The Queensland Government has sought to strengthen its financial assurance and rehabilitation framework in response to cases such as Linc Energy Ltd (in Liq); Longley & Ors v Chief Executive, Department of Environment and Heritage Protection  QSC 53 which we have previously reported on in the context of resource companies seeking to disclaim liability for their environmental obligations.
In 2016 the Queensland Government commissioned the Queensland Treasury Corporation to carry out a review of the financial assurance framework for the resources sector. The findings of that review were published in the Review of Queensland Financial Assurance Framework.
In 2017 the Queensland Treasury Corporation released the Better Mine Rehabilitation for Queensland Discussion Paper, Financial Assurance Framework Reform Discussion Paper and Financial Assurance Review – Providing Surety Discussion Paper, which proposed significant reforms to the rehabilitation and financial assurance frameworks in Queensland for resource activities.
Mineral and Energy Resources (Financial Provisioning) Bill 2018
In furtherance of the reform proposals, on 15 February 2018 the Queensland Government introduced the Mineral and Energy Resources (Financial Provisioning) Bill 2018 into Parliament.
The purpose of the Bill is to:
- reform the existing financial assurance provisions for resource activities; and
- introduce new rehabilitation and closure plan requirements for mining leases and related environmental authorities.
Financial assurance reforms
The Bill proposes to establish a new financial provisioning scheme to deal with the environmental impacts of resource activities. The financial provisioning scheme proposes to include a scheme fund, surety arrangement and the appointment of a scheme manager who would be responsible for managing the scheme fund and cash surety account, entering into arrangements with resource companies, categorising and allocating risk, and conducting annual reviews.
Rehabilitation and closure plan reforms
The Bill also proposes to amend the Environmental Protection Act 1994 to require all applications for an Environmental Authority to provide progressive rehabilitation and closure plans. The plans must demonstrate how and where environmentally relevant activities will be carried out on the land in a way that maximises the progressive rehabilitation of the land to a stable condition and provide for the condition to which the land must be rehabilitated before it can be surrendered.
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