19 October What the FIRB? An update on Australia’s foreign investment rules for energy and resources October 19, 2022 By AMPLA Admin Conference, General, Resources and Energy ForeignInvestment, FIRB, Energy&Resources, ER Law National Conference 0 Mellisa Lai, Partner, Johnson Winter & Slattery For over a decade, I’ve helped investors navigate Australia's foreign investment laws. The area saw a significant change in 2015 when a lot of things that were set out only in policy were brought into the legislation. Since then, we’ve had a number of changes around critical infrastructure associated with the port of Darwin lease in 2016, followed by COVID changes in 2020 and more critical infrastructure changes linked to national security in 2021. At the same time, the government has been looking at critical minerals facilitation and the changing geopolitics of the world. At the ER Annual Conference I’ll be giving a snapshot of these changes and how they impact you. Often people think that it’s just major transactions that need to be reviewed by the Foreign Investment Review Board but in reality, the foreign investment laws are a broad set of rules and many things can be caught up in them. The day-to-day operations of a mining company or an energy provider may be caught by the rules when it comes to things like internal corporate changes or establishing new projects, including acquiring real estate or critical energy assets like mining tenements. There are many doors that can lead an investor into the rules - all of which have to be closed, or approval obtained before proceeding with a transaction or project in Australia. The first question is whether you are considered a foreign investor. The concept is much broader than it seems and Australian incorporated entities can still be considered to be foreign investors. Another thing to be aware of is that, ultimately, whether or not to grant a foreign investment approval (conditionally or unconditionally) is a discretionary decision of the Treasurer of Australia having regard to Australia’s national interest. This decision is supported through a broad consultation within government and could include the Critical Minerals Facilitation Office, the Australian Competition and Consumer Commission, the Australian Taxation Office and national security agencies, for example. State government agencies might also be involved. A decision will only be made by the Treasurer if the transaction is not contrary to Australia's national interest, or for a subset of national security related transactions, is not contrary to Australia's national security. To support this, investors need to understand the political landscape and impact of their investment on national security, competition, the economy and community. The character of the investor is also considered. Operational matters such as investment in energy transition projects, decommissioning existing power plants, or new capacity building can all be caught by Australia’s foreign investment rules. Each engagement may also result in new conditions being imposed for past investment decisions. Given this year’s change in government, there are questions about whether any significant changes will arise for the foreign investment rules. We’ve already seen the application fees that foreigners pay to engage with the system have doubled to almost $1.1 million since the change in government. At the moment, businesses are looking for certainty - particularly with energy transition being a focus - however this is a constantly changing area and investors should seek advice early to keep projects on track. To hear more about this join me at the ER Law Annual Conference in October. You can register to attend the ER Law Annual Conference HERE Related Articles POWERING CONSUMER PROTECTIONS: WHY DECENTRALISED AND DISTRIBUTED ENERGY RESOURCES WARRANT A NEW LENS ON CONSUMER PROTECTION REGULATIONS Recent years have seen distributed energy resources usher in a new era of self-generation and reduced reliance on traditional centralised energy networks. Australian customers are increasingly enabled to access unconventional “behind the meter” energy sources and contribute to a two-way flow of energy back to the grid. How foreign investment changes may impact the mining and energy sector In early June 2020, the government announced a review of the foreign investment rules, expanding them to apply to all foreign investors in anything deemed a ‘sensitive national security business’. The changes are scheduled to come into effect on 1 January 2021. There are concerns that this will impact foreign investment in the mining and energy sectors, and in particular the critical minerals space. The states boost the energy and resources sector This year will be remembered for the many challenges that it brought to both individuals and industry. As Australia starts to return to some normality, many states are looking to boost industry, increase jobs and innovate for the future. In this article, we look at various state initiatives designed to boost the energy and resources sector. Submission - DISER Consultation Paper December 2020 ‘Enhancing Australia’s decommissioning framework for offshore oil and gas activities’ Overview of the Government’s Resources and Energy Report The Department of Industry, Science and Resources recently published its quarterly report on Resources and Energy. The report includes forecasts from the Office of the Chief Economist on the value, volume and price of major Australian resources and energy commodity exports. COMMUNITY LEGAL RIGHTS IN MINE CLOSURE PLANNING; A COMPARATIVE ANALYSIS OF THREE AUSTRALIAN STATES Professor Alex Gardner, University of Western Australia Law School, and Laura Hamblin, formerly research associate at the UWA Law School, 2021 Why does the Mining Act 1978 (WA) not provide secure legal rights for community consultation in relation to mining lease proposals and mine closure plans? Addressing this question presents an important theme for this comparative review of some core features of the regulatory frameworks for mine closure in three Australian States. It also raises important questions for future legal research. Western Australia, Queensland and Victoria have prominent but vastly different, and thus uniquely significant, mining industries. Western Australia’s mining industry has a long history of large and smaller scale mining of a diverse range of minerals by various methods that pose significant mine rehabilitation challenges.[i] Queensland’s mining industry is similarly large and diverse, dominated by export coal production, and planning future minerals development in a decarbonising world.[ii] Victoria has a smaller mining industry with a large historical legacy dominated by a coal mining industry for domestic electricity generation in the Latrobe Valley, which is closing as the State actively transitions to renewable power sources.[iii] These States also have significant differences in the regulation of their mining industries. What all three States do have in common is the significance of their mining industries to both the State economy and the communities who depend on or live near mining operations. Importantly, all three States are confronting large legal and regulatory challenges in managing mine rehabilitation and closure. The key to addressing these challenges is effective mine closure planning: the closure of a mine site has ripple effects that are not merely environmental and economic, but social and cultural too. The initial approval of a mine closure plan occurs before any mining has begun and, with the life cycle of a mine often spanning decades, regulatory bodies are approving hypothetical closure scenarios, potentially subject to vast changes. Regulatory bodies may then seek to enforce closure requirements enshrined in a plan that may wane in relevance as mining operations progress, the updating of which may depend on the miner. Yet remedying the regulatory system so that it creates adaptable but consistently effective mine closure outcomes for affected communities still begins at planning. Although that planning is an iterative process across the life of the mine, it is very important at the initial stage of approval. Recent legislative reforms in all three States are adding to the regulatory rigour and adaptability of mine closure planning, though there are very different legal requirements for community consultation. This article aims to explain and assess the regulatory reforms by undertaking a comparative analysis of mine closure planning across Western Australia, Queensland and Victoria, with a focus on the initial approval stage and how stakeholders and communities are brought into that process. The facilitation of continuous and comprehensive community engagement is critical to ensuring that mine closure planning accounts for environmental, economic, social, cultural and safety outcomes after mine closure, but it has not been possible to consider here the process of ongoing mine closure planning, especially for amending mine closure plans and determining satisfaction of mine closure plans leading to resource tenure relinquishment.[iv] The article begins by considering core concepts of mine closure planning and the regulatory goals that inform it. It then provides a comparative overview of each State’s mine closure planning requirements under the mineral resources, environmental and land use planning laws and draws out some of the different regulatory structures and processes for mine closure within each State. The third step in our analysis compares the ways in which those laws provide for local communities’ participation in mine closure planning, with specific attention to whether the regulatory provisions create legally enforceable rights for effective community engagement. The article concludes with a summary of the key points from the discussion of three themes in our analysis: (i) the importance of clear definitions of core concepts and key goals, (ii) mine closure planning as an essential part of a mining proposal, and (iii) the legal definition of community engagement and consultation rights. Mine closure planning and implementation is necessarily influenced by many other spheres of law including taxation law, investment law, water law, and the rights of traditional owners, to name a few. A potentially directly relevant Commonwealth law is the Environment Protection and Biodiversity Conservation Act 1999 (Cth), which may require environmental impact assessment of a mining proposal and closure plan and lead to approval conditions supplementing State requirements.[v] Whilst acknowledging the importance of these adjacent spheres of the regulatory frameworks for effective mine closure planning, this article does not attempt to address their impact. In particular, the rights of Traditional Custodians are a crucial part of mine closure planning that are only briefly noted here and that would benefit from future research. WA Department of Mines, Industry Regulation and Safety, Major Commodities Review 2022-23”. Qld Government, Department of Resources, Queensland Resources Industry Development Plan, June 022. Vic Government, Department of Jobs, Precincts and Regions, Latrobe Valley Regional Rehabilitation Strategy. See L Hamblin, A Gardner, Y Haigh, Mapping the Regulatory Framework of Mine Closure, May 2022, CRC TiME, for a broader exploration of the full life cycle of mine closure regulation. In Buzzacott v Minister for Sustainability, Environment, Water, Population and Communities [2013] FCAFC 111; (2013) 214 FCR 301, [144], [227]-[230], referring to the range of approval conditions, which included mine closure. In setting conditions under the EPBC Act, the Commonwealth Minister must consider any relevant conditions under State or Territory law: at [80] citing Lansen v Minister for Environment and Heritage (2008) 174 FCR 14. Showing 0 Comment Comments are closed.