19 June 2024

First Reading

Bill introduced on motion by Mr Anoulack Chanthivong, read a first time and printed.

Second Reading Speech

Mr ANOULACK CHANTHIVONG (Macquarie Fields—Minister for Better Regulation and Fair Trading, Minister for Industry and Trade, Minister for Innovation, Science and Technology, Minister for Building, and Minister for Corrections) (14:31): I move:

That this bill be now read a second time.

I am pleased to introduce the Coal Mine Subsidence Compensation Amendment Bill 2024. Underground coalmining has occurred across New South Wales, with some areas being mined over 150 years ago. Current operating underground coalmines still exist across New South Wales. Subsidence from old or current mining can cause damage to buildings and other property. The Government acknowledges that subsidence damage can be alarming and stressful for affected communities. The Coal Mine Subsidence Compensation Act 2017 makes proprietors of coalmines liable for compensating property owners if their property is damaged by an active coalmine. It also provides for Subsidence Advisory NSW to administer the compensation system, and assess and manage risks associated with subsidence resulting from underground coalmining. The bill proposes amendments to implement in full the recommendations of the statutory review of the Act, which was completed in 2023.

The amendments in the bill will expand compensation to assist those who need it, improve the claims process to support claimants and enhance the capability of Subsidence Advisory to respond to subsidence impacts and risks. Key amendments include extending relocation compensation to affected tenants, adding more support from Subsidence Advisory in mine subsidence events, allowing claims to be lodged outside of the Subsidence Advisory online portal, adding powers to direct pre-mining inspections, requiring information and documents from coalmine operators, clarifying the roles of Subsidence Advisory and mine operators in the assessment and determination of claims, expanding the scope of the approved procedures, increasing penalties in line with inflation for existing offences in the Act, clarifying provisions for work to prevent or mitigate damage, and clarifying the responsibilities of the chief executive of Subsidence Advisory.

Taken together, those amendments will strengthen the compensation framework and ensure that people who are affected by coalmine subsidence within New South Wales, whether they are from Wallsend or Wollondilly, are able to access compensation and support. I will now turn to the specific amendments in the bill. The Government is committed to ensuring that all customers affected by coalmine subsidence damage are adequately compensated. Currently only an owner‑occupier of a property is entitled to compensation for relocation expenses if their property becomes uninhabitable due to mine subsidence. However, renters are also affected if property they are leasing becomes uninhabitable or may be under repair due to mine subsidence damage. Proposed changes to section 7 (1) (c) of the bill will ensure that renters are eligible for compensation for relocation or short‑term accommodation expenses.

During subsidence emergencies the chief executive can order residents to evacuate, requiring residents to relocate. Under the current Act, there is no clear power for the arrangement of temporary accommodation for affected residents. The bill will amend section 27 by introducing additional powers to allow Subsidence Advisory to arrange accommodation for residents who are required to relocate. Additionally, the Act does not provide Subsidence Advisory with the power to reimburse residents who may incur out-of-pocket expenses for food, clothing and other incidentals due to emergency relocation. Further changes to section 27 will allow residents to be reimbursed for expenses arising from emergency relocation in addition to the chief executive arranging temporary accommodation.

Local infrastructure, such as roads or sewers, may require emergency repairs following damage from mine subsidence. Typically, the asset owner, such as a local council, will carry out the repairs and Subsidence Advisory reimburses the asset owner from the Coal Mine Subsidence Compensation Fund for those works. While section 27 provides power for Subsidence Advisory to carry out repairs, there is no clear basis in the Act to make transfers from the fund to the asset owner to carry out the repairs themselves. Additional amendments to section 27 will ensure that Subsidence Advisory can fund repairs to infrastructure undertaken by relevant public authorities.

Currently the Act allows a person to apply for compensation through an online portal accessed through the Subsidence Advisory website. However, it does not consider that some customers may have trouble lodging their claims through an online portal. The bill proposes changes to section 11 of the Act so that Subsidence Advisory is given the power to set the way a claim can be made. This will enable claims to be lodged outside the online portal. It will ultimately benefits customers as it provides greater flexibility and increased accessibility for claimants, and will assist in futureproofing the claims process.

The purpose of a pre-mining inspection is to determine the condition of a property and any improvements that have been made to the property before mining commences. Making pre-mining inspections a prerequisite to submitting a claim promotes a fair and efficient process to resolving claims should damage from mine subsidence ever occur. A new clause set out in section 10A will make pre-mining inspections a condition to a claim when it is directed by the chief executive. It should be noted that the chief executive will also have the power to accept a claim for compensation in instances when a pre-mining inspection was required but not carried out—for example, when a pre-mining inspection was refused by a previous property owner and the current property owner-claimant is not at fault.

Further, section 31A of the bill will make Subsidence Advisory responsible for arranging pre‑mining inspections. Currently pre-mining inspections can be carried out by appropriately skilled contractors, such as licensed builders or structural engineers, at the request of mine operators. However, Subsidence Advisory lacks visibility over this process and is only able to access some pre-mining inspections once an individual has made a claim. The new section will give the chief executive the power to direct a pre-mining inspection be carried out if they believe there is a risk of damage arising from mine subsidence. This will allow Subsidence Advisory to have clear evidence of the state of a property and its improvements prior to mine subsidence, and claimants will be provided with the most fair, efficient and sustainable method for determining claims.

Additionally, at present Subsidence Advisory has no clear powers to obtain information, such as survey data and maps, of proposed mining activity from mine operators. This difficulty has been due, in part, to that type of information falling outside the scope of the Act. New section 31B in the bill will require mine operators to provide that additional information to Subsidence Advisory. The new provision will give Subsidence Advisory the power to instruct mine operators to hand over that information so that they are able to efficiently assess and determine claims.

There is confusion among community stakeholders that believe mine operators play a role throughout the assessment process for claims in active mining areas. However, that is not the case because Subsidence Advisory conducts the initial assessment to determine if damage falls within a mine operator's zone of influence. Following that, Subsidence Advisory selects an independent assessor to carry out assessments and to prepare a report detailing if the damage is the result of mine subsidence or not. The new section 11A in the bill will clarify that Subsidence Advisory is responsible for all claims of compensation. The proposed amendment will make it clear that Subsidence Advisory is responsible for assessing claims and will remove any misconceptions about the assessment process. Further changes to section 12 will clarify that the chief executive is responsible for determining all claims.

Currently the approved procedures developed by Subsidence Advisory may only deal with the assessment and determination of claims. However, it is necessary that the approved procedures include the steps that happen before mining starts or before a claim is lodged. The bill seeks to change section 14 of the Act, which will see the approved procedures outline in more detail the steps that occur before, during and after the determination of a claim. Additionally, further changes in the bill seek to include a no‑cost review process in the approved procedures to support the resolution of claim disputes. Currently, a compensation claim that is wholly or partially disallowed can seek an independent no‑cost review by the secretary. A mine operator can also seek a review of the chief executive's determination. However, the statutory review heard feedback from both industry and property owners regarding challenges with this process. The changes proposed in the bill seek to provide greater clarity by describing the process for revising the determination of claims in the approved procedures.

The proposed amendments to section 14 of the Act will allow a no‑cost review process to be included in the approved procedures for claimants and mine operators. This will provide an additional review to the secretary review process. The bill also increases the maximum penalties for existing offences to reflect changes in inflation, as measured by the consumer price index. The Act provides Subsidence Advisory NSW with enforcement tools to effectively oversee and enforce compliance with the Act. However, the maximum penalty levels have not been adjusted since the Act's commencement in 2018. The proposed amendments to increase penalties for all existing offences will ensure that the deterrent effect of the penalties is maintained over time.

Currently, a person is entitled to compensation in relation to works to prevent or mitigate damage from mine subsidence. However, some claimants were confused as to whether the compensation related to works for existing or for future structures. The proposed amendments to section 7 of the Act will clarify that a person is entitled to compensation for works to prevent or mitigate mine subsidence damage for existing structures only. This means that costs related to works to prevent or mitigate mine subsidence damage for future development are not eligible for compensation. This amendment will minimise any uncertainty for claimants.

Additionally, changes to section 29 will give the chief executive power in some circumstances to carry out works to prevent or mitigate mine subsidence damage. This would be used for works such as sub‑surface mitigation, while a claim is pending. While section 29 gives power for Subsidence Advisory NSW to fund expenses that may arise from works to prevent or mitigate damage, there is no clear power in the Act for the chief executive to carry out the works. The proposed change to section 29 will give the chief executive powers to direct that such works be carried out and to ensure repairs are not impacted by further subsidence damage. Further changes to section 29 of the Act give the chief executive discretion to fund reasonable expenses that may arise from the works to prevent or mitigate mine subsidence damage.

Under section 29 of the Act, the chief executive can spend money from the fund to pay for works to prevent or mitigate mine subsidence damage. In some circumstances, residents may need to relocate. However, payments for relocation expenses are not payable under section 29. The proposed change will give the chief executive discretion to fund expenses relating to works to prevent or mitigate damage, such as temporary relocation expenses. This allows residents to be compensated for relocation expenses while preventative and mitigative works are completed. Currently, a person is entitled to compensation from the fund to carry out works to prevent or mitigate damage. However, there are no current limits on the number of claims a claimant can make to carry out works to prevent or mitigate damage, or for any damage caused by these works.

New section 10B will limit claims where an owner is paid out to carry out works to prevent or mitigate damage. This means that where an owner is paid out to carry out works to prevent or mitigate damage, any future damages associated with or caused by these works are not eligible for future compensation. In instances where the chief executive believes that the land may subside due to previous coalmining, the chief executive may refuse a development application. However, the current wording of section 22 (7) of the Act creates confusion as to whether it refers to coal to be mined in the future or coal that has already been mined. Proposed changes to section 22 of the Act will clarify the application process for developments and create certainty about the chief executive's power regarding development approvals over past and future mined land.

Proposed changes to section 26 of the Act will allow the chief executive to order the demolition of damaged structures or buildings if it is not realistic to restore them to the condition they were in before mine subsidence damage occurred. The proposed changes expand the chief executive's options for dealing with property or land after purchasing from owners affected by mine subsidence. Without this power, it could be costly to Subsidence Advisory NSW to knock down and rebuild structures to their prior condition. Proposed changes to section 52 of the Act will limit the broad delegation powers, allowing the secretary to transfer their responsibilities to any officer in the department. A key responsibility of the secretary is reviewing claim determinations. Under the Act, the secretary can assign this power of review to any person employed by the department, including the chief executive, which means the chief executive would be reviewing their own decision. The proposed changes to the Act will ensure that the review of claim determinations is fair and cannot be delegated to the chief executive or any person employed in Subsidence Advisory NSW.

The bill implements in full the nine recommendations of the statutory review that was tabled in this place in August 2023. The bill also reflects feedback from members of the public on the subsidence compensation system, particularly local communities in the Wollondilly and Newcastle areas. I thank everyone who provided feedback to the public consultation on the statutory review, and on this bill. The bill will expand the compensation framework to assist more people who have been affected by coalmine subsidence. It reforms the process of assessing and determining claims and enhances the ability of Subsidence Advisory NSW to handle issues that come from coalmine subsidence. I commend the bill to the House.

Debate adjourned.