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Federal Minister for the Environment and Heritage
The Hon Dr David Kemp, MP

Keynote Address
Minerals Council Of Australia's Annual Industry Conference
Old Parliament House
Tuesday, 3 June 2003

Minerals Council of Australia's Annual Industry Conference Keynote Address

As many of you would appreciate, Dr Kemp was instrumental in shaping many of those outcomes and in particular the debate on energy. And I welcome him here today and I invite him to now address us. Please welcome Dr Kemp.

Thank you very much, Barry, Mitch Hooke, members of the Minerals Council of Australia, ladies and gentlemen. It's a very great pleasure to have been asked to address you this morning, to mark the Minerals Week Seminar and I'd like to congratulate the Minerals Council for organising and hosting what is going to be a very valuable event.

It was very satisfying to hear the introductory remarks of Barry Cusack, apart from that unfortunate reference to my football team which it'll do better next year. But the philosophy, the approach, the leadership which has been given by the minerals industry in the whole area of industry sustainability is very important to Australia.

And it's one that I believe stands the industry in very good stead in the wider Australian community. This is widely recognised today and it has been a remarkable journey that the industry has taken to reach this point.

It's particularly pleasing for a member of the Howard Government to hear this approach from the industry because the sustainability of Australia and putting the Australian continent on a sustainable basis is one of the top priorities of this Government and of the Prime Minister.

The Prime Minister, who spoke to you last night at the dinner and will have given you a very good sense of his direction and philosophy, chairs the Sustainable Environment Committee of the Cabinet. That is one of the few major Cabinet Committees that this Government has. The Prime Minister provides that Committee with his leadership and it's a Committee which embodies a whole of government approach to the issue of sustainability.

The Environment Minister is, of course, a lead Minister with that Committee but it includes the Industry Minister. It includes the Agriculture Minister. It includes the Fishing, Forestry Ministers. It includes the Transport and Regional Services Minister, the Deputy Prime Minister. It includes the Science Minister, who all come together to consider the strategic development of this country and the Government's major strategies in key areas where crucial investments are going to make the difference between success and failure for Australia.

So sustainability is now part of the mainstream consideration. And one of the things that I was most impressed with when I became Environment Minister was that it wasn't necessary to fight hard to gain recognition for the significance of environmental issues when one discussed investment development, energy policy, agricultural policy, whatever area of industry policy you turn to. It was just taken for granted that the triple bottom line was going to be there and that all these issues had to be considered together.

Although Government's appreciation of the importance of the environment, I think now it goes back probably to the early 1970s and that has assisted - as Barry was talking to me before - in the transformation that's taken place in the view that the minerals industry and the mining industry take of their place in the community. I think the real structural focus within Government on whole of government and sustainability issues is still coming together in recent years.

And there's no doubt that this industry has been right up there with the game. And in many ways it's provided leadership, not only to other industries in the private sector but I think it's provided leadership to the public sector as well and to government. And I'd like to put that on the record this morning.

When I was looking at the flyer for Minerals Week, I noticed a very profound statement in it which I think sums up these issues very well. It says, 'Understanding the interdependency of issues and balancing the trade-offs between economic development with social progress and environmental management is the fundamental equation of sustainable development.'

And I agree with that completely. It goes to the heart of the challenge that we all face to factor social and economic considerations into our day to day decision making. The financial bottom line is only part of the story. And that's what sustainable development and the triple bottom line recognise, that unless we've incorporated the social factors, the community factors, the environmental factors, those who assess and evaluate the industry - whether they're shareholders or whether they're investors, whether it's the finance industry - these days say to themselves, well that's an industry which is not managing its medium and longer term risks terribly effectively, if it's just concerned with that narrow financial bottom line.

But if the industry is serious about its long-term future, if it's serious about avoiding avoidable problems, then it has to have that wider perspective on its own contribution to sustainable development.

In May last year I was asked to launch a document which looked at the issues of sustainable development for the mining industry in Melbourne. And in May last year the Global Mining Initiative Conference I think set the scene for the challenges ahead. The Toronto Declaration espoused ideas that an environment minister probably holds a self-evident truth these days that the industry needs the support of the community in which it operates; that mining must be seen to be beneficial to the community; that human rights and work place rights have to be respect; and that environmental stewardship is a responsibility.

And I want to acknowledge this morning that the Australian industry had a large role in shaping opinion for that Conference. The Australian industry has been an international leader. And that's not surprising, given the quality of the leadership which exists in the industry.

I believe today that it is widely accepted by corporations and investors that the financial statement is only part of the picture. I think the Australian mining industry's relationship with Aboriginal people has been quite remarkable. It has been in many ways the brightest light that I saw, as Education Minister, as I travelled around Aboriginal communities, and asked what the future was for these communities and spoke to members of these communities who were hoping for something better for their children.

If you asked where the great initiatives were taking place, they were initiatives in which the mining industry was absolutely central. And those - whether those initiatives are taking place at Weipa on Cape York or whether they're taking place in Western Australia with things like the Karratha initiative, I think which was absolutely outstanding in its concept and in the results which have been achieved for the young Aboriginal people taking part in it, who now have futures built on education, training and skills that they could never have contemplated. The mining industry has been right at the forefront of that social transformation. And I would only hope that other industries take a leaf out of your book and that other employers can see what is possible with the level of dedication and leadership which this industry has provided.

And if we can look back in a generation's time and say, well just look at the progress that the Aboriginal people have made in this country, the mining industry will be able to say to itself, well we have been absolutely at the forefront of that progress in the partnerships that we established with Aboriginal communities.

And who would have thought that we could be saying this, say, 25 years ago. It's just absolutely remarkable.

Again at the World Summit, where I was delighted to have Mitch as part of our delegation and making a great contribution there, I think Australia was able to take a leadership role there as the world talked about energy and energy costs and their relationship to globalisation because of the input that we had had from Australian industries including yours.

The Australian environment does face huge challenges and I just want to say a little bit about that as Environment Minister, and again some of you know that. I see Ian Gould down here who is chairing up the Australian Biological Resources Survey which is absolutely critical to our foundation for our decisions on protecting Australia's biodiversity.

We have 10% of the world's species endemic to this country, a treasure house of genetic resources and wonderful natural ecosystems that are now under huge pressure. And we are doing our best as a government to try to work with communities and industry, as you're doing, to try to protect this environmental heritage.

Our natural systems, our rivers are badly degraded in those areas, particularly where population is high. Again in areas where population has progressed less in numbers, the more what we have traditionally called less developed areas - if you go to Kakadu where we have a uranium mining industry, its environmental record has been absolutely outstanding. This is constantly raised of course as a political issue which I have to confront. But there has not been a single environmental impact of significance outside the mine site in Kakadu in 20 years.

And you might not - you know people in the community might be surprised by that statement because it's always coming up in the press as controversial, what is happening. But despite various issues that arise around environmental management and we keep a very tight look on it because it is a very sensitive area and we're constantly on the back of the companies involved. The fact is that the record has been excellent.

And that needs to be acknowledged. But we do have very big environmental issues in this country. I might just mention several initiatives of recent days, just to put them on the record so you can see how serious the Government is.

I mention here the proposal that was put before stakeholders in Queensland two weeks ago to end the broad scale clearing of native vegetation in that State, with the object of achieving significant greenhouse and biodiversity gains. Achieving those gains in a way which will absolutely minimise the impact that Australian responsible action will have on our international competitiveness.'

I draw attention to the announcement at the same time of a new draft Water Quality Protection Plan for the Great Barrier Reef. And yesterday of a major proposed increase in zones of high protection on the Reef. Biodiversity underpins the billion dollar tourist industry that we have on the Reef, and underpins the prosperity of those communities right along the Queensland coast.

Several weeks ago, the Commonwealth and State Ministers directed the Murray Darling Basin Commission to produce by November a fully worked through plan with a triple bottom line to restore additional environmental flows to the Murray River in the interests of reducing salinity and protecting fish, vegetation and the continuing productivity of agriculture along the river.

At COAG later this year, reform of water access and water entitlement rights within a national framework is going to be an absolutely key issue on the agenda of the Prime Minister and the Premiers. And later this year also, the Ministerial Committee on Energy chaired by the Prime Minister will be putting forward a longer term, forward plan for the national energy market to provide certainty and security for investors and integrating the Government's forward strategy on climate change.

The budget this year reflects the Government's commitment with expenditure on environmental measures across the whole of government, not just in my portfolio, now topping the $2 billion a year benchmark. And the Government is going to continue to be supporting the revolution in natural resource management that is being pushed ahead by the Natural Heritage Trust and the National Action Plan on Salinity.

As the Prime Minister said to you last night, with climate change representing a real threat to our environment and our economy, the Government in consultation with stakeholders is going to develop this climate change forward strategy.

Part of that process involves the review of the mandatory renewable energy target, which is occurring as you know at the present time. There are many differing views on how targets and time lines for renewable energy should be set. Renewable energy does have an important place in Australia's energy mix. The Government believes that we need to remain highly competitive internationally in the energy area.

We recognise the importance of low cost energy to the profitability and international competitiveness of very significant Australian industries and that is going to be a key principle that the Government will be looking at in any decisions that it takes in relation to this long-term, forward plan for energy.

We are going to continue to support industry, government and community partnerships, to cut national emissions of greenhouse gases, while maintaining this international competitiveness. There is no question that this country is vulnerable to greenhouse change, greenhouse effects. We've just experienced the most widespread drought in this country in a hundred years and the feature which distinguishes that drought from all previous droughts is that the average maximum daily temperatures were over a degree higher than in any previous drought.

We've seen significant rainfall changes in south-west Western Australia. We've seen unprecedented bleaching events on the Great Barrier Reef as a result of ocean warming. So let's not think that this is not a real issue. It is an issue and, although there's debate about the science of various parts of climate change of which the Government is very well aware, nobody has successfully challenged the existence of the greenhouse effect and the significance of greenhouse gases in this.

Kyoto, as the Prime Minister said last night, is not the answer. The Kyoto framework is not going to do the job. And I'm becoming increasingly convinced as Environment Minister, that the developing countries are not going to sign up to Kyoto-type targets in any second commitment period. And so I think there remains a major question mark over the survival of the Kyoto framework and its approach.

That is, you might say, well that's good news, some of you. But I think that's not good news because it means we don't have any framework for addressing the issue of global warming effectively. And Australia is going to continue to work very intensively in the international arena to put in place a more effective global framework that includes all major emitters. And the developing countries in this coming decade are going to emit far more greenhouse gases than the developed countries.

Technology change is going to be critical. And technology introduction in developing countries is going to be critical to really address this issue effectively in the longer term.

I want to just now in my concluding remarks make a few comments that are specific to the portfolio that I think are of particular interest to the mining industry. You'll be aware of the fact that the Australian National Audit Office recently reviewed the Department's administration of the referrals, assessments and approvals processes under the EPBC Act, the Environment Protection Biodiversity Conservation Act.

The findings in general by the Auditor-General were very positive but the Auditor-General made several recommendations about improving advice to industry. The Auditor suggested that the Department finalise, as soon as practicable, the sectoral guidance on the EPBC Act and encourage proponents to seek advice from the Department before lodging referrals.

It suggested that the Department consider the introduction of an accreditation scheme for consultants submitting applications under the Act, and should consider providing guidance about acceptable standards of information required as part of a referral.

I think these suggestions have got merit and I've recently agreed to a public review of the EPBC guidelines on significance. I'll soon announce a consultation process with key stakeholders and I look forward to comments from both the Minerals Council as well as companies that have got a direct experience under the Act.

I also want to make reference to the fact that managing indigenous and Torres Strait Islander heritage issues is a key concern of the Government. We made a commitment prior to the last election to reform the Indigenous and Torres Strait Islander Heritage Protection legislation. The current legislation, with its endless process and constant reference to the courts is unsatisfactory to all stakeholders. Failing to deliver certainty or finality of decisions and involving expensive and wasteful recourse to the courts.

Following consultation with the indigenous working group, I've written to the Minerals Council seeking your views on the current draft of the Bill, and I look forward to a constructive dialogue on how we can move this issue forward. Because I really believe that we all have an interest in replacing the existing very unsatisfactory legislation with a better piece of legislation that will do away with the very unfortunate deliberate delaying tactics that are used and possible under the existing legislation and it will focus on issues of real substance.

As I've mentioned the local and global minerals industry has been impressive of recent times, in the last couple of decades probably I should say, but particularly recently in examining its performance and its future. Now that the International Council on Mining and Minerals has been tasked with delivering on the promise of these initiatives I look forward to seeing the changes on the ground.

The leadership of this industry and triple bottom line reporting is very impressive. For example, a recent report prepared for my Department showed that only 57 of the top 500 companies operating in Australia are producing environment on triple bottom line reports. Of the companies reporting, 17 were in the mining sector, 17 of the 57.

The challenge now, as I see it, is in integrating the theory of the triple bottom line into the day to day operations of the mine site and the office.

I understand that there's quite a lot of talk in the industry about how to distinguish between good performers and blaggards and I'm therefore impressed with the initiative of those who've set up the mining certification evaluation project. It's a joint R&D exercise notable for its participation of the mining industry, NGOs, labour, government agencies, financial and accounting sector and research institutions.

Its aim is to evaluate, whether independent third party certification of environmental and social performance can be applied to the mining sector. I wish all those involved in this initiative the best of luck.

We're increasingly seeing global finance markets take an interest in how well these environmental issues and risks are being managed. There's a lot of talk about socially responsible investment. These funds I think presently really don't provide a pool of capital that's significant for the industry but increasingly socially responsible investment is going to be a perspective that will be taken by many large financial institutions.

But as Barry said, in this era of globalisation, there is no doubt global financial markets are starting to increasingly look at how an industry addresses the issue of sustainability and this is an industry which can hold its head up very high in that regard. And I've no doubt that it will be an industry that continues to make a very significant contribution not only to Australia's wealth and employment but through its leadership to Australia being able to put itself, as a country, on a sustainable basis where we do finally, properly come to terms with the need to integrate the financial, the social and the environmental in this triple bottom line.

Thank you very much. [Applause]

Well thank you very much, Minister. A wide-ranging talk and I think the points are well made, that we don't have all the answers; no one does. But it's through the dialogue and the working together that we can overcome some of the practices, some of the legislation, etcetera that we find inadequate.

Now the Minister has kindly consented to answer some questions. He is due back at the House shortly. But if there are some questions, he would be happy to taken them now. So please if you would like to pose a question to the Minister, now is your opportunity.

Michael Ray from WWF, Minister. The mineral sands deposits in the Murray Darling Basin constitute, certainly a global-class asset. You made mention of the issues that face water use in the country, but certainly no more clearly evidenced I'd argue than in that particular river basin.

The concerns that certainly my organisation has is that, with the many different mine sites proposed, unless the issue is looked at in a holistic way, we could see far greater impacts on the river system just simply because of the amounts of water that those mining exercises will require.

I'm just interested to know from you whether your Government has plans for a regional planning approach rather than what I would say is a more piecemeal approach on a mine by mine basis? Under the EPBC Act, there's a provision for a regional plan that could look at the development of this industry in a holistic fashion such that we could see it actually contributing to the improvement of the river basin. I just wondered if you've got any proposals for that.

I think the opportunities, as you say, are there to take a more regional approach. So far it is fair to say that what we've done is look at the issue on a case by case basis. And I've had several of those cases that I've had to deal with under the Act since I've been Minister.

I do want to say in relation to those cases that I think the way we've dealt with them has been to look very closely at the particular situation, to consult before we take any action to see what are the various ways in which action can be taken, that minimises cost and maximises effectiveness. And I think we have achieved that in those particular cases.

So I'm not aware of particular problems that have arisen which have come before me at all. They haven't presented significant issues to me as yet in this portfolio. But I do think the general point that, where there is an opportunity to provide guidelines and advice which have a regional and holistic character about them, that that is a worthwhile goal to aim at and I'm certainly very happy as Minister to explore what the opportunities may be there.

Is there another question?

Peter Smith of the New South Wales Minerals Council. Just before going to ask a question, I just might remind the Minister that he might not be aware that there was a - under your Government's Regional Minerals Program I think it was titled - there was a regional study of the Murray Basin looking at the first class environmental assessments there, and it was a useful, initial study.

From the Minerals Council's point of view, we always look towards policy and regulation which is efficient, effective and meaningful. It must have good environmental outcomes because, if it doesn't, it's probably wasting time and money to no good purpose.

But there are some more modern types of instruments. Some kind to mind like the National Pollutant Inventory which were clearly designed for a secondary industry purpose with their emissions and so forth, the end of pipe emissions.

The mining industry is one of those ones which is quite peculiar and it doesn't fit that model well and that there are some interesting areas where I really scratch my head about why it's applied in some cases. And I understand that the NPI will be under review. Could you add any information to some stories about the possible extension of the NPI?

Well this is something that the Ministerial Council considered at its last meeting, and there are certainly a hope to bring more pollutants into the National Pollutant Inventory and to improve the participation in the reporting under the inventory. If there are particular issues that effect the minerals industry, I'd certainly welcome input on that because I think they'd be very timely to us in our consideration of how to take the inventory forward.

It's always a delicate balance with an instrument like the Inventory because it's very hard to get positive reporting when you announce the results of the inventory. And there can be misleading implications drawn from it but at the same time I think it is very reassuring to the general community.

And I think on the whole, it is a very positive thing for industry to just indicate to the general community that it is aware of these issues and is dealing with them in an open and transparent way. And as the community becomes use to this sort of reporting, I think it can only have a positive impact. But I do welcome input from the industry on this and I'd look forward to seeing it.

Thank you, Minister. We'll certainly be wanting to engage with you on that issue. Now I think one more question because we are running short of time for the Minister. Please, in the middle.

Bernie Delaney from BHP Billiton, Minister. Very pleased to hear the comments last night from the Prime Minister about climate change and also what you've said today.

Just following on from the government-industry dialogue that has taken place in recent months, could you comment please on what you have in mind and what the Government might have in mind for further consultation with industry, as policies are formulated around energy and also around the climate change response as part of that whole package?

Yes, our intention is to bring together out of that consultation some proposals that would provide the framework for a longer-term framework for industry investment. I think the consultation was an exceptionally useful process. It canvassed the whole range of issues. There were obviously sectoral differences between the various groups that the Government will have to address in putting together as far as possible an economy-wide framework.

In doing that, the Government will certainly have in mind the fact that significant Australian industries are trading in the global market place. And the implications of any mechanisms that the Government may look for competitiveness in the global market place will certainly be very much at the forefront of the Government's thinking as it puts together this long-term framework.

I don't want to say more about the substance of the Government's considerations at the moment but our intention would be to, when we've put together some proposals in this area, to again engage in extensive consultation with industry about them. So there will be a chance for a good public consideration and debate.

Well thank you very much, Minister. We're aware that you have to move soon.

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