About the financial provisioning scheme
The Mineral and Energy Resources (Financial Provisioning) Act 2018 (the Act) came into force on 1 April 2019. The Act replaces the prior financial assurance arrangements for resource activities under the Environmental Protection Act 1994 (EP Act) with the Financial Provisioning Scheme (the Scheme).
The legislation also amended the EP Act to require mining companies to develop Progressive Rehabilitation and Closure Plans. The EP Act rehabilitation amendments will commence later in 2019 and more information can be found at the Department of Environment and Science’s (DES) website.
The Scheme is administered by the Scheme Manager, a statutory officer supported by Queensland Treasury.
The purpose of the Scheme is to improve the State’s management of its financial risk in the event holders of a resource activity environmental authority (holders) or small scale mining tenure (SSMT) fail to comply with their environmental management and rehabilitation obligations. Over time, the scheme will also provide funds to support rehabilitation of abandoned mines and expand research into mine rehabilitation.
The scheme manager is responsible for administering all SSMT and holders’ financial provisioning on behalf of the State of Queensland. To enable this, all holders and SSMT financial assurance (called surety in the Act) held by the DES and the Department of Natural Resources and Mines (DNRME) was transferred to the Scheme throughout April 2019.
Under the Scheme:
- SSMTs and holders with an estimated rehabilitation cost below $100,000 will continue providing surety and will not be part of the annual risk category assessment process
- holders with at least $100,000 in estimated rehabilitation costs will be transitioned across to the Scheme Manager risk category assessment process over three years. The assessment process will determine whether the holder will be required to provide a contribution to the Scheme’s financial provisioning fund and/or to provide surety to the Scheme Manager.
If you would like more information please read the Transitional Arrangements information sheet.
Who is affected by the Act?
All resource activity holders of an Environmental Authority, even if you don’t currently have a financial assurance condition or have not given financial assurance before.
All holders of an SSMT will be affected by the changes, to varying degrees.
Who is not affected by the Act?
A holder of an Environmental Authority for a prescribed environmentally relevant activity (e.g. non-resource sites such as landfills) will continue to provide financial assurance as per the current financial assurance arrangements under the EP Act.
For information on how the Act applies to you please click on this link to the Business Queensland Financial Provisioning Scheme webpage.
Regulation, Scheme guidelines and information
The Mineral and Energy Resources (Financial Provisioning) Regulation 2019 establishes the prescribed insurer, formula for determining the contribution to be paid to the Scheme’s fund and sets the assessment fees.
To assist holder’s implementation of their obligations under the Act, the Scheme Manager has published the following guidelines, information sheets, templates and surety checklist.
- Transitional Arrangements (Pre-commencement information sheet)
- Forming the Scheme Manager’s Opinion
- Risk Category Allocation (Information Sheet 1)
- Assigning an Authority to a Relevant Holder
- Requiring Surety to Preserve the Financial Viability of the Scheme Fund
- Forms of Surety
- Financial Institution Undertaking (non-cash surety template)
- Cash Surety Deed template
- Surety checklist
- Realising surety provided by multiple holders, (Information sheet 2)
- Financial institution paying out a surety instrument (Information sheet 3)
Mandated notification forms
The Act requires holders to notify the Scheme Manager in certain circumstances. The circumstances and relevant notification form to use are below.
- Form FPS1 – this form is to be completed by a holder that has been allocated to a risk category to apply under s33 of the MERFP Act to the scheme manager for a proposed changed holder review allocation.
- Form FPS2 – this form is to be completed by a holder, that has been allocated to a risk category, to give notice to the scheme manager under s42 of the MERFP Act that there has been a direct/indirect change of holder for an authority.
- Form FPS3 – this form is to be completed by a holder to give notice to the scheme manager under s43 of the MERFP Act that production in relation to an authority has ceased.
Scheme process for consultation
The Scheme Manager will release documents for consultation from time to time in this section. Once the consultation period has closed, the documents will be removed from the web page until provided as an approved process.
For scheme matters, please email firstname.lastname@example.org or phone the Financial Provisioning Scheme on 07 3035 3551.
For further information about the whole reform project please visit https://www.treasury.qld.gov.au/growing-queensland/improving-rehabilitation-financial-assurance-outcomes-resources-sector/
For further information about mining rehabilitation reforms please visit Department of Environment and Science – Mining rehabilitation reforms.
Contact DES for all enquiries about your Authority, including any questions about the ERC for the Authority:
Petroleum & Gas Business Centre
Telephone: 07 3330 5715
Minerals Business Centre
Telephone: 07 4222 5352
Coal Business Centre
Telephone: 07 4987 9320 5
Small Scale Mining
Contact the Small Scale Mining Assessment Hub for all enquiries in relation to your SSMT:
Telephone: (07) 4987 9350