Focus needed on mining compliance: Auditor General

Government agencies need to do much more to ensure mining companies comply with their environmental, Aboriginal heritage and local content obligations, a report by Auditor General Colin Murphy has concluded.

Mr Murphy said responsibility for monitoring and ensuring compliance with conditions rests with several agencies, and performance varies significantly across these agencies, and across key conditions.

“Financial returns to the State from mining are well managed, but current weaknesses in how some social, environmental and economic conditions are monitored and enforced need to be addressed,” Mr Murphy said in a statement.

The report found the monitoring and enforcement of environmental conditions needed significant improvement.

Mr Murphy said mine operators were required to submit Annual Environmental Reports (AER) to the Department of Mines and Petroleum (DMP) but only about half those sampled had done so, and DMP had rarely followed up.

“The AERs provide regular information on whether the mines are minimising their impact on the environment but not enough of them were being reviewed and the information was not being well used in monitoring industry compliance,” he said. 

“DMP’s inspection program, to verify how operators comply with environmental conditions and to identify breaches, needs to be more effective.

“Less than half of our sampled sites had been inspected in the last five years, and the way sites are selected doesn’t yet ensure that inspections are well targeted.

“There is also a risk that poor compliance will not be detected on a number of State Agreement mines because the Department of State Development (DSD) and DMP have differing understandings of who should be monitoring and enforcing conditions on these mines.”

Mr Murphy said agencies reported a number of environmental offsets in place, however different agencies established and managed these offsets differently resulting in poor transparency and accountability.

“Although Government has been developing a formal offsets policy, other offset related issues also need to be addressed such as having a clear record of how many environmental offset agreements the state has entered into, what it should be receiving and whether the offsets are being fulfilled.”

In relation to local content obligations, Mr Murphy found that DSD tracks the use of local services, material and labour on State Agreement mines but it was not actively assessing if operators are meeting their obligations to maximise local content.

Mine operators are also required to comply with relevant Aboriginal heritage conditions and the audit report found that the Department of Indigenous Affairs (DIA) has not effectively monitored or enforced compliance with these conditions, and as a result, heritage sites may have been lost or damaged without the State knowing or acting.

Mr Murphy also identified that while stronger requirements for mine closure and rehabilitation have been introduced, the State is still exposed to significant financial risks.

“It is a concern that financial bonds against poor environmental outcomes only meet 25 per cent of estimated total potential costs, but agencies have identified this risk and are working to reduce it,” he said.

“Developing and regulating the mining industry requires striking an often difficult balance between apparently conflicting interests.

“Parliament and the community need to know that the State’s interests are being protected – unless government addresses the current weaknesses in the monitoring and enforcement of some mining conditions, it cannot give that assurance.”