New Queensland scheme to ensure resource companies pay for environmental cleanups
The Queensland Government is introducing a new framework, expected to start next year, to ensure resource companies either make a payment into a fund to cover potential future clean-up costs or be required to provide a surety.
Treasurer and Minister for Trade and Investment, Curtis Pitt, said a proposed new Financial Provisioning Scheme would replace the existing financial assurance arrangements for the resource sector.
He said the system had been developed following calls in May for feedback on discussion papers and subsequent consultation with individual resource companies; peak resource industry and environmental representatives; and the public.
“Currently, as a last resort, the State Government may need to meet the costs for managing the health, safety and environmental impacts from land disturbed by a resource activity.
“To manage this risk, resource project operators provide financial assurance to the government to cover their expected rehabilitation costs. But in some cases that may not be sufficient.
“The new Financial Provisioning Scheme will lower the risk to taxpayers for footing the clean-up bill for resources projects.
“Project operators will either make a payment into a fund to cover potential future clean-up costs or be required to provide a surety.
“It will, for the first time, reflect the unacceptable risk to taxpayers of a project failing to meet its rehabilitation obligations and manage the environmental impacts of the land it disturbs.
“Projects deemed to be a lower risk will have a lower contribution rate to the fund.
“Using the full estimated cost to rehabilitate the land to determine the contribution or surety reduces the cost gap taxpayers currently met if a project operator fails to meet their obligations,” Mr Pitt said.
Natural Resources and Mines Minister, Dr Anthony Lynham, said the new system recognised that quality projects operated by sound companies with low risk of defaulting and remaining project value would be eligible to enter into the pooled rehabilitation fund.
“A central pillar of the new arrangements is the pooled rehabilitation fund,” Dr Lynham said.
“Low risk operations will contribute to the pooled fund, and if a project fails, the pool can fund any outstanding rehabilitation and environmental management costs.
“The rehabilitation pool will ensure sufficient funds are available to government and reduce costs relief for miners.
“Miners will no longer need to provide expensive bank guarantees with onerous collateral requirements.”
Under the new rules, effective from 1 July 2018, high-risk operators and projects that aren’t eligible to enter the pooled rehabilitation fund will instead need to provide to government a surety that in the event of default, the outstanding rehabilitation costs will be met.
Minister for Environment and Heritage Protection and Minister for National Parks and the Great Barrier Reef, Steven Miles, said the proposed new system would better protect our environment and communities.
“The new rehabilitation requirements will ensure that resource project operators manage and rehabilitate disturbed land as the life of the mine proceeds, instead of leaving the clean up until the mine closes,” Mr Miles said.
“Operators will be required to plan for rehabilitation over the life of the mine and report on achieving milestones set out in their plan.
“By progressively rehabilitating disturbed land, resource project operators will be improving environmental and community outcomes while minimising their Financial Provisioning Scheme costs.”
More discussion papers will be released on the Queensland Treasury website over the next year, with the new framework planned to be in place by mid-2018.