it is quite an impost on the landowner. With our modern farming, timing is very important. There are seeding and harvest times, but then we have different types of farming operations. The opposition sees the easiest way to help landowners in that situation is to give them an opportunity to recover or have their legal fees paid so that they are not out of pocket at all by the whole process of being approached by either an exploration or a mining company.

We have one farmer, of whom I think the minister is probably aware, in the electorate of Goyder who has contacted the member for Goyder, Stephen Griffiths. They have an exploration licence over their farm, but the company does not know when it will explore. It is a coal mine, from what I understand. The farmer has a couple of sons and, from the little bit of information I have, he would like to expand or at least wants to make future decisions about his farming operation, his family and whether they should expand—a whole range of things. I am sure you would appreciate, Mr President, that a family farm is an important part of our rural communities.

In this case this person and his family have a cloud hanging over them. There is an exploration licence; they may explore, they may not. They might find something, they might not. From the viewpoint of the bank and certainty—the Hon. John Gazzola is laughing.

Members interjecting:

The Hon. D.W. RIDGWAY: The Hon. John Gazzola apparently was laughing at one of my colleagues rather than at my comments. I certainly do not attribute his laughter to my comments.

The Hon. T.J. Stephens interjecting:

The Hon. D.W. RIDGWAY: It was at the Hon. Terry Stephens. I know it is late in the week, but nonetheless—

Members interjecting:

The Hon. T.J. Stephens: Throw us out.

The PRESIDENT: Order! The Hon. Mr Ridgway should not be distracted by a couple of miners!

The Hon. D.W. RIDGWAY: In these circumstances there is a financial concern for—

Members interjecting:

The Hon. D.W. RIDGWAY: They are not bad, this lot: they think they can talk whenever they want. I would like the minister to consider these circumstances. I do not know how you quite deal with it from a landowner's viewpoint. There is an exploration licence hanging over them, they want to make financial decisions about expanding the farming operation or selling the land—there is a whole range of considerations—and this is like a cloud over the future of their farm. I suspect it has impacts from a banking and financing viewpoint, for a whole range of reasons. I would like the minister to give the matter some consideration because I do not really know how to deal with it, but it needs to be looked at.

Clause 37 is the next clause I will address. It relates to notice of entry and involves an amendment to section 58A(6), and the penalty provision is to be substituted with a maximum penalty of $50,000. I highlight this because it is a substantial increase. I know there is a significant penalty for illegal mining, and some of the activities mentioned in the bill have a significant penalty, and it needs to be a deterrent. Many penalties have gone from $1,200 to many tens of thousands of dollars: I have noticed $50,000, $120,000 and $250,000. The minister made some mention in his second reading explanation of a deterrent for illegal mining, and we all accept that, but I would like an explanation as to why these fines and penalties have gone up by such a significant amount.

Clause 38, relating to the use of declared equipment, amends section 59(1ac) by deleting 'and the minister to whom the administration of this act is committed' and substituting 'the Director of Mines'. An application is made to the Director of Mines to use declared equipment for mining operations, with the subsequent referral of an application to a relevant minister. If the director and the minister cannot agree on an application, as we understand it, this subsection is taking away powers from the mining minister and handing them to the director in terms of negotiating on applications. That is, again, with the use of declared equipment. We would like an explanation from the minister as to why it is just the Director of Mines and not the minister still included. Surely, the minister is the person accountable to the people and the parliament, and we would have thought that it seems to be sensible that he should still be involved. Nonetheless, we would like an explanation.

The next amendment that we would like some clarification on is clause 46 which relates to the mining and rehabilitation plans (MARPs). New part 10A, section 70B—Preparation or application of program under this part, under subsection (2), provides:

A program under subsection (1) must—

(a) specify the mining operations that the holder of the mining tenement proposes to carry out in pursuance of the tenement; and

(b) set out—

(i) the environmental outcomes that are expected to occur as a result of the mining operations (including after taking into account any rehabilitation proposed by the holder of the tenement and other steps to manage, limit or remedy any adverse environmental impacts); and

(ii) the criteria to be adopted to measure those environmental outcomes;

The minister might like to clarify—from what we understand and what we would assume—that these environmental rehabilitation programs have been done, and they have already been done in an informal manner for some time, known as MARPs. We understand this amendment simply gives power to the minister to insist on a MARP being drawn up.

Further, the interpretation is that the clause effectively states that the regulations may provide for some sort of code or template for a MARP under subsection (8), or it would be prepared under subsection (2) in a less prescribed manner. So, we have some concerns in that situation. We would like some clarification from the minister.

Under the same clause, we have a concern about subsection (10). Should the minister not have to give cause for determining that:

Subsection (9) does not apply in relation to mining operations carried out by the holder of a particular mining tenement if the Minister has, by notice to the holder of the tenement, determined that the subsection will not apply in the circumstances of the particular case.

Subsection (9) provides:

If—

(a) a program is in place under subsection (8); and

(b) the mining operations to be carried out by the holder of a mining tenement fall within the ambit of that program,

the holder of the mining tenement may, subject to complying with any requirement prescribed by the relations for the purposes of this subsection, rely on the program prescribed by regulations rather than a program prepared under subsection (2) or (3) (and subsections (4) to (7) will not apply).

As I said, subsection (10) provides:

Subsection (9) does not apply in relation to mining operations carried out by the holder of a particular mining tenement if the Minister has, by notice to the holder of the tenement, determined that the subsection will not apply in the circumstances of the particular case.

It is our view that the minister should give cause for why he has made that determination, and there does not seem to be a provision for appealing the minister's determination at that particular point either, so we would like an explanation on that.

The next part is new part 10B of that clause 46, which is quite a large clause, and so it is a lengthy amount of text into the new act. For the most part, we are comfortable with part 10B. These environmental issues have probably been happening loosely for some time. I will read this small bit out:

If, in the opinion of an authorised officer—

and given that an 'authorised officer' can be anybody from the Public Service under this current act—

(a) mining operations are being conducted in a way that results in, or that is reasonably likely to result in—

(i) undue damage to the environment; or

(ii) a breach of the environmental outcomes under a program under part 10A; and

(b) it is urgently necessary to take action under this subsection,

the authorised officer may, by written notice given to any person involved in undertaking the mining operations (an environmental direction), direct that action be taken to comply with specified requirements to prevent or minimise damage to the environment (to the extent necessary to address the relevant matter arising under paragraph (a)).

As I have said, we are reasonably happy with most of part 10B. This has probably been happening in a less formal manner for some time. However, section 70E(2) states that an authorised officer, if they can determine that there are certain risks to the environment, can give directions for alternate actions to be taken by the operator. Our question is: if the operator is already working per the MARP, why should this subsection exist? So, effectively, if people are operating to the mining and rehabilitation plan, why do you need to have this particular subsection? In effect, they are already following an agreement in place, which can be changed by the minister at any time under subsection (6).

A further question is: if the minister has approved the plan and then determines that it needs to be altered, at whose cost will that be? Subsection (7) states that the director must establish a process for an internal review if the authorised officer has directed that action is to be taken. Why is that process not also established under the act? I think there are two clear points there. If it is operating under an existing plan that the minister has approved and the operator has been given a direction by the authorised officer and has to change the plan, who pays that particular cost? In relation to the internal review, why is that process not established under the act?

Again, relating to clause 46, we now move to new section 70H, which talks about action if non-compliance occurs. Maybe I should read subsection (1) for the benefit of those reading Hansard. Subsection (1) states:

If the requirements of an environmental direction or a rehabilitation direction are not complied with, the minister may take the action required by the direction.

(2) Any action to be taken by the minister under subsection (1) may be taken on the minister's behalf by an authorised officer or by any other person authorised by the minister for the purpose.

It seems a little strange that they can take powers to direct somebody to fix a problem. If the action is taken on behalf of the minister, they can direct anybody; so, an authorised officer, or any other person authorised by the minister for the purpose. It seems to be way too broad, and we would certainly like an explanation as to why we have somebody else. We already have very extensive powers to appoint authorised officers. It just seems a bit strange to be able to appoint anybody else.

The next amendment that the opposition has some concerns with is clause 54, which inserts new section 74AA—Compliance Directions. Subsection (1) states:

The minister may issue a direction under this section (a compliance direction) for the purpose of—

and it goes through a whole range of things, but I will read the first one. Paragraph (a) states:

securing compliance with a requirement under this act, a mining tenement (including a condition of a mining tenement) for any authorisation under or in relation to a mining tenement; or

What we are trying to work out is why the minister needs to do this. We would like an explanation of what is actually not right with the current act that he needs to do this. If it is not broken, why fix it? Can the minister, when he responds, please give some examples of how and where this particular power might be used?

Clause 55 relates to compliance orders. It deletes the words 'the director' from new section 74A(1). We want to know why the powers of the Director of Mines have been lessened in this instance. On the one hand, we have compliance directions—we do not know quite why they are there—and now the director is taken out of the compliance orders.

The opposition has some questions—and would like an answer from the minister when he sums up—about clause 60, which inserts a range of new sections, in particular, new section 77D(5), which provides for the release of information. New subsection (5) provides that 'subsections (3) and (4) do not apply'. New subsection (3) provides:

However, if the mining tenement is still current, the Director of Mines must not act under subsection (1)…

New subsection (1) provides:

The Director of Mines may release any report, information, sample or other material of a prescribed kind obtained from the holder or former holder of a mining tenement under this act.

If it is already operating and you do not want your competitors to know information about exactly what you are mining, we can understand that. New subsection (3) provides:

However, if the mining tenement is still current, the Director of Mines must not act under subsection (1) without—

(a) the consent of the holder of the mining tenement; or

(b) the consent of the minister.

New subsection (4) provides:

The minister must consult with the holder of the mining tenement before deciding whether or not to grant a consent under subsection (3).

New subsection (5) provides:

Subsections (3) and (4) do not apply—

(a) to the release of information in circumstances prescribed by the regulations in connection with the operation of this section...

We would like to know what regulations are proposed for the operation of this particular section and how it is envisaged they will apply. What circumstances would exist where the director of mines or the minister would not need to consult about the release of material under the circumstances prescribed. We would like to know the circumstances in which we would find ourselves where the minister, by regulation, would disclose information.

Clause 70 provides for administrative penalties. New section 91 provides:

(1) This section applies to any provision of this act (or the regulations) at the foot of which the words 'administrative penalty' appear.

(2) If a person who is a holder or a former holder of a mining tenement is alleged to have contravened a provision to which this section applies, the minister may, by notice in writing to that person, impose an administrative penalty on that person.

(3) The amount of an administrative penalty is an amount (not exceeded $10,000) fixed by regulation in relation to the relevant provision.

Our understanding is that there are no grounds to appeal administrative penalties, and $10,000 seems an awfully large amount of money for the minister—whether it be minister Holloway or a future minister—with a stroke of a pen to impose, given that I suspect it will be in relation to some information received by an authorised officer. Effectively, any one of the 90,000-odd Public Service employees are captured under this bill. The sum of $10,000—albeit 'not exceeding $10,000'—seems an excessively large fine to be issued at the whim of the minister, with no grounds of appeal.

I have highlighted the concerns of the opposition in relation to this bill. I know we have posed a large number of questions. As I said in my opening remarks, whoever is in government has always supported the mining industry, as does the opposition. We see it as an important part of the state's future; sadly, more important than the current federal Labor government sees it in its approach to the super profits tax, although the new Prime Minister today said she wanted to open the doors of the government in order to negotiate. Nonetheless, her statement was that they should be taxing the mining sector very heavily.

We are somewhat disadvantaged in that our mineral resources are buried under a large layer of silt and stone and it is more expensive to mine. So, if mining operations are taxed more heavily some of the marginal operations in South Australia are put at risk—

The PRESIDENT: It is only the profits.

The Hon. D.W. RIDGWAY: Mr President, I did not know that you would be engaging in the debate, but it is interesting that you are. I will say this and then conclude because it is Thursday afternoon and getting late. It looks as though the government may, in the end, remove extractive industries from this new super profits tax.

The sand and gravel that goes into the concrete of a house, and the rock of that comes from Penrice to make the cement will be taxed. The iron ore that makes the reinforcing will be taxed, the COLORBOND steel on the roof will be taxed, and if you have tiles they will be taxed because they are dug out of the ground. The gypsum that makes the plasterboard will be taxed, the iron ore that goes into the COLORBOND wall cladding will be taxed, the silicon used to make the glass will be taxed—

The Hon. J.M. Gazzola: Bob the Builder!

The Hon. D.W. RIDGWAY: The honourable member says 'Bob the Builder'. Virtually everything that goes into a new house will be taxed, even your granite bench tops that are mined at Padthaway—unless perhaps you are like the members of the government who have the very nice Italian floor tiles and Italian marble benches. That is how insane this new tax is; this resources super profit tax would affect housing affordability in this state particularly. So, it is not only jobs at the mining companies at one end that would be affected. We all want young Australians and young South Australians to be able to buy their first home and get into home ownership, but this ridiculous tax will force up the price of every new home. I know that is somewhat off the topic, Mr President, but you were starting to interject, so I thought I would take that opportunity.

With those remarks I indicate that the opposition is happy to support the bill. We do have some amendments I will put on file shortly, and I look forward to the minister's response to the questions I have raised so that we can progress the bill at a further date.

Debate adjourned on motion of Hon. D.G.E. Hood.

At 17:23 the council adjourned until Tuesday 29 June 2010 at 14:15.