THE Resources Regulator will not prosecute a mining company over an unpaid secret $5 million Hunter community fund after an investigation revealed significant NSW Government agency failures, including that government representatives knew the fund wasn’t paid for more than four years.
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The regulator accepted an enforceable undertaking from Hong Kong-backed Ridgelands Resources on June 22 in lieu of prosecution after acknowledging the company provided information to the Department of Planning “from which the status of the fund could be clearly discerned”, after the contract was signed in February, 2013.
In a major embarrassment for the government, the regulator found the exploration licence contract with Ridgelands contained “material deficiencies” which raised doubt about whether the company was obliged to distribute the $5 million to Muswellbrook community groups, despite being a condition of consent.
While Ridgelands was required to establish the fund, “on a very strict reading (of the contract).. there is no requirement to expend any of the monies within a specified period, nor at all,” the Resources Regulator said in a report released on Monday.
The regulator dropped the prosecution and accepted an enforceable undertaking requiring Ridgelands to pay an additional $200,000 to the community fund so that $5.2 million is paid to Muswellbrook groups by June, 2019.
In early June Muswellbrook Shire Council mayor Martin Rush announced Ridgelands had agreed to fund 27 community projects worth $4.5 million in a second round of approvals after funding projects worth $500,000 in February.
Any alleged contravention was a result of negligence as opposed to a deliberate or wilful act.
- Resources Regulator on $5 million 'secret' community fund
The secret fund’s existence was only revealed after Ridgelands representatives approached Muswellbrook Council in July, 2017 offering $500,000 in lieu of the $5 million under a five-year exploration licence contract due to expire seven months later.
The council knew nothing of the community fund despite the contract requiring Ridgelands to establish it “as soon as reasonably practicable” after the exploration licence was granted over more than 7600 hectares of land at Wybong, and publicise its existence and guidelines for applying for grants.
The council took the company to court to enforce the community fund condition.
The Ridgelands debacle – slammed by former Muswellbrook councillor Christine Phelps as “The NSW Government and the mining industry in cahoots again to shaft the community” – exposed serious deficiencies in how government agencies have monitored mining industry conditions of consent over decades.
The lack of public, and internal department, knowledge of the Ridgelands exploration licence consent conditions and lack of enforcement were particularly damaging in the wake of Independent Commission Against Corruption investigations of Hunter mining titles leading to the jailing of some former Labor government ministers.
Department of Planning and Resources Regulator investigations launched after the secret fund’s existence was made public in August, 2017 revealed a staggering 36,000 conditions of consent across 998 prospecting titles and 975 extraction titles in NSW. The conditions were being “actively monitored as a priority task”, the Resources Regulator said on Monday.
The regulator was satisfied there were “no deliberate attempts by Ridgelands to hide any alleged non-compliance” with the $5 million community fund condition after acknowledging information was provided to the Department of Planning and the Division of Resources and Geoscience over an extended period.
“Any alleged contravention was a result of negligence as opposed to a deliberate or wilful act,” the regulator said.
Transfer of the Division of Resources and Geoscience – which oversees mining titles – to the Department of Planning in April, 2017 prompted a “high priority” review of its systems and processes which “were not in line with current best practice”, the regulator said.
“As a result of this independent review a number of positive changes have been instituted, primarily a concerted investment in systems, people and new processes, including a sharpening of accountability,” the regulator said.
The new process included “keen oversight of the compliance system” under a team responsible for titles administration, the regulator said.
“A major restructure sees the outdated legacy titles administration system upgraded with new database systems, making explorations and mining titles (including the Ridgelands title) publicly available through its online portal,” the regulator said.
“The new electronic titles management system will feature enhanced search and tracking functions, and is scheduled for completion by the end of 2018.”
Ridgelands Resources applied to renew the exploration licence over the Wybong land on February 23, only four days before the licence signed with the NSW Government expired.
