Federal Court expands scope of activities associated with coal mining projects caught by water trigger under the EPBC Act

A recent decision by the Federal Court has broadened the types of resource projects that may be caught by the water trigger provisions under the Environment Protection and Biodiversity Conservation Act 1999. The case will have implications for resource operators, as the court expanded the types of activities that are considered to be associated with ‘coal mining activities’. This means that activities such as water supply schemes for coal mining, pumped hydro projects that are associated with coal mining and coal seam developments may fall within the definition of a large coal mining development requiring referral to the Independent Expert Scientific Committee.

In Australian Conservation Foundation Inc v Minister for the Environment [2021] FCA 550, the Federal Court overturned the decision of a delegate of the Commonwealth Minister for the Environment that a proposed water infrastructure project associated with the Carmichael Coal Pine did not require approval under the water trigger provisions of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

Water trigger

A ‘controlled action’ is a type of action that could have a significant impact on a ‘matter of national environmental significance’. Accordingly, a controlled action is prohibited under the EPBC Act, unless there is a referral to, and approval from, the Minister or the Minister decides that the statutory prohibition is not a ‘controlling provision’ for the relevant action.

Sections 24D and 24E of the EPBC Act provide that a controlled action may include an action that involves a coal seam gas development or a large coal mining development that will have, or is likely to have, a significant impact on a water resource. These are known as the ‘water trigger’ provisions.

ACF v the Minister

The proceedings concerned a proposed action by Adani Infrastructure, known as the North Galilee Water Scheme Water Infrastructure Project (NGWS), which involved the construction and operation of new infrastructure to harvest and store up to 12.5 gigalitres of water from the Suttor River, in order to provide an alternate water supply to the Carmichael Coal Mine.

Adani Infrastructure referred the NGWS to the Minister for a ‘controlled action’ decision under the EPBC Act. In December 2019, the Minister’s delegate decided that:

• the NGWS was a controlled action under the EPBC Act;
• the ‘controlling provisions’ were sections 18 and 18A of the EPBC Act (ie involving listed threatened species and communities); and
• the water trigger provisions (sections 24D and 24E of the EPBC Act) did not apply to the NGWS.

The effect of the decision was that the water trigger did not apply and that the project did not need to be referred for advice to the Independent Expert Scientific Committee (IESC).

The Australian Conservation Foundation Incorporation subsequently applied for judicial review of the delegate’s decision, on the basis that the NGWS is a ‘large coal mining development’ for the purpose of the water trigger provisions and therefore should have been referred to the IESC for advice.

Interpretation of ‘large coal mining development’

Section 528 of the EPBC Act defines a ‘large coal mining development’ as:

The EPBC Act does not contain any definition of ‘coal mining activity’ or its constituent parts, which has led to uncertainty regarding what types of coal mining activities would fall within the definition of a ‘large coal mining development’.

In ACF v the Minister, Justice Perry adopted a broad definition of ‘any coal mining activity’, by accepting that an action will involve a large coal mining development if the action is so closely associated with the mining of coal as to be integral to it.

The court also accepted that:

• the reference to the word ‘development’ in the definition of coal seam gas development and large coal mining development were not intended to limit those actions to the physical process of mineral or coal seam gas extraction; and
• the definition of ‘any coal mining activity’ is intended to capture a broad range of activities within the concept of a large coal mining development, including those that are so closely associated with the mining of coal that mining could not be undertaken without the activity in question.

Based on this construction, the court found that the NGWS was properly characterised as involving a large coal mining development for the purposes of the water trigger provisions.

The controlled action decision was subsequently remitted back to the Minister, in order to decide whether the NGWS is likely to cause a significant impact on a water resource under the water trigger provisions.

Implications

As a result of broad construction adopted by ACF v The Minister, the types of activities that may be caught by the water trigger provisions has been expanded to include activities that are not only strictly mining activities (ie extraction of coal), but also those activities that may be ancillary and integral to a large coal mining development. The practical effect of this decision is that ancillary activities, such as a water infrastructure project for a coal mine, might be caught by the water trigger and therefore need referral to the IESC for additional review.

It is also possible that this decision may be applied to similarly expand the types of activities caught by the definition of coal seam gas developments.

Resource operators need to be mindful of this decision when considering whether to refer large coal mining and coal seam gas developments under the EPBC Act, particularly due to the potentially significant civil and criminal penalties that may be imposed for a breach of the water trigger provisions. This may also result in practical implications for projects, such as additional assessment requirements and associated delays.