Media release

Auditor-General’s report: Victorian communities at risk, taxpayers foot the clean-up bill as government neglects mine rehabilitation 

August 17, 2020

Victoria’s mines are contaminating communities and leaving a legacy of social, financial and environmental liabilities, warn lawyers and environmental NGOs. 

Lawyers at Environmental Justice Australia, acting for community groups including Friends of Latrobe Water, warn the “systematic regulatory failures” documented in last week’s Auditor-General’s report into the state’s mine rehabilitation have allowed arsenic, heavy metals, acidic water and other mine waste pollution to seep from abandoned mines into surrounding communities and waterwaysUsed for irrigation, swimming and fishing, these waterways are habitat to fish, frogs and fragile ecosystems. 

The Auditor-General’s report found the government “is not effectively regulating operators’ compliance with their rehabilitation responsibilities,” exposing Victoria to “significant financial risk”. Frequently, mining sites “have been poorly rehabilitated or not treated at all” presenting “risks to Victorians and the environment. 

Bronya Lipski, lawyer at Environmental Justice Australia, said: 

“The Auditor-General’s report paints a picture of regulation for the industry, by the industry’. It gives Latrobe Valley and Gippsland communities little confidence that mine rehabilitation will be done in the robust and comprehensive way that residents and the surrounding environment deserve. 

“The report shows the concerning potential for conflicts of interest, a lack of enforcement of regulation and neglectful approval of inadequate rehabilitation plans. It shows the state’s contingent liability  — or estimate of potential liability — is an absurdly low estimate that wouldn’t cover a new stadium construction, let alone comprehensively rehabilitate a single mine. 

Regulation of mines under the Mineral Resource (Sustainable Development) Act isn’t being enforced. Reclamation bonds—the funds meant to guarantee that cleanup costs are covered if a company walks away from its mine — have been undercosted or given back without proper site inspection and rehabilitation. 

The Victorian government has looked the other way while local communities are left to suffer after private companies have scarred the land, made their profits, contaminated waterways and then left the cleanup costs to the taxpayer. While communities face an environmental and health burden, the state is facing a legacy of liabilities.  

“The Victorian government must ensure that we have an empowered and independent mining regulator to rigorously assess rehabilitation and take strong enforcement action where necessary.  

Tracey Anton, member of Friends of Latrobe Water, said:  

The Auditor-General’s audit shows that we need integrated agency oversight of rehabilitation, including by the EPA. Victoria has suffered under ineffective policy and management of rehabilitation processes, including miscalculating bonds, premature return of bonds without site inspection, and operators being allowed to forfeit legal responsibilities.  

While coal mining has shaped our community for nearly 100 years, we’ve got three enormous holes in the ground here in Latrobe Valley. But with the Hazelwood rehabilitation process underway and a lack of community access to really important information like technical documents and the work plan variation, how can anyone feel confident that the regulator is ensuring that ENGIE, EnergyAustralia and AGL are going to be held to undertaking comprehensive rehabilitation plans? 

The Minister for Planning must make the process transparent and allow the community the right to have a say under an Environmental Effects Statement (EES). We have been asking Minister Wynne to require  ENGIE’s Work Plan Variation for rehabilitation to be referred referred under the EES process, but received no response. In light of the Auditor-General’s damning report, we call on him to act now. 


The Victorian Auditor-General’s Office undertook an audit into the Department of Jobs, Precincts and Regions (DJPR) regulation of mine rehabilitation and investigated whether this regulation minimises Victoria’s exposure to rehabilitation liabilities.  

According to the audit report, “systematic regulatory failures” include: “using outdated cost estimates; not periodically reviewing bonds for their sufficiency—including a four-year bond review ‘moratorium’ for which there is no documentary evidence that it was duly authorised; failure to assure that site rehabilitation had actually occurred before returning bonds; approving inadequately specified rehabilitation plans; lack of enforcement activities.” The report concluded that DJPR is not effectively regulating operators compliance with their rehabilitation responsibilities. 

The Mineral Resources (Sustainable Development) Act 1990 is intended to encourage mineral exploration and operations. The Act also contains some provisions that aim to minimise risks to the environment and community. DPJR and the Department of Environment, Land, Water and Planning (DELWP) identify and manage rehabilitation liabilities from abandoned and legacy sites, and the audit considered DPJR’s coordination with relevant government agencies on mine rehabilitation. 

Mines are huge contributors to gas emissions, climate change, and toxic pollution that causes death and disease. But their true costs to health, the environment and the economy are still being unearthed. While some changes to address conflicts of interest were made following Parliament’s Independent Inquiry into the EPA in 2016, Earth Resources Regulator (ERR)—the primary mining regulator—still resides within DJPR, which seeks to foster and develop the mining industry, presenting conflicts of interest. 

ERR acknowledges that it has not effectively discharged its responsibilities and is working to rectify identified issues. Following the recommendations of the 2014 and 2016 inquiries into the Hazelwood mine fire, ERR began improving its regulatory performance. However, its early reforms were broad, and it was not until mid-2018 that ERR started specifically addressing rehabilitation issues. 

Read Environmental Justice Australia’s Toxic and terminal: How the regulation of coal-fired power stations fails Australian communities.

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