MINING (MISCELLANEOUS) AMENDMENT BILL

Final Stages

Consideration in committee of the House of Assembly's amendments.

The Hon. P. HOLLOWAY: I move:

That the House of Assembly's amendments be agreed to.

The Mining (Miscellaneous) Bill 2010 is a reflection of the government's commitment to its principles of effective and efficient regulation of our mineral resources sector through best practice management of South Australia's mineral assets.

The government recognises that the exploration and mining sectors require predictable procedures for access to land, security of exploration and/or mining tenure, and predictable regulatory processes in order to commit to higher risk for investment in mineral resource exploration, new mine development and life of mine operations.

The government also recognises that landholders and communities require clear and timely advice on their rights under the Mining Act and on the responsibilities of exploration and mining companies who are seeking to access their land.

We believe the bill, with the amendments suggested by the House of Assembly, which have been subject to significant discussion between members and the shadow minister, the government, SACOME and I am sure other interested parties in coming to this conclusion, if they are accepted, achieve those objectives and also underpin the government's targets for growing the prosperity in this state which recognises the importance of our resources sector in growing the state's future economic prosperity through increased business investment, regional development and opportunities for employment and skilling balanced against key environmental and social objectives.

The further amendments to clause 7 of the bill seek to delete subparagraph (1) of new section 9AA Part 9 Part A that relate to waivers of exemption. Specifically, subparagraph (1) requires that where a mining operator has made application to the ERD Court for an order, the mining operator must satisfy the court that exceptional circumstances exist justifying the carrying on of mining operations on exempt land. The fundamental problem with this provision is that it does not support the key objective of this state's mining legislation which is to support triple bottom line sustainable development through the encouragement of exploration and mining.

I would like to point out that subparagraph (2) of section 9AA Part 9 Part A, which is not being amended, ensures that landowner interests are protected. It clearly provides that a mining operator must be able to satisfy the court that any adverse effects of the proposed mining operations can be appropriately addressed by the imposition of conditions on the mining operator, including the payment of compensation to the landowner. If the mining operator cannot satisfy the court then the court may refuse the application. This amendment to clause 7 ensures that the legislation supports the triple bottom line principles by ensuring it remains equitable for both the landowner and the mineral resources sector.

The further amendment to clause 40A seeks to qualify that the rights to require acquisition of land will not apply to exploration licences. As I previously pointed out to honourable members, an unintended consequence of this amendment applying to exploration licences is that it does not recognise the short-term impact and temporary nature of mineral exploration activities, together with a significantly low success rate in the discovery of an economic resource.

The intent of this provision is to provide the landowner with the option to apply to the Land and Valuation Court for the acquisition of land where an economic resource is being discovered. Clause 40A is also being amended to provide that the court may take into account any compensation or other amounts that had been paid to the owner under the other provisions of the act.

This amendment is particularly important for existing mines where the mining operator and landowner may have already negotiated relevant compensation. In these cases, it will be a relevant consideration for the court whether that compensation was fair and reasonable or whether further compensation is warranted in a particular case.

The honourable member who introduced the original amendment to clause 40A, the Hon. Mr Brokenshire, was concerned that a landowner would be restricted during the exploration period from being able to go to an independent arbiter. These further amendments do not preclude the landowner and explorer from entering into a private agreement at the exploration stage for the acquisition of land, nor does it preclude the landowner from seeking appropriate compensation from an independent arbiter.

The current compensation provisions under the Mining Act 1971 clearly state that the owner of any land shall be entitled to receive compensation for any economic loss, hardship and inconvenience. Factors to be considered include damage to land, loss of productivity or profits and any other relevant matters.

Notwithstanding that the bill further enhances the existing compensation provisions by explicitly providing that a landowner can be compensated for legal costs when negotiating such compensation, the bill's enhancement to landowner-related rights and obligations, environmental assessment, compliance and regulatory tools, increased penalties, greater transparency and red tape reduction initiatives clearly demonstrates the government's commitment to implementing best practice legislation which will encourage investment in exploration and mining but is underpinned by the principles of sustainable development. The statutory safeguards ensure the responsible management and exploitation of the state's mineral assets to ensure the state and the people of South Australia receive an appropriate financial return for their valuable mineral assets.

As I say, the amendments in the House of Assembly, which have been subject to significant inter-house consideration and discussion, should be accepted because they do reach the right balance between the mining industry—very important to this state—and also the farm community, which is an equally important industry for South Australia.

The Hon. D.W. RIDGWAY: I indicate that the opposition will be supporting the amendments from the House of Assembly, and I will make a couple of comments. There was some discussion in the media following the debate in the House of Assembly, in particular that the opposition had supported certain amendments in the Legislative Council and then changed its mind and not supported them in the House of Assembly.

That is one of the luxuries for a party that has representatives in both houses, unlike Family First and the Greens, which only have representatives in the Legislative Council. Sometimes we get additional advice between the houses that comes to light and, in particular, I refer to amendment 2, clause 7, page 7, which deletes subparagraph (i):

(9) On an application, the ERD Court may—

(a) if the mining operator satisfies the Court that—

(i) exceptional circumstances exist justifying the carrying on of mining operations on the exempt land

The opposition received advice from the department that putting this condition in the bill meant that this condition could never be met and, as the minister explained, that would be at odds with the principles of the Mining Act, and so it made sense for the opposition to support that particular amendment.

Likewise, amendment No. 2, which just deletes the word 'the' adverse effects to the proposed mine in subparagraph (ii) and substitutes it with 'any', is simply consequential. I think there were amendments originally proposed by the Hon. Mark Parnell, in particular, the amendments in relation to the acquisition of land and there were a number of amendments proposed by the Hon. Robert Brokenshire. It is a shame he is absent this afternoon and cannot deal with these amendments because he was passionate in the media when this bill came back from the House of Assembly. Maybe he has lost his passion somewhat today.

This amendment inserts a couple of sentences, in particular under the right to require the acquisition of land and in particular after section 2, at the end of the first sentence, which is 'The court may on application under this section' add 'if the court considers it to be just and appropriate in the circumstances of particular case'. That is amendment No. 3 which the opposition supports. Amendment No. 4, clause 45, page 29, line 33, after 'compensation' insert:

, after taking into account (to such extent as the Court considers appropriate) any compensation or other amounts that have been paid to the owner under the other provisions of this Act.

I think the opposition sees this as being fair and just. If a landowner has already received some payment or some compensation for activities that have already occurred on his or her property, then those payments should be taken into account when calculating the final amount of compensation. I am sure the Hon. Mr Brokenshire would not think it appropriate that we should allow, if you like, a double dipping, but that fair, just and appropriate compensation be paid. The final amendment relates to clause 45, page 30, after line 2; that is, insert:

(3) This section does not apply in relation to an exploration licence.

I guess this is the one amendment where I am a little annoyed with the Hon. Robert Brokenshire, in that, when we had the debate in the Legislative Council, rather than prolong the debate, I indicated that the opposition was prepared to support it.

I indicated a number of concerns that I had that about its having unintended consequences. I did not really know about having compensation applicable during the exploration phase but indicated that we would support it and look at it between the houses. The Hon. Robert Brokenshire was in the other place for a number of years and he has been in parliament for a number of years, and I am somewhat disappointed about the focus the media put on that issue when it was our clear intention to look at it between the houses.

In relation to an exploration licence, let us take a tenement 10 kilometres by 10 kilometres. If you drill a hole every kilometre—and you might find that a property (one kilometre by one kilometre is 100 hectares) might be 300 or 400 hectares—on 1,000 acres, you might have potentially four holes drilled on it if that is the sort of exploration that is going to be undertaken, or maybe only one.

Certainly to require a mining company to acquire that property to drill just one or two holes in the initial phase of exploration, in the opposition's view, would probably be prohibitive for mining companies. With those few words, I indicate we are happy to support the amendments proposed by the House of Assembly, but again reiterate my disappointment about some of the games that were played with the amendments by other members.

The Hon. M. PARNELL: The Greens do not support these amendments. If I am disappointed, I am not half as disappointed as the Farmers Federation. The Farmers Federation had hoped that the Legislative Council would maintain the position of supporting sensible amendments that redressed the current imbalance in bargaining and in power between landholders and mining companies. We know that, historically, when disputes arise, mining companies always win. What these amendments seek to do is to level the playing field. They do not guarantee that, in a dispute, the farmer would always win, but they level the playing field.

The Farmers Federation stated quite simply that, when it comes to exempt land, it just wanted the right to say no. The deletion of the exceptional circumstances clause almost guarantees that the classification of land as exempt is almost meaningless in state law.

Exempt land is a fraud: it is not exempt. What exempt land now means is that, if a mining company wants to go onto exempt land, all it has to do is try to extract an agreement and, if an agreement is not forthcoming, it goes to the Environment, Resources and Development Court and asks the court to impose the conditions it would have had to agree to anyway.

Given that the legislation, if this amendment passes, requires no more test than the imposition of conditions and the payment of some compensation, the activities will go ahead. We have to ask ourselves: why, in a piece of legislation (the Mining Act), do we have a category of land called 'exempt' which is not, in any sense, exempt from mining? What 'exempt land' now means in the Mining Act is that you have to approach the landholder and talk about compensation and conditions. However, when push comes to shove, you go to the umpire and the umpire will allow mining to go ahead, subject to compensation and conditions. There is no ability for the farmer to say no.

The minister referred to all of the consultation that has taken place between the houses. Whilst I cannot speak for other crossbench members, I certainly was not consulted, and I bet the Farmers Federation was not consulted. The Leader of the Opposition refers to the luxury they have with members in both places, the consultation between the houses was basically the mining industry leaning on the Liberals to backflip its position, and the backflip—

The Hon. D.W. Ridgway: That's rubbish!

The Hon. M. PARNELL: You say it's rubbish? I think the Farmers Federation has got it pretty right. It states in its media release of 29 October:

The Farmer's Federation...and its members are reeling from shock and are deeply disillusioned by the lack of support from politician on two key amendments in the Mining Act that would have strengthened the rights of farmers versus mining companies' encroachment on farming land.

The Farmers Federation represents farmers in this state—if members of the Liberal Party want to suggest otherwise, let them do so—and they feel disillusioned. In the release, Mr White, President of the Farmers Federation says, 'We've been abandoned by our representatives and every South Australian must condemn this act.'

So, the category of exempt land now is getting close to meaningless. The suggestion was put that the test in the legislation of exceptional circumstances to justify the carrying out of mining is a test that could never be met. I do not accept that for one minute. Certainly, it is a test. Could it never be met? It could be met if exceptional circumstances existed.

If the value and rarity of the minerals were such that our only chance to access them was to go onto exempt land, the test would have been met and the exemption would have been overruled. What this provision now does is it forces farmers to sign waivers that they do not want to sign: it forces them to sign up. So, that is amendment No. 1.

Amendment No. 2 is consequential, and I will not speak further to that. Amendments Nos 3 and 4 are of no great consequence, and they can go through. However, amendment No. 5 is, I think, a significant downgrading of this legislation. The amendment seeks to prevent a farmer, or landholder, from even asking that their land be purchased. It was never intended that there would be an automatic right of every landholder to insist that when a company held an exploration licence it was obliged to buy their farm; that was never the intention.

In fact, the bar would be set fairly high and it would be very difficult for a landholder to convince the Land and Valuation Division of the Supreme Court of South Australia that the inconvenience they were suffering as the result of a mineral exploration licence was so significant that their farm must be bought—it would be a very high test. This amendment legally prevents the farmer from even asking the question. Let me phrase it this way: you can ask the mining company to buy your farm but if they say no you have no right to go to the umpire to test the validity of that refusal.

The point has been made by the minister that mineral exploration is a short-term impact, and, from the Leader of the Opposition, that mineral exploration involves fairly minimal interference with land. Both of those points can be challenged. The reality of mineral exploration is that it can go on for years and years and years, and that means years and years of uncertainty for farmers.

In terms of its impact on the land, the Leader of the Opposition referred to the irregular drilling of small holes spaced far apart. Yes, that is one form of mineral exploration. The other thing you can do with a mineral exploration licence is what Marathon Resources does and bury tens of thousands of bags of waste in shallow graves. That is also an activity under a mineral exploration licence.

What I sought to do, in supporting the amendment that was put forward in this respect, is to acknowledge that farmers have a legitimate expectation of some form of certainty. They want to know whether a mining company is going to just be there for a short period, have a quick look around and then move on. In that short period, yes, there will be uncertainty and they will not know if anything will be found, but, hopefully, the mining company will have negotiated reasonable conditions and there will be no disruption to farming activities, whether it is lambing, crops, or whatever it might be.

The point is that, the longer an exploration licence goes on without the mining company committing to either mine and then probably buy the farm or move on, that uncertainty means that that landholder is unable to commit to any form of long-term investment. Forget the idea of building a new shearing shed, putting in new stockyards, buying new headers or ploughs, or whatever it is, because, whilst that mineral exploration licence goes on, they will not know whether they are ever going to recoup that investment.

That level of uncertainty is why the farmers want—in probably fairly extreme cases, I would imagine, quite rare—the ability, if they cannot reach agreement with the mining company, to go to court and see whether the court will order the mining company to buy their land. So, having removed the ability to make such a request of the court on a mineral exploration licence basically ensures that uncertainty will rule.

The uncertainty that farmers face will continue, and they now know that there is nothing that they can do about it. There is no umpire that they can go to and say, 'Surely enough is enough. Surely it is time for this mining company either to agree that they are going to mine or move on.' The mining department is not going to be cutting short their exploration licences at the request of farmers. They will keep the exploration licence going as long as they think there is a prospect that something might be found and provided that some minimum amount of exploration activity is undertaken.

I am disappointed that these sensible amendments made by the Legislative Council are not going to prevail. I would urge, at least, my colleagues on the crossbench to keep faith with the farming community of this state and to insist on sensible changes that actually level the playing field in disputes between mining companies and farmers. The Greens will be opposing these amendments.

The Hon. D.G.E. HOOD: I think members are aware that the intention of the Family First amendments was to create an environment for farmers, producers of food and the like giving a sense of certainty about their investments. We had quite an extensive debate a number of weeks ago about these amendments, so I will not rehash those arguments but make just a few comments. It would be no surprise to members that we oppose the changes made to these amendments—the amendments to the Family First amendments moved by the Hon. Mr Brokenshire—which essentially were aimed at empowering farmers to initiate a buy-out of the farm. These changes water down what was an essential change to the Mining Act to protect farmers significantly impacted by mining operations, whether it be mineral exploration or otherwise.

In particular, the fifth amendment, which the Hon. Mr Ridgway has just said will be supported by the opposition, eliminates farmer-initiated buy-out when mining is at the exploration stage. As the Hon. Mr Brokenshire said and outlined in some detail in committee a number of weeks ago, the prospect for exploration can be a major impact on the farm itself and on the farmer's business, as it may be. The clause as worded was such that the exploration prospect had to be having some significant impact on farming activities—that was the intention of the amendment—so farmers could not initiate buy-out just by virtue of fact of the exploration itself: there had to be substantial justification.

It goes without saying that Family First is disappointed that parliament will not support our original amendments. It is fair to say that the opposition is worthy of credit for considering them at least, and I put that on the record. The other government amendments to the Family First clauses we can accept, particularly amendment No.4 on factoring in past compensation to a landholder when considering a pay-out sum for the purchase of the property. However, we feel that neither amendment No. 3 or No. 4 was really necessary since we expect that the court would have applied those tests in any case.

Overall, we are disappointed that our amendments on food security and special recognition of groundwater issues and fairer treatment of farmers do not stand in their own right. We think they were a reasonable attempt to satisfy the needs of farmers and the mining industry. Family First, it can be said, is a friend of both those industries; certainly we have never made any moves in this parliament that would be unfavourable to either of them, and I assure members that we certainly have no intention to do so. We will continue to fight for food security and seek a balance that allows mining companies to operate well and relatively unencumbered as well.

Motion carried.