Duplication and inefficiency under the microscope in Productivity Commission study into resources sector regulation

The complicated, overlapping regulation of resources projects has long been a significant concern for the sector. In Queensland, for example, it is common to see approvals for resources projects delayed by many years (some major projects have been delayed for over 10 years) while State and Federal regulatory requirements (including third party objection and review and appeal processes) that often overlap with duplicative processes are navigated.

In August, Treasurer Josh Frydenberg announced the Productivity Commission will examine regulation affecting the resources sector and highlight best practice, saying resource projects are "being held back by complex layers of state and federal regulations... It has become harder than ever to get new resources projects off the ground, restricting the sector’s future expansion and costing jobs right across Australia."

The Issues Paper for the study has now been released, and of the various matters addressed, the key topics affecting project approval timeframes relate to identifying criteria for assessing regulatory best practice and examining to what extent the current regulatory processes are consistent with best practice. Submissions are due by 31 October 2019.

What the study into resources sector regulation is meant to achieve

The terms of reference for the study describe the background and goal of the study:

• Regulations across Australia may pose unnecessary burdens or impediments on resources companies operating, or seeking to operate and invest, in Australia.
• The scope of the study is to identify effective regulatory approaches to the resources sector and highlight examples of best–practice regulation across the Australian resources sector and internationally, taking into account the unique regulatory challenges facing individual jurisdictions.
• This will provide opportunities for individual jurisdictions to assess their own regulatory environments, and to draw on leading practice.

Regulatory best practice – key issues to consider making a submission on

Of the various matters covered by the Issues Paper,  the following stand out as major concerns for resource project proponents in respect of regulatory best practice:

Regulatory design: Information is sought on matters, including:

• where regulatory creep occurs; and
• whether regulation is overly complex.

Efficiency, transparency and accountability of decision-making: Information is sought on matters, including whether:

• the roles, responsibilities and requirements for different regulatory agencies are clear and duplication is avoided; and
• decision-makers are accountable, including through review processes that avoid unnecessarily long delays in approval processes.

These are key causes of routine delays in resources development in Queensland. The Issues Paper specifically identifies the Adani Carmichael mine site as a project where multiple review mechanisms at the State and Federal level were a source of uncertainty, cost and time for the project. More recently, the same issues have also been experienced (and are continuing) in relation to the approvals for the New Acland Stage 3 project. 

The Issues Paper notes that participants should not feel restricted to comment only on matters in the paper. Information and comment is sought on issues which participants consider relevant to the study's terms of reference.

When are initial submission due?

Initial submissions are due by 31 October 2019, with a draft report due for release in March 2020. There will then be a further opportunity to make submissions prior to a final report being issued to Government in August 2020.

If you'd like to discuss the issues raised in the Issues Paper, or would like help in crafting a submission, please contact us.