Improved Management of Exploration Regulation (IMER) applies to all exploration licences and assessment leases issued under the Mining Act 1992, as well as any exploration licences, special prospecting authorities and assessment leases issued under the Petroleum (Onshore) Act 1991. These are collectively referred to in these FAQs as 'exploration titles'.

Background

Why is resource exploration in NSW being reformed?

Improved Management of Exploration Regulation (IMER) reflects the NSW Government's commitment to ensuring regulatory best practice, boosting industry growth, and providing greater public confidence in the exploration sector.

The reforms offer a complete overhaul of NSW exploration regulation, with tough new streamlined rules across all types of exploration activities.

They will help to grow exploration in NSW and drive a competitive resources sector by providing upfront rules, cutting red tape and providing increased flexibility through risk-based regulation.

IMER will also promote stronger accountability for industry and offer the community greater clarity about and confidence in the regulation of the exploration sector.

The reforms will apply from 1 July 2015 to all new applications for the grant, renewal or transfer of an exploration title. They will also apply to any renewals of petroleum titles granted after 1 July 2015. The reforms will be implemented progressively and reviewed after 12 months to ensure the settings are operating seamlessly.

What does IMER consist of?

In order to minimise disparate reporting periods over a year, explorers can now submit all reports at the same time, including the summary activity, exploration, environment management, rehabilitation and community consultation reports.

What are the new codes that will be introduced under IMER?

Codes that take effect from 1 July 2015:

Codes that take effect from 1 March 2015:

What are the new guidelines that will be introduced under IMER?

Guidelines introduced from 1 July 2015:

Guidelines to be introduced 1 March 2016

Guidelines to be introduced later on:

  • industry guideline for coal explorers (exploration)
  • industry guideline for petroleum explorers (exploration)
  • industry guideline for assessment leases

What does IMER mean for the NSW exploration industry?

The reforms will boost the NSW exploration sector with:

  • Improved clarity via:
    • upfront, predictable regulation
    • more consistent application of regulation
    • the elimination of duplication and overlap with existing regulatory requirements
    • a move away from exploration titles that are fixed in time to titles that consolidate approved activities over time.
    • new clearer requirements for explorers that allow for risk-based management of activities
    • a shift away from the often confusing exploration category system to new exploration title conditions for activity approvals
    • new industry guidelines detailing the process of applying for prospecting titles and the responsibilities of applicants and authority holders.
  • Industry growth via:
    • a more flexible, less complicated, risk-based regulatory system
    • the opportunity for innovation and best practice in meeting requirements
    • the availability of full statutory licence term for minerals titles
    • improved work program management
    • faster and more streamlined approvals.
  • Time and cost savings via:
    • requirements that are easier to comprehend and implement
    • a quicker approvals process for lower impact exploration activities
    • simplified documentation for lower impact exploration activities
    • full statutory terms for minerals titles
    • clearer title instruments
    • consolidated reporting
    • standardised exploration title conditions for activity approvals
    • easier submission of forms online

What does IMER mean for the community?

The reforms serve to boost community confidence in exploration, with regulation that not only better meets risk-based needs affecting the local area, but also increases the level of targeted compliance and enforcement that focuses on areas where the risks are greatest.

Under the former system, the public was not always aware of the conditions imposed on explorers as part of title applications or activity approvals. Under IMER, the minimum standards in the codes are known at the outset (and publicly available) and the requirements are less complex and in plain English. This provides the community with improved clarity of what is expected of industry as part of the exploration process.

Further, the new mandatory Exploration Code of Practice: Community Consultation (introduced  on 1 March 2016)  seeks to enhance the understanding of the consultation requirements of the exploration industry and the community.

Consultation

Who was consulted in the development of IMER?

The Division of Resources and Energy (DRE) has undertaken targeted briefings and consultation about the reforms.

Interest groups communicated with about various aspects of the reforms include the Land and Water Commissioner's Petroleum Access Group, the Irrigators Council, NSW Farmers, and the Thoroughbred Breeders Association.

Industry groups consulted include the NSW Minerals Council, the Association of Mining and Exploration Companies (AMEC), and the Australian Petroleum Production and Exploration Association (APPEA).

Several other NSW Government agencies were consulted to arrive at a whole-of-government approach to regulation.

Extensive consultation occurred through the development and finalisation of the Exploration Code of Practice: Community Consultation. This included a process of public exhibition which comprised letters and emails to over 2500 title holders, community members and other stakeholders, social media events, dedicated webpage and email address, and presentation to stakeholder meetings.

Will there be ongoing consultation during the implementation of IMER?

Industry and the community will be engaged with during the reforms' implementation in the following ways:

  • DRE will provide industry with regular updates via email
  • regional industry workshops will be held in August/September 2015
  • ongoing information on the progress of transition will be provided at relevant forums
  • there will be a 12 month review of the new system, as well as the codes of practice.

Risk-based regulation

What does risk-based regulation mean in the context of exploration?

The current prescriptive regulatory framework is labour intensive and not necessarily proportionate to risk and complexity.

Risk-based regulation acknowledges that industry is best-placed to identify the most effective way to manage their activities in line with regulations.

With this type of regulation, the requirements imposed on explorers are not prescriptive, meaning that they do not specify particular measures or controls to be implemented. Rather, the onus is placed on the explorers to assess and adopt the most suitable measures to prevent harm based on the localised risk, type and scale, phase and duration of exploration activities.

For example, although a mandatory requirement will be imposed on explorers to implement all measure to prevent pollution caused by dust, the methods used to satisfy this requirement would not be specified. Such measures could include spraying unsealed tracks with water, revegetating disturbed areas immediately after activities cease or altering work practices. This enables explorers to identify the most appropriate dust suppression measures to achieve the regulatory requirement.

Risk-based regulation also enables DRE to best target its resources to areas of higher risk in ensuring highly effective compliance and enforcement.

Compliance and enforcement

How will IMER affect enforcement of the regulations?

In preparation for the reforms, the DRE's compliance and enforcement efforts have been strengthened. Additionally, the reforms will help to increase compliance as they enable the Division to focus on areas where the compliance risk is greatest.

How does DRE assess what are exploration activities of greater risk?

DRE's compliance and enforcement priorities are focussed on delivering the best outcomes for the community, industry and the Division. In this regard, its decision-making process is based on its extensive data and knowledge base, as well as information from the community and industry.

From 1 September 2015, IMER will launch a streamlined assessment of common exploration activities (being lower impact exploration activities) that meet specific location requirements, and satisfy stringent impact thresholds and criteria. However, non-common exploration activities and all petroleum exploration activities are assessed at a higher standard and applications for these activities must be accompanied by additional environmental impact assessment information.

What will happen if I undertake a comprehensive risk assessment as part of the regulation, but it failed to identify a hazard that later causes an incident?

An investigation will determine if the risk assessment that was carried out was appropriate. Also any control measures put in place to prevent or mitigate the risk may also be examined to determine if the measure was appropriate in preventing or minimising the risk (so far as reasonable practicable in the circumstances). Consideration will be given to risk assessments and control measures implemented in accordance with relevant international and national standards/guidelines.

Financial capability

Why does DRE require a list of current ELs or ALs held or pending by an applicant and any Related Body Corporate in NSW?

DRE requires a complete list of the current exploration licences (ELs) or assessment leases (ALs) held by an applicant/transferee and any Related Body Corporates at the time of the application, given the titles may be held in different names.

Who does Section 2A (financial history) apply to?

Section 2A applies to all applicants. The types of matters in Section 2A refer to offences that only natural persons can commit, therefore Section 2A must be completed by:

  • the applicant, when the applicant is a natural person, or
  • all the officers of the company, when the applicant is a company.

Who does Section 2B (company financial history) apply to?

Section 2B applies to applicants who are a company. When the applicant is a company, Section 2B must be completed and signed by an officer of the company.

What if I answer 'no' to all the questions in Section 2A or 2B?

If you answer 'no' to all the questions in Section 2A or 2B, you must include your signed check sheet with the application.  No further information is required at the time of submitting the application.

What if I answer 'yes' to any of the questions in Section 2A or 2B?

If you answer 'yes' to any of the questions in Section 2A or 2B, you must include your signed check sheet with the application plus, you will need to attach a separate statement setting out the specific circumstances of the history and the reasons why those circumstances should not prevent you from holding a title.

What part of Section 3 do I complete if the applicant is an ASX listed company?

DRE has implemented a risk based model to ensure that titles are granted to applicants who have the financial capability at the time the application is made or who are able to secure the financial resources.

If you are an ASX listed company you can choose to complete and submit Section:

  • 3A only, OR
  • 3B and 3C, OR
  • 3D only.

To determine which section to complete, please consider the thresholds.

If a Section 3A statement is submitted, all the documents identified in items 1 to 6 of the section 3A statement must be attached.

Note: Section 3D statements are not available for coal applications/renewals/transfers.

What part of section 3 do I complete if the applicant is a Related Body Corporate of an ASX listed company?

If you are a Related Body Corporate (according to the definition in the guideline) of an ASX listed company, you can choose to complete and submit:

  • 3A only, OR
  • 3B and 3C, OR
  • 3D only.

To determine which section to complete, please consider the thresholds.

If a section 3A statement is submitted, all the documents identified in items 1 to 6 of the section 3A statement must be attached.

Note: Section 3D statements are not available for coal applications/renewals/transfers.

What part of Section 3 do I complete if the applicant is a company and the majority of shares are owned by an ASX listed company?

If you are a Related Body Corporate of an ASX listed company you can choose to complete and submit:

  • 3A only, OR
  • 3B and 3C, OR
  • 3D only.

To determine which section to complete, please consider the thresholds.

If a section 3A statement is submitted, all the documents identified in items 1 to 6 of the section 3A statement must be attached.

Note: Section 3D statements are not available for coal applications/renewals/transfers.

Why is a Section 3C statement (accountant report) required to be signed by an independent person?

DRE has implemented a risk based regulatory model. Applicants who must submit a Section 3B statement have higher activity levels, therefore DRE require an independent financial assurance in the form of a Section 3C accountant report to assist with the assessment process.

Implementation

When does IMER take effect?

The reforms will apply to all grant, renewal and transfer applications for exploration licences and assessment leases (exploration titles) lodged after 1 July 2015.

The reforms will also apply to any petroleum title renewal applications after 1 July 2015.

Will there be any changes to existing titleholder rights under IMER?

No. All rights and obligations of existing titleholders remain in place until the title is renewed or transferred.

How long will applications take to process under IMER?

Processing times for applications are not expected to vary. Existing service delivery standards apply and will continue to be reported on.

Under IMER, will there be any additional cost for applications?

No. The reforms do not include any increase in fees or costs.

Will there be 'opt in' arrangements put in place if I want my exploration title to be assessed under the new regime post 1 July 2015?

Not at this stage. Legislative changes that are likely to be made by Parliament later in the year may allow 'opt in' arrangements to occur.

Under IMER, when will I receive a new/updated exploration title document?

If you have been issued an exploration title issued under the reforms, you will receive an updated version of your title document each time one of the following occurs:

  • your title is renewed
  • your title is transferred
  • your title is transferred in part
  • a security review results in a variation to the security you need to provide and maintain under the title
  • a new mineral group is added to your title
  • you are granted a new activity approval
  • you change your name
  • your title is devolved to another person
  • your title is cancelled in part (at your request or otherwise)
  • you carry out the right to negotiate process, and obtain Ministerial consent to carry out exploration activities on land where Native Title has not been extinguished

What do I need to do if I want an exploration and mining titles agent to be the primary contact for my exploration titles?

Indicate this on the application form/s and provide the agent with a letter of authorisation setting out what the agent is authorised to do on your behalf.

You need to understand that the title holder is still accountable in relation to compliance and enforcement. Stating that, 'I left that for my agent to do,' will not be an acceptable excuse in the event of a breach occurring.

Legal status of codes and guidelines

What's the difference between a code and a guideline?

Codes of Practice are enforceable and are therefore mandatory. They will apply via the conditions of an exploration title.

Guidelines explain a process or provide guidance on how to prepare management plans, environmental assessments, complete a form, etc. As such, they are not mandatory but may be considered in any investigation to determine whether the measures put in place were reasonable and appropriate in preventing or minimising the risk.

Activity approvals

How does IMER affect activity approvals?

Improvements to the activity approval process will be launched on 1 September 2015. This will simplify assessment requirements for lower impact exploration activities.

Assessment of exploration activity applications by DR will be streamlined for common exploration activities (CEAs) that the Division has determined are unlikely to have a significant impact on the environment, such as those that meet specific location requirements and satisfy stringent impact thresholds and criteria. The activity must also be undertaken in accordance with all relevant Codes of Practice and/or title conditions, as well as subject to any limits and management controls the explorer described in its application.

An example of a CEA could be a drilling program that clears less than a hectare of land, outside of any environmentally sensitive areas.

Non-common and intensive mineral and coal exploration activities, and all petroleum exploration activities, will be analysed and assessed in greater detail and applications for these activities must be accompanied by additional environmental impact assessment information in the form of a Review of Environmental Factors (REF). Depending on the type of activity proposed, and how far it deviated from the CEA criteria, this may be a Targeted REF or a Guideline REF. An Environmental Impact Statement (EIS) may be required if there is a likelihood of significant harm to the environment. These activities will also be approved subject to compliance with relevant Codes of Practice and/or title conditions, and the REF. This pathway would apply to any activities undertaken in environmentally sensitive areas.

Explorers should refer to ESG5: Assessment Requirements for Exploration Activities for further information.

What exploration activities do not need further approval?

This will not change. Certain exploration activities with minimal environmental impact have been identified as exempt development under the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP).  These minimal impact activities do not require further environmental assessment or approval prior to being carried out.

Under the Mining SEPP the following activities are exempt development, provided they are of minimal environmental impact:

  • the construction, maintenance and use of equipment for the monitoring of weather, noise, air, groundwater or subsidence;
  • low intensity exploration activities, including:
    • geological mapping and airborne surveying
    • sampling and coring using hand-held equipment
    • geophysical (but not seismic) surveying and downhole logging
    • accessing of areas by vehicle that does not involve the construction of an access track or road.

How long will the processing of CEA applications take?

When the new processes are introduced, the target time for the processing of CEA applications will be 10 business days. Read more about DRE service delivery standards.

Are petroleum explorers able to take advantage of the streamlined assessment process for CEAs?

Petroleum exploration activities will not be eligible to be assessed under the streamlined assessment process for CEAs. Petroleum explorers must prepare and submit a Review of Environmental Factors (REF) in support of an application for approval to carry out petroleum exploration activities that require further environmental assessment.

What are the new requirements for an Agricultural Impact Statement (AIS)?

Currently, an AIS is required for all exploration activities that require submission of an Review of Environmental Factors (REF), regardless of whether there will be an impact on agricultural resources or industries.

However, new AIS guidelines will only require an AIS where there is a requirement for a REF and there will be a potential impact on agricultural resources or industries.

For further information, refer to the Guideline for Agricultural Impact Statements at the Exploration Stage.

Reporting

How does IMER affect industry reporting?

A new guideline for annual reporting requires all reports covering exploration, environmental management and rehabilitation, and for coal and petroleum community consultation, to be supplied at the same time.

Who do I contact if I need assistance in providing exploration, environmental or community consultation reports?

For exploration reports:

For environmental reports:

For community consultation reports:

Work program

How does IMER affect work programs?

Work programs are now part of the exploration title instrument, rather than simply being referenced by a title condition. (The contents of a work program that will be made public will be subject to any confidentiality provisions under the relevant legislation.) Additionally, work programs now cover exploration activities (i.e. prospecting operations), environmental management and rehabilitation, and community consultation, helping to identify what the title holder is planning and has budgeted for these additional activities.

Work programs for mineral and coal are currently only used for assessing whether an exploration title should be granted or renewed. Standard exploration title conditions will now also require compliance with the work program during the term of a title and set a minimum standard of performance, but not a cap.

Importantly, work programs now allow for greater flexibility, allowing mineral explorers to seek licences for five years. They now also allow explores to submit work programs for a broader exploration project, not just individual title areas.

Who do I contact if I need assistance in relation to my work program?

For mineral exploration:

For coal and petroleum:

Petroleum

Which of the new Codes and Guidelines are relevant to petroleum explorers?

All of the new Codes and Guidelines apply to petroleum explorers.

The following are specific to petroleum exploration (and some also apply to production):

The current codes for fracture stimulation and well integrity continue to apply.

Which petroleum compliance issues are enforced by the Environment Protection Agency (EPA) and which by DRE?

The EPA is the sole authority responsible for regulating compliance and enforcement of all conditions within petroleum titles and exploration activity approvals, excluding work health and safety.

The EPA issues environment protection licences (EPLs) under the Protection of the Environment Operations Act 1997. EPL conditions relate to pollution prevention and monitoring, and cleaner production through recycling and reuse and the implementation of best practice.

DRE is responsible for the compliance and enforcement of work health and safety requirements in the petroleum sector.

Do the codes change who can apply for a Petroleum Exploration Licence?

No. The recently adopted Minimum Standards and Merit Assessment Procedure (Minimum Standards) sets the framework for determining applications to grant, renew and transfer petroleum exploration licences.

The Minimum Standards require applicants to demonstrate they:

  • have the technical skills
  • have the financial capacity
  • have a sound compliance history
  • are a 'fit and proper' person to hold a petroleum exploration licence in NSW.

How does IMER impact the area I can apply to explore for petroleum?

IMER has no direct impact. A freeze is currently in place on all new applications for petroleum exploration licences in NSW.

As announced in the NSW Gas Plan, the Government is establishing a statewide Strategic Release Framework for petroleum titles.

Under the new framework, new gas exploration will only be permitted in areas of the State released for exploration, based on a consideration of environmental, social and economic factors.

Further, under the new framework, only those operators that meet the highest standards of financial and technical capacity will be able to obtain petroleum titles.