26 November 2013

Report of the Victorian Gas Market Taskforce released

The Victorian Gas Market Taskforce, which was led by former Howard Government Minister Peter Reith, has released its final report.

The Taskforce was commissioned by the former Victorian Premier, Ted Baillieu, in December 2012 to consider ways to improve the operation and efficiency of the east coast gas market, and increase gas supply.

The recommendations in the report support the development of the onshore gas industry in Victoria to increase gas production, in the context of the depletion of offshore gas reserves and projected increases in the price of gas.

Key recommendations

The report’s key recommendations include the lifting of the current ban on hydraulic fracking and the issue of further CSG exploration licences.

The report also recommends that a Gas Commissioner be appointed to promote community consultation and the dissemination of credible information about CSG, with a view to increasing community confidence in the CSG industry.

Further consultation

In releasing the report , Premier Denis Napthine said that this was the ‘first step in a consultative process to seek Victorians’ views on issues of concern in regard to onshore gas in Victoria’.

Feedback on the report is being sought until the end of March 2014, prior to a 12 month community consultation process to be facilitated by the Minister for Energy and Resources, Nicholas Kotsiras.

A report on the findings of this 2-stage consultation process is planned to be released in July 2015.

Ban on fracking to remain

Dr Napthine also announced that the ban on hydraulic fracking would remain in place until at least July 2015 while the consultation process was ongoing.

According to Dr Napthine, a key factor to be considered by the Victorian Government in relation to the development of the onshore gas industry is the impact to the water table and aquifers, and the Victorian Government would not support onshore gas production until there is scientific evidence showing that the industry would not risk Victoria’s assets.

The bottom line

While the Taskforce’s recommendations clearly support the development of the onshore gas industry in Victoria,  it is unlikely that there will be any movement towards the industry’s development until at least the second half of 2015.

For further information, please contact Myra StirlingSenior Associate, Brad Popple, Solicitor, Melbourne or your usual Herbert Smith Freehills contact.

21 November 2013

Ghana plans to reintroduce a mining windfall tax

The Budget and Economic Policy Statement of 2013 reiterates the willingness of the government to implement a windfall tax on mining profits.

The windfall profit tax was introduced in the Budget and Economic Policy Statement of 2012 and was debated, but not implemented, by Parliament in 2012.

The 2012 proposal was that all entities engaged in mining operations in Ghana would, in addition to their annual corporation tax, pay a windfall tax on their adjusted cash balances for the relevant period. The windfall tax rate proposed was a flat 10% on the adjusted cash balance, such balance being calculated by deducting from chargeable income all taxes paid or payable, all capital expenditures incurred on depreciable assets and inventory during the year of assessment and adding any interest allowed as tax deduction,  capital allowances and any negative cash allowance brought forward. The windfall tax would apply to any positive tax adjusted cash balance after the relevant deductions and additions are made.

Despite the opposition of mining companies, this tax was again debated, however the conditions of its implementation are not yet determined, in particular its interaction with the stabilisation provisions.

For further information, please contact Linda Feniniche, Avocat, Hiba Abi Haidar, Avocat, Paris or your usual Herbert Smith Freehills contact.

18 November 2013

Qld: Government releases Galilee Basin Development Strategy

On 7 November 2013, the Queensland Premier, Campbell Newman, released the Galilee Basin Development Strategy (Strategy). The Strategy acknowledges the long-term economic benefits that opening up the Galilee Basin to mining would bring to Queensland and is designed to support and encourage business and industry to develop key infrastructure across the region.

The Strategy details government initiatives aimed at early development of the southern and central Galilee Basin (with priority to be given to ‘first movers’). These initiatives include:

  • lowering start-up costs by offering a discounted royalty period which will gradually ramp-up to full royalty by the end of the period,
  • streamlining land acquisition, planning, approvals and red tape reduction by compulsorily acquiring land for projects, delivering project approvals in a timely way and consider declaring projects ‘prescribed projects’ to overcome unreasonably delays in obtaining project approvals,
  • positioning Abbot Point as the Galilee’s gateway to the world by reserving the Terminal (T2) development site for a proponent to develop coal stockpiling and handling infrastructure, and
  • supporting infrastructure development and corridors by supporting the development of localised water solutions, encouraging and assisting private investment in relevant electricity transmission and prioritising the development of roads critical to opening up the Galilee Basin.

No further details have been released at this stage.

Notably, the Strategy comes less than a week after approval of GVK’s Kevin’s Corner project which is expected to be Australia’s biggest coal project. Kevin’s Corner joins the adjacent Alpha Coal project which was approved in August 2012.

In addition, Aurizon has been developing an integrated rail transport and port solution for Galilee Basin coal over the past two years.

For further information, please contact Jay Leary, Partner, Roger Allingham, Graduate or your usual Herbert Smith Freehills contact.

15 November 2013

Victoria to raise the bar for mining exemptions

The Victorian Minister for Energy and Resources recently introduced the Mineral Resources (Sustainable Development) Amendment Bill 2013 (Vic) (the Amendment Bill) into the Victorian Parliament.

The Amendment Bill, if passed, will likely make it more difficult for land to be declared exempt from exploration and mining licences. The Minister will now be required to consider the value of mineral resources (including coal seam gas) before an exemption is granted.

Under the existing Mineral Resources (Sustainable Development) Act 1990 (Vic) (the Act), the Minister has the power to exempt any land from being subject to a licence granted under the Act (i.e., exploration licence, mining licence, prospecting licence or retention licence). Currently, when deciding whether to grant an exemption, the Minister must take into account ‘the social and economic implications of the decision’.

What will change?
The Amendment Bill would amend the Act so that the Minister would be obliged to take into account ‘the known or potential value of mineral resources on the land and the impact that the proposed exemption may have on that value’ when deciding whether to exempt land from being subject to a licence.

The amendment has been proposed following recommendations made by the Victorian Parliament’s Economic Development and Infrastructure Committee in its inquiry into greenfields mineral exploration and project development in Victoria (22 May 2013).

In particular, the Committee had recommended that the Victorian Government develops a land use policy framework to better manage competing land uses in Victoria.

Who will be impacted?
The impact of the proposed amendment is likely to make the Victorian mining legislation more conducive to the development of the mineral and extractive resources industries. In doing so, the changes will be of concern to community groups seeking to apply for mining exemptions to prevent exploration and mining (including in respect of coal seam gas) in their local areas.

The Amendment Bill also contains other proposed amendments to the Act which are aimed at reducing the administrative and regulatory burden on industry, including the introduction of statutory time frames for the processing of licence applications and the streamlining of work plan requirements.

For further information, please contact Myra Stirling, Senior Associate, Liam Hickey, Solicitor or your usual Herbert Smith Freehills contact.

8 November 2013

NSW Aboriginal cultural heritage — a changing legislative landscape

A complete overhaul of the legislative framework for Aboriginal cultural heritage in NSW is underway. The review is aimed at delivering a more efficient and effective process for the protection of Aboriginal cultural heritage and obtaining development approvals. Public feedback on a model proposed by the NSW Government is currently being sought.

In 2012 the NSW Government established an independent Aboriginal and Cultural Heritage Reform Working Party. In December 2012 the Working Party made 23 recommendations for legislative reform. In 2012 and 2013 the NSW Office of Environment and Heritage managed 2 stakeholder public consultation programs. In response to these recommendations and public consultations, the NSW Heritage and Aboriginal Affairs Ministers have now released a discussion paper detailing a conceptual, proposed new model for the protection and management Aboriginal cultural heritage in NSW.

Key features of the proposed new model are:

  • the creation of new, stand-alone Aboriginal cultural heritage legislation,
  • new definitions and objectives to increase the protection of Aboriginal cultural heritage,
  • the creation of local Aboriginal cultural heritage committees,
  • decentralised Aboriginal cultural heritage management with local Aboriginal cultural heritage committees being a ‘one stop shop’ responsible for all consultation and decision making for local Aboriginal cultural heritage matters, including undertaking mapping and creating plans of management,
  • an expanded, publicly accessible Aboriginal cultural heritage register database,
  • making publicly available maps identifying areas of high, low or no Aboriginal cultural heritage value, and plans of management which will outline specific strategies for managing the Aboriginal cultural heritage identified in the maps,
  • statutory project agreements which are ‘fit for purpose’ made between proponents and local Aboriginal cultural heritage committees for the management of areas identified as high or unknown Aboriginal cultural heritage value,
  • a new funding system for which a series of options are being consulted on,
  • mandatory timeframes and legislated processes including for making project agreements and managing unexpected finds, and
  • a legislated dispute resolution and appeal process.

The discussion paper calls for public feedback. A series of 11 stakeholder consultation workshops are proposed to be held in NSW in November and December 2013. Formal submissions in response to the discussion paper must be made by 14 February 2014.

Following the consultation and submission process, feedback will be provided to the Government for consideration in drafting an exposure Bill. The public will be given further consultation opportunities on release of the draft exposure Bill.

For further information, please contact William Oxby, Partner, Alice Hoban, Senior Associate, or your usual Herbert Smith Freehills contact.

1 November 2013

Qld: Draft Qld Ports Strategy proposes to concentrate port development in QLD to 5 key port areas

The Queensland Government released its draft Ports Strategy on Thursday 17 October 2013.

The draft Ports Strategy proposes to:

  • declare that Brisbane, Mackay / Hay Point (in 2 separate zones), Gladstone, Townsville and Abbot Point ports will be the 5 priority port development areas (PPDAs) in Qld,
  • limit port expansion and development to within these 5 PPDAs (by prohibiting capital dredging for deep water port facilities outside the PPDAs) until 2022,
  • permit port and terminal expansion and development (including dredging) within the 5 PPDAs via a Government-facilitated staged and incremental expansion process, and
  • require PPDA’s to comply with a set of master plan guidelines (the details of which have not yet been released).

The draft Ports Strategy aims to:

  • achieve a balance between the ‘twin goals’ of sustainable economic port development and environmental protection, and
  • preserve the Queensland Government’s commitment in the GBR Ports Strategy (which is based on UNESCO recommendation) to restrict port development outside Queensland’s established major trading ports within or adjoining the GBRWHA.

The draft implementing legislation is intended to be in place by next year.

The Queensland Government is also continuing its review of port governance and supply chain coordination and delivery across the Queensland port network.

The closing date for submissions is Friday 13 December 2013.

To review the draft Ports Strategy: Queensland Ports Strategy Draft for consultation