WA Mining Projects Conflict of Interest Issues to be Fixed by Environmental Protection Validation Law

Friday 12 September 2014 @ 11.09 a.m. | Legal Research | Trade & Commerce

Recently, the ABC News reported that the environmental approvals for dozens of gas and iron ore mining projects in Western Australia (WA) were at risk of being found to be invalid by the WA courts after a review found that the Environmental Protection Authority (the EPA) may have failed to follow the conflict of interest procedures as set out by the Environmental Protection Act 1981 (WA) (the EP Act) sections 11 and 12.

To remedy the position and put validity beyond doubt the WA State Government on Wednesday (9 September 2014) introduced into the Legislative Assembly a new proposed law the Environmental Protection Amendment (Validation) Bill 2014.

Background - The Court Decision

In Wilderness Society of WA (Inc) v Minister for Environment [2013] WASC 307, decided on 19 August 2013, Chief Justice Martin of the WA Supreme Court handed down a decision on a challenge to the validity of State environmental approvals for the Browse LNG Precinct. The decision upheld the challenge of the Wilderness Society on the basis that the EPA had failed to comply with the EP Act sections 11 and 12.

Section 11 deals with meetings of the EPA and establishes that the quorumfor an EPA meeting is three "unconflicted" members.

Section 12 deals with the disclosure of interests by EPA members and prohibits members with "a direct or indirect pecuniary interest in a matter" before a meeting of the EPA from taking part in the consideration or discussion of the matter, or voting on the matter.

In his decision, Chief Justice Martin found that the EPA had failed to comply with section 12 of the Act because EPA members who held shares in companies with a commercial interest in the outcome of the Browse LNG Precinct assessments participated in the assessment. Further, Chief Justice Martin found that because such share-holding members were at times during deliberations required to form a quorum, as required by section 11, there was also a failure to comply with section 11 of the EP Act.

Following from and as a consequence of the EPA's failure to comply with these two sections, Chief Justice Martin held that the environmental approvals which followed the EPA's purported assessment were invalid.

How the Validating Legislation is to Work

The Explanatory Memorandum (the EM) introducing the legislation states that the purpose of the Bill was to amend the EP Act to effectively provide that the rights, obligations and liabilities of all persons would be the same as if each "relevant action" of the EPA and the subsequent environmental approval had been validly done.

The relevant actions to which the validating legislation applies are those actions which are invalid by reason of:

  • a failure to comply with section 11 and/or 12 of the Act;
  • the existence of a reasonable apprehension of bias by EPA members; or
  • the response to a perceived conflict of interest being to rely on a delegation where no delegation was in fact available.

The EM states that the proposed law will:

"not prevent a court from setting aside an approval if it finds that the EPA's assessment was actually influenced by the interest of one or more of its members".

The validating legislation will not prevent decisions being challenged on grounds which do not concern conflicts of interest.

How Browse LNG Precinct Affected by Proposed Legislation

The EM indicates that because the assessment of the Browse LNG Precinct proposal has already been the subject of a judicial determination, the Government's proposed law will not seek to "validate actions and decisions taken in the assessment of that proposal" thus not affecting the decision of Chief Justice Martin in [2013] WASC 307. Instead, delegates of the EPA who had no involvement in the process held to be invalid in [2013] WASC 307, are, according to the EM, undertaking a fresh assessment of the Browse LNG Precinct proposal.

Measures Taken to Resolve Conflict Problems

The EM states that, following the Court's decision in [2013] WASC 307 on 19 August 2013, the EPA was asked to review and update its procedures relating to its treatment of perceived and actual conflicts of interest, which it did, and is now placed with measures to deal with future issues relating to conflict of interest. However  the EM  concludes that:

". . . the fact remains that the past failings could only be cured by undertaking a reassessment of the affected proposals, some of which are already in the course of being implemented, or by validating legislation".

The EM then states that the government has opted for validating legislation because of:

". . . the considerable public expense which would be involved in a reassessment of all those matters [projects], significant investment in private and public works which underpin the State's economic development would be put at risk. The reputation of the State as a secure place for substantial capital investment would be compromised."

In the Government's view, the validating legislation is: "necessary to avoid these outcomes".

Other Reactions to the Legislation

Fortescque Metal Group is reported by Mining News.net as saying, through its CEO, that it was assured the government was taking all appropriate steps to remove any risk and provide investment certainty and that it:

“. . . applaud[ed] the state for taking this decisive action to provide certainty and confidence to significant Western Australian projects, . . . ”

The WA Greens, through MLC   Robin Chapple, are reported to have called for the EPA's board to be restructured and overhauled:

". . . Quite clearly the structure of the [EPA] board has been wrong, and when the minister has made new appointments, he has appointed the wrong people to the board."

The ABC quotes the WA Wilderness Society director, Jenita Enevoldsen, as saying that concerns remained and that  the Society would:

". . . like to see an independent inquiry, a further inquiry into the rest of these projects so that answers can be given in regards to controversial projects like the Roe 8 Highway and the Underwood bushland."

Further, Ms Enevoldsen is quoted by the ABC as saying an inquiry should look into decisions made by the EPA and the WA Government's management of it:

"We would love to trust the Government but that actually hasn't worked out, in the past, for us, . . . It really would be great to have an independent panel assess this."

WA Wilderness Society's manager, Mr Peter Robertson is also quoted by the ABC as saying the matter "was not over yet" and that it was:

". . . very concerning . . . that there's now a renewed assessment process happening through the EPA of the James Price Point gas hub, . . . And we have written now in very strong terms to the delegates who are carrying out that assessment saying we believe what they are doing at the moment is illegal as well. . . We'll probably end up in the Supreme Court and we believe, based on our legal advice, it is likely the Government will once again be found to have acted unlawfully."

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