Queensland’s water resource legislation – an overview

Liam Davis, Partner and Claire Meiklejohn, Senior Associate, McCullough Robertson

Access to water is a critical and ever-evolving issue for the resources industry.

The scrutiny of project impacts on water supplies is exacerbated by increasing demand, coupled with recent drought conditions.

As both the State and Federal Governments have tightened water regulation and assessments for the resources sector in recent years, it has never been more important for mining companies to carefully consider their existing water arrangements (including approvals and access, contingency planning, water-sharing, and dealing with mine-affected water), likely future requirements and potential legal solutions available.

The following is a useful summary of the primary legislation regulating water resources in Queensland.

If you operate a resources project that relies on water from the environment, or are considering acquiring such a project, it is vital the project has access to adequate water supply going forward, and all necessary approvals are held to authorise any impacts to water.

In the absence of a clear and well-considered water strategy, proponents risk delays or cutbacks to exploration and production, resulting in significant impacts on individual operations, mining towns and regions, and the Australian economy. There may also be opportunities for the resources industry to provide community benefits and improve water security through projects funded under the recently announced Queensland Government’s Resource Community Infrastructure Fund.

Water management framework in Queensland

In Queensland, all rights to the use, flow and control of water are vested in the State. The water management regime in Queensland is managed by the Department of Natural Resources, Mines and Energy and the Department of Environment and Science. The Water Act 2000 (Qld) (Water Act) creates a framework for managing the allocation and use of water and other resources.

The supporting regime is based on statutory water plans, specific to different catchment areas in Queensland.

A water plan is the primary tool for managing water allocations and providing for water security and environmental flows. Water plans also prescribe the volume of unallocated water which is available within its catchment area. It may also impose limitations on taking or interfering with various water types for certain purposes and establish criteria for deciding applications for water allocations and water licences, in the plan area.

The term ‘water entitlement’ refers to both water licences and water allocations. A water entitlement is an authorisation to take or interfere with water from a specified location for a particular process. A water licence must be associated with land tenure or a resource tenement.

The application process for a water entitlement generally involves public notification, to which any person may make a submission about the application. Applications are decided in accordance with the Water Act and the relevant water plan (where one exists).

A water allocation is a broader right, generally allowing its holder to take a nominated volumetric amount of water during its period, subject to any conditions or specifications set out in the allocation. Unlike a water licence, a water allocation can be traded (subject to the trade rules) in its own right, distinct from other property rights. Allocations are often managed in accordance with operations licences.

A water permit may also be available for shorter-term take or interference with water for a specific and time-limited purpose, such as a construction activity. The Water Act also provides for a number of other more minor permits and licences, generally required to conduct particular physical works.

Specific water regulations applicable to resources projects

For resource activities, the Water Act provide various statutory rights to take and interfere with different types of water, in conjunction with related obligations including in relation to making good impacts, and monitoring reporting.

Underground water

Water approvals are now a key strategic matter for resource projects in the current climate following recent substantial regulatory reform. Rights to take or interfere with underground water in Queensland vary between the taking of water which occurs as a direct result of the authorised mining activities, for example, by de-watering the coal seam, known as ‘associated water’.

The general provisions of the Water Act and plans, including requirements to obtain a water licence, apply to taking or interfering with underground water when otherwise related to, but not directly required for, undertaking authorised activities, e.g.

a) water for human consumption, or

b) water taken for use in mine operations.

Associated Water

Since 2016, it has been clear that mining lease holders are entitled to take associated water to conduct authorised activities without first obtaining a water licence, subject to compliance with a range of related obligations. This has given miners the same statutory rights historically enjoyed by petroleum producers. Prior to this time, a number of miners had been required to obtain water licences for associated water, eg. to dewater and access a deposit.

The statutory amendments also introduced the concept of an Associated Water Licence (AWL) which retains some relevance for projects that were on foot prior to December 2016. Importantly, AWLs are subject to public notification and appeal rights. New mining projects which enjoy statutory underground water rights must have the relevant impacts assessed as part of the application for an environmental authority (EA).

Underground water management obligations

When exercising underground water rights, resource tenement holders must record and report the volume of associated water taken and, specifically for mineral development licence (MDL) and mining lease (ML) holders, notify the regulator of the time that exercise of underground water rights commences.

The Water Act prescribes other obligations to monitor and manage impacts on underground water, including:

a) underground water impact reports;

b) provisions for projects within cumulative management areas (Surat CMA); and

c) make good obligations, including baseline and impact assessment for potentially impacted landholder bores.

Water monitoring authorities

The underground water management obligations for a resource project will often require the proponent to monitor water at locations outside the area of its tenement, where land access has already been addressed.

In this scenario, a water monitoring authorities (WMA) under the Mineral Resources Act 1989 (Qld) or Petroleum and Gas (Production and Safety) Act 2004 (Qld) is a potential pathway for:

a) authority to undertake the monitoring activities off tenure; and

b) a mechanism for land access.

WMAs are ‘resource authorities’ for the purposes of the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) (MERCP Act). That means the land access framework under the MERCP Act is available to holders of a WMA. A WMA can also be obtained over land which overlaps other mining or petroleum tenure held by third parties.

Surface and non-associated water

Certain requirements under the Water Act also apply, subject to the provisions of the applicable water plan, to taking or interfering with water in a watercourse, lake or spring, including by impoundment and subsequent use. A water licence may be required for any such take or interference. Overland flow water, however, is generally unregulated throughout the State.

Watercourse diversion

Resource projects may require the diversion of watercourses in order to access the resource deposit. Proponents have a statutory right under the Water Act to interfere with (but not take) the flow of water in a watercourse where the impacts of the interference are assessed as part of the EA application for the project, and there are EA conditions which address the watercourse diversion. A water licence may also be separately required under the Water Act in some circumstances.

Federal regulation

In addition to Queensland’s statutory regime for water management, the ‘water trigger’ was introduced into the national Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) in 2012, meaning that coal seam gas (CSG) projects and coal mining development water resources are now a matter of national environmental significance (MNES).

The EPBC Act requires projects that will have, or are likely to have, a significant impact on MNES to be referred to the Federal Minister who will determine whether or not it is a ‘controlled action’ requiring assessment and approval.

This means that CSG or coal mining projects – both greenfield and brownfield - may require Federal Government approval if they are likely to have a significant impact on a water resource in addition to State approvals. The water trigger remains complex to understand when considering transitional protections under the EPBC Act.

Summary

The water regulatory framework for resources projects is complex and multifaceted. This article provides a non-exhaustive summary of some of the approvals and related issues our clients need to navigate. Please do not hesitate to contact a member of our specialist resources approvals and compliance team for assistance in navigating approvals which might be required for your resources project in Queensland, such as:

a) the impact of expansions on existing EPBC Act referrals, approvals or historic transitional protections;

b) land access for water monitoring obligations;

c) make good agreements; and

d) whether a specific interference with or take of water may trigger an approval requirement.