Why miners want a deal done on new environment laws | Insiders On Background

Key Concepts

• Environment Protection and Biodiversity Conservation Act (EPBC Act) Amendments: Proposed changes to Australia's primary environmental legislation.
• Net Zero Emissions Target: A commitment to reduce greenhouse gas emissions to zero.
• National Environmental Protection Agency (EPA): A proposed independent regulator for environmental protection.
• Ecologically Sustainable Development: Balancing environmental protection with economic development.
• Critical Minerals: Minerals essential for modern technologies and renewable energy.
• Natural Justice: The right to a fair hearing and due process.
• Stop Work Orders: Directives to halt construction or development activities due to environmental concerns.
• Greenhouse Gas Emissions Reporting: Mechanisms for companies to report their emissions.
• Safeguard Mechanism: A policy to limit emissions from large industrial facilities.
• Jurisdictional Leadership: Australia's position as a leading country in mining and minerals processing.
• ESG (Environmental, Social, and Governance): Factors considered by investors when evaluating companies.

Summary

This transcript features an interview with Tanya Constable, head of the Minerals Council, discussing proposed amendments to Australia's Environment Protection and Biodiversity Conservation Act (EPBC Act) and the broader implications for the mining industry. The conversation highlights the tension between environmental protection and the need for faster project approvals, particularly for renewable energy, critical minerals, and housing developments.

1. EPBC Act Amendments and the Need for Balance

The core of the discussion revolves around the government's attempt to pass significant amendments to the EPBC Act, which has grown to approximately 1500 pages. Constable emphasizes the Minerals Council's call for a balance between protecting the environment and ensuring ecologically sustainable development. This dual objective is crucial for enabling projects to proceed while safeguarding biodiversity, which is currently in steady decline in Australia. The government requires either Coalition or Greens support to pass these changes.

2. National EPA: Role and Concerns

A key element of the proposed legislation is the establishment of a National EPA, envisioned as an independent regulator for environmental protection, compliance, and assurance. Constable agrees with the concept of a "tough cop on the beat" for enforcement, as recommended by the Samuels review. However, she raises concerns about the proposed structure for assessments and approvals. The Minerals Council believes that if states and territories are accredited for these functions, the National EPA should not also be involved in them. Instead, it should focus solely on enforcement and assurance, with the Minister retaining final decision-making power.

3. Penalties and Stop Work Orders

The interview delves into the proposed penalties within the legislation. While Constable acknowledges that an $850 million penalty for the most egregious environmental acts is acceptable, she argues for more balance. The current framework, she contends, does not adequately account for administrative errors or unintentional mistakes.

A significant point of contention is the stop work orders. Constable advocates for a clear maximum period of two weeks for such orders, after which a court order would be necessary. This is to prevent prolonged project delays and ensure natural justice is applied. She believes courts can handle such timeframes, citing past instances. The Minerals Council insists that natural justice must be reinstated in the act.

4. Minister's Power to Sack EPA Boss

The Coalition's demand for the Minister to have the power to sack the EPA boss is discussed. Constable deems this "entirely appropriate" as the Minister is the ultimate decision-maker. She argues that the CEO of the EPA must be accountable to the Minister, and there should be clear statements of expectations or a model similar to the National Offshore Petroleum Safety Environment Management Authority.

5. Red Lines and the Risk of Greens' Demands

Constable clarifies that the proposed changes are fundamental to achieving the desired balance and are not "red lines" in the sense of sinking the bill. However, she stresses that if these issues are not addressed, the legislation will fail to provide further environmental protection or facilitate project development. The Minerals Council's preference is for the Coalition to support the bill with these necessary amendments, rather than letting it sink and potentially forcing Labor to negotiate with the Greens, whose demands might be more extreme.

6. Climate Trigger and Emissions Disclosure

The absence of a climate trigger in the legislation, a demand from the Greens, is noted. Constable views the requirement for proponents to report and disclose emissions and mitigation measures as a duplication of existing mechanisms like the National Greenhouse and Energy Reporting (NGER) scheme and the Safeguard Mechanism. She questions the necessity of this additional paperwork. The Minerals Council wants clarity that this disclosure will not be used to block projects during the assessment and approval process.

7. Net Zero Target and Emissions Reduction

The conversation shifts to the net zero emissions target. Constable reiterates the Minerals Council's ambition for net zero by 2050 but emphasizes their focus on emissions reduction and lowering energy costs. She states that the industry will always comply with the law, including any government target.

Regarding the impact of dropping the net zero target on investment, Constable is not definitive. She states that investors focus on ESG factors, including emissions reduction, and that Australian companies are performing well in this regard. She believes that what companies are individually doing to reduce emissions is critical for attracting investment, rather than solely relying on a government target. This includes investments in energy efficiency, fuel switching, and renewable energy.

8. Energy Costs and Competitiveness

Constable identifies energy costs as a major problem for Australia, stating they are "too high" and impact competitiveness. She believes that stabilizing energy costs is crucial for the next five years. While the impact of dropping the net zero target on energy costs is unclear, the focus remains on addressing these costs.

9. Critical Minerals and Environmental Assurance

The interview concludes with a discussion on critical minerals. Constable highlights the $1 billion US-Australia critical minerals deal as a significant step towards opening up projects. She mentions the Arafura mine (rare earth) in the Northern Territory, which could produce 4% of global critical minerals, and the Lynas project in Western Australia, already a significant producer of rare earths.

Addressing concerns about environmental damage, as seen in China, Constable asserts that Australia has robust regulations for environmental protection. She believes companies act responsibly and that the EPBC Act amendments are critical for continued assurance. The development of critical minerals processing, beyond just mining, is seen as a major opportunity for Australia to add value and maintain its global leadership in the sector, potentially leading to trillions of dollars in projects and significant wealth creation. Partnerships with the US, Japan, Korea, Canada, and the EU are expected to drive this growth, particularly in northern Australia.