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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
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Bills

Statutes Amendment (Energy and Mining Reforms) Bill

Committee Stage

Debate resumed.

Clause 5.

Mr PATTERSON: In terms of determining what is a material breach of sufficient gravity to justify this, can the minister give some examples in terms of what would trigger a forfeiture of the licence in terms of the Energy Resources Act?

The Hon. A. KOUTSANTONIS: It depends, and it is complicated. It is not as simple as saying, 'Here is a codified list of offences. If you break these, you lose your licence.' Are they repeat offenders of environmental breaches? Are they unable to financially submit appropriate regulatory improvements that they are being asked to do? It is a pattern of behaviour. There could be potential outcomes in other jurisdictions that we are concerned about: late payment of bills, not paying royalties, who knows? I do not think we should restrict this; I think we should have a broad scope. Remember, ultimately, at any stage any proponent can go to a court and have an independent assessment of the decision-making made by the minister in this area.

So I am relatively relaxed about having these powers. These powers would be obviously on the basis of a recommendation of the department to the minister that the proponent has breached these requirements by the department on numerous occasions, we have made an independent assessment that this person is no longer a fit and proper person to hold a licence and these breaches now have reached the level where we think you should act.

Obviously, the reverse is that the only tools I really have are very blunt, which are a complete extinguishment of the mining licence. So this gives us a bit more of a surgical scalpel to be able to remove people, but it also allows us to have greater intervention if there are environmental breaches, financial breaches or repeated breaches that might trigger public outrage or action that any reasonable person will think is unfair.

Mr PATTERSON: You have laid the picture out of a licence holder not paying royalties or continually causing environmental harm. Would there be a structured process around warnings and opportunities to rectify as we go through? Is that formalised, or is it informal, before the forfeiture is triggered? Are there formal notices?

The Hon. A. KOUTSANTONIS: I think all of the above. Ultimately, this would need to stand up in a court, and a court would naturally ask, 'What are the natural justice principles that you followed? Did you inform the proponent that they were making breaches? Did you give them an opportunity to rectify? After an opportunity to rectify, did they do it again?' It is pretty standard regulatory process, and what we are doing is giving the regulator the pretty standard 2025 tools that they need in their arsenal to make sure they can offer modern regulatory processes for any type of mining regulation.

If you regularly built tailings dams that regularly leak: you are warned, you make a repair, it happens again and it happens again. Obviously if there are constant repeats and warnings it will reach a point where the department will reach the end of its tether and say, 'We have made continual requests, we have given continual warnings, we have given them final notice, we have done all the things that we think will stand up in court to allow us to act under this section of the act,' and they would advise the minister to do so.

If I just turned up arbitrarily and said, 'I am removing BHP's licence', or OZ Min's licence, or so and so's licence without cause, a judge would force me to make my decision again on the basis that I have not given this proponent natural justice, I would assume. There are protections in common law as well and there are protections that we give our proponents but there are also foundational principles in the regulatory process. If you keep on breaching the directions of the regulator, what should the regulator be allowed to do? This is the point of freshening up the act.

If someone is told, 'You are doing repeated environmental damage in breach of your licence,' what is the consequence? There needs to be a consequence. We want remedy. If there is no remedy and it continues to happen, what are the public to say? 'Minister, this person is continually polluting the environment. Why won't you act?' The response, 'I don't have the powers under the act,' is not sufficient.

What we are doing is making sure that the department has the arsenal it needs for effective regulation to make sure it can enforce these improvements, with ultimately the penalty being at the end if the remedies are not enforced.

Mr PATTERSON: I am assuming if you cancel the licence there would be a similar process? What I was trying to elicit there is that it would be similar to cancelling the licence in terms of lead-up. At the moment, you are saying it is quite a sledgehammer, you can only cancel it, whereas this is now giving you the option to cancel or forfeit and then once it is forfeited then the next consequence is, 'Okay, I am looking to transfer the licence over.'

Maybe if the minister could tell us how a transfer would be conducted? Would there be a competitive tender for this once it is forfeited? Would there be someone who the minister has chosen beforehand sitting in the wings and then just does a transfer straightaway? Maybe if you could talk through how you see that process running and how transparent that process would be as well.

The Hon. A. KOUTSANTONIS: I want the department to have maximum flexibility here. If there are two proponents in a joint venture, one joint venture party is a minority owner who is attempting to do the right thing and the majority owner is continually breaching, you might consider transferring that licence to the minority holder or vice versa, depending on their behaviour. My natural instinct would be that there would be some sort of competitive process that would be conducted.

What I am trying to avoid here is just termination and going back to exploration licences and starting all over again, which could take years. This is one of the issues we had with Gupta and the mining licence. I really only had one sort of play, which was the cancellation of the licence and then there is no ability to sell the mining licences to another provider who might buy the steelworks. So whoever bought the steelworks would have to go through the entire process all over again to build up a mining licence, rather than being able to transfer those mining licences directly to someone else.

I think this gives us the ability to be a lot more nimble to maintain the investment previously made and move out a rogue operator who is not adhering to the regulatory standards that we would expect.

Mr ELLIS: This is the juncture at which the minister cautioned me during his closing debate about placing the power of decision-making into the hands of an unelected official and bestowing upon them the ability to adjudicate as to whether breaches of a licence would be so egregious as to constitute a breach. I tend to agree with him. I think making sure that the parliament has primacy and that the decisions are representative of the people who have elected us, and come through us as closely as possible, is generally and more broadly right. Again, for once, I find myself in agreeance with the minister.

The problem we have, though, obviously, is that he also made the point that he would take his mining policy to the election and we could take ours, and that he was confident that his would be more broadly popular across the entirety of the state. We have a situation where, despite the fact that we have maintained or returned, I suppose, decision-making to a public sphere, we will find ourselves in the minority and with limited influence on that decision.

So how do we ensure that as a smaller population base in regional South Australia we can exert appropriate influence on that decision commensurate with the fact that we are the ones who are unduly affected by the outcome of these breaches of the Mining Act?

The Hon. A. KOUTSANTONIS: That is an excellent question. I will answer it in this way: you are our neighbours. There is no animosity between city and farming and regional communities. The amount of sympathy in the city for regional communities is huge. When farmers are doing it tough in drought, most of the money raised for drought assistance comes from metropolitan Adelaide. I do not view this as 'us versus them'—I just do not.

I do not think any of my constituents in West Torrens, who live in Torrensville and Thebarton and Mile End, hate farmers. I think they actually really respect farmers and really care about their wellbeing and want to make sure that they are okay. If I was trying to do something that actively hurt farming communities, my constituents would not be very happy with me. I think the member fundamentally misunderstands the high regard in which farming communities are held within metropolitan Adelaide—in fact, within metropolitan Australia.

All it takes is to open the Financial Review or watch morning TV or listen to FIVEaa or the ABC. If I go on radio and say that we should push aside the rights of farmers for the rights of miners, I guarantee the member that most of the phone calls that come in, in opposition to that statement, will not be from regional South Australia, they will be from metropolitan South Australia because we care deeply about our farmers. They do care deeply about them. I just do not think that mindset is there.

What I am saying is that I have to have a balance between the interests of one group over another. In my own party, in my own broad spectrum of 'the left', there are people who are passionately opposed to fossil fuel extraction but I cannot get to net zero without more gas, so I have to have a difficult conversation with my own people. 'I am sorry, if you want more wind farms, more batteries you need more gas, to have gas-fired generation as backup.'

I say the same to you. The responsible thing to say to the farming community is: this plough is made of steel. Where did it come from? The diesel that goes into your tractor is not synthetic. It has come out of the ground. The fertilisers that you use are from mining endeavour. The paint that you use is from mining. The applications of the mining industry within farming are vast.

It is not us or them; it is symbiotic. You cannot exist without the other. Farming is the foundation of our economy because it provides us with food. The mining industry provides us with the advanced metals and minerals that we need and the complexity that gives us jobs. You cannot have one without the other, and we are blessed to have both. What I am trying to do is to come up with a regulatory framework that looks after both.

I am not looking for a mandate from the people to do you over. I am looking for a mandate that allows me to have co-regulation that allows farming to coexist with mining. That is what I am trying to do.

Mr ELLIS: When this decision-making power is returned to the minister and he is able to exercise it in line with what the right thing to do is, how will independent members or backbenchers know that this decision is on foot? How will we be able to have our say and put the views of our electorate through the process to ensure that they are considered? Will there be notice given to parliamentarians? Will there be notice given to community that consideration has been made as a result of a breach that it will be happening? What will the practical realities of public decision-making and direct input be to this process?

The Hon. A. KOUTSANTONIS: With any system of government, it is goodwill. You can prescribe it and codify it as much as you like. In the end, it comes down to the practice of the parliament. It is no different to a stamp duty exemption. As Treasurer, I have the ability to grant stamp duty exemptions. We grant stamp duty exemptions all the time for certain individual pieces of transactions, whether it is land tax or whether it is other forms of discretion that ministers hold.

The process is that I am here every day when parliament is sitting and I am subjected to your questioning every day, and I cannot make decisions in secret, which is the whole purpose. Whatever decision I make, whether I grant an extension or do not grant an extension, I cannot keep it secret. I am legislating to make it public, so you would know about it.

As a good local MP, you would know that there is a mining licence being granted in 2024. We are getting close to the 18-year mark in 2040, or whenever it might be, and nothing has occurred. It would be normal to think that a member would get up in the parliament and ask the mining minister, 'Hey, so-and-so resources' mining lease is at 17 years: (a) have they applied for an extension? (b) will you grant it? (c)' insert other question.

I think the accountability is the fact that it is an elected member. Think of the alternative. Let's say it is an ombudsman, as you want. Do you know what you would get? You would get an annual report tabled in the parliament once a year, and that would be it. That would be justiciable in a court, taken up mainly by the mining companies rather than ordinary citizens. Ordinary citizens are at my front door every day.

I asked the member for MacKillop about the impact of a member of parliament when we did a compulsory acquisition that impacted family farming communities with a road in the South-East. We were getting nowhere with the department. He called a public meeting with me and had the communities that were impacted voice their opinions. I instructed the agency to listen to the communities. He has got a good outcome.

With an ombudsman or an independent, unelected official, you will read about it in the annual report after the decision has been made. That is my view. I accept that your perception is that my agency is biased towards mining.

Mr Ellis: They should be.

The Hon. A. KOUTSANTONIS: I disagree. I have had many times when my guys walk in and say, 'This is not an exploration licence we should grant, because it's a dubious deposit and the farmland is too rich. It's not wise.'

So I disagree about that. I think they care just as much about maintaining farmland as other agencies, but ultimately we want deposits out the ground because it creates wealth, not for us personally but for the state. I am more relaxed about this than I ever have been, because of the nature of the system. As long as we have this parliamentary democracy, I think the checks and balances are in place and ultimately they are subject to legislation, which can be changed.

Mr ELLIS: Just for the thrills of being here so late: one key difference perhaps would be that with an ombudsman providing an annual report to parliament there would be a record, pattern and precedent that is set by decisions. How will we know where there has been a decision not to revoke or remove a licence from someone? I guess there has been a decision made, but the decision has been made not to take it away. Will that be publicised, or will that be considered no case to answer, case closed and shut away?

I can see, obviously, how the ones that are revoked will become publicly available information. How will we know when it is not enough for it to be taken away so we can rely on that for precedent going forward?

The Hon. A. KOUTSANTONIS: Any notice of transfer will be gazetted.

Mr Ellis: What about where the decision is not the transfer? Are we not going to take the licence away and decide the breach is not—

The Hon. A. KOUTSANTONIS: Well, if they have not breached anything, why would you take the licence away? We do not publish every year everyone whose driver's licences we have not suspended. There is the good order of regulatory transparency, and then there is just bureaucracy gone mad. We are not going to report on things we have not done. Why would we?

But I suppose the point that I think that you have lit up within me is: if you are reaching the end of your 18-year period of your mining licence and you are granted an extension or not granted an extension, what is the public notification process? I suppose that is the point that you are making, or are you talking about transfers of licence?

Mr Ellis: Clause 5 is about the forfeiture of a licence for a breach—

The Hon. A. KOUTSANTONIS: Well, that would be gazetted. If you have not forfeited, what are we reporting?

Mr TELFER: Just looking at new subsection (4)(c) which speaks about 'undue damage to the environment in connection with any operations carried out under the licence' as one of the criteria for consideration that the minister is satisfied has occurred, 'undue damage' is quite vague terminology. I have had experience in my electorate where probably perspective on damage that is caused may be different depending on whether it is the landowner, the mining operator or department staff coming and looking at it.

What do you envision the process would be to ascertain or judge whether damage that is done is undue or whether it is to be expected within the processes of the following out of the licence? And what will that process look like? My electorate was probably at the cutting edge of this 10 years ago, when you were the minister previously, when some of the exploration companies were first going into farming land, and there were some less than ideal situations. I think probably at the time the DMITRE staff were not properly equipped to, firstly, supervise and, secondly, enforce some of the obligation that was within the act at the time.

So what do you envision that process looks like? What is going to be the threshold for judgement when it comes to undue damage, and what agency involvements are there going to be?

The Hon. A. KOUTSANTONIS: I suppose the best way to explain it is what is outside the scope of the authorised activity within the licence. So if you are creating activity that is outside that, that you have not been authorised to do, that could be considered undue environmental harm. I know one of the big issues from farming communities about exploration has been compaction of soil by driving through paddocks rather than following existing paths and the damage that does. I think the mining industry is pretty well educated on that, as is my agency.

So we will authorise certain conduct. If that conduct has not been authorised and that activity occurs outside the authorisation, that is outside the scope. Then, ultimately, it will be an independent assessment by the agency. You know, a farmer makes a complaint: 'They have broken my fence.'

Mr Telfer: That's not environment.

The Hon. A. KOUTSANTONIS: Well, it could be. Or they have spilled something outside an area which they were not authorised to do. I do not want to codify this, because I want to give the ability for maximum protection to farmers and the maximum ability for commonsense outcomes from the department. The moment you codify this to within an inch of its life, there is no discretion. I think we have the balance right.

But this will continually be improved and changed. I can guarantee you this will not be the last amendment to the Mining Act. We will have continual improvement, probably every parliament, to the Mining Act as new practices come into place and as new activity is either to be outlawed or allowed. I think basically it is, by and large, what is outside the scope of what is approved to be considered 'undue environmental impact'.

Mr TELFER: Can I just unpack that a little bit more, minister, to try to have an understanding of what you envision the process for reporting of that might be. Is this going to be a judgement that a departmental officer will make based on periodic supervision of an exploration or will it be upon a concerned landowner making a report or, if it is a roadside, a council making a report? Within the licence for mining exploration, for instance, there is not a lot of specificity when it comes to what is allowed and what is not.

As part of the committee in the former term, I know you heard about some of the challenges that were faced by landowners. I remember presenting. You did not make it to Tumby Bay, but I presented to some of your parliamentary colleagues about some of those nuanced challenges where there is a power imbalance. For instance, you talked about the compacted soil but in high rainfall areas the ramifications of that are also run-off and erosion and that sort of other environmental damage.

Is the process that you envision going to be one which is clear as far as the reporting of concerns of potential undue environmental damage? Is the burden of obligation of reporting on the landowner or a third party, or do you envision that the department will be more actively involved in the monitoring aspect of it?

The Hon. A. KOUTSANTONIS: Obviously, once the PEPR is entered into, farmers will have access to it so they will know what the approved activity is.

Mr Telfer: A lot of it is pre-PEPR, though.

The Hon. A. KOUTSANTONIS: Sure, but they know what the approved activity is and if it is outside that they can make reports. Obviously, we have a greater role in monitoring, which I expect my agency to do and I am very keen for them to be appropriately funded to do so. I understand that they now have a greater impact with the Treasurer than they did previously.

Mr Telfer: Symbiotic.

The Hon. A. KOUTSANTONIS: I am very keen for them to have the resources that they need to make sure they can do the monitoring. The way I view it is, one of the big concerns that I hear from regional communities is by the time the impact occurs and the responses from the agencies are delayed, it is all too late. That gets down to resources sometimes and just us not knowing what has occurred.

It is no different to any regulated licence. If someone gets building approval to build two storeys and they build three, we will not know until someone reports it. There is monitoring that occurs intermittently, but ultimately we rely on people being aware of what the conditions of approval are, that if there are breaches of those conditions they report them, and that the regulator has the tools within the legislation to respond adequately and make remedy. That is what we are attempting to do here.

If you are asking me, 'Can you run through step-by-step every single individual process for every individual breach?' I cannot do that, because the truth is I am not going to be out there doing it. It is going to be Ben and his team; it is not going to be the minister. I am going to get the reports and I will read about them. It will be our mining inspectors who will be out there saying, 'This is the PEPR, this is the approved activity. They acted outside the scope and this is the penalty we have under the act.'

From my perspective and especially the department's perspective, if there is an ore body in an area and there is one farmer impacted by that mine and a proponent is acting appallingly, the one thing I know about ore bodies is they do not respect land borders. They run across entire regions. I tell you who communities trust more than mining regulators: they trust the farmer who has the proponent on their land right now. So it is incumbent on us to make sure we do everything we can to empower that farmer to know that, when we set conditions and approve the activity, it is enforced.

It is no different from the stuff that I saw members of the Liberal Party talking about with the nuisance bill. For us to know something is a nuisance, you have to make a complaint. We are not going to have people out there monitoring farm pumps, checking for noise, and then giving them an expiation notice.

Mr Telfer: You don't license farm pumps.

The Hon. A. KOUTSANTONIS: Exactly. No, we do not license farm pumps, but we do license activity. I suppose there is a sense of we license the activity and the farmer knows what the approved activities are. If the mining proponent is acting outside their remit, they can complain to us, and we will do regular inspections anyway to make sure that they are fitting that. We do that with quarries, and we do that with mining licences regularly. We do inspections, but we are not going to have someone on the farm the whole time doing a checklist. There will be a level of cooperation that is required, which is just the nature of regulation.

Mr TEAGUE: Just to pick up on what the member for Narungga was addressing in terms of reporting, it is true, is it not, minister, that the two obligations to report publicly are the section 91AB(2) and the section 91AC(5) obligations to publish a notice in the Gazette. That is of the forfeiture on the one hand and then the transfer on the other.

In terms of the minister's discretion, let us just be clear on the face of the change. Under section 91AB(3), the minister has to give a notice that the minister only needs to be satisfied of the subsection (4) criteria. It does not need to enter into the subsection (5) 'notice to make good' criteria; that is a discretionary point. So the notice could just be simply: 'I am letting you know this is coming up, this is out.' It is effectively one step.

In terms of section 91AC, transfer: section 91AC(2)(a)(ii) combines to say that the minister can go ahead on the minister's own initiative to transfer that forfeited licence. So, on the face of it at least, there is actually a lot of discretion, one might say almost complete discretion, residing in the minister, and the minister has the obligation on each occasion to publish a notice in the Gazette. They are just the new rules of the game.

The Hon. A. Koutsantonis: Yes. I do point out, though, those are the existing rules for granting a licence. The minister has the ultimate discretion.

Mr TEAGUE: I am just doing my best as succinctly as possible to set out that, regardless of all the likely practical consideration and the ultimate accountability to all of the above, the result of section 91AB and section 91AC is that the discretion is going to reside almost entirely in the minister to decide on a forfeiture and to exercise a transfer, subject to the criteria in subsection (4).

If there is a question, it is: does the government indicate to the committee that the criteria in subsection (4) might be justiciable? Is that the case? If so, we do not see anywhere else criteria upon which it might be justiciable. It is going to be for an aggrieved party, on receipt of the notice, to kick and scream as quick as they can about that. Perhaps can I put it this way: is the notice going to have to specify the subsection (4) ground that the minister is satisfied of? If not, how is it practically going to be brought before a court?

The Hon. A. KOUTSANTONIS: The answer to that is no. It is no different to the granting of a licence. In your neck of the woods, Bird in Hand is a good example, where the agency recommended one outcome, but the minister decided against it for his own reasons.

Mr TEAGUE: It is a bit different to the granting of a licence in that here you are dealing with a status quo ante, in that there is a holder who is now the subject of a forfeiture notice. I think the result of the variety of indications there from the minister is that the holder of the licence is not going to know necessarily the grounds upon which the notice has been issued under subsection (3), and they are not necessarily going to be given any opportunity to rectify whatever it is that is the reason for the notice. All they will have in their hand is the notice, so if they want to run to the court, then they will just have to say to the court, 'Look, we've got a notice. We don't know any grounds upon which the notice is issued.' Is it just going to have to be teased out if the court determines that the minister, as respondent, is going to have to describe the grounds? Is that the way it is going to work?

The Hon. A. KOUTSANTONIS: Yes.

Mr TELFER: I just have one additional clarification, minister. I think it was in response to the member for Narungga's question that you spoke about repeated offences or the burden of proof. A company that potentially has had their licence forfeited might push back legally on the minister's decision, but nowhere within this clause is the word 'repeated' used. When you speak about the four different reasons and that a minister must take into consideration that they are satisfied that one or more of the following has occurred, it is the first time it happens. But to build the case, are you envisioning that the minister would take into account something that is repeated?

The point I was making about subparagraph (c), the undue damage, is the threshold for undue damage is one thing, but would you envision that a minister would use their discretion? We have spoken about the fact that ministers have the ultimate discretion with this when considering the repeated action or the intention of a company—negligence of process, that sort of thing. I was just curious when you use the word 'repeated', when it is not within the legislation itself.

The Hon. A. KOUTSANTONIS: It might not be repeated. It might be one event that is so overwhelmingly harmful that it would not justify allowing them to continue. Again, to go to the earlier point raised by the deputy leader, there is maximum discretion for the public to intervene.

Clause passed.

Clauses 6 to 8 passed.

Clause 9.

Mr PATTERSON: In regard, again, to forfeiture and the provisions made for that as well, the member for Heysen spoke to it to some extent, but maybe you could talk through it. If a licence holder is subject to forfeiture, what would be their right to appeal via the ERD Court? What would that process entail, and when can they go through the appeal process? Is it before the forfeiture takes effect, or is it straight after the minister's decision? What are the timelines between getting the notice and the forfeiture? How does that play out in practice?

The Hon. A. KOUTSANTONIS: Once the minister makes their decision, the proponents can take legal action in the ERD Court.

Mr PATTERSON: You talked about guidelines here, but, ultimately, in terms of that decision, it is the minister's call. Are there any safeguards around this? What guardrails are in place to ensure that there are not politically influenced forfeiture decisions where the minister just says, 'Well, we are going to move one out and put one in'? How is that prevented in the act? From what I understood from what you said, ultimately, it is the minister's call, but is there a process leading up to this?

The Hon. A. KOUTSANTONIS: Political interference would be corrupt and there are other provisions and other acts that deal with that. You are not going to say, 'Here is a Liberal proponent who wants to build a wind farm or do something. I am going to move them on because there is a Labor proponent who wants to do it.' That is clearly improper, so I am not following the line of questioning. Are you saying—

Mr PATTERSON: So you are saying the protections are the bodies—corruption, etc.—as opposed to within this—

The Hon. A. KOUTSANTONIS: In relation to the granting of mining licences, they could do so within the act but have corrupt intent, which would be found out by another body. I think you are asking me a question I cannot answer. You are saying to me, 'How do you stop someone who has behaved inappropriately and breached clauses of the act from being dismissed for political purposes?' I would not remove someone for political purposes. However, I might add, you might not grant a licence in the first place for political reasons because a community, despite the proponent having met all the regulatory requirements for the licence, may not have met the hurdle of community acceptance.

We do not have a clause in here that says, 'Everyone in Glenelg North must like this before we approve it.' This is pretty standard regulatory approval stuff that is in place. I am not trying to be clever about it, I am just saying I am not sure I can answer your question because the way you framed it is like asking, 'How do I stop political interference?' Well, I am a politician and there is going to be political decision-making.

I am not trying to be clever. I see the deputy leader shaking his head. My point is that it is impossible to remove the inherent biases of politicians in decision-making because we are politicians. For example, in my local community, someone wants a bus stop here instead of there. The department says it should be there instead of here. My political bias is to listen to my community about where they want their bus stop, not where the agency wants it.

I do not want to invite more debate on this than is necessary, but we are here because of our political biases, right? Some members do not want mining in the Adelaide Hills, others do. Some people do not want fracture stimulation in the South-East, others do. These are not questions of science or regulatory approvals; these are questions of political bias. That is why we have elected parliaments.

Otherwise, we would just have independent experts making decisions on the basis of their independent assessment. We allow communities to have a say, which is what politics is all about. People are entitled to say, 'Despite meeting all the criteria set out under the act, we do not want this to occur.' An example of that is fracture stimulation in the South-East. You did not like it and I did and you passed the law to ban it—political bias.

Mr PATTERSON: In terms of the notice provisions that are in place, you get a notice of forfeiture and you said the appeal can occur immediately. What information would be provided in the notice? Is it going to be provided via regulation that it stipulates that this information is provided? Where I am getting to, of course, is that, as part of the appeal process, in terms of the reasons given for the minister to forfeit this, it certainly would help in terms of any appeal processes if you knew the reasons behind the minister's decision. So will that ever appear in the notice to them, or will it be quite to the point and just say it is forfeited and then it is up to the licence holder to then go to court and say, 'It has been forfeited. I am not quite sure why, but these are why it should not be'?

The Hon. A. KOUTSANTONIS: Yes.

Mr TEAGUE: I note the admonishment before. I should not be demonstrative. It is good sportsmanship that you are dismissed and you just get off the ground, I guess. The point is that it is exactly the same as clause 5 for these purposes. I hear the minister rehearse the point about the politics. Just to be a bit more particular about it, the structure here is that the minister has discretion on the minister's own initiative, notice in the Gazette, to determine that the licence is forfeited to the Crown and the only stipulation is that, before making that determination, the minister has to give notice.

The minister has already told the committee that the notice, even though the minister needs to be satisfied of the subparagraph (4) criteria, none of which are political, thankfully—breach of the act, breach of a term or condition of the licence, undue damage, and failure to carry out activities—are not cover, they are merits. That notice has to be issued before the determination is made, but we hear that the notice does not have to stipulate which of those grounds is the cause of the notice. So the whole thing could potentially concentrate very, very quickly, and whoever is in receipt of the notice is only going to find out if they choose to try their luck.

But the thing I want to stress here is that there is a stipulation that before making the determination the minister issues the notice. So perhaps the first question is: what work does that have to do? If you are not allowed to make the determination until you issue the notice, what purpose does that serve? What is the minister necessarily going to find out as the result of issuing the notice?

The Hon. A. KOUTSANTONIS: We are going through procedural fairness. We are checking if there has been activity outside the licence operation. We are having a look at it. But, ultimately, the member is right. I am giving discretion to the parliament, to the minister, because if you are conducting activity outside your licence on someone else's land that is not yours, or you are being licenced for an activity on your land that the parliament has decided needs to be regulated, the minister should have the right to intervene if you act outside of that scope.

It is, I suppose, no different from a FIRB approval and having to submit to FIRB or the ACCC—the ACCC is probably not the right example because the ACCC publish their thinking. But FIRB, for example, the minister can make his decision and ultimately is subjected to an independent court process and if they are in error will have to make the decision again. And through that court process, if the minister has made an error and not followed the act, the court will intervene. It is no different, I think, from what we have in other pieces of legislation. I suppose the one error the member is trying to tease out is: is this fair to a proponent?

Mr TEAGUE: Or licence holder.

The Hon. A. KOUTSANTONIS: Or licence holder. My view is that the role of the parliament is to protect the public.

Mr TEAGUE: Well, perhaps just to underscore then, the minister talks about procedural fairness. This is the holder of a licence, and I can hear all the responses about practicalities and what might go on in the real world, but the minister is not protesting too much. If you are the holder of the licence, on the face of this you can be in receipt of a notice that is issued prior to a determination but that notice is not actually helpful to anybody in particular, and whatever grounds the notice is issued on are not disclosed to anybody and there is no period of time that the notice stipulates is provided for a response or a question, and so you are going to have to be in the hands of the court to determine whether or not to require disclosure by the minister of the grounds upon which the notice was issued before even possibly considering a question of whether or not a determination was improperly predetermined. But there is not really a lot on the face of it to sort of characterise procedural fairness there.

The Hon. A. KOUTSANTONIS: It would not be the first you have heard about it because you would have been receiving questions from the regulator about your conduct. Why would we force someone to forfeit their licence if they have not breached any of their conditions?

Mr TEAGUE: For the political reasons that you have just described.

The Hon. A. KOUTSANTONIS: No, they are already an existing licence holder. For example, if a politician said, 'There's an active mine in this area,' let's say in an electorate in the Adelaide Hills and it is deeply unpopular locally and the opposing political party hears the minister has granted the licence and that member goes to the election saying, 'If our government is elected we will cancel this mine licence.' I am not saying this allows it, I am just saying in principle. I think what you are talking about is mandate. Are you talking about political mandate?

Mr Teague interjecting:

The Hon. A. KOUTSANTONIS: Okay. If you are breaching the conditions of the act or conditions of your licence, you are not hearing about it for the first time when you get a forfeiture notice. The practicalities are you are hearing about it from the regulator regularly and the department has reached a point where the next step is forfeiture. So I do not think we are at any point here in dispute because there is no reason to issue a forfeiture notice if the person has not breached any of their conditions. Why would you?

Mr TEAGUE: Just so we are really clear, there was some allusion there to an election commitment.

The Hon. A. KOUTSANTONIS: I asked if you were asking about mandates. That is what I was asking you. You said no.

Mr TEAGUE: I did not ask about mandates. I am just wanting to be clear. I was asking about the provisions of the second round of these criteria and to be clear, this criteria certainly does not give the minister the opportunity to fulfil an election commitment. This, curiously, actually keeps the minister on the rails; it is just that the process does not require disclosure of the reason and the notice does not have any process associated with it.

I hear what the minister has said about how the licence holder is likely to have heard from the regulator lots of times and practicalities and all that sort of thing. But when it boils down, on the face of it there is no real rein on the minister's power to exercise these steps within the minister's discretion and with very little stipulated procedure, let alone procedural fairness.

The Hon. A. KOUTSANTONIS: In this hypothetical situation where out of nowhere a forfeiture notice has been issued to a licence holder, the reality is that the only way it would get the attention of the minister would be if there had been repeated breaches and regulatory involvement by the regulator. I think we are chasing a straw man here. There are powers in numerous acts that give ministers extraordinary powers to do things. This is no different.

This is not going to an unelected official who is not accountable to anyone. This is going to a minister who is accountable to the parliament and ultimately to the public, so I am less concerned about it. I would be more concerned if these powers were going to an unelected official who did not have to submit to questioning and regular scrutiny. In this situation I do, so I am comfortable with it and I think the parliament will be as well.

Clause passed.

Clauses 10 to 15 passed.

Clause 16.

Mr PATTERSON: In subsection (3) of new section 30AAB at paragraph (b), it gives reasons for the minister to be looking at giving a special circumstances extension. It provides:

the applicant has been unable to meet the requirements of the expenditure commitment, work program or other requirement under their exploration licence within the existing term of the licence due to circumstances—

(i) beyond the control of the applicant; and

(ii) that could not reasonably be foreseen at the time at which the licence was last renewed…

I am more interested in subparagraph (i) but you could maybe talk also about subparagraph (ii). What really would constitute 'beyond the control of the applicant' and is that only 'beyond the control of the applicant' since the last renewal in terms of your response to this?

The Hon. A. KOUTSANTONIS: This gets down to basically land access or anything that might be unforeseen. It could be a commodity price or environmental regulations. It could be a corporate process that is in place that is stopping them from getting access to land to conduct their expenditure that they required. It could be a whole series of reasons that would be independently assessed by the agency and then put to me and I will make a recommendation. If there is an environmental condition that is put over the top that means they cannot do their expenditure: that is one reason. There might be a court process in place that means they cannot get access to land to conduct activity: that could be another reason to be contemplated.

There are a number of reasons that you would contemplate under this section: a process for an extension if they cannot get access to land and meet their expenditure requirements, or it might be as simple as the commodity process has tanked and they cannot raise capital.

The question for us as a regulator then is: do we act commercially and say, 'There was an incident in Fukushima which saw the uranium price collapse globally, therefore uranium explorers weren't fulfilling their basic requirements for exploration expenditure'? If it is on the basis that the commodity price had collapsed during an event somewhere else, that might be a reason you would grant an extension—if it is something out of their control. It could be a landowner taking court proceedings. It could be native title issues in not allowing land access or not getting agreement from the traditional owners. There are a number of reasons you would consider.

Mr PATTERSON: In terms of some of the reasons, if I look at new section 30AAB it is basically stating 'The Minister may only receive and consider an application under subsection (2) if the Minister is satisfied'. From the briefing provided to me, the default position is that the 18 years stand unless there are special circumstances, and this subclause lists some of the reasons why.

Maybe the minister could talk through subsection (3)(a)(ii) where it states 'has made a discovery of minerals, has a new exploration model in respect of minerals or is further developing a mineral deposit'. Maybe you could talk through the new exploration model and whether that relates to the existing licence holder, because potentially a new one could come in with a new exploration model. Is that where it would be looked at, or would it just be that the existing licence holder has had 16 years and then, all of a sudden, has discovered a new exploration model?

Maybe you could talk through that. Also, that is a reason, but is the minister constrained to these reasons or does the minister again—a bit similar to the forfeiture—have the ultimate decision and, as you said, potentially politically?

The Hon. A. KOUTSANTONIS: Suppose I put it another way. The reason we supported the change to an 18-year cap that the former Liberal government made was that we support the 'use it or lose it' principle. As a foundational principle within the act, once you are granted a mining licence you have 18 years to develop the project. That has not changed. What we are doing is giving ourselves flexibility through a different exploration model, a commodity price change, a change in ownership, a new investor, or potentially different commodities being discovered. This happens often. An iron ore player can turn into a graphite player, or a gold player can turn into a uranium player. It depends entirely on the geology and the circumstances around it.

But yes, you are right: ultimately the discretion remains with the minister because—and I go back to the foundational principle—how long should you be allowed to sit on land where exploration has discovered an ore body and you have been granted a mining licence with approvals to mine? How long should you be allowed to sit on that before you develop it? The parliament decided that it is 18 years. We decided that in the last parliament, when the Marshall government was in office.

The question I am posing to the parliament now is: should we give discretions to allow an extension on the basis of circumstances that are beyond the control of the proponent or which are just sensible changes? I think what you outlined in your question is absolutely right. Yes, the minister maintains full discretion. Yes, the minister can consider these other options. So we are giving the public maximum scope to approve or not approve.

Fundamentally, my biggest concern in the mining sector as the mining minister—and this might not be yours but it is certainly mine, and my regulators will hate me saying this—is that I think we have fostered a behaviour of approval mining, which really worries me. That is, proponents peg out land, get their approvals, sit there and just wait to sell their proposal to someone else. Now that is a legitimate business model, and that is how we got Carrapateena if the truth be told.

However, the taxpayer has no discretion to look into that and say, 'No, you have gone too far. You are holding onto a mine that could be developed and you haven't developed it yet, so you've got to go. You have reached your 18 years. Time is up. We are not giving you an extension.' There are some people who get the approvals and then are offering to sell it on the basis that they receive a royalty on top of our royalty for the minerals that are removed.

Again, that is a legitimate business practice within the mining industry. That is not necessarily in our interest, because that additional royalty they could be charging could make the deposit uneconomic. They reach their 18-year gap and, had it not been for that additional royalty they are charging, the mine would have been developed and the taxpayer would have the jobs, the investment and the royalties that come with the development of that mine.

So we are drafting a piece of legislation here that benefits the public, and the public outcomes of granting these licences, and gives great discretion to the minister to act in the interests of the public. You would assume that whoever holds this position as the mining minister will always act in the public interest. If you are like me, you would think that on most occasions the interest of the public is to develop the mine. But if a proponent is land banking or ore banking, and keeping that ore there waiting for a greater return later, and sterilising it for anyone else to develop and extract, we should act.

I remind members of the parliament that we have made this decision already. We have decided this. If this legislation fails, after 18 years you are gone. You lose your licence, we start again. I am not changing that. All I am saying is that there might be a good reason to grant you an extension, but there might be a reason not to, and we will not always intervene. So let's not overcomplicate this. The parliament has made a decision—we are not trying to change that—I am just giving us a bit of discretion at the end of that 18 years.

Mr PATTERSON: Moving forward, subsection (7) provides:

(7) The holder of an exploration licence to whom this section applies who has been granted a special circumstances extension may apply for a second or subsequent special circumstances extension however, the Minister may, in the Minister's absolute discretion, refuse to grant the second or subsequent application.

Why is there a need for more than one extension? My understanding on reading that is that there is no real limit on the number of extensions. No matter how difficult that may be, it is open-ended. So the question would be is there a limit on the number of extensions that can be granted, and why is there a need for more than one?—a use it or lose it principle.

The Hon. A. KOUTSANTONIS: It is a good question. I will give you two hypothetical situations. A proponent turns up, it is an iron ore play and they say, Well, actually now we think there is more gold than there is iron ore. We changed the exploration model, we want to extract gold.' The gold price plummets and the iron ore price surges. They say, 'Actually, we want to go back to an iron ore play.' 'Okay, we will grant an extension.' It makes sense.

However, if someone is continually changing their exploration model or we feel, for whatever reason, internally that, actually no, they are just land banking—and remember, I have an independent agency who have expertise looking at this, advising the minister—we have complete discretion to say, 'No, that's enough. You've had extensions, you haven't developed the mine, it's time to move on.' So we are giving ourselves maximum flexibility.

I will give you another reason. You might grant an extension on the basis that commodity prices are suppressed. We reach an upcycle. Commodity prices elevate to a point where the mine is economic, they plough down the path of developing the mine and then an event occurs where the commodity price crashes again, which happens in the mining industry quite regularly, and they ask for another extension, and they have expended a large amount of money. Why would we punish that company that has done everything right, and, through no fault of its own, the commodity price has collapsed, making their mine uneconomic? Of course you would grant them another extension, because the alternative is you extinguish the licence and you have to start all over again.

In effect, the taxpayer is picking and choosing the optimal outcome for itself, which is what the public would demand of us. 'What is best for us as the public?' Commodity prices collapse, 'Yes, you can stay.' 'You have been banking the land for 18 years hoping to get someone to develop it for you and pay you a royalty. Nothing has occurred, no, you cannot. It is time for someone else who is serious.'

Or, if legitimately, through new advances in technology, you are able to extract another commodity and you want to change your exploration model and develop some other type of mine or new technique, why would we not allow that to occur? But we would make an assessment each and every time. Again, that gives us back some flexibility. But I go back to the foundational principle: you have 18 years to develop your mine. Unless there are extenuating circumstances as set out in the act, that 18 years is it, which is something all of you imposed on us.

All I am saying is why not give the taxpayer the ability to cleverly say, 'You are close to something. We will let you extend'? Maybe a small start-up company has got Rio Tinto buying in at 49 per cent—it would probably not be 49 per cent, it would probably be 51 per cent but whatever—and all of a sudden Rio Tinto turn up and they say, 'This company's mining licence expires in six months. We would like there to be an extension.' Am I going to say no? Of course I am not. We are going to say yes because a very large mining company with experience and a track record of developing mines has come in and farmed in. There might be an offtake that has come up. Whatever it might be, it gives us maximum flexibility to intervene.

I think that was the one flaw in the previous government's legislation and if you asked Dan van Holst Pellekaan today, he would accept it probably was a flaw, that they should have allowed an exemption regime at the end of 18 years to continue that. I do not see this as being anything other than being in the right interests of the taxpayer.

Mr TELFER: Just to unpack that a little bit, I am sure there are probably some exploration licences that may well be reaching the 18-year mark sooner rather than later. Like I said, some of those ones in farming areas over my way, doing the maths, will not be too far away.

Taking into account the likelihood of there being an exploration that culminates in actual mining happening, and the justification or otherwise that the minister takes into account when they are considering an extension for a period of time, as you have alluded to with your explanation, do you envision there could be a scenario where a minister, when a licence is reaching the 18-year anniversary, being uncertain about the capacity of that company to reach the point of actually mining an ore body, would say, 'Well, your time is up'?

As we know, tenements are then open to whoever to come in and it is game on. When there is an ore body there is always going to be an interested party that is going to be looking at it. In my mind, as a landowner, I do not see that there is any better outcome one way or another for a landowner. In reality, if you are a landowner who has had a licence holder for 17 years that has not reached the point of mining, probably you are more certain about what they are going to do—e.g. nothing—than potentially a new miner coming in. I do not see necessarily, as far as landowners go, that it is going to be a better outcome one way or the other.

Do you see a scenario, though, that a minister may test the market, for want of a better word, where there is interest, and say, 'Your 18 years has extinguished,' test the market and the only ones that may be interested are the ones that already own the collateral, the knowledge, the base for that licence? Do you envisage a scenario where a minister could consider that although they have rejected the company that owns the tenement from extending beyond 18 years, after a process has been opened that that same company can apply straight up? There is no sort of cooling-off period where a company cannot reapply; at the end of the 18-year mark they can reapply even if the minister has rejected their application for an extension.

The Hon. A. KOUTSANTONIS: Yes, of course. This again goes back to the tension between farming and mining, and I understand this. Being on Eyre Peninsula most of the farms are freehold I would have thought, and the idea that a Western Australian exploration-based company can peg out your land, get a licence from us and walk onto your farm and start drilling can be quite confronting for people.

If they have a tenure of 18 years over your land it can be quite an issue. And then, at the end of that, because iron ore commodity prices are below 60 and staying below 60 and the ore bodies are at depth and there is the cost of mining, and there is no rail line and there is no water to process it and get it out to export, the port has not been developed, it just sits there and they keep on asking for extensions, you are right, I could say, 'No, you're not being granted an extension.' We could issue another round of auctions for tenements or we could say, 'We're not interested in tenements in this area for a while. We are going to hold back.'

Again, it gives maximum flexibility to the taxpayer to maximise their return. My role as Treasurer and mining minister is to maximise the return for our taxpayers. It is in the taxpayers' interests to develop that mine. If the plan is not developing that mine, it is in my interests—when I say 'mine' it is in the public's interests—to remove that person and put someone else in who will develop that mine. If it is not possible and it is just causing angst and heartache to the farmer, why continue it?

The department has come to me asking to release tenements in certain areas and I have said no, it is not worth it. So I do envisage where there are ore bodies that are, in my opinion, currently not likely to be mined anytime soon, reaching the point at the end of the exploration period where I will say, 'You are not being renewed and we're not putting this land out for tenement release again for a while,' and just leave it there. It might happen or we might go out straightaway. It will be done on a case-by-case basis on what gives the best return for the taxpayer.

The hard part of that is, of course, the poor old farmer who is sitting there thinking, 'I'm going to deal with someone else now. I have to get to know this other person again. I have to educate them about my farming routine and what I need and what I don't need'—whereas the other guy generally knows. But you and I both know what usually happens: if it is a substantial deposit they will buy the farmer out. If they do not buy the farmer out, and the farm is bigger than the exploration company, usually the farmer is adequately compensated with rent, and it droughtproofs the farm.

I think what it really boils down to—and this is me making a value judgement, and I apologise in advance for it—is the emotional impact of having someone else tell you what they can do on your land, which I completely understand. The problem we have is that the resources that you and I own on behalf of the people of South Australia are under that farmer's feet, and they belong to us. When I say 'us', I mean all of South Australia, and there is the impasse.

The member from Narungga would like me to pass a law that says everything from the top of the ground all the way to the centre of the earth belongs to the freehold landowner—it all belongs to them. No, the mineral wealth is endowed to the people of South Australia, and therefore the government on their behalf. We own the mineral resources and we are not changing it anytime soon.

Mr TELFER: Just to unpack that a little bit more, for me as a landowner I do not see it as much about the emotional aspect. It is more about the operational impact, and this is one, I think, which is probably underestimated by those who do not have a detailed understanding of agriculture and management of an asset base. It is that uncertainty that comes in. There is a range of shored-up knowledge about ore deposits in my electorate. There certainly are those who have the certainty that there is a significant ore body under their tenement, in the footprint that they have rights over, who indeed are paying farmers holding fees, for want of a better word, creating some certainty for the farmer.

Those cases are uncommon; I will put it that way. The most likely experience that we have is companies that have little capital behind them holding tenements for exploration over swathes of regional South Australia, predominantly agricultural land, that do not certainly have the capital to be able to provide certainty for farmers through that process. A farmer, basically, at any one time could have someone coming and saying, 'Well, this is what we are doing.'

More and more, we are starting to see the turnover of these exploration companies. You and I both well know that there is a big difference between a mining company and an exploration company. Exploration companies are a bit more speculative investment and a lot less capital. If you are a serious mining company that owns a tenement and you are looking at trying to advance that to a point of extraction, you certainly have a longer term and larger capital perspective. If you are an exploration company that is trying to shore up an ore body to be able to then onsell that tenement to a potential developer of that mining lease, it is a completely different game.

I am just trying to unpack a little bit as far as this process goes for extension what you envision. I was interested in your reflections that there may well be, or there have been, areas where a tenement is in place and then a decision is made to not open up for applications for that tenement to be taken up again. The feeling, certainly in regional South Australia, is that once there is an identified tenement that is going to continue to be that way infinitum. In two years' time, five years' time or 50 years' time, there could be someone who wants to utilise that tenement.

Under what scenario do you envision that a minister would either make a decision to not put that tenement back out to market or make the decision that that is unviable or—I cannot remember the exact terminology that you used. What conditions, what information do you think a minister—you in that situation or a future minister—might take into account to make that decision? You talk about in the best interests of the state as the owner of the minerals. The reality is that any money coming in for a tenement is going to be advantageous to a mining minister who is looking at the financial opportunities for the state.

What would be the threshold for a minister to say, 'No, I don't think this is going to be something which is viable,' because in the end that is a minister making a judgement on a business call where a speculative investor may look at it very differently. I am uncertain about what that scenario might look like. Can you unpack it a little bit more for me?

The Hon. A. KOUTSANTONIS: My personal view is 18 years is enough. If it has not been developed in 18 years it is probably not going to get developed. But there could be extenuating circumstances that might justify an extension. That is my personal view. Worldwide events occur. Imagine someone getting to the end of an 18-year tenement term in the middle of COVID and the state having no ability to grant an extension. How could they possibly have done their minimum expenditure? How could they possibly have developed that mine during COVID? There are circumstances.

But my personal view is if you cannot develop a mine in 18 years, you are not trying. Something has happened. And I am reluctant to grant extensions. I have been convinced by the agency that there are rare circumstances where an extension should be considered, and I have said to the industry—because I resisted this call because I do like the idea of use it or lose it; but I was convinced by the agency and the industry that there are circumstances that are beneficial not just to the mining company but mainly to the taxpayer in terms of the ability to grant an extension. And it will be done on a case-by-case basis.

But I tell the industry now publicly, 'If you haven't developed your mine in 18 years, don't come crying to me.' I'm not in the extension-giving business. Eighteen years is enough. However, if someone bursts through the door and says, 'Look, it's year 16. We've been looking for graphite this whole time. We found this massive deposit of gold. Gold prices are through the roof. We think the deposit's massive and it's a 30-year mine,' I'd be crazy to say, 'Bad luck. You've still only got two years to develop a mine' or 'two years of exploration.'

So, obviously, you have to be sensible about this. I go back to my original point: what is in the interests of the taxpayer? It is not in the interests of the taxpayer to continue somebody who has not been developing a mine on that land, because they are not going to develop a mine. But I also point out to the member for Narungga, who talked about 'this tenement', that it does not extinguish the tenement. So what is the difference to a landowner? Other than personnel, it is nothing. Nothing. There is no change. So I think this is really much ado about nothing here, because I do not see many of these extensions being granted personally.

Mr TELFER: Sorry, the question I was asking was about the point you were making about once an 18-year period is up or 18 plus whatever. You spoke about a scenario where a minister might envision that that tenement not go back out to market, for whatever reason. Can you give me some understanding as to what you think a minister would be taking into account to not put it out for another 18 years? That is the point I was making. It has to be an interesting scenario where a minister says, 'Well, because X company for 18 years hasn't been able to get to a point of extraction, that probably means the whole thing's not viable and I'm not going to put it out again.' I don't see that scenario happening. Can you give me an example as to where a scenario like that might come into play?

The Hon. A. KOUTSANTONIS: I can. Like I said to you in my earlier answer, if you can't develop a mine in 18 years, you're not developing a mine.

Mr Telfer: Yes, but someone else might.

The Hon. A. KOUTSANTONIS: Someone else might have a different proposal, but they will come to us and they will consider that. But I would not let the department issue tenements on areas unless I felt there was a reasonable prospect of there being a discovery.

Mr Telfer: Based on—

The Hon. A. KOUTSANTONIS: Based on geology. That is for a greenfield site. On an existing site if there have been proponents exploring there for the last 36 years or since 1971—since the Mining Act—right up till now and no mine has been developed we are wasting our time. I am wasting my regulator's time, I am wasting the farmer's time, I am wasting everyone's time. My view is: 18 years is enough. The industry might not like this.

Without wanting to mention anyone in particular as an example, I think Iron Road's mine is developable. I think it will be a mine eventually. Magnetite is in hot demand. Haematite is going out of business very quickly and South Australia is blessed with magnetite reserves. There is a good port nearby, there are railways nearby and Northern Water could produce water adequately for them. I am more confident about that.

But if there is another mine somewhere else that has been looked at that is not prospective, that is not going to happen and that has just been sitting there causing people grief, then I am not really in the business of granting them extensions. That will be based on the advice I receive from my agency on a case-by-case basis.

I have done this previously. The department have come to me and said they want to release prospective tenements on an area and I have said no, because I am not going to go through 18 years of grief in this regional community on the basis of there potentially being a mine when I think the chances are that it is probably uneconomic. I am not going through it. I am not into 'the entire state is a mining tenement and people can just pick and choose where they want to mine'. I want to make sure that we have a prospect of getting a mine up.

We still have to be speculative, we still have allow entrepreneurship and we still have to allow some risk, but I am sufficiently confident that we have the ability internally to say some areas just are not worth going to.

Mr TELFER: As a supplementary to that, and it will be a quick one, what do you envision the process would be for community involvement in that? I do not know when a tenement is coming up in my area. I know the concern that a community would have if the consideration—I am interested in that consultation process, because you might not know the level of community angst if 12 years ago there was uproar and the company has not done anything for six years. What would that engagement process look like? Thank you for your flexibility.

The Hon. A. KOUTSANTONIS: In my experience, if there are any people with tractors and ploughs nearby they are going to be opposed to what I have said about mining. That is the general rule. You can assume if it is freehold farmland there will be concerns about mining access. If there is an exploration area release occurring, you would have public consultation on it and people would know about it and people would have the ability to put their say in.

We would not allow mining in the Barossa Valley; we would not allow mining in McLaren Vale. These are small, iconic areas—we would not allow mining. We were doing the geological surveys for the tunnels to understand the soil types for the tunnel boring machines. We found large gold deposits in Unley. We are not allowing gold mining in Unley, you know? So, yes, there is discretion there but I think the process is common sense.

Mr ELLIS: I have a process question, Chair. I obviously have amendments on file but I have a couple of questions that I would like to ask about what will inevitably be the clause. Do I do that now or after my amendments have failed?

The CHAIR: I suggest you move your amendments and then you can ask questions about them. Or do you want to ask questions about the substantive bill itself?

Mr ELLIS: The clause as it is currently written, which is—

The CHAIR: You can ask your three questions on the substantive bill and then you can still move your amendments.

Mr ELLIS: Thereafter?

The CHAIR: Yes.

Mr ELLIS: Right, thank you.

The CHAIR: I am assuming you will not ask questions about your own amendments, though.

Mr ELLIS: I am very confident that they are brilliant and unquestionable. I have two really quick questions, please, minister. Forgive me, you have said quite clearly that your personal view is that 18 years will be sufficient. How did you reach the conclusion that a five-year extension is the number that you need? If there is a solution imminent, would two years not have been enough?

The Hon. A. KOUTSANTONIS: I followed the advice of my agency, which said that five years would be an adequate time to be able to deal with the regulatory approvals that would be needed for a change of environmental conditions for a different type of exploration plan that might be in place. I am not a mining expert, and I hazard a guess there is no-one in this building who is a mining expert. I rely on my mining regulators giving me advice as the minister. They gave me the five-year number. I interrogated why they wanted five years, and I was satisfied that five years was an adequate number.

Mr ELLIS: Second question: we have no reason to believe it is not the case, but if your personal view is that 18 years is enough and that there will be exceptional circumstances where an imminent improvement will come that will allow a mine to be viable, why then do we need the capacity for multiple five-year extensions to be presented?

The Hon. A. KOUTSANTONIS: Events, dear boy, events. Things happen. Wars happen. Pandemics occur. Commodity prices change. Stock markets crash. Nuclear reactors explode. Tsunamis occur. There are impacts on commodities and prices. China dumps a vast amount of iron ore onto the system and iron ore prices plummet. They stop buying iron ore and iron ore prices plummet.

Whatever it might be, we have to have the ability to be nimble and allow extensions, because through no fault of their own there are some companies who are not land banking, are doing the investments and do want to get a mine up, who are seeing the commodity price not reach a point where it is economic. We should be supportive of that. So that is why: it is events. We should have the ability to be nimble here rather than just a blunt guillotine.

I am a politician: I want my cake and I want to eat it, too. I want to be able to say to people, 'You have had 18 years, that's enough,' but I also want to be able to say, 'You get an extension,' because that is what the public would demand of me because they want to have the good outcome for the taxpayer. I keep on going back to this point. I feel like I am repeating myself, but I just want to let the parliament know again: the foundational principle of 18 years has been set by the parliament. It was passed unanimously. I think there were 26 Liberal MPs. The remainder were 19 Labor MPs and a few Independents.

We passed a bill in here unanimously for an 18-year hard deadline. Through that 18-year hard deadline's implementation, we have seen credible evidence through the agency that there should be the ability for a ministerial exemption. That does not mean everyone gets one. It is still 18 years. You have to satisfy a lot of very cynical people that you deserve an extension, and I think that is the appropriate mechanism to have in place.

Mr ELLIS: Mr Chairman, is now the opportune time for me to move my amendments? Can I seek the consent of the house, or those therein, to move them collectively rather than separately?

The CHAIR: I am happy for you to move both, if you like, on the understanding we then vote on both at once. Are you happy with that?

Mr ELLIS: Yes, that is my preference. It is already quite late.

The CHAIR: Okay. You are happy, I am happy, we are all happy.

Mr ELLIS: Excellent. I will be even happier, I am sure, when the parliament sees the wisdom of the amendments and supports them unanimously.

The CHAIR: That might be stretching it a bit.

Mr ELLIS: I move:

Amendment No 1 [Ellis–1]—

Page 11, line 25 [clause 16, inserted section 30AAB(2)]—Delete '5 years' and substitute '2 years'

Amendment No 2 [Ellis–1]—

Page 12, lines 39 to 43 [clause 16, inserted section 30AAB(7)]—Delete subsection (7)

I do not mean to add a great deal to my second reading contribution. I have not yet been convinced, unfortunately, by the minister's submissions. I do not see that a five-year extension is necessary, nor do I see that multiple extensions would be necessary. I will take the minister at his word that his personal view is that 18 years is enough and that it would be extraordinary circumstances that warrant a five-year extension, but alas, he will not be in the chair indefinitely. There will be other ministers who come in whom we might not have the same level of faith about their capacity. I worry for those days as well.

I do accept, however, that there will be exceptional circumstances that warrant an extension. I do appreciate that leniency and flexibility might be an admirable thing for the department to have, but I do not accept that five years is the number, acknowledging that, of course, I am not a mining expert, as the minister has just said.

I think that two years will be sufficient, because these projects that we are talking about, these special circumstances exemptions, are for projects that are on the cusp of being finalised. Two years should be enough, in my view. That will make it 20 years in total. I submit that that is more than enough time to get an exploration licence converted into an actual mining licence. So I have moved both those amendments collectively for the consideration of the parliament.

The committee divided on the amendments:

Ayes 13

Noes 21

Majority 8

AYES

Basham, D.K.B. Batty, J.A. Brock, G.G.
Ellis, F.J. (teller) Gardner, J.A.W. Hurn, A.M.
McBride, P.N. Patterson, S.J.R. Pederick, A.S.
Pratt, P.K. Teague, J.B. Telfer, S.J.
Whetstone, T.J.

NOES

Andrews, S.E. Brown, M.E. Champion, N.D.
Clancy, N.P. Dighton, A.E. Fulbrook, J.P.
Hildyard, K.A. Hood, L.P. Hughes, E.J.
Hutchesson, C.L. Koutsantonis, A. Michaels, A.
Mullighan, S.C. Odenwalder, L.K. (teller) O'Hanlon, C.C.
Pearce, R.K. Picton, C.J. Savvas, O.M.
Szakacs, J.K. Thompson, E.L. Wortley, D.J.

PAIRS

Tarzia, V.A. Malinauskas, P.B.
Pisoni, D.G. Boyer, B.I.

Amendments thus negatived; clause passed.

Clause 17.

Mr PATTERSON: Clause 17, regarding a change in control of a tenement holder, is more expansive than the previous changes of ownership in the Energy Resources Act and the Hydrogen and Renewable Energy Act. It goes into more detail around what is considered in the interpretation of what is involved and then it moves on to approval of change of control.

Overall, though, we have spoken before around change of control and, ultimately, the minister has discretion. There are a few guidelines in place that are put into the act, but it seems from previous questions that the minister can also make their own sovereign decisions. Can the minister again confirm that is the case here in the Mining Act? Also, again, can the minister talk to whether there will be transparency around this? Will the minister publish reasons for approval of change of control or refusal?

The Hon. A. KOUTSANTONIS: Yes and no.

Mr PATTERSON: In terms of notices that are given—again, we have talked about the notices and how expansive they are—what consultation will be done with the landowner, especially with regard to farmers if there is going to be a change in ownership for the tenement holder? Will they be notified that you are considering changing it, and the reasons why you agreed to the change? Maybe if you could talk through the consultation around that?

The Hon. A. KOUTSANTONIS: No.

Mr PATTERSON: So what is the mechanism then, if there is a change of ownership for the landowner that the tenement is upon, to be given notice? Is it incumbent on the actual licence holder of the tenement itself, or will the government give notice that this has happened for transparency reasons?

The Hon. A. KOUTSANTONIS: I am not sure why I would be negotiating with a landowner about a tenement condition.

Mr PATTERSON: That was not the question; the question was in terms of giving notice to them that this has happened, that there has been a change of ownership and that you have approved it and these are the reasons why, seeing you are giving yourself the powers.

The Hon. A. KOUTSANTONIS: It would be updated on the mining register.

Mr PATTERSON: There are also offences there and, again, for consistency, the maximum penalty is $16.5 million. That is the maximum, of course. Is there going to be proportionality in terms of what the penalties will be for smaller explorers, because the point was made I think by AMEC that with some of these smaller explorers their market cap is less than the $16.5 million that is the penalty?

The Hon. A. KOUTSANTONIS: This would be at the discretion of the court. They will take into account the market capitalisation, their indiscretions against their conditions. I am not sure what point you are getting at.

Mr PATTERSON: The point is proportionality. I can understand that with the Energy Resources Act you are dealing with big companies. I can understand with renewable energy. But here you have quite a big penalty in comparison to the actual size of some of these companies. So how did you arrive at that $16.5 million? It has gone up from $250,000 in the other act.

The Hon. A. KOUTSANTONIS: The advice I have is that we mirrored the Corporations Act.

Clause passed.

Clause 18.

Mr PATTERSON: We have asked a lot of questions. Transfer of ownership: we can understand for energy and resources or for renewables, but when you have farmers involved and there is a transfer—and I know that you have said previously there is no consultation or no notice given in terms of if there is a change of ownership, but when it comes to forfeiture, again, you have said before there will be no consultation—when you are transferring it over to another operator, is there any provision for consultation with the landowner themselves?

The Hon. A. KOUTSANTONIS: No, because the conditions of access to the tenement are unchanged. It is just the ownership structure.

Mr PATTERSON: You are saying the conditions are unchanged, so there are no provisions in there for the minister to say, 'Okay, we are going to transfer ownership, but also apply other conditions as part of this.' Because certainly when you are looking at transferring it, is there the scope to move it across but then also apply extra conditions looking at fit for purpose?

The Hon. A. KOUTSANTONIS: Obviously, there are other provisions within the act that allow consultation if there are changes in condition, and that would apply in this case. If you give an extension with different conditions, or you approve a different exploration plan, there are other provisions within the act that would cover this, so it is unnecessary for it to be covered within this provision.

Clause passed.

Clause 19 passed.

Clause 20.

Mr PATTERSON: In terms of the Mining Rehabilitation Fund, how will the proposed scheme allow voluntary payments into the Mining Rehabilitation Fund? How will that be structured in reference to existing companies that have already paid a bond, but then also to future companies that have not yet paid a bond? I think there were provisions in there around whether the entire bond be paid up-front, but in lieu of that potentially voluntary payments be put towards the Mining Rehabilitation Fund.

The Hon. A. KOUTSANTONIS: The regulations will follow, which will govern the way the funds can be paid into the rehabilitation fund, but ultimately what we are attempting to do here is we will have maximum flexibility. So you can either have a bond, which is easily bankable, or there can be other opportunities where there are people with better financial credentials and we can arrange voluntary payments into a rehabilitation fund to offset any need for a bond, but it will give the department maximum flexibility and this will come through in the regulatory process afterwards.

Mr PATTERSON: In terms of the funds that are collected—you have companies that are opting in to do this—will those funds be strictly quarantined for the rehabilitation of the current and future mining activities or will they be more geared towards addressing legacy site issues? If it is to raise funds to address legacy rehabilitation issues, has there been modelling undertaken to determine what the proportion might be that goes towards previous legacy sites and funds that are stored in future in anticipation of maybe potential future rehabilitation sites?

The Hon. A. KOUTSANTONIS: There is a very large legacy of unrehabilitated exploration sites of about a quarter of a billion, so these payments will take a long, long time, but we need to start somewhere. This is just giving us the chance to begin.

Mr PATTERSON: That is a substantive amount, so maybe, minister, you could explain how the levies would work and coexist alongside the existing requirements for rehabilitation bonds. How do you see that working both for upcoming or new tenements and then for existing ones where they have already paid a bond, there is already a bond in place?

The Hon. A. KOUTSANTONIS: We want to be as flexible as we possibly can be with the timing of these payments to try to keep financial liquidity within the proponents. If you have a bond, environmental rehabilitation requirements grow as a mine and exploration processes grow. You have ever increasing contributions to the fund and you allocate them as need be. But as I said, there is a very large legacy unfunded liability, as it were, for legacy sites. This is a beginning. We are trying to fix past errors and we will get there eventually but this is just a process of beginning.

Mr PATTERSON: What is envisaged in terms of the quantum of the levy? How are you going to apply it for a small mine site compared to a big mine site? How is it going to work proportionally? Is there a prescribed amount? Is it going to be a percentage of the rehabilitation bond or is it going to be a transaction that is done on a case by case basis?

The Hon. A. KOUTSANTONIS: We will do an assessment of what the rehabilitation liability may be, look at the ability of the company to pay and their financial capabilities, and then work backwards. But we will do an independent assessment of what we think the rehabilitation liabilities are, the ability for them to pay, what the size of the bond may be, what the size of the levy may be, and voluntary payments. This will give us the full discretion we need to make sure that we are able to (a) continue exploration to discover the geology of the state, (b) make sure we are able to rehabilitate as we go, and (c) understand the economic viability of the proponents who are on country who can actually make payments in a sustainable way without it being crippling.

Clause passed.

Remaining clauses (21 and 22) and title passed.

Bill reported without amendment.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Energy and Mining) (23:12): I move:

That this bill now be read a third time.

I thank members for their contributions. Again, I think these amendments to the act give us maximum flexibility in the interests of taxpayers in the state, and I look forward to its bipartisan passage through the house.

Mr PATTERSON (Morphett) (23:12): The committee stage has fleshed out some questions and brought up some concerns as well. I get back to what I was saying in the second reading debate and the glaring problem that I think was glossed over, which goes to the point around consultation. The minister's attitude with the consultation was that the mining industry is supporting this, and why would they be complaining about this. The consultation was perfunctory: not necessary. Other aspects were not really consulted on, which saw both AMEC and SACOME saying the consultation period was lacking.

The minister says, 'Well, I want to do this anyway, so I am doing it.' That is his right but when, in the committee stage, we asked him to list through who was consulted on this bill it was quite clear in the list that was provided—unless I misheard—that there were no primary producers in there. There were no representatives of the farming industry and, throughout the discussions, we could hear the need to balance both the needs of the mining industry and the farming industry as well. We have the mining industry which—I would agree with the minister—are supportive of the changes there, but even they are complaining about the lack of consultation. SACOME made the point in their submission, and I will reiterate it:

We note advice issued by the Department of Prime Minister & Cabinet's Office for Impact Analysis that best-practice consultation should not be 'rushed' or 'burdensome' for stakeholders; and that 'between 30 and 60 days is usually appropriate for effective consultation, with 30 days considered the minimum'.

At the same time we have AMEC making the same point:

While AMEC and other industry associations have made every effort to raise awareness of the release of the Draft Bill, it is understood that the Department for Energy and Mining…did not directly inform licence holders of the consultation. This obligation is a critical oversight given the limited consultation period of just five business days, which also overlapped with a major mining conference in Adelaide and a public holiday in Western Australia where many companies are headquartered. Meaningful engagement requires sufficient time to consult with industry participants, legal advisors, and other relevant stakeholders. The timing and brevity of the consultation has significantly constrained stakeholders' ability to review the Bill and prepare considered responses.

That is coming from the industry, and yet we heard nothing from the farmers, from the primary industry. Through the committee stage we saw the opposition, because of this lack of consultation, supporting the reduction of the special circumstance extension to two years, which would get us past the election and would allow those licences that need to be acted on straight away to be looked at, and then for proper consultation to be informed to come to a considered position.

Here we again see a bill rushed through in this place. We will continue to consult, as I said in my second reading speech, between the houses to try to get proper insights, not only from the industry but also from the primary producers as well. As I said in my second reading speech, we are not going to oppose this in this house. We are going to continue to consult between the houses to make our way through this and to actually get proper consultation, which this government has not provided, because we take the opinions of our primary producers and farmers seriously.

Mr ELLIS (Narungga) (23:16): I intend to oppose this bill for the reasons outlined in my second reading speech. To summarise, it is chiefly because I believe that the results and findings of the select committee report, tabled nearly four years ago, have been basically ignored and have not found their way into this bill. I am fearful that the consultation submitted by the relevant farming groups in this round has been ignored. I am concerned, once again, that this has been a mining bill that might have adverse impacts on landowners and regional people, and it has been presented in November during harvest, once again. So it is for those three reasons.

I make the point for the benefit of Hansard and for the benefit of the record that the private members' mining bill that I presented to this parliament was introduced during November, but the vote on that bill was held in April, after the harvest was finished and at a more opportune time. For those three reasons I will be opposing this bill. I would like to see more done in this area straight after the election.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Energy and Mining) (23:18): If this bill does not receive bipartisan support in the upper house it will not pass, and the people responsible for that would be the Liberal Party of South Australia. If that means that tenement holders are not able to be granted an extension, I will let every single one of them in the mining industry know that the person responsible for them losing their tenements is the shadow minister for net zero and shadow minister for mining. There are no excuses on this bill. These are minor changes, and if the opposition do not want to support them they should vote against it in the House of Assembly and let us know, and we will withdraw the bill and take it to the election. It is very simple.

The house divided on the third reading:

Ayes 34

Noes 3

Majority 31

AYES

Andrews, S.E. Basham, D.K.B. Batty, J.A.
Brown, M.E. Champion, N.D. Clancy, N.P.
Dighton, A.E. Fulbrook, J.P. Gardner, J.A.W.
Hildyard, K.A. Hood, L.P. Hughes, E.J.
Hurn, A.M. Hutchesson, C.L. Koutsantonis, A.
Michaels, A. Mullighan, S.C. Odenwalder, L.K.
O'Hanlon, C.C. Patterson, S.J.R. Pearce, R.K.
Pederick, A.S. Piccolo, A. Picton, C.J.
Pisoni, D.G. (teller) Pratt, P.K. Savvas, O.M.
Stinson, J.M. Szakacs, J.K. Teague, J.B.
Telfer, S.J. Thompson, E.L. Whetstone, T.J.
Wortley, D.J.

NOES

Brock, G.G. Ellis, F.J. (teller) McBride, P.N.

Third reading thus carried; bill passed.

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