In Australian Conservation Foundation Incorporated v Minister for the Environment [2021] FCA 550, the Federal Court decided that the Commonwealth Minister for Environment should have applied the EPBC Act 'water trigger' to Bravus' North Galilee Water Scheme Water Infrastructure Project. The decision has the potential to significantly expand the application of the water trigger to ancillary activities for coal seam gas and coal mining projects.
Resources proponents should take a fresh look at their projects for potential water triggers.
Under sections 24D and 24E of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), an action which 'involves a coal seam gas development or a large coal mining development' requires referral to and approval from the Commonwealth Minister for Environment if the action has, will have, or is likely to have a significant impact on a water resource (Water Trigger). The Water Trigger therefore makes a water resource a matter of national environmental significance for some activities.
Introduced in 2013 by former independent New England MP Tony Windsor, the Water Trigger was a contentious addition to the EPBC Act. The wide scope of 'water resource' (any surface or groundwater and organisms and ecosystems that contribute to the physical state and environmental value of water) captures the impacts of nearly every coal mining and coal seam gas development. The resources industry has criticised the Water Trigger as a duplication of State processes, a source of cost and delay (particularly the requirement to refer controlled actions to an independent expert panel), and potentially retrospective due to a perceived inadequacy in its transitional provisions.
The NGWS is a proposal by Bravus entity Adani Infrastructure to harvest and store up to 12.5 gigalitres of water from the Suttor River, in order to provide an alternative water supply to Bravus' Carmichael coal mine. The referral is a separate but related action to the Carmichael coal mine referred in 2010 and approved in 2015. The scope of that referral included the supply of 12.5 gigalitres of water to the mine from the Belyando River.
Following referral of the NGWS, in December 2019, the Minister's delegate decided that the NGWS was a controlled action and that sections 18 and 18A of the EPBC Act (in relation to listed threatened species and communities) are the 'controlling provisions' for the action. The delegate decided that the Water Trigger did not apply to the NGWS, because while the NGWS supplied an input (i.e. water) for the extractive process at the Carmichael coal mine, the NGWS was distinct from the extractive process itself.
In March 2020, the Australian Conservation Foundation Incorporated (ACF) applied for judicial review of the delegate's decision, arguing that activities that involve large coal mining developments include infrastructure that will supply an input to a mining operation.
In a decision handed down on 25 May 2021, the Court accepted ACF's broader construction of the relevant provisions. The Court accepted that an action will involve a large coal mining development if the action is so closely associated with mining of coal as to be integral to it.
Among other things, the Court:
Based on this construction of the Water Trigger, the Court found that the NGWS was properly characterised as integral to the conduct of mining operations at the Carmichael coal mine, involves a large coal mining development, and is subject to the Water Trigger.
The controlled action decision has been remitted back to the Minister, who is now required to reconsider the referral according to law, and in turn, decide whether the NGWS is likely to cause a significant impact on a water resource.
The decision has potentially significant impacts on the referral and assessment of large coal mining and coal seam gas developments under the EPBC Act, and raises a number of questions for proponents.
While the decision related only to a coal mining development, it has the potential to similarly expand the current understanding of the definition of a coal seam gas project under the EPBC Act.
The Court indicated that the definition of coal seam gas development as 'any activity involving coal seam gas extraction' suggests an intention to capture activities integral to coal seam gas extraction, and not to limit the concept of coal seam gas development to the physical extraction of coal seam gas.
The construction of the Water Trigger accepted by the Court is different from the construction in the Department of Agriculture, Water and the Environment's Significant Impact Guideline 1.3: Coal seam gas and large coal mining developments – impacts on water resources (Guideline).
The Guideline indicates that, to fall within the Water Trigger, an activity must form part of the process of extracting coal or coal seam gas. The development of associated infrastructure that is not part of the extractive process is excluded from the definition of coal seam gas development and large coal mining development under the Guideline.
Neither the delegate nor the Court referred to the Guideline in interpreting the Water Trigger, indicating that both accepted that the Guideline is not a relevant consideration for the Minister in making a controlled action decision under section 75(1) of the EPBC Act.
The stated purpose of the Guideline is to assist proponents in deciding whether to refer potentially relevant actions. There is now a clear discrepancy between the Department's published guidance on the scope of actions covered by the Water Trigger, and the Court's view on the application of the Water Trigger. The Department has not yet indicated whether it will revise the Guideline to reflect the construction of the Water Trigger set out in the Court's decision.
As a consequence of the Guideline, many proponents have decided not to refer actions that, following the Court's interpretation, could in fact be subject to the Water Trigger. Where those actions have, will have, or are likely to have a significant impact on a water resource, the failure to refer the action and to obtain any necessary approval is a breach of the EPBC Act.
In the circumstances, it is unclear whether the Department will decide to retrospectively apply the Court's interpretation of the Water Trigger to these actions, or decide not to take enforcement action where proponents can demonstrate that they relied on the Guideline to inform the decision not to refer.
Proponents should consider whether they have taken or will take actions that fall within the expanded understanding of the Water Trigger, and have not referred these actions for a controlled action decision. We recommend seeking legal advice before making a referral.
Please contact us if you would like more information about the implications of this case on your business.