Gold standard: fast-track mining project must pass environmental audit
Comment: There's been a great deal of noise about the Fast-track Approvals Act 2024. Widely panned for lowering environmental standards, here's how it might roll for one big project. Though the scale of this gold mine is very large, the process will be very similar for all substantive applications under the act.
The Clutha River runs south through the Tarras Valley into Lake Dunstan near Cromwell. It's a wine and fruit-growing area boarded to the east by Bendigo Station, part of the South Island high country, notable for its wild, undeveloped landscapes. In those hills lies the site of the proposed Santana Minerals Ltd Bendigo Ophir project, an open-cast gold mine. Santana is an Australian company. The mine's open pit would be very large and deep. Some underground extraction is also proposed. A tailings pond would store toxic processing waste on site behind a dam. For ever.
Santana says it will be lodging its formal application this month for various consents under the fast-track process. These will include approvals under the Resource Management Act and under various conservation laws.
The process is complicated and fast.
Before even lodging its application, Santana must consult with entities listed in the act, including relevant local councils and iwi and hapū. That must be meaningful, which the Environmental Defence Society considers requires Santana to provide a full draft of its assessment of environmental effects.
It can then apply to the Environmental Protection Authority, which must publish the application without delay on the fast-track website. At this point the authority undertakes a 'completeness' assessment. Inadequate consultation or incomplete technical assessments would render an application incomplete and therefore should be returned to the applicant.
If complete, the authority passes the application to the Panel Convenors to set up an expert panel.
The panel then takes over the process and acts independently from the Environmental Protection Authority. It has broad discretion over how the application is considered and who will be heard. The Environmental Defence Society considers itself an affected party with respect to Santana's application given that it represents a relevant aspect of the public interest and has independent technical evidence to bring to bear. Key local community groups may also be heard.
Given the scale and complexity of Santana's project, and its highly sensitive ecological and landscape location, EDS expects that the panel would opt to hold a formal hearing with expert witnesses, cross-examination and expert conferencing. It should also commission its own independent peer reviews of key aspects of the proposal.
Each procedural decision made by the authority, panel convenors and panels, including the completeness assessment, the membership of the panel and who the panel asks to provide feedback, can be judicially reviewed in the High Court if there are valid grounds.
The key statutory test that the panel will undertake boils down to a proportionality assessment set out in section 85 of the act: are the adverse impacts of the mine sufficiently significant to be out of proportion to the project's regional or national benefits? It's novel wording, and the way it is interpreted by panels will undoubtedly be tested by the courts on appeal or review or both.
The starting point therefore requires an economic cost-benefit analysis and an assessment of environmental effects. No fast-track application should pass the completeness test without both included. An economic analysis is quite different from an assessment of the financial returns of a project. And under the act, those benefits must be found in New Zealand, not overseas.
The Environmental Defence Society engaged the New Zealand Institute of Economic Research to advise which questions should be addressed in Santana's economic analysis. Based on its advice, the list includes:
What are the direct and indirect economics impacts of the project on the local, regional and national economy?
What is the method used for the analysis?
What are the GDP, consumer spending, and employment impacts?
How will the workforce requirements of the project affect Central Otago, considering direct and indirect workers?
Where will they be sourced?
What are the expected impacts on businesses, wages, housing, infrastructure, healthcare, schools, and recreational amenities in Central Otago?
What are the competitive advantages of the project that make it the 'lowest cost gold mine' in Australasia, in comparison with other gold mines or a 'typical' Australasian gold mine?
What potential changes might Santana make to the project if projected profits fall to levels indicated in the sensitivity analysis, such as below $1 billion or below $500 million?
What are the economic valuations of the various environmental impacts (terrestrial ecology, freshwater ecology, freshwater availability, landscape, etc)?
How has the assessment accounted for the project's end-of-life costs?
What activities will be entailed in finishing the project, restoration and leaving the area?
If Santana were required to set aside a substantial contingency fund or long-term bond to fund long-term restoration of the site, what would be the effect on the economics of the project?
Specifically, what would be the effect of a substantial bond on total profits, the benefit-cost ratio, and the net benefit?
The second part of the assessment relates to environmental impacts. Santana's published material about the project lists some of its likely and potential impacts. The matters needing focused expert evidence include:
Mine design: has the pond and tailings dam design been peer reviewed by an independent international expert (common practice offshore)?
has the pond and tailings dam design been peer reviewed by an independent international expert (common practice offshore)? Terrestrial ecology: what indigenous plant and animal species inhabit the project site and are any threatened or at-risk; what habitats are located within the site and are any of significance; how will the RMA hierarchy (avoid, remedy, mitigate etc) be applied; are consents required to destroy protected wildlife; and what is the overall significance of the impacts on the ecological values in a regional and national context?
what indigenous plant and animal species inhabit the project site and are any threatened or at-risk; what habitats are located within the site and are any of significance; how will the RMA hierarchy (avoid, remedy, mitigate etc) be applied; are consents required to destroy protected wildlife; and what is the overall significance of the impacts on the ecological values in a regional and national context? Freshwater ecology (including streams, wetlands and aquifers ): what is the baseline state for freshwater health on, around and downstream of the site; what impacts are there on freshwater ecology and how will they be addressed; how will leakage from the tailings dam (if any) be prevented; and what effects cannot be avoided?
): what is the baseline state for freshwater health on, around and downstream of the site; what impacts are there on freshwater ecology and how will they be addressed; how will leakage from the tailings dam (if any) be prevented; and what effects cannot be avoided? Environmental hydrology and geochemistry: what will be the impact on ecosystems and groundwater users from groundwater drawdown related to the open pit and mine dewatering?
what will be the impact on ecosystems and groundwater users from groundwater drawdown related to the open pit and mine dewatering? Water use: what volumes of takes are required; where will the abstraction come from; what effects will that have on existing users and ecosystems; where will discharges be made; what are the chemical parameters of the discharges?
what volumes of takes are required; where will the abstraction come from; what effects will that have on existing users and ecosystems; where will discharges be made; what are the chemical parameters of the discharges? Landscape: what are the landscape values of the site; what are the likely effects; are any effects unable to be avoided; will there be remote view impacts; what about light impacts offsite and night; and are simulations provided?
what are the landscape values of the site; what are the likely effects; are any effects unable to be avoided; will there be remote view impacts; what about light impacts offsite and night; and are simulations provided? Cultural and heritage: what are the impacts and are they positive or negative?
what are the impacts and are they positive or negative? Local effects: what are the traffic, noise, dust, recreational use, amenity and energy impacts?
what are the traffic, noise, dust, recreational use, amenity and energy impacts? Performance bond: is there a long-term bond proposed to guarantee post-closure maintenance of the site that also covers any catastrophic failure of the tailings dam and if so is the quantum adequate?
is there a long-term bond proposed to guarantee post-closure maintenance of the site that also covers any catastrophic failure of the tailings dam and if so is the quantum adequate? Conservation covenants: what are the implications on the existing conservation covenants present over the subject property?
When the panel has completed its assessment, it must decide whether to decline or approve the application. If the latter, it would propose conditions, and there would be a chance for participants to comment on them. After the decision is made, there are limited opportunities for an appeal and wider ones for judicial review which must be filed within 20 working days.
EDS is engaging substantively in fast-track projects but is putting significant effort into Santana's application given its imminence, and potential environmental effects. We are waiting to see the full application and evaluate its merits with our experts. Because input is time-limited, that means we must invest resources well in advance of the full application being available. Notably, Santana has indicated it will not share its assessment of environmental effects before filing (after earlier indicating it would do so).
EDS believes this project needs rigorous testing through the limited opportunities available under the Fast-track Approvals Act 2024. This is a statutory process which must be conducted independently, fairly and reasonably and follow the legal pathway. Hyperbolic cheerleading by ministers about the alleged benefits of mining have no place here. Whether Santana passes the section 85 test remains to be seen.
There are many fast-track applications pending and communities and councils will be watching with concern. Some projects will be positive, others not. This analysis will hopefully assist in better understanding the way the legislation is likely to operate. To further assist people to engage in other fast-track proposals, EDS has published a peer-reviewed, plain-language guide to the Fast-track Approvals Act 2024.
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