Federal Court of Australia finds that the water trigger under the EPBC Act applies to the North Galilee Water Scheme Infrastructure Project

In brief

The case of Australian Conservation Foundation Incorporated v Minister for the Environment [2021] FCA 550 concerned an application to the Federal Court of Australia (Court) brought by the Australian Conservation Foundation Incorporated (ACF) against the Minister for the Environment (Cth) (Minister) for judicial review of a decision of the Minister's delegate (Delegate) under section 75 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). 

The Delegate decided under section 75 of the EPBC Act that a proposed action referred by Adani Infrastructure Pty Ltd (Adani Infrastructure) comprising the North Galilee Water Scheme Water Infrastructure Project (Proposed Action) was a controlled action and that sections 24D and 24E of the EPBC Act, which are called the "water trigger", were not controlling provisions for the purposes of the EPBC Act (Decision). The Decision was made on remittal by the Delegate because of an earlier controlled action decision that was set aside by the Court. 

The Proposed Action was for the construction and operation of infrastructure to harvest and store up to 12.5 gigalitres of water from the Suttor River in Central Queensland to provide an alternative water supply to the Carmichael Coal Mine and Rail Project, which included approval under the EPBC Act for water to be supplied from the Belyando River flood harvesting structure. The Belyando River is the main tributary of the Suttor River.  

The key issue for the Court's determination was whether the Delegate had erred in construing sections 24D and 24E of the EPBC Act in making the Decision, in particular whether:

• the textual and contextual considerations of sections 24D and 24E support a narrow construction so as to exclude the Proposed Action for the purposes of those provisions;

• the penal nature of the provisions supports a narrow construction of sections 24D and 24E; 

• in construing sections 24D and 24E, it is relevant that the Minister is able to impose and vary conditions for approval under the EPBC Act. 

Ultimately, the Court found that the Delegate had erred in deciding that sections 24D and 24E of the EPBC Act were not controlling provisions in respect of the Proposed Action and so granted the ACF's application for judicial review, set aside the Decision to the extent sections 24D and 24E were determined not to be controlling provisions, and remitted the Decision to the Minister to be remade according to law. 

Court finds that the textual and contextual considerations of sections 24D and 24E of the EPBC Act do not support a narrow construction of the provisions

Sections 24D and 24E of the EPBC Act prohibit the taking of an action that involves coal seam gas development or large coal mining development if the action has, will have, or is likely to have a significant impact on a water resource unless, among other things, an approval for the taking of the action is in operation under the EPBC Act. 

The Delegate construed, and Adani Infrastructure submitted in support of the Delegate's construction, that the phrase "action" that "involves" "coal seam gas development" or "large coal mining development" is limited to an activity that physically extracts "lumps of coal from the ground". The Court rejected this construction on the basis that it created artificial distinctions and did not have regard to the language and context of sections 24D and 24E. 

The Court held at [92] that the word "involves" was intended to convey a looser connection between an action and the specified developments than if the action was, for example, intended by Parliament to "be part of" a specified development. 

The Court considered the definition of large coal mining development, in particular, the words "any coal mining activity", and held at [93] as follows:

In line with orthodox principles of statutory construction, all of these words must be given meaning and effect: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [71]. In this case, as ACF submits, to confine the phrase “coal mining activity” to “the process of extracting coal from a mine” as construed by the delegate leaves no work for the word “activity” to do. Yet the use of the word “activity”, especially when combined with the word “any”, is strongly indicative of an intention to capture a broad range of activities within the concept of a large coal mining development and certainly those so closely associated with the mining of coal that mining could not be undertaken without the activity in question.

The Court held at [94] that a broader construction of sections 24D and 24E was consistent with the purpose of the EPBC Act to "regulate large coal mining developments and their impacts on water resources". In so finding, the Court had regard to the Second Reading Speech to the Bill which inserted sections 24D and 24E, and found at [98] that "the mischief to which ss 24D and 24E are directed does not support a narrow construction of the water trigger controlling provisions adopted by the [D]elegate".  

In considering the consequences of a narrow construction of sections 24D and 24E, the Court held at [103] as follows:

[I]f the impact on water resources at the time of the original approval was regarded as a matter of national environmental significance, there is no reason why it would lose that significance merely because the issue arose subsequently in relation to an alternative water source. That would undermine the objects of the EPBC Act in s 3(1) and the purpose of the water trigger controlling provisions as elucidated by the Minister in the 2013 Second Reading Speech.

Finally, in support of a broad construction of sections 24D and 24E, the Court referred at [105] to the opinions of Barwick CJ, McTiernan, and Menzies JJ in the case of Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (1969) 120 CLR in which their Honours agreed that "mining operations" covers "any work done on a mineral-bearing property in preparation for or as ancillary to the actual winning of the mineral".

Court finds that it is unnecessary to narrowly construe sections 24D and 24E of the EPBC Act containing civil and criminal penalties 

Adani Infrastructure submitted that where there was ambiguity as to the meaning of sections 24D and 24E the provisions should be construed narrowly because sections 24D and 24E attracted potentially significant civil and criminal penalties. 

Adani Infrastructure's submission was made in reliance on the observations of Gibbs J (as His Honour then was) in Beckwith v The Queen (1976) 135 CLR 569 that relevantly "[i]n determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous … doubt may be resolved by refusing to extend the category of criminal offences".  

The Court held that it was unnecessary to construe the provisions narrowly because, read in context the meaning of sections 24D and 24E was clear. The Court relevantly observed at [108] as follows:

[I]t cannot only be said that the presumption is “slight”, as Adani Infrastructure accepts; it loses any real force in the context of the particular legislative scheme created by the EPBC Act. By their very nature, the controlling provisions containing civil penalty and criminal offences will generally, if not inevitably, involve complex and evaluative scientific assessments of environmental impacts. In the case of water impacts from large coal mining developments and coal seam gas extraction, this is reflected in the creation of the Expert Committee and the strict requirements as to the expertise of its members.

Court finds that general provisions dealing with the variation of conditions of an existing approval under the EPBC Act does not support a narrow construction of sections 24D and 24E of the EPBC Act

Adani Infrastructure submitted that the operation of section 143 of the EPBC Act, which confers a discretion on the Minister to revoke, vary, or add to the conditions attached to an approval under the EPBC Act, supported a narrow construction of sections 24D and 24E. 

The Court rejected Adani Infrastructure's submission given the "compelling textual and contextual considerations" of sections 24D and 24E. 

Conclusion

The Court granted the ACF's application for judicial review and set aside the Decision to the extent sections 24D and 24E were determined not to be controlling provisions in respect of the Proposed Action, and remitted the Decision to the Minister to be remade according to law.