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RESOURCES LEGISLATION AMENDMENT (BTEX PROHIBITION AND OTHER MATTERS) BILL 2014

  Resources Legislation Amendment
(BTEX Prohibition and Other Matters)
              Bill 2014

                       Introduction Print


            EXPLANATORY MEMORANDUM


                             Clause Notes

                    PART 1--PRELIMINARY
Clause 1   sets out the main purposes of the Bill. The Bill amends the
           Geothermal Energy Resources Act 2005, the Greenhouse
           Gas Geological Sequestration Act 2008, the Mineral
           Resources (Sustainable Development) Act 1990 and the
           Petroleum Act 1998 to prohibit the use of BTEX chemical in
           hydraulic fracturing, makes other miscellaneous amendments
           to those Acts, and also amends the Offshore Petroleum and
           Greenhouse Gas Storage Act 2010 and the Pipelines Act
           2005.

Clause 2   sets out the commencement provisions for the Bill. The Bill
           comes into operation on a day or days to be proclaimed, except
           for section 64, which comes into operation on the later of the
           day on which section 44 comes into operation, or the day on
           which section 879 of the Water Act 2014 comes into operation.
           The Bill provides if a provision of the Act (except sections 3, 6,
           13, 25, 63, 64 or 69) does not come into operation before
           1 September 2015, it comes into operation on that day.
           Clauses 3, 6, 13, 25, 63 and 69 relate to the statutory condition
           prohibiting the use of BTEX chemicals in hydraulic fracturing.
           In order for the statutory condition to take effect, substantial
           amendment to associated regulations will be required. At the
           time of writing, a moratorium is in place which has banned


571368                              1       BILL LA INTRODUCTION 5/8/2014

 


 

hydraulic fracturing in Victoria until at least July 2015. The moratorium will continue while scientific studies and community consultations are completed to inform the Government's decision making on this matter. The legislated ban on the use of BTEX chemicals in hydraulic fracturing will form part of the overall decision made on whether hydraulic fracturing can be completed within Victoria. PART 2--AMENDMENT OF GEOTHERMAL ENERGY RESOURCES ACT 2005 Clause 3 inserts new section 63B into the Geothermal Energy Resources Act 2005 to provide that an authority is subject to the condition that the use of restricted hydraulic fracturing substances is prohibited in carrying out any hydraulic fracturing permitted by the authority. Hydraulic fracturing is used to stimulate or enhance the flow of gas and oil, or fluids for geothermal energy, by creating fractures in coal or other hard rock formations, such as shale and tight sandstones. This enables an economic recovery of hydrocarbons. The process involves injecting a fluid into the rock formation at pressure. The mix of components used in the hydraulic fracturing fluid and the pressure required depend on the geological environment. Typically hydraulic fracturing fluids have three components: water (approximately 90 per cent), proppant to hold fractures open such as sand or equivalent (approximately nine per cent) and chemicals to control the properties of the fluid (approximately one per cent). BTEX refers to the chemicals benzene, toluene, ethylbenzene, and xylene, which are naturally occurring compounds found in petroleum products. These chemicals may be used in the chemical component of hydraulic fracturing fluid and have been known to have harmful effects on human health. As such, this amendment classes the use of BTEX chemicals as a restricted hydraulic fracturing substance. Clause 4 inserts new section 63C into the Geothermal Energy Resources Act 2005 to provide that an authority is subject to the condition that the holder of the authority comply with any conditions specified in a land use activity agreement under 2

 


 

section 31(3) of the Traditional Owner Settlement Act 2010 (TOS Act) that were accepted by the applicant for the authority. The TOS Act establishes a framework for recognising traditional owner groups based on their traditional and cultural associations to certain land in Victoria, by providing for the making of land use activity agreements (LUAA) between the State and traditional owner groups. For the earth resources sector, LUAAs may specify conditions on exploration authorisations. This amendment facilitates the enforcement of obligations on earth resources authorisations when agreements are made under the TOS Act. PART 3--GREENHOUSE GAS GEOLOGICAL SEQUESTRATION ACT 2008 Clause 5 amends section 124 and 125 of the Greenhouse Gas Geological Sequestration Act 2008. Section 124 of the Greenhouse Gas Geological Sequestration Act 2008 (GGGS Act) allows the holder of an exploration permit, retention lease or an injection and monitoring licence to be granted a special access authorisation (SAA) to carry out the exploration of greenhouse gas activities in the area in which it is granted. In practice, this means that exploration type activities can occur outside of the primary area initially granted under a permit, lease or licence. Under section 124(1) of the Act, this includes conducting seismic surveys, carrying out baseline investigations, the taking of samples, the making of a well and behaviour monitoring of liquid and gas that has been injected in part of an underground geological storage formation. Section 124(2) states that the holder of an SAA does not acquire any rights with respect to the greenhouse gas substance injection and monitoring within the area it is granted. The requirement to be a holder of an exploration permit, retention lease or an injection and monitoring licence before an SAA is granted limits the use of SAAs to onshore tenement holders, and in turn restricts offshore tenement holders who do not hold this form of permit, lease or licence from conducting 3

 


 

onshore geological gas exploration activities, including seismic surveys, that may be relevant for their offshore tenement. In comparison, special access authorisations also operate under the Petroleum Act 1998 (Petroleum Act), albeit for a smaller subset of exploration activities. Under section 84, a special access authorisation may be granted to any person, irrespective of whether the applicant also holds an exploration permit, retention lease or a production licence. In the petroleum context, the SAA allows for exploration operations which are specified in the authorisation; however, section 84(2) of the Petroleum Act does not allow the holder of the authorisation to make a well in the authorised area. Similar to the GGGS Act, the holder of an SAA under the Petroleum Act does not acquire any rights to the petroleum within the area in which it is granted. This amendment mirrors the Petroleum Act, to provide that it is not necessary for the holder of an SAA to be a holder of an onshore tenement and limit the SAA to authorising exploration operations (excluding the making of a well). As such, all reference to wells, including special access well plans, have been repealed. Clause 6 inserts new section 158A into the Greenhouse Gas Geological Sequestration Act 2008 to provide that an authority is subject to the condition that the use of restricted hydraulic fracturing substances is prohibited in carrying out any hydraulic fracturing permitted by the authority. Hydraulic fracturing is used to stimulate or enhance the flow of gas and oil by creating fractures in coal or other hard rock formations, such as shale, tight gas and deep geothermal. This enables an economic recovery of hydrocarbons. The process involves injecting a fluid into the rock formation at pressure. The mix of components used in the hydraulic fracturing fluid and the pressure required depend on the geological environment. Typically hydraulic fracturing fluids have three components: water (approximately 90 per cent), proppant to hold fractures open such as sand or equivalent (approximately nine per cent) and chemicals to control the properties of the fluid (approximately one per cent). 4

 


 

BTEX refers to the chemicals benzene, toluene, ethylbenzene, and xylene, which are naturally occurring compounds found in petroleum products. These chemicals may be used in the chemical component of hydraulic fracturing fluid and have been known to have harmful effects on human health. As such, this amendment classes the use of BTEX chemicals as a restricted hydraulic fracturing substance. Clause 7 inserts new section 158B into the Greenhouse Gas Geological Sequestration Act 2008 to provide that an authority is subject to the condition that the holder of the authority comply with any conditions specified in a land use activity agreement under section 31(3) of the Traditional Owner Settlement Act 2010 (TOS Act) that were accepted by the applicant for the authority. The TOS Act establishes a framework for recognising traditional owner groups based on their traditional and cultural associations to certain land in Victoria, by providing for the making of land use activity agreements (LUAA) between the State and traditional owner groups. For the earth resources sector, LUAAs may specify conditions on exploration authorisations. This amendment facilitates the enforcement of obligations on earth resources authorisations when agreements are made under the TOS Act. Clause 8 amends sections 159(1), 160(1) and 161(1) of the Greenhouse Gas Geological Sequestration Act 2008 to remove reference to special access well plans as a consequence of amendments in clause 5 of this Bill. Clause 9 amends section 175A of the Greenhouse Gas Geological Sequestration Act 2008. Section 175A of the Act states that if a primary authorisation that is the basis for a special drilling authorisation (SDA) granted under either Part 8A of that Act or the Offshore Petroleum and Greenhouse Gas Storage Act 2010 (OPGGS) is cancelled or suspended, the SDA that relates to that primary authorisation is also taken to be cancelled or suspended. Section 175A does not account for the surrender of a primary authorisation and the subsequent surrender of an SDA by association. 5

 


 

Under Part 8A of the Greenhouse Gas Geological Sequestration Act 2008, section 146H states that if a primary authorisation is surrendered, the accompanying SDA specified in the primary authorisation is also taken to be surrendered. However, the OPGGS does not specifically provide for special drilling authorisations and as such the SDA is not specified in the primary authorisation. Therefore, if a primary authorisation granted under the OPGGS is surrendered, the SDA that relates to that primary authorisation may effectively continue. This amendment clarifies this by providing that if a primary authorisation that is the basis for a special drilling authorisation under the Greenhouse Gas Geological Sequestration Act 2008 or the Offshore Petroleum and Greenhouse Gas Storage Act 2010 is surrendered, the special drilling authorisation that relates to that primary authorisation is taken to be surrendered on the same day that the primary authorisation is surrendered. Clause 10 inserts new section 187A into the Greenhouse Gas Geological Sequestration Act 2008 to provide that an authority under this Act is not declared to be personal property for the purposes of section 8(1)(k) of the Personal Property Securities Act 2009 of the Commonwealth. Section 8(1)(k) of the Personal Property Securities Act 2009 (PPSA) relates to a particular right, licence or authority granted by or under a law of the Commonwealth, a State or a Territory. If, at the time when the statutory right is granted, or at any time afterwards, a provision of that law declares that kind of statutory right not to be personal property for the purposes of the PPSA, then that statutory right is not declared to be personal property. Clause 11 amends section 190 of the Greenhouse Gas Geological Sequestration Act 2008. This amendment ensures that a planning scheme cannot prohibit the granting of a special drilling authorisation, consistent with the provisions in relation to greenhouse gas exploration and injection and monitoring authorisations. This amendment will make the Greenhouse Gas Geological Sequestration Act 2008 planning provisions consistent with the Petroleum Act 1998 and Geothermal Energy Resources Act 2005. 6

 


 

Clause 12 amends sections 212(4) and 303(1)(h) of the Greenhouse Gas Geological Sequestration Act 2008 to remove reference to special access well plans as a consequence of amendments in clause 5 of this Bill. PART 4--AMENDMENT OF MINERAL RESOURCES (SUSTAINABLE DEVELOPMENT) ACT 1990 Clause 13 inserts new definitions into section 4(1) of the Mineral Resources (Sustainable Development) Act 1990. Hydraulic fracturing is used to stimulate or enhance the flow of gas and oil, or fluids for geothermal energy, by creating fractures in coal or other hard rock formations, such as shale and tight sandstones. This enables an economic recovery of hydrocarbons. The process involves injecting a fluid into the rock formation at pressure. The mix of components used in the hydraulic fracturing fluid and the pressure required depend on the geological environment. Typically hydraulic fracturing fluids have three components: water (approximately 90 per cent), proppant to hold fractures open such as sand or equivalent (approximately nine per cent) and chemicals to control the properties of the fluid (approximately one per cent). BTEX refers to the chemicals benzene, toluene, ethylbenzene, and xylene, which are naturally occurring compounds found in petroleum products. These chemicals may be used in the chemical component of hydraulic fracturing fluid and have been known to have harmful effects on human health. As such, this amendment classes the use of BTEX chemicals as a restricted hydraulic fracturing substance. Clause 14 amends section 6A(4) of the Mineral Resources (Sustainable Development) Act 1990 to correct a typographical error and clarify that Deep Lead Nature Conservation Reserve (No. 2) is exempted from being subject to a tourist fossicking authority. Clause 15 amends section 7(2) of the Mineral Resources (Sustainable Development) Act 1990 to update references to the Land Conservation Council and Land Conservation Act 1970 with the Environmental Assessment Council and the Victorian Environmental Assessment Council Act 2001. 7

 


 

Clause 16 substitutes section 8AA of the Mineral Resources (Sustainable Development) Act 1990 in order to correct section references as a consequence of amendments in clauses 44 and 58 of this Bill. Clause 17 amends sections 12(2) and 12A(4) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of a review of the Mineral Resources (Sustainable Development) Act 1990 (MRSDA), the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. Tailings are defined in section 4 of the Act to mean any waste mineral, stone or other material produced during the course of mining. Consequential to the introduction of prospecting and retention licences in 2010, it is considered that the holder of a prospecting licence should pay royalties in respect of the disposal of tailings for this licence type. Clause 18 inserts new section 14B(5) into the Mineral Resources (Sustainable Development) Act 1990 to provide that a prospecting licence is not declared to be personal property for the purposes of section 8(1)(k) of the Personal Property Securities Act 2009 of the Commonwealth. This amendment brings prospecting licences into line with other licences under the Act. Section 8(1)(k) of the Personal Property Securities Act 2009 (PPSA) relates to a particular right, licence or authority granted by or under a law of the Commonwealth, a State or a Territory. If, at the time when the statutory right is granted, or at any time afterwards, a provision of that law declares that kind of statutory right not to be personal property for the purposes of the PPSA, then that statutory right is not declared to be personal property. Clause 19 substitutes section 14C(3)(b) of the Mineral Resources (Sustainable Development) Act 1990 to provide that a retention licence may be renewed in accordance with provisions of this Part. The renewal of a retention licence has been moved to the broader licence renewal provisions under clause 36 of this Bill. 8

 


 

Subclause (2) inserts new section 14C(5) into the Mineral Resources (Sustainable Development) Act 1990 to provide that a retention licence is not declared to be personal property for the purposes of section 8(1)(k) of the Personal Property Securities Act 2009 of the Commonwealth. Section 8(1)(k) of the Personal Property Securities Act 2009 (PPSA) relates to a particular right, licence or authority granted by or under a law of the Commonwealth, a State or a Territory. If, at the time when the statutory right is granted, or at any time afterwards, a provision of that law declares that kind of statutory right not to be personal property for the purposes of the PPSA, then that statutory right is not declared to be personal property. This amendment brings retention licences into line with other licences under the Act. Clause 20 inserts new section 15(1BH) into the Mineral Resources (Sustainable Development) Act 1990. Currently, surveys and marking out are only required after a licence is granted. The purpose of the marking out and surveying provisions in the MRSDA is to provide certainty to licensees and applicants as to the areas covered by licences and to avoid disputes between licensees and applicants regarding the location of licence boundaries. However, licence applications identify boundaries with varying degrees of accuracy, and these licence boundaries are used for legal purposes. As a result, instances have arisen where the legal licence boundary (as in the application) is not consistent with the survey plan or the boundary as marked on the ground. This amendment provides that an application for a mining licence, prospecting licence or retention licence must include a survey of boundaries of the land proposed to be covered, as a consequence of amendments to Division 3A in clause 30 of this Bill. Subclause (2) substitutes section 15(9) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment extends 9

 


 

section 15(9) to the granting of a retention licence, so that it covers the granting of a mining licence, prospecting licence and retention licence over land that is covered by an exploration licence. Amendments are also being made to provide for exploration licence applicants, in addition to exploration licence holders, to consent to the granting of one of these licences over land that is covered by an exploration licence application conditional on specified depth restrictions. Clause 21 inserts new section 16B into the Mineral Resources (Sustainable Development) Act 1990 to provide that a retention licence will continue in effect pending the outcome of a mining licence application, operate in pendency. This amendment ensures consistency with other licenses under the Act to provide that a retention licences can continue to operate in pendency while a follow on licence is being applied for and are in line with the pendency provisions for other licences in the Act. Clause 22 amends section 18(c) of the Mineral Resources (Sustainable Development) Act 1990 to extend to a prospecting licence the requirement of the Department Head to give notice to Heritage Victoria that a licence applicant has the highest ranking. This amendment ensures consistency between mining and prospecting licences for the notice requirements under section 18. Clause 23 amends section 25 of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. Paragraph (a) amends section 25(1)(e) to extend to a retention licence or a prospecting licence the requirement that the Minister must not grant a licence over land that is exempt under the Act or any other Act. Paragraph (b) amends section 25(3) to ensure that a licence applicant has substantially complied with both the Act and the regulations. As currently drafted, section 25(3) of the Act 10

 


 

provides that an applicant can substantially comply with the Act or the regulations. Paragraph (c) amends section 25(6) to refer to prospecting licence instead of mining licence. Subclause (c) also amends a cross reference to refer to section 38A instead of section 30. Clause 24 amends section 26(4A) of the Mineral Resources (Sustainable Development) Act 1990. Section 116 of the Act provides that a licensee must provide to the minister relevant information relating to work done under a licence. Section 26(4A) however provides that it is only a condition on a mining licence to provide a document to the Minister under section 116. This amendment clarifies that it is all licence types which that must comply with section 116. Clause 25 inserts new section 25(5) into the Mineral Resources (Sustainable Development) Act 1990 to provide that it is a condition of a licence that the use of restricted hydraulic fracturing substances is prohibited in carrying out any hydraulic fracturing permitted by a licence. The terms "hydraulic fracturing" and "restricted hydraulic fracturing substances" are defined in clause 13 of this Bill. Clause 26 inserts new section 26(7) into the Mineral Resources (Sustainable Development) Act 1990 to provide that it is a condition on a licence that the licensee complies with any conditions specified in a land use activity agreement under section 31(3) of the Traditional Owner Settlement Act 2010 (TOS Act) that were accepted by the applicant for the licence. The TOS Act establishes a framework for recognising traditional owner groups based on their traditional and cultural associations to certain land in Victoria, by providing for the making of land use activity agreements (LUAA) between the State and traditional owner groups. For the earth resources sector, LUAAs may specify conditions on exploration authorisations and prospecting licences. This amendment facilitates the enforcement of obligations on earth resources authorisations when agreements are made under the TOS Act. 11

 


 

Clause 27 substitutes section 26AA(a) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to the addition of these licence types to provide that exempted land, as contemplated by section 7 of the Act, should apply to all licence types. Clause 28 amends section 26AD(2) of the Mineral Resources (Sustainable Development) Act 1990 to include reference to section 15(1BH). This section, as provided for under clause 20 of this Bill, provides that an application for a mining licence, prospecting licence or retention licence must include a survey of boundaries of the land. Subclause (2) amends section 26AF(1)(a) of the Act. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to those changes and provides that the Minister must not grant a licence over land that is exempted under section 6 of the Act (land not available for exploration, mining and searching) or any other Act from being subject to a licence of the type applied for (i.e. exploration, retention, prospecting and mining licences). Subclause (3) amends section 26AF(4) of the Act to insert reference to section 26(5) as a consequence of amendments in clause 25 of this Bill, which prohibits the use of restricted hydraulic fracturing substances in hydraulic fracturing. Subclause (4) amends section 26AF(4) of the Act to insert reference to section 26(7) as a consequence of amendments in clause 26 of this Bill, which imposes a condition on a licence that the licensee complies with any conditions specified in a land use activity agreement under section 31(3) of the Traditional Owner Settlement Act 2010. 12

 


 

Clause 29 amends section 26AJ(4) of the Mineral Resources (Sustainable Development) Act 1990 as a consequence of amendments in clause 20 of this Bill, being the requirement to survey upon application for a mining licence, prospecting licence or retention license. Subclause (2) amends section 26AM(1)(a) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to these licence types and provides that the Minister must not grant a licence over land that is exempted under section 6 of the Act (land not available for exploration, mining or searching) or any other Act from being subject to a licence of the type applied for (i.e. exploration, retention, prospecting and mining licences). Subclause (3) amends section 26AM(5) of the Mineral Resources (Sustainable Development) Act 1990 to insert reference to section 26(5) as a consequence of amendments in clause 25 of this Bill, which prohibits the use of restricted hydraulic fracturing substances in hydraulic fracturing. Subclause (4) amends section 26AM(5) of the Mineral Resources (Sustainable Development) Act 1990 to insert reference to section 26(7) as a consequence of amendments in clause 26 of this Bill, which imposes a condition on a licence that the licensee complies with any conditions specified in a land use activity agreement under section 31(3) of the Traditional Owner Settlement Act 2010. Clause 30 inserts new Division 3A--Survey of land proposed to be covered by mining licence, prospecting licence or retention licence--into Part 2 of the Mineral Resources (Sustainable Development) Act 1990. The purpose of the marking out and surveying provisions in the MRSDA is to provide certainty to licensees and applicants as to the areas covered by licences and to avoid disputes between licensees and applicants regarding the location of licence boundaries. Surveys and marking out are only required after a licence is granted. However, licence applications identify 13

 


 

boundaries with varying degrees of accuracy, and these licence boundaries are used for legal purposes. As a result, instances have arisen where the legal licence boundary (as in the application) is not consistent with the survey plan or the boundary as marked on the ground. The marking of boundaries with posts and other markers is intended to be a permanent marker and must be maintained by the licensee. However, in reality, posts and markers can be easily removed, moved by other parties or may not be well maintained by licensees. Furthermore, industry has argued that marking out is costly and unnecessary given the accuracy with which technology, such as GPS, can position locations on the ground. As such, the requirement to mark out has been removed from the Act. This amendment moves the provisions regarding the requirement to survey a licence area for prospecting, retention and mining licences, access to land for survey as well as security and insurance to the licence application stage rather than following the granting of a licence, as provided in clause 20 of the Bill. Clause 31 amends section 26A of the Mineral Resources (Sustainable Development) Act 1990. Section 26 of the Act applies to a mining or prospecting licence that covers agricultural land that is not owned by the licensee and the licensee proposes to carry out work on that land. Section 26A(1) of the Act requires a holder of a mining or prospecting licence that covers agricultural land to prepare a statement of the economic significance of the work. Prospecting and mining licences allow for exploration and mining to be undertaken on the licence. However, the statement of economic significance should only be attached to mining. This amendment clarifies that a statement of economic significance should only be attached to mining undertaken on a mining or prospecting licence. Economic analysis is not relevant to exploratory work as a licensee cannot assess the value of an undiscovered mineral resource. Clause 32 substitutes section 27(3) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the 14

 


 

two existing licence types, exploration and mining licences. This amendment gives effect to these licence types and provides that all licences may apply to a tender over land that has been exempted under section 7 from being subject to a licence. Clause 33 amends section 27D(3) of the Mineral Resources (Sustainable Development) Act 1990 to clarify that where the Minister has invited tenders for a licence the Minister need not require a tender applicant to prepare a mineralisation report as provided for under section 15(6C). This is to reflect that the Minister would use the tender provisions set out under Division 5 of Part 2 when he or she is already satisfied with the mineralisation of the tender area. Clause 34 substitutes section 27E(3)(b) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to these licence types and clarifies that all licences may apply to the Minister's acceptance of a tender over land exempted under section 7 (Minister may exempt land from exploration or mining licence) from being subject to a licence. Clause 35 substitutes section 31(8) of the Mineral Resources (Sustainable Development) Act 1990 to clarify the circumstances for renewal of a mining licence and an infrastructure licence. Infrastructure mining licences are not intended to be used for the extraction of minerals rather they provide for the construction of facilities and infrastructure associated with the extraction of minerals under another mining licence. As currently drafted, section 31(8) of the Act precludes the renewal of an infrastructure mining licence unless there is or has been "mining of a mineral resource". The "mining of a mineral resource" is not relevant for infrastructure mining licences and this wording may preclude the appropriate renewal of these licences. Alternatively, if the renewal of infrastructure mining licences was dependent on "mining" taking place or having taken place this would allow 15

 


 

for the renewal of these licences because the definition of "mining" includes the processing and treating of ore. This amendment ensures that an infrastructure licence is captured within this provision, as this type of licence is not used for the extraction of minerals but rather in the construction of facilities and infrastructure associated with the extraction of minerals under another mining licence. Clause 36 inserts new section 32(1A) into the Mineral Resources (Sustainable Development) Act 1990 to provide that a retention licence that has been renewed has effect for a period not exceeding 10 years. This amendment replicates current section 14C(3)(b) of the Act and has been moved to the general renewal provisions of the Act. Clause 37 substitutes section 33(3) of the Mineral Resources (Sustainable Development) Act 1990 to provide that before approving an instrument of transfer, the Minister must be satisfied that the proposed transferee is a fit and proper person, intends to comply with the Act, genuinely intends to do work, has an appropriate work plan and is likely to be able to finance the proposed work and rehabilitation of the land. As well as this requirement, the Minister must be satisfied that the existing licensee must have paid all outstanding fees, bonds, royalties and rents in respect of the licence, and has an adequate work plan. Subclause (2) inserts new section 33(3B) to provide that the Minister may approve an instrument of transfer where there are outstanding fees, bonds, royalties and rents in respect of the licence if the proposed transferee agrees to pay the amounts outstanding. This amendment ensures that the commercial sale and transfer of a licence is unimpeded. As provided in clause 43 of this Bill, the Department Head may refuse to accept for registration an approved instrument of transfer if the proposed transferee has not paid the outstanding fees, bonds, royalties or rents agreed to. Subclause (2) also inserts new section 33(3C) to provide that if the Minister is not satisfied that the work plan relating to a licence is adequate, the Minister may consent to the transfer of the licence subject to the proposed transferee being required to submit a new work plan for approval by the Department Head within the time specified by the Minister. 16

 


 

Clause 38 substitutes section 38(1)(b)(vi) of the Mineral Resources (Sustainable Development) Act 1990 to provide for consistent drafting with section 31(2)(f) of the Act. Clause 39 amends section 38A of the Mineral Resources (Sustainable Development) Act 1990. Section 38A provides for the cancellation of an exploration licence in relation to a percentage of the number of graticular sections covered by the licence as originally granted. Subsequent licence amalgamations make it difficult to determine the number of graticules to be cancelled. In order to clarify how this section operates in this circumstance, this amendment provides that the percentage cancelled is to the licence as originally granted, and as amalgamated with another licence. Section 38A(5)(b) provides that in calculating the area to be cancelled, if a licensee holds 2 or more exploration licences with a common expiry date over adjoining areas, the combined areas covered by the licences may, at the Ministers discretion, be treated as a single area. Common expiry dates and whether the licences are adjoining are not relevant and do not impact on the calculation of the area to be cancelled. As such, these words have been deleted. Clause 40 repeals section 38AA, 38AB, 38AC, 38AD and 38AE of the Mineral Resources (Sustainable Development) Act 1990 as a consequence of the amendments made in clause 30 of the Bill, which relate to survey and the removal of marking out requirements. Clause 41 amends sections 40(5) and 41(4) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to those changes by including reference to prospecting licence in section 40(5) (work plan requirements) and 41(4) (application to vary a work plan) of the Act, which were inserted as part of the Mineral Resources (Sustainable Development) Amendment Act 2014. 17

 


 

Clause 42 amends the heading to section 41AD of the Mineral Resources (Sustainable Development) Act 1990 to correct a typographical error in reference to a work plan. Clause 43 inserts new section 69(2)(xvb) into the Mineral Resources (Sustainable Development) Act 1990 to provide that written undertakings entered into under new section 107 of the Act (clause 56 of this Bill, which relates to enforceable undertakings) are to be registered on the Mining Register. Clause 43 also inserts new section 64(5) into the Act. Under section 33 of the Act (as amended by clause 37 of this Bill) the Minister may approve an instrument of transfer where there are outstanding fees, bonds, royalties and rents in respect of the licence if the proposed transferee agrees to pay the amounts outstanding. New section 64(5) provides that the Department Head may refuse to accept for registration an approved instrument of transfer if the proposed transferee has not paid the outstanding fees, bonds, royalties or rents agreed to. Clause 44 inserts new Division 1--Searching for stone--into Part 6A of the Mineral Resources (Sustainable Development) Act 1990. The detailed search (exploration) for stone provisions in the MRSDA largely relate to consent to search for stone on Crown land, though they also cover consent to search on land managed by water authorities and notice with regard to searching for stone on road reserves, and include the right of review by the Victorian Civil and Administrative Tribunal (VCAT). Consents for searching for stone on most private land are largely dealt with by private arrangements between extractive operators and landowners. These provisions are unnecessarily long, prescriptive and detailed. In addition, the right of review by VCAT (where the Crown land Minister or water authority refuses to consent to search for stone or places conditions on consent) is inconsistent with the work authority approval process which does not attract VCAT review. At present, a proponent may seek VCAT review of the Crown land Minister's or water authority's decision not to consent or place conditions on consent to search for stone; however, when the proponent, having invested a considerable sum to identify a stone resource, seeks approval of a work authority to extract stone, the decision to not grant the work authority or to place conditions on the work authority is not 18

 


 

subject to review by VCAT. This amendment corrects this by removing the VCAT review section from the searching for stone provisions. This amendment also consolidates the current provisions into a consent provision requiring the consent of the Crown land Minister or water authority (as the case may be) which may include conditions to search for stone on Crown land or controlled by a water authority. The notice provisions with regard to road reserves will be maintained. The notification of Registered Aboriginal Parties will no longer be the responsibility of the Crown land Minister. Departmental guidelines will instead provide that those seeking consent to search for stone on Crown land should advise the Department of State Development, Business and Innovation (DSDBI) which in turn will advise the Registered Aboriginal Party. Clause 45 substitutes section 77G(2)(a) of the Mineral Resources (Sustainable Development) Act 1990. When extractive industries were brought under the MRSDA in January 2010, a key reform was removing work plan requirements for small quarries (less than five hectares in area and five metres in depth) that do not involve blasting or clearing of native vegetation. These operations are subject to a Code of Practice. This amendment clarifies that a work plan is not required for a person who proposes to apply for an extractive industry work authority to carry out an extractive industry on land that has an area not exceeding 5 hectares and at a depth not exceeding 5 metres (rather than land that has an area of less than 5 hectares and a depth of less than 5 metres as is currently provided for). This will make the extractive industry Code of Practice authority size restrictions consistent with those for the mineral industry. Clause 46 amends section 77N of the Mineral Resources (Sustainable Development) Act 1990. Section 77N(2)(b) currently provides that in order to transfer an extractive industry work authority, the Minister must be satisfied that the work plan to which the extractive industry work authority relates is adequate. This requirement, however, does not take into account small quarries (less than five hectares in area or five metres in depth), 19

 


 

which are subject to a Code of Practice and do not require a work plan. This amendment clarifies that the adequate work plan requirement only relates to an extractive industry work authority holder who has a work plan. Clause 47 inserts new section 77OA into the Mineral Resources (Sustainable Development) Act 1990. This amendment clarifies an extractive industry work authority holder's entitlement, subject to Ministerial consent, to voluntarily surrender an extractive industry work authority in the same way that a licensee may surrender a licence. Clause 48 substitutes section 77S(1) of the Mineral Resources (Sustainable Development) Act 1990. An extractive industry operation can be approved through either a planning permit or an Environmental Effects Statement. Section 77S of the MRSDA requires an applicant for an extractive industry work authority to lodge a copy of their application with the Department Head, send a copy to a licence holder in the same area and seek consent from that licence holder. This is limited to an extractive industry work authority applied for through a planning permit. As a result, these requirements do not extend to proponents who have prepared an Environment Effects Statement as an alternative to applying for a planning permit. This amendment rectifies this issue by moving the notification requirement to the extractive industry work authority application, rather than the planning permit application, to provide for the same notification requirements for all extractive industry work authority applicants. Clause 49 amends section 79 of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to those changes and applies rehabilitation plan requirements to the holder of a prospecting licence. 20

 


 

Clause 50 amends section 80 of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. The amendment in paragraph (a) gives effect to those changes and applies the return of rehabilitation bond requirements to the holder of a prospecting licence. Paragraph (b) amends section 80(6) to correct a reference to "licensee", which should refer to "authority". Clause 51 amends section 82(2) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to those changes and applies the return of rehabilitation bond provisions to the holder of a prospecting licence holder. Clause 52 amends section 89(3) of the Mineral Resources (Sustainable Development) Act 1990 to correct a typographical error incorrectly cross referencing to compensation provisions detailing loss of amenity under section 85(1A)(d). Clause 53 amends section 89AA(1) of the Mineral Resources (Sustainable Development) Act 1990 as a consequence of amendments in clause 58(2) of this Bill which relate to searching for stone and maintain the provisions for the state to undertake searching for stone. Clause 54 substitutes section 94(1) of the Mineral Resources (Sustainable Development) Act 1990. At present, inspectors' powers of entry under the MRSDA only cover worksites that are operating under an earth resources authorisation (licence or work authority). The power to enter an unlicensed site requires a court ordered search warrant. This amendment extends an inspectors powers to gain access to 21

 


 

illegal sites where there are reasonable grounds for suspecting that a site is an illegal worksite. Extending the power of entry will provide that where an inspector reasonably believes that a site is operating without an earth resources authorisation (in breach of the Act), an inspector will be able to respond expeditiously to illegal activity on private land where they would not otherwise have rights to access, without first obtaining a search warrant. The extended power of entry is required for the purpose of giving direction, gathering evidence and the completion of any other compliance action, including service of a notice under section 110A, which gives an inspector the power to issue a notice to a person (other than the holder of an authority) who an inspector reasonably believes will carry out an activity on land in contravention of the Act or regulations. The notice may require a person to stop the activity or take remedial action to remedy the contravention. This amendment does not change the current requirement for inspectors to obtain a search warrant to enter places used for residential purposes (except with the consent of the occupier). Clause 55 inserts new Division 1--Definitions--into Part 12 of the Mineral Resources (Sustainable Development) Act 1990. The definitions of authorised person and authority have been moved to this Part from current sections 100(7) and 110A(3) of the MRSDA (as repealed in clause 57 of this Bill). Clause 56 inserts new Division 3--Enforceable undertakings--into Part 12 of the Mineral Resources (Sustainable Development) Act 1990. The MRSDA establishes a range of offences, with penalties, which may be prosecuted in the courts. However, in practice, most breaches are addressed using the general powers of inspectors and the other enforcement tools provided by the MRSDA. In addition to statutory enforcement tools, such as notices, the Department of State Development, Business and Innovation (DSDBI), the regulator for the MRSDA, has widely utilised administrative measures such as instructions, information, advice, education, codes of practice and guidelines to improve compliance in the minerals and extractive industries. 22

 


 

This amendment introduces an enforceable undertaking into the Act which will serve as an enforcement tool, offered at the discretion of the regulator and voluntarily entered into by authority holders, in lieu of prosecution for a contravention of the Act or regulations, non-compliance with any condition of an authority or work plan, and undertaking work otherwise than in accordance with an approved work program. Enforceable undertakings are well suited to implementing systemic change by an authority holder to prevent future breaches. Where an authority holder enters into an enforceable undertaking the regulator cannot prosecute for the original offence. Enforceable undertakings may be published by the Minister in any manner the Minister considers appropriate and will be registered on the mining register. As enforceable undertakings are given in lieu of prosecution, the Bill will also insert an offence for failure to comply with an enforceable undertaking, with a maximum penalty of 2500 penalty units for corporations and 500 penalty units for individuals. Clause 57 amends Part 12 of the Mineral Resources (Sustainable Development) Act 1990. Paragraph (a) inserts the heading to Division 4 of Part 12-- Remedial notices and orders and enforcement orders. Paragraph (b) repeals the definitions of authorised person and authority and moves them into new Division 1 of Part 12 as a consequence of amendments to clause 55. Paragraph (c) inserts the heading to Division 5--General into Part 12. Clause 58 amends section 112 of the Mineral Resources (Sustainable Development) Act 1990 as a consequence of amendments made by clause 44 of this Bill. Section 112 currently provides for the Minister to authorise any person to enter, or fly over, any land for the purpose of making a land, mining or geological survey on behalf of the Department. The amendment incorporates the existing section 77C of the Act, where the Minister may authorise search for stone by the Department, into the related section 112 provisions for land, mining or geological survey. 23

 


 

Clause 59 substitutes section 115(3) of the Mineral Resources (Sustainable Development) Act 1990. In 2010, to implement the outcomes of the first phase of the MRSDA review, the MRSDA was amended to provide for two new types of licences, prospecting licences and retention licences, in addition to the two existing licence types, exploration and mining licences. This amendment gives effect to those changes and clarifies the owner's liability requirements for these licences. This section has also been amended as a consequence of amendments made by clause 30 of this Bill regarding surveys of land. Clause 60 amends section 119 of the Mineral Resources (Sustainable Development) Act 1990. Section 119 of the MRSDA replicates the former section 53 of the repealed Extractive Industries Development Act 1995. This provision obliges persons administering the Act not to divulge, communicate or publish information obtained in the course of their duties under the Act. Disclosure was permitted under the former section 53 with the written consent of the "holder of the work authority" rather than the "licensee" as provided for under the current section 119 of the MRSDA. This amendment ensures that the holders of work authorities are captured under this provision. Subclause (2) amends section 119(3) to provide that an authority holder means an exploration and mining licence as well as an extractive industry work authority, consistent with section 77U of the Act. Clause 61 amends section 124(1)(d) of the Mineral Resources (Sustainable Development) Act 1990. This amendment provides the regulation making power as a consequence of the amendments to the survey and marking out provisions in clause 30 of this Bill. Clause 62 repeals spent provisions in sections 126 and 128 of, and Schedule 1 to the Mineral Resources (Sustainable Development) Act 1990. 24

 


 

Clause 63 repeals the definition of hydraulic fracturing inserted by section 41 of the Mineral Resources (Sustainable Development) Amendment Act 2014 in proposed clause 2 of Schedule 4A to the Mineral Resources (Sustainable Development) Act 1990, as a result of the new definition of hydraulic fracturing inserted by clause 13 of this Bill. Clause 64 amends sections 44(2)(b), 44(8)(a), 77A(2), 77A(5), 77A(6) and 77B(a) of the Mineral Resources (Sustainable Development) Act 1990 and section 41 of the Mineral Resources (Sustainable Development) Amendment Act 2014 to update references from the Water Act 1989 to the Water Act 2014. Clause 65 provides savings and transitional provisions for amendments for this Part of the Bill. Clause 20 of this Bill introduces the requirement that survey of the licence should accompany a licence application. This requirement will apply to new licence applications made after the commencement of this provision. Licences that are in application or which have already been granted will continue to be subject to the existing survey and marking out requirements in the MRSDA. Clause 37 of this Bill introduces new matters that the Minister must be satisfied of prior to transferring a licence. These new requirements regarding work plans and the payment of fees will not apply to transfers that have been applied for prior to the commencement of this provision. Existing applications for licence transfer will be assessed based on section 33(3) of the current MRSDA. Clause 48 of this Bill amends section 77S(1). Section 77S(1) currently applies to a person who applies to a responsible authority for a permit under the Planning and Environment Act 1987 to carry out an extractive industry in respect of land which is the subject of a licence under Part 2 of the MRSDA. Following the commencement of clause 48 of this Bill, any applicant for an extractive industry work authority who has undertaken the requirements of the current section 77S(1) of the MRSDA when applying for a permit for the relevant area will not be required to comply with the new section 77S(1). 25

 


 

PART 5--OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE ACT 2010 Clause 66 substitutes section 286(1)(c) and (d) of the Offshore Petroleum and Greenhouse Gas Storage Act 2010. This amendment clarifies that a proponent is able to drill an onshore deviated well (under a special drilling authorisation, as provided for under Part 8A of the Greenhouse Gas Geological Sequestration Act 2008) into an offshore area (where it holds an assessment permit) and inject or store greenhouse gas substance. At present it is unclear if the drilling of a deviated well from outside the offshore greenhouse gas tenement is provided for under the Offshore Petroleum and Greenhouse Gas Storage Act 2010. Clause 67 inserts new Part 6.10--Using and Sharing Offshore Information and Things--into the Offshore Petroleum and Greenhouse Gas Storage Act 2010 to replicate Part 6.11 of the Commonwealth Offshore Petroleum and Greenhouse Gas Storage Act 2006. This Part enables the sharing of information between regulatory entities under the offshore petroleum regime with appropriate Commonwealth, state and territory agencies. In summary, the amendments in this Part will-- · enable information obtained by the Minister or the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to be used for the purposes of the performance or exercise of any of its functions or powers under the Act and associated regulations; and · enable the sharing of information between the Minister and NOPSEMA and other relevant Commonwealth, State and Territory Government agencies, to assist or enable those agencies to perform their legislative functions and powers. The amendments in this Part provide that information that can be shared may include personal information or health information. The use and disclosure of personal information obtained under this Part is regulated under the Privacy and Data Protection Act 2014, while the Health Records Act 2001 regulates health information. 26

 


 

Information shared by the Minister or NOPSEMA would be for the purposes of the performance or exercise of any of its functions or powers under the Act and associated regulations. Enabling information to be used by the Minister or NOPSEMA in this manner will ensure the more efficient and effective operation of the regulator to achieve the legitimate and lawful objectives of the Act and regulations in relation to regulation of the high-hazard offshore petroleum industry. Information may only be shared between entities with regulatory functions under the Act and associated regulations, or between the Minister or NOPSEMA and other Commonwealth, State or Territory government agencies, for use by those entities or agencies in relation to the exercise of their functions or powers under an Act or regulations. In all cases, the ability to share information is discretionary and not obligatory. The person in possession of the information will be able to specifically consider the type of information to be shared and the rationale for sharing that information in each particular case before making a decision to share the information. The Minister will also have the ability to place conditions on the sharing of information with the listed entities, such as conditions restricting further disclosure. A provision has also been included to require parties to de-identify personal information wherever possible (where the sharing of specific personal information is not necessary). Clause 68 inserts new clause 48 into Schedule 5 to the Offshore Petroleum and Greenhouse Gas Storage Act 2010 to provide for the transitional arrangements for new Part 6.10. Subclause (2) provides that the Governor in Council may make regulations in relation to matters of a savings or transitional nature consequent to the enactment of new Part 6.10--Using and Sharing Offshore Information and Things--in clause 67 of this Bill. Subclause (3) provides that in this clause, offshore information has the same meaning as provided in clause 67 of this Bill and personal information has the same meaning as in the Privacy and Data Protection Act 2014. 27

 


 

PART 6--AMENDMENT OF PETROLEUM ACT 1998 Clause 69 inserts new section 101A into the Petroleum Act 1998 to provide that an authority is subject to the condition that the use of restricted hydraulic fracturing substances is prohibited in carrying out any hydraulic fracturing permitted by the authority. Hydraulic fracturing is used to stimulate or enhance the flow of gas and oil, or fluids for geothermal energy, by creating fractures in coal or other hard rock formations, such as shale and tight sandstones. This enables an economic recovery of hydrocarbons. The process involves injecting a fluid into the rock formation at pressure. The mix of components used in the hydraulic fracturing fluid and the pressure required depend on the geological environment. Typically hydraulic fracturing fluids have three components: water (approximately 90 per cent), proppant to hold fractures open such as sand or equivalent (approximately nine per cent) and chemicals to control the properties of the fluid (approximately one per cent). BTEX refers to the chemicals benzene, toluene, ethylbenzene, and xylene, which are naturally occurring compounds found in petroleum products. These chemicals may be used in the chemical component of hydraulic fracturing fluid and have been known to have harmful effects on human health. As such, this amendment classes the use of BTEX chemicals as a restricted hydraulic fracturing substance. Clause 70 inserts new section 101B into the Petroleum Act 1998 to provide that an authority is subject to the condition that the holder of the authority comply with any conditions specified in a land use activity agreement under section 31(3) of the Traditional Owner Settlement Act 2010 (TOS Act) that were accepted by the applicant for the authority. The TOS Act establishes a framework for recognising traditional owner groups based on their traditional and cultural associations to certain land in Victoria, by providing for the making of land use activity agreements (LUAA) between the State and traditional owner groups. For the earth resources sector, LUAAs may specify conditions on exploration authorisations. 28

 


 

This amendment facilitates the enforcement of obligations on earth resources authorisations when agreements are made under the TOS Act. Clause 71 amends section 113A of the Petroleum Act 1998. That section states that if a primary authorisation that is the basis for a special drilling authorisation (SDA) granted under either Part 6A of that Act or the Offshore Petroleum and Greenhouse Gas Storage Act 2010 (OPGGS) is cancelled or suspended, the SDA that relates to that primary authorisation is also taken to be cancelled or suspended. Section 113A does not account that if a primary authorisation is surrendered, the accompanying SDA specified in the primary authorisation is also taken to be surrendered. Under Part 6A of the Petroleum Act 1998 (Petroleum Act), section 95H states that if a primary authorisation is surrendered, the accompanying SDA is also taken to be surrendered. However, the OPGGS does not specifically provide for special drilling authorisations and as such the SDA is not specified in the primary authorisation. Therefore, if a primary authorisation granted under the OPGGS is surrendered, the SDA that relates to that primary authorisation may effectively continue. This amendment clarifies this by providing that if a primary authorisation that is the basis for a special drilling authorisation under the Petroleum Act or the OPGGS is surrendered, the special drilling authorisation that relates to that primary authorisation is taken to be surrendered on the same day that the primary authorisation is surrendered. PART 7--AMENDMENT OF PIPELINES ACT 2005 Clause 72 inserts new definitions and amends existing definitions of the Pipelines Act 2005. Paragraph (a) inserts a new definition of applicant to mean a person who has lodged an applicant for a licence to construct and operate a pipeline. This definition contrasts with the definition of proponent which is amended by paragraph (d) to mean a person who proposes to apply for a licence to construct and operate a pipeline. The definition of proponent is amended to exclude a reference to an applicant for a licence. 29

 


 

The amendment to the definition of proponent and the introduction of the definition of applicant seeks to improve the clarity of the operation of the pre-licence process set out in Part 4 of the Act and clarify the rights and responsibilities of proponents and applicants throughout. In addition, paragraph (a) inserts a new definition of pipeline corridor. "Proposed pipeline corridor" is defined in the Act to mean a corridor of land within which a pipeline is proposed to be constructed. The term "proposed pipeline corridor" is used specifically in section 27 of the Act in relation to proponent notices to be provided to owners and occupiers; however, "pipeline corridor" is also used throughout interchangeably. This amendment repeals proposed pipeline corridor and inserts a definition of pipeline corridor to mean a corridor of land within which a pipeline is proposed to be constructed. Paragraph (b) inserts a new definition for approved consultation information. The new definition for approved consultation information recreates the existing definition of approved consultation information which captures information that is to be provided to owners and occupiers in relation to a proposed pipeline and extends the definition to cover information that is to be provided to owners and occupiers in relation to a proposed significant alteration. This is a consequence of amendments made under clause 90 whereby the Minister may require a licensee proposing to apply for a significant alteration to a pipeline route to prepare a consultation plan. Paragraph (c) inserts a new definition for approved consultation plan. The new definition for approved consultation plan recreates the existing definition of approved consultation plan which captures a consultation plan approved under Division 1 of Part 4 in relation to a proposed pipeline and extends the definition to cover a consultation plan that may be required under Division 6 of Part 5 in relation to a proposed significant alteration. This is a consequence of amendments made under clause 90 where by the Minister may require a licensee proposing to apply for a significant alteration to a pipeline route to prepare a consultation plan. 30

 


 

Paragraph (d) amends the definition of operation to cover pipeline testing as well as the maintenance, alteration, decommissioning and removal of a pipeline. This change is intended to reduce the regulatory burden on industry by allowing licensees to undertake operational maintenance and repairs, which may require testing, and as long as this is done in compliance with the operational management plans and the relevant standards. Paragraph (e) substitutes the definition of owner to cover an owner of private land as well as an owner of Crown land. The new definition is consistent with the definition of owner in section 4 of the Mineral Resources (Sustainable Development) Act 1990. The amendments to the definition will restrict the definition of owner, in relation to private land, to the registered or entitled to be registered proprietor, the mortgagor (if the land is mortgaged), the licensee under the Victorian Plantation Corporation Act 1993 and in any other case, the person who has a fee in the land. Paragraph (f) amends the definition of proponent to mean a person who proposes to apply for a licence to construct and operate a pipeline. The definition of proponent is amended to exclude a reference to an applicant for a licence and is consequential to the new definition of applicant inserted by subclause (a). Paragraph (g) repeals the definition of proposed pipeline corridor. This is consequential to the insertion by subclause (a) of the definition of pipeline corridor in the same terms. Paragraph (h) amends the definition of public authority. Public Authority is currently defined in the Act to mean any body corporate established by or under an Act for a public purpose other than a municipal council. This definition is based on the definition of public authority in the Planning and Environment Act 1987; however, for the purposes of the Pipelines Act, municipal councils should be considered public authorities. The effect of this amendment is to include a municipal council within the definition of public authority. Clause 73 amends section 16(1) of the Pipelines Act 2005 to require that a pipeline proponent must have consultation plan which has been approved by the Minister under section 18 before the proponent gives a notice of intention to entre land under 31

 


 

Division 2 or gives notice of a pipeline corridor under Divisions 3. The amendments clarify that the consultation plan must be approved rather than simply be prepared prior to giving notice under Division 2 or Division 3. Clause 74 amends section 22(3) of the Pipelines Act 2005. Section 22 of the Act relates to applications to the Minister for Energy and Resources from a proponent for a pipeline where agreement for entry to land cannot be reached from the owner or occupier. Section 22(3) currently provides that an application cannot be made under this section for consent to enter Crown land unless the consent of the Crown Land Minister has first been obtained under section 21. Section 22(3) is currently unclear as to the circumstances of refused entry to Crown land. It is intended that an application would be made under section 22, to the Minister, for consent to enter land, when an occupier of Crown land has restricted a proponent's entry, despite consent being granted by the Crown Land Minister. Clause 75 amends section 26(4) of the Pipelines Act 2005. Section 26(4) of the Act states if consent to enter Crown land under section 21 applies (Crown land Minister's consent), and there is a native title holder or occupier of that Crown land, a proponent may only enter the land if agreement is reached with the native title holder or occupier, as agreed under section 20, which provides that a proponent must take all reasonable steps to reach agreement with each owner and occupier of land in relation to land entry. In this circumstance, there could be a native title holder who is also the occupier of the land, or a native title holder and an occupier that are separate. The amendments to section 26(4) clarify intent of the section that in the circumstances where a native title holder and an occupier are separate, the consent of both parties, as provided for under section 20, is required (or alternatively a Ministerial consent under section 25 is in force) for the proponent to enter land. Clause 76 amends section 27 of the Pipelines Act 2005. This is consequential to the replacement of the term "proposed pipeline corridor" with "pipeline corridor" further to amendments made by clause 72 (a) and (g) of this Bill. 32

 


 

Clause 77 amends section 30(a) and (d) of the Pipelines Act 2005. Paragraph (a) amends section 30(a) of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Paragraph (b) amends section 30(d) of the Pipelines Act 2005. This is consequential to the replacement of the term "proposed pipeline corridor" with "pipeline corridor" as a consequence of the amendments made by clause 72(a) and (g) of this Bill. Clause 78 amends section 31 of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Clause 79 amends section 32(1) and (4) of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Paragraph (b) also amends section 32(1) to provide that a proponent must give notice of the application for a licence to the Water Minister. Section 32(1) sets out the entities the proponent must give notice of the application for a licence to, at present the Water Minister is not included in the list of entities. Section 49 details what matters the Minister must consider when determining an application for a licence, including any written comments received from the Water Minister and from the relevant Crown Land Minister on the impact of the proposed pipeline. The amendments in clause 79(1)((b) will provide a mechanism by which the Water Minister is notified of a licence application so he or she may provide written comments for consideration by the Minister under section 49. Clause 80 amends sections 33 and 35 of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. 33

 


 

Clause 81 amends section 37 of the Pipelines Act 2005. The amendment made by subclause (1) is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Section 37(2) sets out that the proponent may, when requesting that the Minister determine the licence under section 37(1), include details of how the proponent has addressed or proposes to address any matters raised in the submission made under section 34. The amendment made by subclause (2) provides that, rather than the proponent electing to provide details addressing a matter raised by submissions, the Minister may request that the applicant for a pipeline licence provide details addressing a matter raised by submissions. Persons who may be affected by the grant of the licence may make written submissions to the Minister about the application for the licence under section 34 of the Pipelines Act 2005. Clause 82 amends section 38 of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 81 which provide that the Minister may request that the applicant for a pipeline licence provide details addressing a matter raised by submissions. The amendment substitutes section 38 of the Pipelines Act 2005 to provide that the Minister must determine whether to refer the submissions to a panel or to proceed to determine the application under Division 3. This determination must be made within 28 days after the receipt of a request under section 37(1) or if the Minister has requested further details under section 37(2), within 28 days after the receipt of those details. Clause 83 amends section 45(1) and 46 of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Clause 84 amends section 48 of the Pipelines Act 2005. The amendment made by paragraphs (a) and (b) are consequential to the amendments made by clause 81 which provides that the Minister may request that the applicant for a pipeline licence provide details addressing a matter raised by 34

 


 

submissions. This amendment provides that, subject to any extension under section 48(2), the Minister must determine an application for a licence within 28 days after the last of a list of things have occurred. The list of things will now include the Minister's request that the applicant for a pipeline licence provide details addressing a matter raised by submissions. The amendment made by paragraph (c) is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Clause 85 amends sections 53, 55, 56 and 57 of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Clause 86 amends section 58 of the Pipelines Act 2005 to remove reference to a licence authorising the deviation of a pipeline route within the limits of lateral deviation authorised by the Minister. This removes a duplicative mechanism for deviating a pipeline route as Division 6 of the Act provides the required mechanism to deviate a pipeline route. Clause 86 also inserts section 58(3) of the Pipelines Act 2005 to clarify that a pipeline licence is not declared to be personal property for the purposes of section 8(1)(k) of the Personal Property Securities Act 2009 of the Commonwealth. Section 8(1)(k) of the Personal Property Securities Act 2009 (PPSA) relates to a particular right, licence or authority granted by or under a law of the Commonwealth, a State or a Territory. If, at the time when the statutory right is granted, or at any time afterwards, a provision of that law declares that kind of statutory right not to be personal property for the purposes of the PPSA, then that statutory right is not declared to be personal property. Clause 87 amends sections 59(1)(a) of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. 35

 


 

Clause 88 repeals section 65(2) of the Pipelines Act 2005 as a consequence of amendments made by clause 85 of this Bill, as this section refers to a deviation under section 58 of the Act. Section 58 is being amended to remove reference to a licence authorising the deviation of a pipeline route within the limits of lateral deviation authorised by the Minister. Clause 89 substitutes the existing section 68(3) of the Pipelines Act 2005. The amendments add new requirements on a licensee to give notice of the proposed alteration to each owner and occupier of land affected by the proposed alteration and, at the Minister's request, prepare and obtain approval for a revised consultation plan for a proposed significant alteration. Clause 89 also inserts a new section 68(3A) and 68(3B) into the Act. These provisions are consistent with the existing section 27(2) and (3) of the Act which applies to proponents of pipelines. Proponents seeking to apply for a pipeline licence must prepare a consultation plan (section 16), give notice of intention to enter land for survey (section 19) and give notice to owners and occupiers of land in the pipeline corridor (section 27). The amendments made by this clause will provide that the process which applies regarding consultation plans and the notice to owners and occupiers of land in the pipeline corridor apply to the significant alteration of a pipeline. The amendments to provide for the notice of intention to enter land for survey are included in clause 90 of this Bill. Clause 90 inserts new sections 68A to 68K into the Pipelines Act 2005. New section 68A imposes requirements for consultation plans for proposed significant alterations. This amendment is consistent with the amendments made in clause 89 where, at the Minister's request, a licensee may be required to prepare and obtain approval for a revised consultation plan for a proposed significant alteration. The provision is consistent with section 17 of the Pipelines Act 2005 which applies to proponents of pipelines. 36

 


 

New section 68B provides for the Minister's approval of a consultation plan for proposed significant alterations. This new section 68B is consistent with the existing section 18 of the Pipelines Act 2005 which applies to proponents of pipelines. New section 68C provides that a licensee must comply with a consultation plan for proposed significant alterations. This new section 68C is consistent with the existing obligation to comply with an approved consultation plan under section 18A of the Pipelines Act 2005 which applies to proponents of pipelines, and applies the same penalty of 20 penalty units. New section 68D provides that if a licensee proposes to enter private land or Crown land for the purposes of survey the licensee must give notice of intention to enter land for survey. This new section 68D is consistent with the existing section 19 of the Pipelines Act 2005 which applies to proponents of pipelines. New section 68E provides that if a licensee proposes to enter private land or Crown land for the purposes of survey the licensee must take all reasonable steps to reach agreement with each owner and each occupier of land in relation to entry for the purpose of a survey. This new section 68E is consistent with section 20 of the Pipelines Act 2005 which applies to proponents of pipelines. New section 68F provides that if a licensee proposes to enter Crown land for the purposes of survey the licensee must seek the consent of the Crown Land Minister or the public authority in which Crown land is vested for the purpose of a survey for the proposed alteration, that the Crown Land Minister or public authority may consent to that entry despite anything to the contrary in any other Act, that such a consent must be in writing and may be subject to any conditions the Crown Land Minister or public authority consider appropriate and that the Crown Land Minister must not give a consent in respect of wilderness Crown land. New section 68F is consistent with section 21 of the Pipelines Act 2005 which applies to proponents of pipelines. New section 68G provides that if a licensee proposes to enter private land for the purposes of survey the licensee may apply to the Minister for consent to enter land where the licensee has been unable to obtain the agreement of an owner or an occupier 37

 


 

under new section 68E. New section 68G is consistent with section 22 of the Pipelines Act 2005 which applies to proponents of pipelines. New section 68H provides that if a licensee applies to the Minister for consent to enter land under new section 68G the licensee must give a copy of the application to each owner and each occupier of the land to which the application relates and advise them of their rights under new section 68I. New section 68H is consistent with section 23 of the Pipelines Act 2005 which applies to proponents of pipelines. New section 68I provides that an owner or occupier of land to which an application under new section 68G relates may advise the Minister of their reasons for refusing to agree to the entry of the proponent onto the land for survey purposes and sets out that such advice must be in writing and made within 7 days of the owner or occupier receiving the application under new section 68H. New section 68I is consistent with section 24 of the Pipelines Act 2005 which applies to proponents of pipelines New section 68J sets out, in relation to the Ministers determination of an application under new section 68G, the timeframe in which a decision must be made, the things the Minister must take into account, the things the Minister must be satisfied of before consent can be given, that the Minister must not consent in respect of wilderness Crown land, the form of the consent and the process for notifying the licensee. New section 68J is consistent with section 25 of the Pipelines Act 2005 which applies to proponents of pipelines. New section 68K sets out the effect of a consent given under section 68F or 68J. New section 68K is consistent with section 26 of the Pipelines Act 2005 which applies to proponents of pipelines. Clause 91 substitutes section 73 of the Pipelines Act 2005. This section applies where a licensee holds two or more licences for pipelines and wants to consolidate, in whole or in part, any part of those licences into a single licence. The section clarifies that the licensee may apply to the Minister to consolidate the licences into one of those licences which will be the ongoing licence. That is, the consolidation of the licences will not result in a new licence rather an amendment to one of the existing licences. 38

 


 

Clause 92 substitutes section 77 of the Pipelines Act as a consequence of amendments made in clause 92 of this Bill. Clause 93 repeals section 78 of the Pipelines Act 2005 as a consequence of amendments made in clause 100 of this Bill which provides that the ongoing licence takes effect upon registration. Clause 94 amends sections 89, 90, 91, 92 and 94 of the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Clause 95 amends section 95 of the Pipelines Act 2005. Subclause (1) is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. Subclauses (2) and (3) are consequential to the amendments made by clause 90 of this Act that requires a licensee to give notice of the proposed alteration to each owner and occupier of land affected by the proposed alteration. The notice of the proposed alteration must be given under the new section 68(3) for a licensee to be able to apply to the Minister for consent to compulsory acquire an easement under Division 2 of Part 6. Clause 96 amends section 99 of the Pipelines Act 2005 to remove reference to a licence authorising the deviation of a pipeline route within the limits of lateral deviation authorised by the Minister as a consequence of the amendments made in clause 86. Clause 97 amends section 120 of the Pipelines Act 2005. Paragraph (a) clarifies that it is the Minister, not the Secretary, who must give notice to the owner of the building of the time and place of a hearing regarding a building that is constructed near a pipeline. This amendment ensures consistency in that it is the Minister who is the decision maker, not the Secretary. Paragraph (b) amends section 120(4)(a) of the Act. This section currently provides that the owner of a building may be directed by the Minister to remove an impediment or danger near a pipeline, as specified in the "order". The word "order" should refer to a "direction" of the Minister, for consistency with Part 8 of the Act. 39

 


 

Clause 98 inserts new Division 4--Infringements--into Part 11 of the Pipelines Act 2005. New section 183A provides that an inspector, on believing that a person has committed an offence under the Act or the regulations that is prescribed as an infringement offence, may serve an infringement offence on that person, as prescribed within the meaning of the Infringements Act 2006. This amendment will ensure that Energy Safe Victoria (the Victorian gas and electricity safety regulator) and Earth Resources Regulation can issue infringement notices for offences under the Act or regulations as an alternative method or dealing with minor offences, giving the person to whom a notice is issued the option of paying a fixed penalty, rather than proceeding to a court hearing. Clause 99 amends section 186(2) of the Pipelines Act 2005. Paragraph (a) provides that the Secretary must record on the Pipelines Register instruments for creating, assigning or affecting interest in, or conferred by, licences (including mortgages). This amendment provides for consistency with other Acts within the earth resources sector, such as section 69(2)(xiv) of the Mineral Resources (Sustainable Development) Act 1990. Paragraph (b) substitutes section 186(2)(d) of the Act. Section 186(2)(d) currently provides that details of notices published under section 67(1) (decision on application or a minor pipeline alteration) or 70(3) (decision on application for a major pipeline alteration) must be published in the Government Gazette. The requirement to be published on the Pipelines Register already exists. This amendment removes the duplication. Clause 100 inserts new section 186B into the Pipelines Act 2005. Subclause (1) provides that a document that the Secretary must record on the Pipelines Register under section 186(2) has no effect until it is registered (other than documents listed in section 186(2)(a), (ca) or (e)). In order to comply with the administrative arrangements in the Pipelines Act, the excluded paragraphs must have effect before registration. Subclause (2) provides the transitional arrangements for new section 186(2)(ca) of this Bill. An instrument for creating, assigning or affecting interests in, or conferred by licences (including mortgages) has no effect until it is registered, 40

 


 

regardless of whether it is created on or after the commencement of new section 186B in clause 101 of this Bill. Clause 101 amends clause 3(2) of schedule 2 to the Pipelines Act 2005. This amendment is consequential to the amendments made by clause 72 of this Bill that relate to the definitions of applicant and proponent. PART 8--REPEAL OF AMENDING ACT Clause 102 provides that the Act is repealed on the first anniversary of the first day on which all of its provisions are in operation. The repeal of this Act does not affect in any way the continuing operation of the amendments made by this Act (see section 15(1) of the Interpretation of Legislation Act 1984). 41

 


 

 


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