A two part series: Make Good Agreements and new obligations under the Water Act
Sep 2016 |
The first part of this two part series, ‘Changes to the Water Act – Can you comply with your new obligations?’ focused on entry into Make Good Agreements.
In the second part of our Water Act series, we focus on the changes to the Water Act 2000 (Qld) (Water Act) that are due to commence in December this year. Those changes will bring mining activities conducted pursuant to the Mineral Resources Act 1989 (Qld)(MRA) within the ambit of Chapter 3 of the Water Act.
Part 2 – New obligations under the Water Act
The Water Reform and Other Legislation Amendment Act 2014 (Qld) (WROLA Act) made significant changes to the Water Act, as well as to the resources legislation. It was passed on 26 November 2014, and its provisions have gradually commenced, with the final provisions to commence in December 2016. These provisions primarily relate to resource tenure holder’s obligations under Chapter 3 of the Water Act.
The WROLA Act seeks to achieve a consistent framework for underground water rights for miners and petroleum tenure holders, as well as the management of the impact of taking underground water.
Changes to MRA
The MRA will be amended to insert a new Chapter 12A. Chapter 12A will entitle the holder of a mineral development licence (MDL) or a mining lease (ML) to take or interfere with underground water in the area of the licence or lease, if it occurs during the course of, or results from, the carrying out of activities permitted by the licence or lease. The petroleum legislation has similar provisions, and both acts will be amended so that mining and petroleum tenure holders have equal rights to take and interfere with water.
Currently, s235(3) of the MRA specifically requires the holders of mining leases to obtain separate authority for diverting or appropriating water. The WROLA Act removes this section.
Water taken by the holder during the course of its permitted activities is known as ‘associated water’, which is the same term currently used in the petroleum legislation. The MDL or ML holders’ right to deal with associated water are known as the holders’ ‘underground water rights’.
The taking or interfering with water that is not associated water will still require a permit or licence under the Water Act.
The holder of an MDL or an ML may use associated water for any purpose within or outside of the MDL or the ML area, which reflects the existing petroleum legislation provisions regarding the use of associated water.
MDL or ML holders will be able to apply for water monitoring authorities under the MRA. A water monitoring authority allows certain water monitoring activities (such as drilling water monitoring bores or testing existing bores) outside of the area of the MDL or ML, so that water monitoring can be undertaken.
Changes to Water Act
Relevant to holders of MRA tenure, Chapter 3 of the Water Act will, from December, apply to MLs and MDLs. Chapter 3 will require that all resources tenure holders:
- Monitor and assess the impact of the exercise of underground water rights on water bores;
- Enter into make good agreements with owners of bores that are affected;
- Prepare underground water impact reports (UWIR); and
- Manage the cumulative impacts of petroleum and mining tenure holders exercising their underground water rights.
Some of the key new obligations are discussed in more detail below.
a. Underground water impact reports
The holder of a ML or a MDL must, generally before a holder exercises its underground water rights, prepare and lodge an UWIR. A revised UWIR is required every three years.
A UWIR must include information regarding the amount of water to be taken, the affected aquifers and bores where water levels are predicted to decline (known as ‘immediately affected areas’ or ‘long term affected areas’), and must include water monitoring strategies. The ML or MDL holder must publish a notice about the proposed UWIR and give a copy of the notice to each owner of a water bore within the tenure area.
The public can make submissions, and a summary of submissions must be prepared and lodged with the final UWIR, including information regarding any changes made to the draft UWIR as a result of the submissions received.
Some existing MLs or MDL will be exempt from this requirement where existing Water Act permits or licences are in place.
b. Cumulative management areas
A cumulative management area (CMA) can be declared in an area where there is likely to be a decline in the underground water level due to the underground water rights being exercised by more than one resource tenure (both petroleum and mining tenures).
Where a CMA is declared, the Office of Groundwater Impact Assessment (OGIA) will prepare the UWIR and will allocate to each relevant tenure holder the individual water bores it is responsible for monitoring and ultimately, making good (see ‘make good agreements’ below).
c. Baseline assessments
A mining tenure holder will be required to prepare a baseline assessment plan for the area of the ML or MDL before the holder commences exercising its underground water rights. The baseline assessment plan must identity the relevant water bores within the tenure area, confirm those where a baseline assessment has already been undertaken, and submit a proposed timetable for completing the baseline assessments on the identified water bores. Once submitted and approved, the baseline assessment plan, including the timetable, must be complied with.
When conducting the baseline assessments, the resource tenure holder must obtain information relating to the level and quality of the water in the water bores being assessed, as well as the current and historical use of the water. The outcome of the bore assessment must be notified to the bore owner within 30 business days.
d. Make good agreements
Where a UWIR (prepared by either a resources tenure holder or the OGIA) identifies that a bore is likely to experience a water level decline, the resources tenure holder must undertake a bore assessment. If the results of the bore assessment determine that the bore suffers from ‘impaired capacity’, ‘make good measures’ are required to be undertaken by the relevant resources tenure holder to ‘make good’ the bore owner’s access to water. Depending of the change in water level, the use of the water by the bore owner and a number of other factors, make good measures to be agreed in a make good agreement can include:
- Bore enhancement, such as deepening the bore;
- Constructing a new bore;
- Providing an alternate water supply;
- Undertaking monitoring; and
- Monetary or non-monetary compensation.
These make good measures are only examples, and the commercial agreement reached between the resources tenure holder and the bore owner is at the discretion of the parties.
e. Transitional provisions
There are some transitional provisions that will assist existing holders of MLs and MDLs transition to the new regime.
How can we help?
Carter Newell can provide cost effective support to resources companies to understand and comply with your new Water Act obligations, including preparing and negotiating make good agreements. Please contact us for more information.
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