Gunns pulp mill permit to expire again?

By passing the Pulp Mill Assessment Amendment (Clarification) Bill 2009, the Labor Govt, aided by the Libs and abetted by the Upper House added two years onto the duration of the Permit, while doing nothing to clear up doubts as to the meaning of ‘substantially commenced’.

Nick Clark’s Mercury article “Pulp Mill Permit Confusion” was quite interesting. What does the term ‘substantially commenced’ mean and do Gunns only have three months in which to have substantially commenced the construction of the mill? Can they claim that years of planning, round the world trips and attempts at community consultation constitute sub-elements of commencement? Or is it just those actions that are controlled by the Permit and the performance of which will be evidence of substantial commencement?

However we answer these questions, it seems that either the Govt, the Opposition and the Upper House were fools or that they were mendacious…

BACKGROUND

“On 20 October 2009 the Director, Environment Protection Authority, Mr Warren Jones (Director, EPA), wrote to the Secretary of the Department of Primary Industries, Parks, Water and Environment advising that, on the basis of advice that he had received from the Solicitor-General, uncertainty has arisen (re expiry of Permit due to works not substantially commenced).

The uncertainty arose as a result of the potential expiry of Schedules LU1, LU2, LU3 and LU4 of Appendix 2A to the Pulp Mill Permit, which are taken to have been issued under the Land Use Planning and Approvals Act 1993 (LUPAA).2 ”

http://www.parliament.tas.gov.au/bills/Bills2009/pdf/notes/102_of_2009-Fact%20Sheet.pdf

THE CLARIFICATION BILL

Within little more than a fortnight, David Bartlett introduced the PULP MILL ASSESSMENT AMENDMENT (CLARIFICATION) BILL 2009 into Parliament in November of that year. During debate in the Lower House, David Llewellyn was repeatedly asked to table the legal advice which the Greens claimed apparently showed that the Pulp Mill Permit had expired. He did not. However he claimed that the Solicitor General’s advice included the following points:

1. The Solicitor-General believes that it is unlikely that Gunns has met the test of substantial commencement in relation to any of the four land-use permits.

2. The advice notes that Gunns legal representatives have put arguments to the effect that either section 53(5) does not apply to LU1-4 or, alternatively, that there has been substantial commencement. The principal Crown Counsel does not agree with this interpretation but in discussions has noted that ultimately the question may only be resolved by a court.

3. In the first instance, the principal Crown Counsel suggests that, if they agree with the view that the permits have expired, the relevant councils would have the primary obligation to take action to enforce their planning schemes.

PULP MILL FOOTPRINT ILLEGAL?

The Greens made the point that the clearing of the bush at Longreach for the mill footprint after the expiration of the Permit would have constituted illegal works, and that in truth the Bill was not a Clarification Bill, but rather a Bill of Validation of illegal works.

What that did, late in 2009 Bill, was to attempt to reactivate the Pulp Mill Permit which had just expired two years after it came into effect on the 30th August 2007, due to the works authorised by the Permit not having been substantially commenced.

DETAILS OF CLARIFICATION BILL

Clause 4 of the Bill amended Section 8 of the PMAA 2007 in the following way:

Clause 4 amended section 8 of the Principal Act by inserting three new subsections.

The proposed subsection 8(4) provided that the Pulp Mill Permit lapses if the project has not been substantially commenced within 4 years from the date of commencement of the permit (ie 30 August 2011).

The proposed subsections 8(5) and (6) dealt with permits that may be taken to have been issued under other legislation specified in the Pulp Mill Permit, in accordance with section 8(1)(c) of the Principal Act, and extended the life of those permits. In particular, the proposed subsection 8(5) provides that a permit that is taken to have been issued under:

• the Land Use Planning and Approvals Act 1993 (LUPAA) only lapses under section 53(5) of that Act if the Pulp Mill Permit lapses;

• the Water Management Act 1999 (WMA) lapses under section 159(8) of that Act at the end of 4 years from the date of commencement of the Pulp Mill Permit, if the dam works within the meaning of that Act are not substantially completed within that 4-year period.

The proposed subsection 8(6) provides that a permit that is taken to have been issued under either the LUPAA or the WMA, that would have lapsed prior to commencement of the Act, is deemed not to have lapsed.

DEBATE

The then Minister for Planning, David Llewelyn, in his Second Reading speech, told the House:

“The Pulp Mill Assessment Amendment (Clarification) Bill 2009 provides certainty about the date on which the Pulp Mill Permit lapses, should Gunns Limited have failed to substantially commence the development and operation of a bleached kraft pulp mill in northern Tasmania.”

That statement was misleading: There already existed a known expiry date – 2 years where works had not substantially commenced and in the case of dams, 3 years where the works were not substantially completed. What the Govt was doing was renewing/extending the expiry date for another 2 years, from 30th of August 2009, when it had expired, till 30th August 2011.

The Minister continued:

“At the time of passing the Act it was not considered necessary for the Pulp Mill Assessment Act to contain a date at which the Permit would cease to exist, had the project not substantially commenced.”

That was again misleading. Section 53.(5) of the Land Use Planning and Approvals Act 1993 (LUPAA) quite clearly applied:

“53. When does a permit take effect?

[…] (5) A permit lapses after a period of 2 years from the date on which it was granted if the use or development in respect of which it was granted is not substantially commenced within that period. ”

Then Minister Llewellyn continued:

“Mr Speaker, the amendment of the Pulp Mill Assessment Act means that regulators can be certain that should Gunns not have substantially commenced the project by 30 August 2011, the Pulp Mill Permit lapses and Gunns’ authority to build and operate the pulp mill is extinguished.

Four years is considered a reasonable period of time given the size and considerable complexity of the project and lapsing provisions in other legislation.”

In the due course of time the Bill went to the Council, and there the Leader of the Govt, Doug Parkinson read the same speech as had Llewellyn in the Lower House. Following this, Ruth Forrest, who had voted for the PMAA, but against the Permit, had the following to put to Mr Parkinson:

“I do want the Leader to address his mind to one matter. It was the thing that stuck in my mind when I first looked at this – and the member for Western Tiers alluded to it. It talks about the pulp mill permit lapsing if the project is not substantially commenced before the end of the period of four years, which is August 2011.

We know from all Gunns’ reports that they have spent a substantial amount of money already on this project, but has it been ‘substantially commenced’? I would probably argue no, because there is no hole in the ground and there has been no slab poured. So what is ‘substantially commenced’? How is that going to be assessed? I think it needs to be on the record so that when we get to 28 August or whatever date it is and the parties who would like to see this thing killed come back and say, ‘What have you substantially commenced?’, if just the trees have been cut down, is that enough?

I think it needs to be fairly clearly defined what ‘substantially commenced’ means and also with the dam construction, what does ‘substantially completed’ means, because I know that there are frameworks around this but I think it needs to be clearly articulated so we do not have to come back here again and try to sort out another mess. I just need that clarification from the Leader [Mr Parkinson] in his summing up or in the committee stage. I will take him to task then, so it is best if he do it in reply probably, because it is going to happen anyway. Madam President, I do support the bill.”

To which Mr Parkinson replied:

THE TEST: ‘motive for the doing of any particular work (window-dressing) irrelevant’

“The Solicitor-General has advised that the following matters must be kept in mind in considering the on-ground works carried out by Gunns to date. There has been a substantial commencement authorised development under any permit but the test of ‘substantial commencement’ is an objective, not a subjective one – that is, motive for the doing of any particular work is irrelevant. The test to be applied is whether the work or development, the subject of the approval or consent, has been begun by the performance of some substantial part of that work or development and, in that respect, it is a question of degree in each case. The facts must be such as to lead naturally to the conclusion that the commencement of the development is not merely evident but a commitment of resources of such proportion relative to the approved project as to carry the assurance that the work has really commenced. At the end of the day it will be a matter for the Regulator, Warren Jones, to determine. That is the position we are in. I think somebody else already referred to the EPO director’s letter advising the secretary of the department that, in his words, ‘the doubt over the current status of the permit needs to be resolved’ ”.

[DAM WORK TO BE SUBSTANTIALLY COMPLETED]

“In relation to the matter raised by the honourable member for Western Tiers, the requirement for substantial completion in relation to a dam works permit mirrors the requirement of the Water Management Act. We have extended the requirement to substantially complete from three years with a possible two-year extension in the WMA to four years in this bill, although Gunns must have substantially commenced the project within four years. The dam works must be substantially completed within that time.”

It is surprising that Ruth Forrest should have promised her vote in advance of finding out what ‘substantially commenced’ meant. In any event, the Bill was passed, the PMAA Section 8 was successfully amended and since then no construction works allowed for by the Permit a Permit have occurred.

WHERE ARE WE NOW?

It is now the 2nd of June, which gives three months, or 92 days, for works covered by the Revamped Permit to begin. Gunns have no JVP. Their share price is 34c, like it was shortly before the nosedive to 26c which brought the resignation of John Gay. However there seems no way out of the morass. Not only do we have a Gunns Ltd which seems intent on sacrificing everything to the pulp mill, including its own viability, but we also have no way out while our government cannot admit that there is no hope for the mill, and will not provide the leadership required to guide Tasmania back to safety. Incredibly the Bartlett government believed that the so called Pulp Mill Assessment Amendment (Clarification) Act was one of two methods available to bring about a resolution of the problem caused by Gunns Permit having expired. One, of which they availed themselves, was the legislative route, and the other it was said, lay in Court action. Indeed, as A Govt Fact sheet advised:

“The lapsing of the Permit is, therefore, a matter that can only be conclusively resolved by a court or by legislation.”

SECTION 11!

And here is another Government-made debacle. For although the PMAA Section 11 does not apply to the construction and operation of the proposed mill, it quite arguably might well apply in preventing us from using any court to give judgement on the status of the Permit:

11. Limitation of rights of appeal

[…]

“(2) For the purposes of subsection (1), “any action, decision, process, matter or thing arising out of or relating to any assessment or approval of the project under this Act” includes any action, decision, process, matter or thing arising out of or relating to a condition of the Pulp Mill Permit requiring that the person proposing the project apply for such other permits, licences or other approvals as may be necessary for the project.”

The operative word in this is ‘includes’. That means other matters concomitant to such considerations of the Permit are not by virtue of this subsection excluded from the general s.11 bar on actions. Simply put, we probably can’t use the courts to test whether the Permit has expired. What a tragedy that our government simply doesn’t understand its own shoddy legislation. And did not Warren Jones, in writing to DPIWE in October 2009, thereby initiating the Govt’s knee-jerk reaction, express the concern that unknown parties might initiate a court action to confirm the Permit’s expiration? Did he too not understand Gunns’ legislation?

“There is some risk that a third party may choose to test the expiry clause in a court of law.” (Unless presumably the govt did something to dispose of the ‘uncertainty’)

The irony being that the ignorance of the application of s.11 is widespread. Another matter that needs to be understood and addressed is that of the Permit as a single over-riding thing which lapses in its entirety, if work has not substantially commenced, regardless of the fact that the Permit comprises four land-use permits – the water-supply pipelines (Launceston and West Tamar), the mill and the George Town workers’ quarters. What would a person regard as constituting ‘substantially commencing’ the project? And remember also, that the test for a dam is that it must be substantially completed. Doug Parkinson’s test as outlined above is next to worthless. He sought to dress up his definition in reasonable words and phrases like ‘objective, not a subjective one’, ‘test to be applied’, ‘a question of degree’. But in the end, for him the test of ‘substantially commenced’ lies in it being evident “that the work has really commenced.” What a tortured definition!

HERE AGAIN IS PARKINSON’S TEST FOR SUBSTANTIAL COMMENCEMENT:

“There has been a substantial commencement authorised development under any permit but the test of ‘substantial commencement’ is an objective, not a subjective one – that is, motive for the doing of any particular work is irrelevant. The test to be applied is whether the work or development, the subject of the approval or consent, has been begun by the performance of some substantial part of that work or development and, in that respect, it is a question of degree in each case. The facts must be such as to lead naturally to the conclusion that the commencement of the development is not merely evident but a commitment of resources of such proportion relative to the approved project as to carry the assurance that the work has really commenced.”

CONCLUSION:

Nick Clark’s Mercury article “Pulp Mill Permit Confusion” (HERE) was the inspiration for the above article. In essence his article said that there was confusion about the term ‘substantially commenced’ and by implication that Gunns have three months to have substantially commenced the construction of the mill (for it is the construction and operation that permits allow, not the costs in preparing plans, trips for finding JVPs etc – they don’t need permits) or face the expiry of the Pulp Mill Permit.

The irony is that our Labor Govt, aided by the Libs and the Upper House thought that by simply adding two years onto the duration of the Permit, (the Clarification Bill) they were clearing up doubts as to the meaning of ‘substantially commenced’. Many people regularly call such people fools. On reflection, I truly think they are right. How could they be so stupid? Many people voted for these our recalcitrant representatives. How could the electorate be so stupid? Or were we being deceived?