DISCUSSION AND CONCLUSIONS
ROLE OF THE MINING REGULATOR
Prior to 1 January 2008, the Mining Regulator appeared to take a proactive approach to its monitoring of fire incidents at the Hazelwood mine, as exemplified by its response to the November 2003 and October 2006 fires. This is notwithstanding that none of these incidents caused any serious injuries.127
The Mining Regulator’s position concerning its current responsibility for preventing and mitigating the risk of fire in open cut mines is clear: ‘we don’t regulate fire.’128 According to Ms White, this has been the case since 1 January 2008,129 noting that the requirement to address health and safety in work plans actually remained until 30 June 2010.130
In light of the impacts of the Hazelwood mine fire felt by the Morwell community, the Mining Regulator’s position appeared inconsistent with the objectives of the Mineral Resources Act, which include ensuring that ‘the health and safety of the public is protected in relation to work being done under a licence.’131
Ms White suggested that the Mining Regulator was prevented from fulfilling those objectives in relation to the likelihood of a fire igniting in the Hazelwood mine primarily due to the ‘prescriptive approach’ of the mine licensing regime, in particular the prescriptive nature of information that must be included in a work plan under Schedule 15 of the Mineral Industries Regulations.132
Ms White’s interpretation of the Mining Regulator’s powers under the Mineral Resources Act and Mineral Industries Regulations is a narrow one.
Schedule 15 of the Mineral Industries Regulations sets out the prescribed information a work plan must contain under s. 40(3)(a) of the Mineral Resources Act. It does not limit the matters that a work plan, rehabilitation plan, or community engagement plan within a work plan, may contain.
The matters that a rehabilitation plan must address under s. 79 of the Mineral Resources Act are not exhaustive. The enabling provisions listed in Schedule 15 are also not expressed to be exhaustive, nor is there any statutory requirement that the Department Head must approve or vary a work plan containing all of the information listed in Schedule 15.
The Department Head and the Mining Regulator, as the Minister’s delegate, are granted broad discretion in determining whether to approve mining licences, work plans and work plan variations. The Minister or the Department Head may impose conditions in respect of a mining licence or work plan variation in relation to a range of matters, such as protection of the environment and community facilities, which are broad enough concepts to encompass risks associated with mine fires.133
The position adopted by Ms White is not, in the view of the Board, the only interpretation open of the Mining Regulator’s regulatory power in respect of fire prevention under the Mineral Resources Act or related regulations. None of these regulatory instruments expressly and unambiguously excise fire from the public safety matters the Mining Regulator is entitled to take into account in exercising its powers. This is particularly so having regard to the broad public safety related objective of the Mineral Resources Act as expressed in s 2(b)(vii).
That VWA was also responsible for overseeing the risk of fire at the Hazelwood mine did not absolve the Mining Regulator from having any role to play. The current Memorandum of Understanding exists precisely because the agencies have overlapping responsibility. In practice, certain issues have attracted the attention of both agencies. For example, the Mining Regulator considered itself responsible for addressing public safety issues arising from stability issues in the northern batters of the Hazelwood mine (an issue that must be specifically addressed in work plans for certain mines),134 notwithstanding that VWA also took an interest in that area insofar as it affected workplace safety.135
The Board does not accept that after 1 January 2008 the Mining Regulator no longer had any statutory power, either through the mine licensing or work plan approval process, to address issues relating to the risk of fire at the Hazelwood mine.
The Mining Regulator, like VWA, failed to recognise that fire was a hazard that not only had the potential to affect the health and safety of employees, but also the Morwell community. This may account for why the Mining Regulator did not consider itself responsible for overseeing fire risks in the Hazelwood mine. This residual risk associated with public safety was not identified during the transitional arrangements in place between 2006 and 2008, nor as part of Deloitte’s audit of the transition of responsibility for OHS from the Mining Regulator to VWA in June 2008.
However, the Mining Regulator was nonetheless aware that a fire at the Hazelwood mine could affect public safety. As noted in Chapter 3.3 Fire prevention and mitigation measures taken by GDF Suez, the potential effects of a mine fire on surrounding land and the Morwell community were recognised by the panel commissioned to assess the environmental effects statement forming part of the 2009 work plan variation for the Hazelwood mine.136 As Environment Victoria submitted, the Mining Regulator must be taken to have knowledge of this report.137 Further, the Mining Regulator was aware that rehabilitation of worked out areas was an effective means of preventing the outbreak of fire at an open cut mine.138 It was therefore in a position to directly influence at least one measure GDF Suez could adopt to address fire risk.
The fact remains that the Mining Regulator does not consider itself to have the powers necessary to enforce measures directed to the prevention and mitigation of fire in mines. Further, there was also evidence that the Mining Regulator does not presently have the necessary expertise to effectively oversee this area.139
ROLE OF VICTORIAN WORKCOVER AUTHORITY
VWA’s role in regulating mine fires that have the potential to affect the health and safety of the public is necessarily constrained by the reach of s. 23 of the OHS Act. That section is limited to risks that arise from the conduct of the undertaking of an employer.
Mr Neist provided an opinion to the Board that the Hazelwood mine fire did not arise from the conduct of the mine operator’s undertaking. The Board does not agree. The Board accepts that a fire in the worked out areas of the Hazelwood mine is a risk that could arise from the conduct of the undertaking and might therefore fall with the scope of s. 23.
The Board was concerned by two aspects of VWA’s oversight of fire prevention and mitigation practices at the Hazelwood mine:
- the failure to monitor GDF Suez’s response to the recommendations in the 2008 GHD report
- the manner in which VWA examined the adequacy of the Safety Assessment relating to mine fires conducted by GDF Suez.
VWA did not request a copy of the GHD report in relation to the September 2008 fire at the Hazelwood mine. As a result, VWA was not in a position to monitor whether any of the recommendations made in that report were implemented at the Hazelwood mine. For the purposes of the Inquiry, the key recommendation in that report was that a risk assessment should be conducted on the ‘non-operational’ areas of the Hazelwood mine to determine whether further prevention work was required. That did not happen. As noted by Counsel Assisting, this was ‘most unfortunate as it represents a lost opportunity.’140
The Board notes that VWA monitoring activities summarised by Mr Hayes and Mr Kelly are limited to ‘serious’ incidents and ‘major mining hazards,’ that is incidents and hazards that carry a significant risk of causing more than one death. Similarly, VWA focuses on investigating mining incidents that are classified as ‘serious’, ie incidents that have the potential to result in a fatality. This is consistent with the broad VWA strategy of targeting its interventions in the areas where it can have the greatest impact on workplace safety.
The Victorian Government submitted that the failure to monitor the mine operator’s response to the September 2008 incident was justifiable on the basis that it was not a ‘major mining hazard’ and it was:
…therefore appropriate for the VWA to leave responsibility for the implementation of the 2008 GHD report with the entity responsible for implementing it, GDF Suez and, instead, focus its regulatory resources on ensuring that GDF Suez had appropriate systems for dealing with major mining hazards.141
The Board does not agree with this submission.
VWA’s approach in relation to the September 2008 fire stands in stark contrast to the Mining Regulator’s oversight of GDF Suez’s implementation of recommendations arising out of the October 2006 fire, which led to a wholesale review of the Fire Service Policy and Code of Practice at the Hazelwood mine. VWA representatives had already conducted at least three inspections following the September 2008 incident. During one of these inspections, VWA was made aware of the GHD report.142 Given that VWA was already actively following up on the incident, it would not have required significant additional resources to have requested a copy of the report or to make enquiries with GDF Suez as to what it had intended to do in response to the recommendations suggested.
Mr Neist agreed that it is appropriate for VWA to monitor what a duty holder is doing in response to recommendations arising out of an incident, and that it is necessary for VWA to obtain a copy of an incident report in order to carry out this function.143 Mr Neist’s comments were not confined to ‘major mining hazards’. His only explanation for why a copy of the report was not sought following the September 2008 fire was that this incident occurred early in VWA’s tenure as the regulator (some nine months later).144
It is apparent from Mr Hayes’ evidence that during the verification inspection of the Hazelwood mine in June 2012, VWA was primarily focused on ensuring that GDF Suez’s Safety Assessment documentation was complete, rather than whether the Safety Assessment had adequately addressed the risk of fire at the Hazelwood mine.
In its submission to the Board, the Victorian Government stated that the manner in which VWA conducted its verification inspection in 2012 must be viewed in the context of other evidence before the Board suggesting that the Safety Assessment did satisfy the requirements of r. 188.8.131.52 The Board agrees. However, the Board is concerned that VWA placed undue focus on administrative or procedural compliance with the OHS Regulations, rather than ensuring substantive compliance. The Board considers that effective regulation must focus on substance rather than form.
The Board recognises the principle underlying the regulatory regime that the primary obligation to manage risk at a site rests with the duty holder.146 It also recognises that there are necessary constraints on how a government agency can allocate its resources. However, the Hazelwood mine fire has demonstrated that there are consequences of real import where the approach to regulation is overly passive. As noted by Environment Victoria in its submission to the Board:
The ‘hands-off’ approach has created a leadership vacuum of real consequence. By leadership we mean (at least) taking responsibility for asking whether the consequences of the mining operation are addressed in a way that adequately protects the community in both the short and long term and for ensuring that real protections are in place.147
Transfer of Occupational Health and Safety Responsibility
The Board notes with concern some of the evidence it heard relating to the transition of responsibility for the administration and enforcement of the OHS regime in respect of mines from the Mining Regulator to VWA.
In particular, the large scale transfer of staff from the Mining Regulator to VWA that was recommended by the 2006 Pope report did not occur. Secondly, contrary to the findings of the 2008 Deloitte audit, Mr Hayes told the Board he did not have access to files of the Mining Regulator in relation to the Hazelwood mine before 1 January 2008.
The Victorian Government sought to address these concerns by suggesting:
- In 2008 it was considered preferable to recruit new staff rather than force Mining Regulator
staff to transfer to VWA.
- VWA was able to access Mining Regulator files if it requested them.148
Regrettably, this was new evidence that was not put before the Board during its public hearings. Ms White’s and Mr Hayes’ evidence on these matters on the other hand was both unequivocal and unchallenged.
The Board acknowledges that the Deloitte audit found that there was an effective transfer of mining industry expertise and knowledge from the Mining Regulator to VWA, but notes these conclusions were formed on the basis of discussions with staff employed by the Mining Regulator and not VWA.149 There remains a real possibility that expertise and knowledge relevant to assessing fire risk at the Hazelwood mine was lost as a result of the transfer of OHS responsibility from the Mining Regulator to VWA.
IS THERE A REGULATORY GAP?
Depending on the interpretation of the legislation adopted, there may not in fact be any gap in the statutory framework itself. In the Board’s view, both VWA and the Mining Regulator had statutory powers enabling them to influence and enforce compliance with fire prevention practices at the Hazelwood mine.
However, both agencies adopted a narrow reading of the statutory regime underlying their respective areas of responsibility which resulted in a real practical gap in regulation of the Hazelwood mine. Mr Neist acknowledged the existence of this gap and the need to fill it.150
Mr Neist’s evidence that a fire in the worked out areas of the Hazelwood mine did not arise from the ‘conduct of the undertaking’ and therefore fell outside of the scope of VWA’s regulatory reach is troubling. If this view is accepted, on the evidence of both Mr Neist and Ms White, the prevention of fires such as the Hazelwood mine fire would lie outside the regulatory oversight of either government agency.
The Board does not accept Mr Neist’s views, nor do they represent the considered opinion of VWA, with the result that the regulatory gap is narrower than it might have otherwise been.151
In the Board’s view, both the VWA and the Mining Regulator had statutory powers enabling them to influence and enforce compliance with fire prevention practices at the Hazelwood mine. However, regulation of the mine was undermined by:
- the silo mentality adopted by the Mining Regulator and VWA in carrying out their functions
- the passivity with which each agency has pursued its supervision of the Hazelwood mine
by shifting complete responsibility for dealing with fire risk to GDF Suez.152
As noted by Environment Victoria in its written submission to the Board:
While regulators must be conscious of the limits of their regulatory jurisdiction, the segregation of fire risk from mining operations (including rehabilitation) has been absolute and inflexible, and has had the consequence that no agency has considered risk holistically.153
The Memorandum of Understanding between the Mining Regulator and VWA attempts to recognise areas of overlapping responsibility and define each agency’s role in regulating each area.
If the Mining Regulator and VWA had approached their respective roles in the consultative manner contemplated by the Memorandum of Understanding, this may have resulted in overlapping responsibilities, but as noted by Counsel Assisting, ‘that is far preferable to there being a gap.’154
The risk of fires like the Hazelwood mine fire that occurred in February and March 2014 slipped through the cracks between regulatory agencies. This reality must be confronted if similar incidents are to be avoided in the future.
OPPORTUNITIES FOR ENHANCING THE REGULATORY REGIME
In light of VWA’s emphasis on ‘major mining hazards’, it is doubtful that this agency is best equipped to address risks that have the potential to affect the health and safety of the public, particularly if it is the only agency with any oversight of this issue. Under the VWA incident classification scale, it would be open for the agency to consider the Hazelwood mine fire as a ‘minor’ incident and would therefore rank very low in targeting its resources. Following its experience with the Hazelwood mine fire, the Morwell community could be forgiven if it took issue with treating large scale fires in the worked out areas of the Hazelwood mine as ‘minor’.
The Board considers that the Mining Regulator and VWA both have a role in regulating fire risk in the Victorian mining sector. The mine licensing regime is a potentially powerful tool for influencing the way in which mine operators manage risks that could impact on the public. If the Mining Regulator shared responsibility for regulating fire risk, this role would fit squarely within the legislative intent of the mine licensing regime. The Mining Regulator is not confident that it has a sufficient statutory basis to fulfil this role.
The present uncertainty concerning the scope of the Mining Regulator’s statutory powers and area of responsibility might be resolved when s. 16 of the Mineral Resources Amendment Act comes into operation.
The approach of the new Act is appropriate because it requires the licensee to identify risk and specify measures to eliminate or reduce that risk as far as reasonably practicable. This is consistent with the manner in which fire is regulated under the OHS regime. It should enable the Mining Regulator and VWA to approach their respective regulatory tasks consistently.155
Environment Victoria submitted that in order to effectively fulfil their shared responsibilities, the Mining Regulator and VWA need to be adequately equipped with staff that have the necessary fire expertise to monitor and enforce compliance with measures to mitigate fire risk.156 The Board agrees. Ms White made it clear that the Mining Regulator does not currently have this capability. Mr Neist also identified that the lack of systems safety specialists to judge whether risks are being properly controlled is a key shortcoming in the skillset of the Earth Resources Unit of the VWA and indicated he would look to bolster the Unit with that expertise.157 It is appropriate that both regulators were receptive to adding this kind of experience and expertise to their teams.
The Board affirms the willingness of the Mining Regulator to explore its potential role following the commencement of s. 16 of the Mineral Resources Amendment Act.
The Board notes the public concern about whether rehabilitation of exposed batters could have prevented the ignition or the spread of fire in the mine and acknowledges that the concern is legitimate and warrants further consideration.
Environment Victoria suggested amendment be made to Schedule 15 of the Mineral Industries Regulations to specifically require that ‘rehabilitation plans included within work plans for a mining licence must include consideration of the means by which progressive rehabilitation may mitigate fire risk.’158 Professor Hepburn also emphasised the importance of effective monitoring and enforcement of rehabilitation plans (particularly progressive rehabilitation obligations) to improve public safety standards and minimise the risk of fire, and she suggested public recording of all rehabilitation plans (final and progressive).159
Ms White welcomed the potential for enhancement of the Mining Regulator’s powers to include rehabilitation specifically for the purposes of fire risk and the possibility of collaborating with other agencies, such as VWA, to strengthen the regulation of mines.160 Opportunities for collaboration between the Mining Regulator and VWA already exist whenever a mine fire is notified to either the VWA or the Chief Inspector of Mines, or when each of the agencies undertake inspections of the mines, but currently very little collaboration appears to take place.
While Environment Victoria’s suggestion might be one way in which work plans could address issues of fire prevention, mitigation and suppression in mines, it is not appropriate for the Board to pre-empt or prescribe precisely how work plans should address these issues, nor the regulatory means by which this will be effected. This is ultimately a matter for the Victorian Government in consultation with the Mining Regulator and other stakeholders.
This is particularly the case having regard to recommendation 19 of the 2012 report of the Economic Development and Infrastructure Committee which led to the outcomes-based focus of s. 16 of the Mineral Resources Amendment Act.
The Victorian Government, while it did not commit to fire control measures being required under work plans, did not suggest that there was any practical or policy-based obstacle to doing so and appeared open to the possibility.161
Section 16 of the Mineral Resources Amendment Act may not come into operation until 31 December 2016.162
Counsel Assisting submitted to the Board that ‘[t]he people of the Latrobe Valley and Morwell in particular are entitled to see any regulatory gap closed at the earliest opportunity’ and encouraged the Victorian Government to consider bringing forward the commencement date.163 This submission was also supported by Environment Victoria.164
The Victorian Government has noted several administrative hurdles before s. 16 can come into operation. These include:
- It will be necessary to amend the regulations in order to ensure the regulations are consistent with and complement the amended provisions of the Mineral Resources Act.
- If fire risk control measures are to become part of work plans, further legislative amendments may be required.
- A regulatory impact statement will also need to be prepared, which may take 12 to 18 months to complete.165
The Board considers that if the commencement date is brought forward to 31 December 2015, there should still be sufficient time to make any necessary amendments to the regulations and enabling legislation, as well as to prepare the necessary regulatory impact statement. The Victorian Government is encouraged to bring forward this date further if the preparatory steps identified above progress more quickly than anticipated.
Once s. 16 does come into force, it is unclear whether existing work plans will need to be revised to meet the new requirements.166 Ms White informed the Board that there will be a transitional phase.167 Nevertheless, the Victorian Government has urged industry, in particular licensees of all Victorian coal mines, to prepare for the inevitable changes.168
On 14 January 2014, GDF Suez applied to again vary the work plan for the Hazelwood mine, which will involve proposed changes to the western boundary of the north field of the mine and mining sequencing and batter rehabilitation.169 There was no evidence before the Board regarding the likely timeframe for the work plan variation process. Based on previous work plan variations, it is possible that s. 16 of the Mineral Resources Amendment Act will have become operational before approval of the work plan variation is complete.
Accordingly, the current work plan variation application presents an opportunity for both GDF Suez and the Mining Regulator to ensure the work plan conforms to the requirements of s. 16 of the Mineral Resources Amendment Act, and sufficiently addresses the risk of fire in the worked out areas of the Hazelwood mine.