Never Get Between A Premier And A Bucket Of Money
By Bernard LaganNovember 8, 2013
The NSW government has bulldozed opposition to more mines, with new rules that put economic benefits – including to the state coffers – above all else.
On the eve of a landmark court decision – widely tipped to rebuff big coal miners – the New South Wales Government has stepped in to ensure that big coal will not be further frustrated by environmental and social objections to its activities.
The state government this week quietly passed into law plans it had foreshadowed in July, to elevate the importance of economic benefits of new coal mines – above their adverse social and environmental impacts – when decisions are being made on whether to approve new mines.
These amendments to NSW planning laws have now come into effect: In future, state tribunals and courts required to rule on new coal mines will have to make the economic benefits of those mines their principal consideration.
The new laws follow outrage among big coal miners – especially from the global conglomerate Rio Tinto – over an historic NSW Land and Environment Court decision issued in April. That decision withdrew permission for Rio Tinto to vastly expand its large Warkworth mine near the hamlet of Bulga in the Hunter Valley. The government denies any connection between the miners’ outrage and the new green-light law. The court decision is now under appeal.
The Bulga residents’ court challenge was seen as a test for big coal miners around the country, to justify now-discredited economic modeling which invariably overstated the numbers of jobs new mines would create. The challenge also invited the court to look closely at how big coal miners have frequently been allowed to destroy land and habitat by offering to save other land, despite the fact that the compensatory lands were often far distant from that which was to be destroyed by mining.
After hearing the case brought against the mine-expansion plan by the people of Bulga, the court’s chief judge, Brian Preston, ruled that Rio Tinto’s plans were deeply flawed. Chief among these defects was that the expanded mine would destroy more of the area’s unique Warkworth Sands Woodland – the last of this type of landscape on the planet, which is also home to several endangered species. Preston found that Rio’s proposals to create environmental offsets – some more than 100 kilometres away – to make up for the habitats it wanted to destroy, were hopelessly inadequate; that the proposed offset lands were not of the same type or quality as those threatened by the mine. He also found that there was no doubt that the enlarged mine – Rio planned to expand it to within 2,600 metres of the village – would have a severe impact on the villagers, in the form of extra dust, noise and visual impacts.
In addition, Justice Preston picked apart Rio Tinto’s vastly inflated claims that some 44,000 new jobs would be created throughout the state as a result of the mine’s expansion. Preston heard evidence that Rio Tinto had based its forecasts on economic modeling so old that it pre-dated the widespread use of mobile phones and the internet. And he accepted evidence that rather than create a vast swath of new jobs, the expanded mine would be more likely to suck workers out of existing jobs.
Rio Tinto was so alarmed by Justice Preston’s decision that in July it dispatched its global head of energy, Harry Kenyon-Slaney from London, to confront NSW Premier Barry O’Farrell. Of course their meeting was held in private and Rio later strenuously objected when The Global Mail used Freedom of Information Laws to try to gain access to material it had put in front of the government to counter Preston’s decision. The government accepted Rio Tinto’s objections and refused us the information.
Kenyon-Slaney also wrote an article – in the wake of Preston’s decision – for The Australian Financial Review in which he called for courts to be stripped of their powers to decide if new coal mines should get planning approval.
The NSW Minister for Resources and Energy, Chris Hartcher, a strong advocate for coal mining, was questioned on ABC Radio about the likelihood that the decision to elevate the economic benefits of coal mining within planning laws had been prompted by Rio Tinto’s setback in the Land and Environment Court.
In Newcastle in July ABC Radio’s Jill Emberson asked Hartcher whether the decision was coincidental, and he replied: “It is only coincidental in this sense; that the new New South Wales planning policy does not relate to the matter which is now before the court.”
The case he referred to is Rio Tinto’s appeal against the Bulga decision (the appeal hearing has now concluded and a decision is expected soon). Hartcher added that the proposed coal-mine-planning laws would have no effect on the decision of the court that is hearing Rio Tinto and the government’s appeal of the Bulga decision.
It is likely to be largely irrelevant for the people of Bulga whatever decision the NSW Supreme Court brings down on Rio Tinto’s appeal against Justice Preston’s decision. Although it is fairly widely anticipated that Rio Tinto will lose its appeal, the miner may have been saved by the government’s decision to act before the court brings down its decision.
Under the changes to the mining-planning laws now in place, Rio Tinto could re-submit its plans to expand the Warkworth Mine. And under the new provisions – that decision makers must elevate the economic benefits of a new coal mine above its adverse environmental and social impacts – Rio Tinto could have a degree of confidence that, second time around, the Warkworth mine expansion would be approved.
Certainly, John Krey, the Bulga resident who masterminded the town’s successful court challenge to Rio Tinto, expects the miner to re-submit its plans under the new laws. The final version of the new laws allows for this; a new clause clarifies that the law applies to both to new coal-mine proposals and the expansion of existing mines.
Minister Hartcher, architect of the changes to the mining law, claimed they were designed to give greater certainty to those who invested in coal mines. While he himself did not link the changes back to Rio Tinto, the coal lobby has claimed that Justice Preston’s decision had exacerbated uncertainty for big mining companies wanting to invest more in NSW.
The small Sydney community law centre – The Environmental Defenders Office (EDO), which ran the case against Rio Tinto before Justice Preston, said its original submission against the laws remained relevant. The EDO said of the effect of the new laws:
“It is concerning that the amendments appear to endorse and reinforce the view that the approval of mining projects is ‘almost inevitable’, even where they have significant negative impacts on human settlements and the environment.”
When the government first put forward the changes to the state mining laws in July, it allowed only two weeks for the public to comment on them. Nonetheless, it was hit with an avalanche of submissions – more than 1,200 – most of which were strongly against the changes.
The government has made only minor changes to the wording of the laws as a result of these submissions – although the changes it has made are telling.
It has now defined the relevant measures of a proposed coal mine’s economic benefits, which planning decision makers will in future be required to give greater weight to. Notably – if perhaps unsurprisingly – they include the value of royalties to the state government; this is the fee coal miners pay for extracting coal. At present the state government collects about $1.4 billion in coal royalties each year.
And it has no desire to see that cash cow reduced. So, from this week on, those who decide whether new coal mines can go ahead, must, by law, take into account the monies the state government would miss out on if a coal mine were not to gain planning approval.
Who was it who said one should never get between a premier and a bucket of money?