Lessons in environmental governance: floods, coal miners and regulators

(This article was originally posted after the floods on Wednesday 26 January, 2011.   After the 2013 flood event  Deputy Premier Jeff Seeney explained that 10,000 megalitres of water was released from Central Queensland mine sites representing 0.18% of the total flow through the Fitzroy system.  Back in 2011-12 the Bligh Government had released 17,000 megalitres or 0.3% of  the total flow.  My issue has never been the discharges during times of flood.  The problem as I see it has always been site design for environmental impact in the development approval process.)

With the notable exception of Greens leader Senator Bob Brown, most people it seems want to see Queensland’s flood prone coal mines back in business as soon as possible.

Across the regional districts of central and southern Queensland floodwaters have overwhelmed towns and communities and effectively shut down a major industry – the mining and export of coking coal for steel production in Japan, South Korea and to a lesser extent China and Europe.

The impact of the floods is not restricted to Queensland.

The economic tremors ripple through to overseas markets too and there is now the real prospect of prices for coking coal spiralling with flow on effects to the cost of steel.

Closer to home in the coal mining heartland of the Fitzroy River Basin, where there are 42 coal mines, it’s an impact that is being felt locally in jobs.

And of course there is the government interest, too.

A slowdown in coal exports means a daily loss of just under $10 million in royalties sorely needed by the State Government facing a recovery bill from Australia’s greatest natural disaster.

With governments under the pump literally, Queensland’s peak mining body is now using the prospect of job losses and further lost income to argue for what amounts to a few short-cuts being taken in the environmental management of the flood recovery.

The implication is that our natural environment can pay for the neglect of the basic principles of precautionary risk management by some mining companies.

Regrettably, mistakes in environmental governance by both industry and government have contributed to some of the delays to restoring production – and it did not have to happen.

In the mining districts the flood impacts have been felt since long before Christmas with many central Queensland miners seeking dispensation from the Department of Environment and Resource Management (DERM) as early as late November to release floodwaters from mine sites into neighbouring creeks and rivers.

At the end of December acting environment minister Andrew Fraser joined forces with Queensland Resources Council chief Michael Roche to assure Queenslanders that mine releases in the flooded Fitzroy Basin would not harm the environment.

Given the enormous volumes of water then traversing the basin, the miners’ chief lobbyist likened the releases to throwing a “thimble in a swimming pool”.

At the time, I was publicly critical of this approach, not because of the likelihood of significant environmental damage, but because emergency releases of such water would not have been necessary had the mining industry and the government applied best practice standards to the development of mine sites in the first place – particularly in respect of managing weather risk.

“Dilution is the solution” to management of contaminants stopped being part of industrial environmental management back in the 1970s and is no longer acceptable except in the most extreme and unavoidable of emergencies.

With a new coal seam gas industry about to start in the Surat Basin that each day will bring upwards of 400 million litres of often times briny water to the surface, the Bligh Government has to be careful not to be setting precedents for a resources sector that has more than its fair share of major risks to manage.

We don’t want a future flood situation, for example, where Darling Downs farmers end up paying for the unpreparedness of resources companies wanting to pump potentially contaminated water straight into the environment and good farmland.

In dry times or floods, coal miners are always dealing with water and each mine site will have some version of a site water management plan.

Open cut coal mines are massive sites stretching across thousands of hectares, yielding millions of tonnes of coal a year.

Depending on the size of the mine and number of pits each site can host dozens of dams, each holding groundwater which is pumped from pits, treated with technologies like reverse osmosis, and used for dust suppression or even irrigation.

Without adequate levee and diversionary protection, in times of severe flood these same dams as well as the pits can be inundated from cross-plain floodwaters or over-flowing rivers.

With the approaching summer rains and the predictions of reputable weather forecasters freely available, in late 2010 the miners knew they were in for a La Nina season.

It was only a few years since their last major flood, a 1 in 500 year event in 2008 which saw the Fairbairn Dam at Emerald overflow.

During the interim not a lot seems to have changed at the level of site operational management.

Instead of building precautionary protective infrastructure or instituting best practice water management in mines most at risk, the miners argued with the government’s environmental watchdog about rules and conditions.

When the heavy rains came the impact was predictable.

According to DERM it has been notified of 15 coal mines and 4 coal seam gas operations in the Fitzroy Basin that have released water outside of their EA conditions since 30 November.

Now, nearly two months after the first flooding rains of the 2010-2011 summer, many parts of the industry in central Queensland remain hobbled by residual floodwater on site and DERM’s understandable refusal to be fast tracked past its own due diligence in dealing with possible environmental contamination.

DERM advised on its web site update on 25 January that most of the 42 coal mines in the Fitzroy Basin were “operating within their Environmental Authority (EA) conditions”, but of course that does not mean those mines have fully recovered – it means they are not breaching the environmental regulations that apply to their operations.

Premier Anna Bligh has insisted that “every single mine is required to have an environmental authority to release water” and while permission has been granted to 20 coal mines to pump out excess floodwater at least another 16 mines reportedly are still awaiting consideration from DERM.

When serious rain events happen that threaten the capacity of a mine to comply with its regulated operating conditions the company can apply to DERM for a permit to act outside its normal Environmental Authority by, for example, releasing flood waters from the site.

These are called Transitional Environmental Programs (TEPs) and are in place for a specified timeframe and are statutory in the obligations set upon DERM and the companies.

While environmental issues and TEPs will vary from site to site, the general idea is to get the mine back to work without damaging the environment.

DERM reports that the mines which have received approved TEPs since December are: Ensham (Ensham Resources), Poitrel (BHP Mitsui), Isaac Plains (Vale), South Walker (BHP Mitsui), Cook (Cook Resource Mining), Callide (Anglo Coal), Moranbah North (Anglo Coal), Minerva (Yancoal Australia), Kestral (Rio Tinto), Carborough Downs (Vale), Burton (Peabody Pacific), Peak Downs (BMA), Dawson South (Anglo), German Creek – Oak Park (Anglo Coal), Goonyella Riverside (BMA), Lake Lindsay (Anglo Coal) and German Creek (Anglo Coal).

The saltiness of the waters being released from mine sites seems to be the most common issue of concern to the environmental regulator, and while it varies from site to site, with evaporation the contamination becomes more of an issue.

The longer the water is left on site the more likely it is to accumulate nasties like heavy metals.

DERM acknowledges that there have been a number of unauthorized releases and while not ruling out enforcement action, it says “the risk of environmental harm is very low” and “on-going monitoring…has not indicated water quality concerns at this time”.

On the face of it, the important question here is not one of containment and treatment of toxic contaminants – most of the water has not been in the mines long enough to become too salty and tests across the industry show that it is no different to background water outside the mine.

The real issues have more to do with environmental governance and risk management by the coal mining industry and the willingness and capacity of the government to set environmental standards that are applicable in practice, enforceable and reflective of best practice internationally.

For the Queensland Resources Council CEO Michael Roche the regulator is not moving quickly enough to get TEPs in place and this week he upped the pressure on the government by saying the was now an “urgent need” to get the water out of the mines and people back to work.

To take full advantage of the prospective return of rail services, Roche says some of the coal mines and some coal seam gas sites need further dispensation from DERM “to pump flood water into nearby creeks that feed strongly flowing watercourses”.

But here’s the rub: with the return of normal flows the dilution factor for waters pumped out of mine sites will be nowhere near as safe as it was at the height of the floods some weeks ago.

Back on 8 January the Premier indicated the desirability of dewatering mine sites during times of high flow: “Sometimes, the best time to discharge is when the water is moving quickly through the river so it can move out…. We’re working with hydrologists, mining scientists and with the companies to do everything we can to get these mines operational. They are some of the state’s biggest employers”.

To the frustration of some in the industry the Premier’s resolve as been slowed by the environmental regulator’s determination that the site de-watering will be done according to an agreed permitting process – which takes time.

Critics of the departmental approach say DERM’s position is unsuited to a flood disaster recovery.

But on the other hand, there remains the slack housekeeping and poor site management evident in parts of the industry that helped some of these mines get inundated in the first place.nb

Unfortunately it is a lose-lose situation that harks back to an earlier flood.

After the coal industry in central Queensland got itself into strife with the EPA (now DERM) back in 2008 over management of that year’s flood, the State Government appointed an expert panel chaired by Professor Barry Hart from Monash University to review and recommend any necessary changes to the regulatory regime for mine site water emissions.

While the Hart Review showed the releases were justifiable, they were not without environmental risk in the form of potential negative impacts like poor drinking water quality and the increased likelihood of “serious adverse effects” on the fish in the Fitzroy River.

Equally importantly, the Hart Review identified issues with the EPA’s (now DERM’s) processes for developing the TEPs, citing the “limited involvement of key stakeholders, a lack of transparency, and poor communications with key stakeholders and the community during the response to this issue”.

Predictably, after being given a good bollocking from politicians on both sides of the fence and from interested stakeholder groups, DERM’s response to the Hart Review has been reflected in a far better consultative process for issuing TEPs.

But for a department that is understandably more risk averse in dealing with mining pollution, the follow-up to the Hart Review has also delivered a much tighter prescriptive list of “dos and don’ts” for how the miners might deal with flood water releases.

Unfortunately, there is one important omission that makes the current regulation quite impractical.

The new conditions developed by DERM through 2009 only consider releases of water from mine sites in low or normal flow events.

There is no prescription for releases from mine sites during the high flow events that can reasonably be expected during a La Nina season.

Fixing the background regulatory context is not going to help settle the current stand off because the high flows have largely passed and decisions on releases will have to be made with waterways getting back to normal – barring another serious rain event later this summer.

For the future though, DERM should improve its regulatory expectation by adding conditions for mine site water management during high flow events.

It’s a provision that is simply essential because of central Queensland’s severe weather variability and the prospects for the region because of climate change.

Frustrations about an absence of conditions for high flows aside, the industry says DERM has been for the most part very responsive to the resources sector’s needs although the QRC is now saying that “further leeway is required to deal with this emergency”.

It is not a leeway that DERM should be rushing to provide.

The conditions imposed since 2008 require rigorous monitoring and reporting requirements on the mines, but with DERM waiting for information to be provided by some operators so that it can make consideration, observers could be forgiven for wondering how seriously some in the industry have taken their obligations.

Beyond the governance process improvements that should arise from the recent floods, the broader policy context for mine management requires a shakeup to jolt the industry out of its complacency about weather risk probabilities.

Coal miners should reflect in their infrastructure and practice the warning of the Queensland Government’s Office of Climate Change that climate change for the mining region means “more intense rainfall on days with heavy rainfall over many areas” and “an increase in the proportion of severe tropical cyclones, with a possible decrease in the total number of cyclones”.

After 2008 the rules for new mines were tightened so that all new mines had to build protective levees to deal with 1 in 1000 flood events – but in the face of industry opposition the requirement was not extended to existing mines – although the prospect for improvement is always there when companies go into DERM negotiating amendments to their existing approvals.

This precautionary requirement should be extended to existing mines with the industry given a five year time frame to retrofit existing sites with 1 in a 1000 year flood protection.

The cost of the upgraded levee and channel protection would be more than offset by the savings of avoided lost production and insurance costs.

Why cannot an industry that specialises in digging enormous holes in the ground and moving millions of tonnes of earthen materials, not be able to build the levee banks and diversionary channelling necessary to keep flood plain running water into its large open cut pits?

The point is that such water should not be in the mines in the first place.

It is a subject that the Insurance Council of Australia should look closely at because its members are the ones left carrying the baby when the miners’ insurance claims are settled.

Government has got a role to play in making sure there is as comprehensive climate weather and hydrological information possible, but these miners are big companies, they should be up to the task of bringing about a safer more robust approach to managing mines in Queensland extremely variable climate.

Beyond the physical infrastructure, there is improvement needed too in management culture and operational discipline.

Specifically, those miners which have not done so already should upgrade their site water management systems to something equating with latter 20th century risk management.

The companies should be applying the same rigour to water risk as they do to worker safety and key executives back in head office should be accountable for its management.

Under the terms of their environmental authority mines are obliged to notify DERM of any unauthorised releases, but the day- to-day management of water has not attracted the interest of head office mining executives as much as it should.

Talk of best practice site water management and it is not possible to point easily to a Queensland coal mine that would fit the bill.

If I were a coal mining executive looking to avoid possible future penalties or a regulator looking to save the community unnecessary impacts, I would want serious answers to the following questions:

  • What is the capacity of the site’s current water management system?
  • Have all measures been implemented to ensure the diversion of clean water away from the mine site?
  • What is being done to manage the water being held on this site?
  • What is the quality of the water?
  • How could it be improved?
  • How much water is normally carried on site?
  • What is the excess currently being carried?
  • What are the concerns of interested stakeholders?
  • What is the company and the government doing to transparently communicate relevant water data?
  • How will we deal with a 1 in a 1000 year flood event?

For good measure, it should be part of the Environmental Approval process for all mines in Queensland, not just new mines, that the companies post this information on their corporate web sites to be freely available to the public.

It is something all miners should do because only then will we have some basis for assessing whether they have properly priced and accounted for the risks of their operation.

Now, the miners can apply “force majeure” to their customers and blame the suspension of sales on an Act of God and hold ups in supply on the regulators.

But with a site specific and transparent water management and reporting regime in place, at critical times like these all stakeholders would be able to know whether there was good reason to be permitting miners with “the leeway” to potentially pollute Queensland’s environment.

Those stakeholders would include the Queensland Conservation Council which has rightly called for an independent study to appraise the likelihood of similar mine flooding events occurring in the future, an immediate moratorium on the construction of new coal mines on floodplains, and regulations requiring that all water released from mine sites must meet and match localized environmental water quality conditions – prior to being released to waterways.

Author: Professor John Cole OAM

Professor Emeritus and founder of the Institute for Resilient Regions at the University of Southern Queensland and Honorary Professor, UQ Business School, The University of Queensland.

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