Victorians let down by Labor’s failed mine regulations – could cost $361 million

Today, the Victorian Auditor-General’s Office (VAGO) released a report on mine rehabilitation.

Victorians should be very proud of their mining sector, a sector which creates over 120,000 jobs, and contributes $13.6 billion to the State’s economy (p 21).

However, it should be no surprise that the Auditor-General has found that the Andrews Labor Government is failing to properly regulate this sector.

VAGO found: 

[The Department of Jobs, Precincts and Regions] is not effectively regulating [mining] operators’ compliance with their rehabilitation responsibilities. This exposes the state to significant financial risk because some sites have been poorly rehabilitated or not treated at all. If not addressed, these sites also present risks to Victorians and the environment (p 1).

The Report had the following devastating findings about the Andrews Labor Government’s failure to safely regulate Victorian mining, which could cost taxpayers up to $361 million (p 36).

1.     The Government has only collected $813 million in bonds for rehabilitation of mine sites. However, VAGO estimates actual rehabilitation costs may be up to $1.2 billion, leaving taxpayers to foot the bill (p 2). 

2.     Almost 1,400 Victorian mines or quarries should have rehabilitation bonds, yet VAGO estimates the levels at which they are set is ‘not sufficient to cover rehabilitation costs’ (p 2).

3.     The way in which rehabilitation bonds are calculated has not been updated since September 2010. Therefore, the calculation does not account for a 19.8 per cent increase in the Consumer Price Index, leading to excessively low bonds being set (p 4).

4.     Earth Resources Regulation (ERR) has no database to prove that mine operators have actually finished their rehabilitation works prior to ERR returning their bonds (p 4).

5.     Bond rates must be reviewed and adjusted over the life of a project to account for increased rehabilitation costs. Damningly, 91.7 per cent of these reviews are behind schedule by an average of 9 years (p 5).

6.     An initial review shows that 72 per cent of rehabilitation plans submitted to the regulator do not have the amount of detail required under the relevant legislation (p 6).

7.     Of the 262 enforcement notices issued by ERR between 2011-12 and 2018-19, none of them related to rehabilitation issues. This is despite the clear failures outlined above (p 8).

8.     No comprehensive list of rehabilitation works completed, or the costs for those works is maintained by ERR. When VAGO requested such a list, they were provided with the names of 19 projects. Yet, no information was give on if those works were completed, or ever begun (p 9).

Comments attributable to Shadow Minister for Resources, Ryan Smith:

“Today’s VAGO Report shows yet again you cannot trust Daniel Andrews and Labor when it comes to mining.

“Labor’s failure to keep basic records has seen up to 72 per cent of mines fail to follow the law. It could cost Victorians up to $361 million to say nothing of the potential environmental damage.”

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