246 Recent Developments (2006) 25 ARELJ Potential Ramifications of Court of Appeal Decision It has always been the case that determinations and valuations can be overturned in the case of fraud, collusion, dishonesty or impartiality. This was not an issue in the case discussed above and the law in that regard is unaffected. Parties to commercial agreements often do, for reasons of expediency, speed, certainty, confidentiality or otherwise, provide in their agreements for valuation or other issues to be referred to independent third parties for determination on a final and binding basis. In so doing they take a commercial risk the determination may be in error, recognizing that the law has traditionally offered very limited grounds for review. It is possible that the decision of the Court of Appeal will, if followed, expand the bases upon which parties to a contract dissatisfied with a decision of a valuer or expert, may seek to review and overturn a determination. In particular, in future cases, a party dissatisfied with an expert determination may seek to persuade the Courts to analyse the methodology undertaken by the expert and, where errors of objective fact are identified as part of that process, seek to have the determination set aside. Clearly each case will depend on the particular terms of each contract, the actual task undertaken by the expert and the nature of the alleged mistake, so each case will turn on its own facts. For that reason, if parties do wish determinations to be final and binding, and are prepared to take the commercial risk of error or mistake, then care should be taken in drafting contractual provisions to identify the extent to which review may be possible or alternatively is not permitted. Parties should not assume that the mere existence of the phrase "final and binding" will mean that determinations are so final and binding in all cases. MINERAL RESOURCES (SUSTAINABLE DEVELOPMENT) ACT 2006 -- KEY CHANGES Introduction The Victorian Mineral Resources Development Act 1990 (`the 1990 Act') was amended and renamed the Mineral Resources (Sustainable Development) Act 2006 (`the 2006 Act') on 31 August 2006. It was not just a name change. The 2006 Act now expressly incorporates principles of sustainability to guide the decision-making process under the Act. Further, the Act now includes detailed provisions aimed at fostering increased community engagement by mining companies. The Act also removes many of the uncertainties that have become apparent since the Act commenced operation. The amendments to the 1990 Act were introduced partly in response to an inquiry launched by the Government in 2005 into the operation of sections 45 and 46 of the Mineral Resources and Senior Associate, Meg Lee, Allens Arthur Robinson. (2006) 25 ARELJ Victoria 247 Development Act 1990 (`the Inquiry')9 and partly as part of the Victorian Government's environmental sustainability action statement, Our Environment, Our Future. In introducing the Mineral Resources (Sustainable Development) Bill, the Minister acknowledged that for many of the `progressive' mining companies the amendments validate the `excellent work they have been doing in the arena of community engagement'. Incorporating Sustainability New principles of sustainable development have been incorporated into the preliminary provisions of the 2006 Act. The `principles of sustainable development' include a list of well-known concepts such as intergenerational equity, the precautionary principle, conservation of biodiversity, incorporation of long-term considerations into decision-making, community consultation, consideration of the aspirations of Indigenous peoples. Another principle which is not always included in lists of sustainable development principles is that `measures adopted should be cost effective and flexible, not disproportionate to the issues being addressed...'. The principles are incorporated through a relatively `weak' or flexible means in a new section 2A(1), namely that `in the administration of th(e) Act, regard should be given to the principles of sustainable development.' In other legislative regimes, such as the Environment Protection and Biodiversity Conservation Act 1999 (Cth), ecologically sustainable development principles `must be taken into account' for various listed decisions under that Act. The Minerals Council of Australia has stated in a press release10 that it is `encouraged by the amendments' to the 1990 Act. In relation to the sustainable development principles, the Minerals Council of Australia has commended their inclusion in the 2006 Act stating that the approach is consistent with the industry's commitment to sustainable development through its Enduring Value framework.11 Incorporating Codes of Practice A new part 8A has been included in the 2006 Act to provide for the making of Codes of Practice by the Minister. There is a mandatory process for public consultation in relation to the making of the Codes of Practice and the Minister must consider any public submissions received. Section 89G provides that breaching a Code of Practice is not an offence. However section 89H goes on to provide that relevant Codes of Practice are admissible in evidence in any proceeding for a breach of any provision of the 2006 Act in relation to which a relevant Code of Practice has been made. While the industry has previously developed its own codes of practice, these are likely to continue to operate at least until the Minister develops codes on the same topics. 9 10 11 The Inquiry Report can be found on the Department of Primary Industry website at . See: . See: . 248 Recent Developments (2006) 25 ARELJ Additional community consultation A new duty to consult with the community has been included as new section 39A of the 2006 Act. The duty is imposed as applying throughout the period of the licence, rather than only at the time of application for a new work area during expansion or development of new work plans. The section is specific in that it requires the licensee to consult by: · sharing information with the community about activities authorised by the licence that may affect the community; and · giving members of the community a reasonable opportunity to express their views about those activities. The section does not require the licensee to take into account any views that are expressed by the community, nor to report to the Department on the consultation that has taken place during the licence term. New Ministerial Panel Process Akin to the planning panel process set up by the Minister for Planning, an advisory panel process is provided for in a new part 4A of the 2006 Act. The Minister may appoint a panel from time to time to consider and advise on any matter relating to exploration, mining or the administration of the 2006 Act. The Panels are empowered to conduct inquiries, call for submissions and to hold public hearings. Administrative changes to rehabilitation obligations While rehabilitation bonds have been part of the 1990 Act for some time, new provisions have been added in the 2006 Act to assist with assessment and enforcement of rehabilitation liabilities. The Minister may now require a licensee to undertake an assessment of the licensee's rehabilitation liability under section 78 in order to determine the amount of the initial bond or to revise the bond amount at a later stage. The Minister can also require the licensee to engage an auditor: · to certify that a rehabilitation liability assessment has been prepared appropriately and that it is accurate; and · to certify that the land has been rehabilitated in order to assist the Minister with deciding whether to return the rehabilitation bond. Auditors appointed under section 53S of the Environment Protection Act 1970 are auditors for the purposes of this provision. Implications Mining companies will need to review their operations to ensure compliance with the new provisions. In planning new projects, the development and implementation of community engagement plans will need to be factored in to project timing and costings. Further, the certification of rehabilitation (2006) 25 ARELJ Victoria 249 liabilities by accredited Environmental Auditors under the Environment Protection Act 1970 will also take additional time and attract additional costs. The Minerals Council of Australia has welcomed the changes, stating that they appear to be a balanced response to improve the operation of mining laws and to bring the Victorian mining laws into modern regulatory practice. GEOTHERMAL ENERGY RESOURCES In April 2006, the Victorian Minister for Energy Industries and Resources, Theo Theophanous, issued a formal invitation for applications for exploration permits pursuant to the Geothermal Energy Resources Act 2005 (Vic) (the Act). In the same month, the Geothermal Energy Resources Regulations 2006 (`the Regulations') came into force. The Regulations The Act is aimed at the large-scale commercial exploration and development of Victoria's geothermal energy resources, and establishes three separate authorities: · an exploration permit; · a retention lease; and · an extraction licence. Under the Regulations, an exploration permit or extraction licence is not required for a geothermal energy resource that has a temperature of less than 70 degrees Celsius or is less than one kilometre below the surface. The Regulations principally govern the identification, assessment and management of the environmental, health and safety hazards involved in undertaking geothermal energy operations. They also provide for certain samples and information to be collected and provided to the Minister (including the provision of an annual technical report by all authority holders), and prescribe various fees and other administrative matters. The Government's Regulatory Impact Statement (on the Regulations) provides that the total indicative costs of the Regulations for an authority holder undertaking `typical' exploration and extraction activities will be in the order of $95,000 per annum. Application for exploration permits There are 31 available exploration areas across Victoria, which together cover the entire state. Applicants had until 11 October 2006 to lodge an application for an initial five-year permit. Under section 20 of the Act, applications will be assessed on the following criteria: Brett Thornton, Articled Clerk and Scott Langford, Partner Allens Arthur Robinson. Also see legislative note on Geothermal Energy legislation in Australia in this volume at (2006) 25 ARELJ 330.