Improving rehabilitation and financial assurance outcomes in the resources sector

Progress on reforms

On 15 February 2018, the Honourable Jackie Trad MP, Deputy Premier, Treasurer and Minister for Aboriginal and Torres Strait Islander Partnerships, introduced the Mineral and Energy Resources (Financial Provisioning) Bill 2018 (the Bill) into the Queensland Legislative Assembly.

This marks a milestone in the financial assurance reform process for the resources sector.  Once enacted, the Bill will achieve improved outcomes for the environment and reduce financial risks to the State when an environmental authority holder fails to meet their rehabilitation obligations.

The existing financial assurance requirements for the resources sector in place under the Environmental Protection Act 1994 will be replaced with obligations under the Financial Provisioning Scheme (the Scheme).

Under the Scheme, environmental authority holders with an estimated environmental rehabilitation cost (ERC) of $100,000 or more will be assessed and allocated by the Scheme Manager to either provide a contribution to the Financial Provisioning Fund or to continue to provide surety equivalent to their estimated ERC.

The Bill also introduces new Progressive Rehabilitation and Closure Plan requirements for site-specific mining lease environmental authorities.

More details regarding the Mine Rehabilitation Reforms can be found on the Department of Environment and Science website – https://www.ehp.qld.gov.au/management/env-policy-legislation/mining-rehabilitation-reforms.html.

Stakeholder consultation on the regulations and guidelines associated with the Bill’s reforms will be undertaken over the second quarter of 2018.

More information

For more information on the reforms, email the Financial Assurance Reform team financial.assurance@treasury.qld.gov.au.

The Queensland Government is working to ensure that reform of the current financial assurance arrangements for the resource sector protects the State’s finances while achieving the best balance between a viable resources sector and the environment.

The reform package proposes to deliver:

  • a higher level of environmental performance
  • rehabilitation investment in the State’s resources industry
  • better protection of the State’s financial interests.

Background

review of Queensland’s financial assurance framework (PDF 1,570 K) in November 2016 found that current resource sector financial assurance arrangements could be improved.

The review recommended a package of reforms to deliver positive environmental outcomes, improve rates of site rehabilitation, and ultimately reduce the amount of rehabilitation required at the end of a resource site’s life cycle.

The package of reforms includes:

  • reforming the current resource sector financial assurance framework
  • improving mine rehabilitation in Queensland
  • expanding the range of surety providers available for the provision of financial assurance
  • improved management of sites in care and maintenance
  • expansion of the abandoned mines program to improve management of legacy issues
  • review of existing approval conditions on the sale of resource assets
  • improved data analysis, information systems and governance framework
  • residual risk policy development.

More information on the review and its findings is available in the Review of Queensland’s financial assurance framework (PDF 1,570 K).

The Queensland Government provided in principle approval to implement the reforms outlined in the review. A project management office was established in Queensland Treasury with representatives from the Department of Environment and Science and the Department of Natural Resources, Mines and Energy to consult with stakeholders and progress implementation.

Program of reforms

The first two discussion papers the Financial assurance framework for reform and Better Mine Rehabilitation for Queensland were released for public consultation on 4 May 2017. Submissions have closed for these papers, however stakeholder consultation on aspects of related policy development is continuing through the Resource Industry Advisory Committee and individual stakeholder meetings. The stakeholder reports below highlights feedback received during the formal consultation period and the Government’s response.

The third discussion paper, Financial Assurance Review – Providing Surety was released for consultation in September 2017. The discussion paper sought stakeholder feedback on a proposed expanded range of surety options. The consultation report below outlines the feedback received from stakeholders.

The discussion papers and stakeholder consultation reports can be accessed below.

Risk assessment process

As part of the proposed package of reforms an assessment will be undertaken on individual resource environmental authority holders to determine the financial provisioning they will be required to provide under the proposed tailored solution. Please click here for a summary of the reforms and proposed assessment. Independent consultants KPMG and Australia Ratings were commissioned by the Government to assist with the design of the risk assessment process. Consultation was undertaken with peak industry bodies, individual companies, and environmental bodies. Findings have now been released in the report Design of the Risk Assessment Process for the Financial Assurance Scheme, available for stakeholder feedback. Please provide the feedback to the email address financial.assurance@treasury.qld.gov.au.

Discussion papers open for consultation Submission close date
There are no discussion papers currently open for consultationNA

Discussion papers closed Date closed
Financial Assurance Review – Providing Surety22 September 2017
Financial assurance framework for reform 15 June 2017
Better Mine Rehabilitation for Queensland 15 June 2017

Stakeholder consultation reports  
Consultation Report – Financial Assurance Framework Reform
Consultation Report – Better Mine Rehabilitation for Queensland
Consultation Report – Financial Assurance Framework – Providing Surety

Future discussion papers Expected publication*
Residual risk discussion paperSecond Quarter 2018
Achieving improved rehabilitation for Queensland: other associated risks and proposed solutionsSecond Quarter 2018
Achieving improved rehabilitation for Queensland: addressing the state’s abandoned mines legacySecond Quarter 2018

*Publication date will be dependent on timing of Cabinet endorsement for release

Last updated: 10 April 2018