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Focus: Supreme Court win for Alpha Mine bolsters future mining applications

7 September 2015

In brief: The Supreme Court of Queensland has dismissed an environmental group's challenge to the Land Court's decision in the Alpha Coal Mine objection proceedings, and ordered it to pay costs. In rejecting concerns raised by the group, the Supreme Court has settled various points of law in ways that may assist future mining lease applicants and deter further legal challenges. Partner Ben Zillmann (view CV) and Senior Associate Giselle Kilvert consider the Supreme Court's decision, and its implication for other miners.

 
 

How does it affect you?

  • It will no longer be open to environmental groups to argue that a mine's proponent must demonstrate a 'net benefit' in order for mine-related approvals to be granted
  • It will be harder for environmental groups to successfully object to proposed mines on climate change grounds associated with the burning of coal in foreign countries
  • Environmental groups may be discouraged from launching judicial review proceedings in respect of Land Court recommendations, due to the risk of adverse costs orders


Background

 Alpha Coal Mine applications

This case concerned applications by Hancock Coal Pty Ltd for a mining lease (ML) and an associated environmental authority (EA) for the Alpha Coal Mine, a proposed open-cut coal mine in the Galilee Basin.

Following the declaration that the mine was a 'significant project for which an environmental impact assessment is required',  the Queensland Coordinator-General assessed the mine's environmental impacts and recommended that various mine-related approvals be granted, subject to conditions. A draft environmental authority was issued for the mine, and the ML and draft EA were publicly notified, commencing a public objection period.

The objection proceedings

Multiple parties lodged objections on many grounds in respect of the ML and EA, each of which were referred to the Land Court for hearing according to the processes of the Mineral Resources Act 1989 (Qld) (MRA) and the Environmental Protection Act 1994 (Qld) (EPA). Key grounds of objection concerned the potential impact of the mine on groundwater and climate change.

Ultimately, the only ground of objection on which the Land Court had reservations in recommending the grant of the ML and EA was the potential impacts on groundwater. The climate change-based objections were unsuccessful.

As a result, the Land Court recommended that either the ML and EA applications be refused, or that the applications be approved, subject to conditions designed to resolve groundwater concerns, including that Hancock obtain water licences to take, use and interfere with water under the Water Act 2000 (Qld).

It was accepted among the parties that Hancock would not be permitted at law to interfere with groundwater without obtaining a water licence, even if the ML and EA were granted.

In dismissing the climate change objection, the Land Court first found that, when considering the possible adverse environmental impact 'of the operations', it was not appropriate to consider the climate change impacts of the burning coal produced at the mine (referred to as 'scope 3 emissions'), because such use of coal was not governed by ML or EA in question (which only permitted the mining of coal).

The Land Court held that it was appropriate to have regard to scope 3 emissions to the extent that they were relevant to the 'public interest' consideration. However, the Land Court found, as a matter of fact, that a refusal to grant the ML and EA in this case was unlikely to affect global emissions, as the evidence showed that global demand for coal would simply be satisfied from another source if the mine did not proceed.

Grant of environmental authority

Following receipt of the Land Court's recommendations, the Minister for Environment and Heritage Protection (the EPA Minister) decided to grant an EA for the Mine, subject to conditions, including that the EA will take effect only upon the grant of the ML which, if granted, will require Hancock to apply for water licences. This gives effect to the intent of the Land Court recommendations to both the EPA Minister and the MRA Minister. Accordingly, an identical or substantially similar condition to that proposed in the ML was not imposed on the EA.

The EPA Minister had obtained earlier advice from the MRA Minister that it would impose a condition of the kind described above.

Grounds of challenge

The Land Court recommendations were attacked by environmental group, Coast and Country Association of Queensland Inc, in four primary ways.

Each of those grounds, and the court's response to them, are summarised below:

1. Alternative recommendation

Argument: It was not open to the Land Court to make alternative recommendations. The Land Court could recommend refusal, grant or grant subject to conditions only.

Response: It was open to the Land Court to make alternative recommendations. Bearing in mind the purpose of the relevant provisions, they should be read as identifying the range of categories of recommendations that could be made, which include alternative recommendations.

2. Net benefit test

Argument: The Land Court should have assessed whether approval of the mine created a 'net benefit' for the local economy – that is, whether the possible economic benefits of the mine outweigh the costs, including environmental harm.

Response: There is no statutory requirement for an applicant for a ML or EA to establish that their project would have a 'net benefit', taking into account all the relevant statutory criteria. Rather, the Land Court must, in considering the statutory criteria in the MRA, be satisfied that the circumstances warrant a recommendation having regard to the purposes for which the Crown should have a right to mine its minerals. The Land Court clearly considered the many issues that it was required to take into account and consider under the MRA, including prejudice to the public interest and adverse environmental impacts.

3. Lack of finality

Argument: The Land Court decision lacked finality because the alternative recommendations in effect deferred the consideration of central issues, including whether the mine should go ahead.

Response: The Land Court's alternative recommendations did not lack finality. The recommendations were simply made with a view to suggesting a course that the relevant decision-makers might take if they did not accept the Land Court's primary recommendations against Hancock's applications. The suggested recommendation was designed to ensure that the evidence about ground water was satisfactorily addressed before mining could proceed and recognised that the issues of concern would need to be addressed by the statutory process under the Water Act if the Ministers decided to grant the ML and EA applications.

4. Climate change consideration

Argument: The Land Court erred in its conclusions about whether the adverse impact of greenhouse gas emissions contributing to climate change from the burning of coal from the mine was a relevant consideration. In any event, even if it was a relevant consideration, the court erred in its further conclusion that the mine would have 'no impact' on such emissions on the basis that, if the mine did not proceed, 'the coal will simply be sourced from somewhere else'. The adverse impacts of the mine should not be artificially separated from activities that give the mine commercial meaning – that is, the burning of coal.

Response: The Land Court's factual findings regarding the effect of global demand on greenhouse gases was logically available on the evidence, and was within the Land Court's jurisdiction to make. The notional environmental harm that might be caused by another coal mine somewhere else in the world was not an irrelevant or impermissible consideration. While an objective of the EPA is environmental protection in the context of ecologically sustainable development, the EPA does not require the court to ignore what is likely to happen elsewhere in the world. Accordingly, the Land Court's findings are not susceptible to challenge.

The subsequent decisions or conduct of the EPA Minister and the MRA Minister were attacked as invalid on the basis that they lacked finality and were made according to recommendations of the Land Court that were themselves invalid. Those grounds of challenge were also dismissed.

What it means for you

This decision offers some comfort to Queensland miners.

The Supreme Court's decision provides greater certainty in respect of future ML and EA applications as it establishes a superior precedent for the principles articulated in earlier Land Court judgments, particularly regarding the relevance of 'scope 3' greenhouse gas emissions and the extent to which consideration of groundwater impacts may be deferred to the water licence application process. The Supreme Court's decision will limit the scope for future dispute on these issues.

The decision also provides useful new authority on the way in which the various matters that are to be taken into account under the MRA when deciding an ML application should be balanced. The definitive statement that it is not necessary to prove a 'net benefit' is a boon for miners.

Finally, the decision of the court to award costs against Coast and Country in the judicial review proceedings may have a sobering impact on the eagerness of environmental groups to engage in future legal challenges, at least in the superior courts.

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