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REVIEW OF QUEENSLAND’S EXPLORATION AND DEVELOPMENT APPROVAL PROCESSES INDUSTRY WORKING GROUP REVIEW supporting resource sector growth 30 April 2010 issues for companies’ exploration and relinquishment strategies. If there is a question mark over a company’s tenure, then investors are going to think twice before investing in that company. More importantly, if those issues are systemic in a jurisdiction, then investors may be reluctant to invest in that jurisdiction. A good approval process should not stymie investment by creating regulatory uncertainty. Streamlining Approvals Project On 27 January 2009, the then Department of Mines and Energy, now within the Department of, Employment, Economic Development and Innovation (DEEDI), at the direction of the Premier, announced an initiative to streamline exploration and development approvals processes as they relate to the mining and petroleum industries in Queensland. The Streamlining Approvals Project recommended efficiency improvements to regulatory and other approval processes for mining and petroleum projects while maintaining strict environmental and land use approval processes. The project reviewed the legislative requirements and administrative systems for environmental, native title, and land use assessments. A key finding was that the assessment process is heavily reliant on paper files and hard-copy documentation that constrains the flow of information between proponents and regulatory agencies and between agencies. A paper based approvals system also limits the ability of agencies to maximise the pool of processing officers by reallocating work across its regional offices. An electronic document management and work flow system presents an opportunity to transform the administration of mining, petroleum and gas tenures in Queensland to best practice technologies and information solutions. Industry Working Group recommendation a. Urgently resource and implement the recommendations of the state government’s internal review, Streamlining Approvals Project: Mining and Petroleum Tenure Approval Process, November 2009, (the ‘Grundy Report’). Approval and tenure processes determine how far into the future the state’s pipeline of developments extend. Slow, inefficient approval processes can mean that the commencement of projects can be pushed back one to two years, which in some cases will mean that the market opportunity has passed. It increases the uncertainty for the company looking to invest. ‘The uncertainty of the length of time an application may take to be approved means there is a fundamental inability for effective project planning for any related mining activities and an ability to reach specific project goals in any anticipated timeframe. Not only does this affect the applicant’s business but leads to slower or halted state development and economic growth. This also threatens a future ability to supply product and maintain a competitive edge in the marketplace’. Industry submission Unexpected regulatory delays bring an additional layer of uncertainty to the process. Surprises, which cause unforeseen delays – or push out approval timeframes, also bring an additional set of costs and frustrations for the industry. While it is expected that highly complex, large or technical proposals will take longer to be page 4
REVIEW OF QUEENSLAND’S EXPLORATION AND DEVELOPMENT APPROVAL PROCESSES INDUSTRY WORKING GROUP REVIEW supporting resource sector growth 30 April 2010 assessed, this complexity should be able to be reasonably anticipated. A good approval or tenure process should be characterised by few surprises and a low standard deviation of approval times around a benchmark. Industry’s feedback has been that a small mine project with no complex environmental approvals and no additional mining tenements required can take 18 months from the beginning of the EIS process to EIS approval and then a further two to three months for the grant of an amended Environment Authority ((EA) (if no objections are made to the draft EA)). In many cases, this two-year delay rivals the construction time to actually have the mine up and operating. The slow approval process (and this in the best case small mine scenario) is particularly trying for industry as the EIS process cannot begin until project and engineering detail is at or about the end of pre-feasibility engineering standard. As a result, the EIS process comes after serious investments have been made in the pre-feasibility work, yet causes engineering progress to be paused while the regulatory processes play out. ‘An approval timeframe of up to (or potentially exceeding) four years does not provide a firm foundation for capital investment in the resources sector, nor provide a timeframe which allows a rapid response to favourable market conditions’. Industry submission A good approval process shouldn’t have these ‘regulatory dead-spots’ where no other progress can be progressed in parallel. Industry Working Group recommendation b. A shift towards parallel rather than sequential approval processes wherever possible, particularly in regard to notification processes. Case study ~ unnecessary delay A company had applied simultaneously for a number of mineral exploration permits in October 2006. One of the applications was proposing to explore in areas of Endangered Regional Ecosystems, which triggered a level 1 noncompliant EA. The Department of Environment and Resource Management (DERM) had written to the company, unfortunately at the wrong address, to request an amendment to the application. Queensland Mines and Energy (QME), not knowing anything about the error, was waiting for the environmental authority to be issued. Then DERM misplaced the application so neither QME nor DERM were taking care of the application. After following up with QME a few times and being told that they were still waiting for DERM, the company managed to find out what was happening, amended the EA application and provided the additional information required. During this time DERM changed the case manager several times, which meant that negotiations had to start over each time. The exploration permit was finally granted in November 2009. The application took 38 months to be granted. page 5
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