Legal Perspectives from EDO TasmaniaThank you devil

17 December 2014

The Supreme Court has today ruled that the decision of the EPA Director to issue an EPN amending permit conditions regulating storage of potentially acid-forming waste at Shree Minerals’ Nelson Bay River mine was unlawful.  You can read the full decision here.

Justice Estcourt noted that the relevant question was whether the amendments “changed the use or development authorised by the Permit in a ‘fundamental’ way”, a question that required a comparison of the physical works authorised  by the original and the amended permits.  His Honour disagreed with the submission of counsel for the EPA Director that the changes were temporary operational change only, and did not fundamentally alter the nature of the mine:

To my mind that is a serious understatement of the nature and quality of the change to the development in all of the circumstances. It is all the more egregious given that the Director was a member of the EPA Board that set the conditions of the Permit refusing above ground storage of the PAF waste material and declining to give Directorial discretion on the issue of PAF storage.

Quantitatively the extent of the physical changes permitted by the variation of the Permit conditions by the EPN is, in my view, quite dramatic…

His Honour also noted that the amendments would allow Shree to “store a massive amount of PAF waste material in a way not only not approved of by the EPA Board but expressly disapproved of for a vastly smaller amount, even with Directorial discretion, which was expressly not granted by the Board because it considered it was unlikely that an appropriate alternative strategy was available or feasible.”

Justice Estcourt observed that, had Shree pursued the above-ground storage option during the original assessment, it was likely that the EPA would have recommended refusal of the project, concluding:

Irrespective however of what the EPA Board may or may not have done, it is my view that any informed bystander considering what the Director allowed as a variation of the restrictions of the Permit would observe that the EPN changed the fundamental development allowed by the Permit.

On this basis, Justice Estcourt held that the amendments were beyond the powers granted to the EPA Director under the Environmental Management and Pollution Control Act 1994 and were therefore invalid.   The parties will make submissions regarding final orders at a later date.

The hearing:  Tarkine National Coalition v Alex Schaap, Director of the EPA

On 11-12 December 2014, EDO Tasmania represented the Tarkine National Coalition (TNC) in their application for judicial review of a decision by the Director of the EPA to amend the permit conditions regulating the operation of Shree Minerals’ Nelson Bay River mine in northwest Tasmania.

Jeremy Gobbo QC and Juliet Forsyth were counsel for TNC, Michael O’Farrell SC and Jenny Rudolf were counsel for the EPA Director.

What is the case about?

In December 2011, Shree Minerals Limited (Shree) applied to Circular Head Council for a development permit for the Nelson Bay River Magnetite Mine.  The proposal was classified as a Level 2 activity, so it was referred to the Board of the Environment Protection Authority (EPA) for assessment under the Environmental Management and Pollution Control Act 1994 (EMPCA).

Shree submitted a Development Proposal and Environmental Management Plan (DPEMP) outlining its proposed operations and commitments to minimise and manage environmental impacts associated with the mine.   The DPEMP was made available for public comment, and all comments received were considered by the EPA in its assessment.

One issue specifically addressed by the EPA, and in correspondence between Departmental officers and Shree, was the management of potentially acid forming (PAF) waste rock and the generation of acid water.  In July 2012, the EPA Board (of which the EPA Director is a member) concluded the only environmentally sound way to manage the PAF waste was via in-ground storage in the Direct Shipping Ore (DSO) pit.  The conditions of the permit issued for the mine explictly required all PAF waste to be contained within the DSO pit.

In late 2013, the EPA received new material from Shree revising the estimated quantity of PAF material that would be extracted from the DSO pit from 14,000 m3 to 230,000 m3. Shree requested a change to their permit conditions to allow for temporary above-ground storage of PAF waste to accommodate this additional volume of material waste (a solution that was suggested by the EPA Director).  In November 2013, the Director issued an Environment Protection Notice (EPN) amending the permit conditions to authorise the temporary above-ground storage.

TNC applied for judicial review of this decision.

The Tarkine National Coalition’s case

TNC made a number of arguments challenging the validity of the Director’s decision:

  1. Fundamental change

TNC argued that the Director’s decision to allow above-ground storage was contrary to s. 44(10) of EMPCA, which says that permit conditions may only be varied where the fundamental use or development authorised by the permit is not changed.

TNC argued that permitting above-ground storage of PAF waste over an area of 1 ha, was a fundamental change to the way PAF material is managed and stored as part of the approved mine development.

TNC also argued that allowing Shree to store PAF above-ground, with only approval from the Director, and not the EPA Board, would allow Shree to circumvent public consultation processes under the EMPCA and the Land Use Planning and Approvals Act 1993.

  1. Environmental risks

TNC argued that, having considered the matters specified in the DPEMP, the original EPA Board’s decision and the further information requested from Shree, the Director could not have reasonably concluded that above-ground storage would not pose any environmental risk. The above-ground storage option was considered and rejected by the EPA Board, of which the Director was a member. In the absence of any new evidence regarding impacts of above-ground storage, it was not reasonable for the Director to be satisfied it was desirable to vary the conditions or restrictions of the permit.

  1. Improper exercise of power

TNC argued that the Director’s decision to allow above-ground storage was an improper exercise of the power conferred to him under EMPCA.  In particular, TNC argued that it was an exercise of power that was so unreasonable, no reasonable person could have made the decision to vary the permit.

The EPA Director’s case

Crown counsel argued that the EPN did not bring about a fundamental change to the use or development which Shree was permitted to carry out Counsel submitted that, under the original permit, it was always necessary to store the PAF waste, therefore the decision to vary the permit conditions merely reflected an operational change, rather than a fundamental change of use.

Counsel submitted, on behalf of the Director, that s.44 of EMPCA did not require there to be evidence of a change in facts before the Director could vary the conditions of the permit.  He argued that storage of PAF waste was always something considered by the Board, however, the temporary above-ground storage facility authorised by the EPN was not something originally considered by the Board.

Counsel argued that, in judicial review (as opposed to merits review), it was not appropriate for the Court to “place the Judge in the shoes of the Director” and consider what reasonable decision should have been made.  He submitted that, s the “repository of power under the Act was placed with the Director, his characterisation [of what was reasonable] should be given great weight.”

Team Tarkine 2


Sincere thanks to our wonderful legal team – Jeremy Gobbo QC, Juliet Forsyth, Adam Beeson, Frances Spry and Rafael Szumer.

(Thanks also to Frances for preparing this summary)