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Old extractive industry permits

27 March 2014

Legislative reform in any area of regulation can often leave a legacy of anomalies, particularly where instruments, such as permits and licences, are issued under older superseded provisions which cease to have effect.  Extractive industry regulation is no exception.

One particular anomaly which I have recently dealt with is extractive industry planning permits that contain fixed expiry conditions, which refer to superseded extractive industry licences and specify that the permit will cease to have effect by a fixed date unless it is renewed or extended.  Typically these permit conditions are phrased in the following manner:

This permit shall have force and effect only until [DATE] which is the date of the expiry of Extractive Industry Licence No. #, but the time within which the development is to be completed may on application made before or within three months after the expiry of the permit be extended by the Responsible Authority.

The purpose of these conditions was to ensure that the life of a planning permit reflected the term of the relevant extractive industry licence, which was previously subject to varying maximum terms of up to 15 years and later up to 30 years.  Unfortunately, despite transitional provisions, some of these conditions remain on planning permits and can create considerable uncertainty for operators, particularly in circumstances where the permit expires.

Legislative background

These expiry conditions were imposed to reflect the expiry date on old extractive industry licences issued and renewed under the provisions of the Extractive Industries Act 1966 (now repealed) and were typically granted for 15 year terms.  Licences were subject to section 4 of the Extractive Industries Act 1966, which then limited the power of the Minister to grant licences for extractive industry to periods not exceeding 15 years, it stated:

4. (1)             Subject to this Act and the regulations the Minister may grant any  person a licence to carry on an extractive industry on any private land for a period not exceeding fifteen years.

Amending legislation passed in 1986 increased the maximum term to 30 years, however some older licences continued to be subject to maximum terms of 10 years on their renewal (see section 17(2) of 1966 Act, as amended).

In 1995 a new regime for the approval of extractive industry work authorities was implemented through the Extractive Industries Development Act 1995, which repealed the 1966 Act.  Under the provisions of the 1995 Act, no time limit was placed on the period for which Work Authorities could be granted.  The policy intent behind these changes recognised the importance of extractive industry approvals being valid and operative for the ‘life of the resource’.  Section 21 of this Act stated:

21. Period of work authority

(2)           A work authority remains in force for the period for which the carrying out of an extractive industry is permitted on the land under the relevant planning scheme or a planning permit unless—

(a)               the work authority is sooner cancelled; or

(b)               the land owner's consent (if required) is revoked, lapses or otherwise ceases to have effect; or

(c)               it is varied under section 22.

A similar provision is also provided for at section 77L of the current Mineral Resources (Sustainable Development) Act 1990, which was amended by the Resources Industry Legislation Amendment Act 2009 (No. 6 of 2009) and repealed the 1995 Act in 2009.

Following the introduction of the 1995 legislation the old licences were converted to work authorities under transitional provisions, incorporating similar conditions, but continuing indefinitely without any expiry.  Where a permit imposed a finite term then the continuance of the work authority was subject to the permit being extended. 

Since the commencement of the 1995 legislation all local planning schemes have been amended to include provisions which prevent councils from including conditions on permits for stone extraction that require the operation to cease by a specified date (see Clause 52.09-6, some limited exceptions apply eg. where land adjoins an urban area).

Are you affected?

If your permit includes a condition like this then it is likely that you would be aware of it and have sought an extension before.  If not, you should carefully check the conditions of any planning permit under which your business operates to ensure that it does not contain any fixed expiry condition that refers or links to the expiry date of a superseded extractive industry licence.

If this is the case then the condition may well be a result of the above legislative changes.  

What should you do?

Unfortunately some councils have seen these expiry conditions as opportunities to phase out what they consider to be inappropriate uses, often arguing (inter alia) that changes in planning policy do not justify extension of the extractive industry use, which they consider should be re-assessed against the current planning framework.  

In light of this it is highly recommended that you act well before the expiry date specified in any condition and seek to amend the planning permit by deleting the expiry condition.  The series of legislative and policy changes described above clearly do not support the continued imposition of these conditions and are material circumstances that are likely to support their removal.

If your permit has expired, or is about to expire by virtue of one of these conditions, then you should immediately act to extend the permit by making a written request to the relevant council.  If council refuses your request then you may have a right to apply to VCAT to have council’s decision reviewed.  Concurrently with any VCAT appeal you should also consider applying to VCAT to have the condition deleted pursuant to section 87 of the Planning and Environment Act 1987.

Extractive Industry

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