1st March 2016

Kylie Hargreaves, Deputy Secretary, Division of Resources and Energy

The latest news on legislation, exploration and production

The changes that have come into effect today on 1 March 2016 bring the Mining Act 1992 and the Petroleum (Onshore) Act 1991 into closer alignment in matters to do with the administration of titles and compliance and enforcement.

The changes create greater consistency for the administration of exploration, assessment and production titles across all resources types to ensure that industry and the community are aware of the standards that must be met for an application to be granted.

The changes also harmonise compliance and enforcement provisions between the Petroleum (Onshore) Act and the Mining Act by providing a wider range of tools to support enforcement of best practice regulatory standards. This includes new directions powers, enforceable undertakings, a broader range of penalty notice offences, and new guidelines and Codes of Practice.

A more competitive sector

Harmonisation follows the coming into effect of legislation establishing the Strategic Release Framework for coal and petroleum, the Environmental Protection Authority as lead regulator for compliance and enforcement of conditions of petroleum titles (with the exception of work health and safety conditions) and expanding the framework of the Workplace Health and Safety mines legislation to cover the petroleum sector. Together, these reforms provide a more consistent and transparent regulatory framework for the resources sector in NSW.

The harmonisation changes provide industry with greater legislative clarity and will help boost community confidence in regulation and enforcement.

For the petroleum industry, the harmonisation changes continue to address the following Gas Plan actions:

  • Action 1: The government accepts all the recommendations of the Chief Scientist and Engineer's independent review and is committed to building a world class regime for the extraction of gas
  • Action 6: The government will implement and enforce a 'use it or lose it' policy requiring titleholders to commit to developing the state's resources or risk losing their title
  • Action 8: World best practice environmental and regulatory standards will be applied to gas exploration and production
  • Action 10: Policy and regulatory reform will provide greater regulatory clarity for industry and communities.

Conditions of title

The harmonisation changes that have come into effect on 1 March 2016 support the streamlined conditions introduced through the Improved Management of Exploration Regulation (IMER). The number of conditions on exploration titles has greatly reduced through the IMER process, with the result that IMER titles now have around 13 standard conditions.

Prior to 1 March 2016, the obligation to keep records was imposed on the title holder as a condition of title. From 1 March 2016, titleholders are still required to keep records, however the mechanism for this requirement has changed from the title condition to a legal requirement under the legislation.

Compliance and Enforcement

New compliance tools, including Penalty Infringement Notices (PINs) for minor breaches of legislation, enforceable undertakings, and the inclusion of a limited number of new offences, are being applied from 1 March. The Enforceable Undertakings Guidelines set out the general process for proposing an enforceable undertaking under the Mining Act or Petroleum Onshore Act, and the general purpose of an enforceable undertaking.

Prosecution Guidelines explain the Division's basis for making decisions to prosecute for offences. The Division will approach prosecution in line with the Office of the Director of Public Prosecutions (NSW) prosecution guidelines.

Community Consultation Code

After considerable community consultation, the Exploration Code of Practice: Community Consultation has been released on 1 March. The new code for community consultation includes five mandatory requirements with comprehensive guidelines on how to comply with these requirements.

Term of prospecting titles

The term of exploration licences (ELs) or assessment leases (ALs) under the Mining Act has been extended from five to a maximum term of six years. Holders of current exploration licences and assessment leases may seek renewal under either the Mining Act or Petroleum (Onshore) Act for a maximum term of up to six years. Applicants will need to provide a justification for the length of title for which they apply, including through a proposed work program.

Confidentiality of reports

On 1 March new provisions take effect that allow for the release of mineral title annual reports five years after submission. These provisions are broadly consistent with those that apply to petroleum titles and are intended to promote more effective and successful mineral exploration through the release of geological data. A transition period has been provided to allow the industry to adjust to the new regime. All minerals annual reports submitted after 1 June 2016 may be released in full five years after the date of submission. For reports submitted prior to 1 June 2016, the Division may release them in full from 1 June 2021. Consultation is ongoing with industry representative bodies regarding whether extremely limited grounds for objection to release will be allowed for reports submitted prior to 1 June 2016.

Other new guidelines and fact sheets

A summary of the new guidelines and fact sheets released on 1 March is outlined on the Division of Resources and Energy (DRE) website. Work continues on improving the documentation.

A review of IMER documentation will be undertaken by DRE from July 2016 to improve and strengthen the business environment for industry. Industry will be invited to engage with DRE during this process.

If you have questions or feedback about these processes or other legislative reforms, please email legislation.reforms@industry.nsw.gov.au.

Kylie Hargreaves
Deputy Secretary, Division of Resources and Energy
NSW Department of Industry