Fact sheet: NSW Coal Mines Subsidence Compensation Act

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The NSW Government has introduced legislation to the NSW Parliament to create a new Coal Mine Subsidence Compensation Act.

The changes contained in the legislation include:

• Mine Operators Liable for Subsidence Damage:  Mine operators will be made directly liable for subsidence damage caused by their operations. Currently mine operators pay a levy towards the Mine Subsidence Compensation Fund, and repairs for coal mine subsidence damage are funded from this pooled industry funding. The proposed reforms will require mine operators to compensate landholders directly in accordance with independent assessments of damage and costs via a panel of technical assessors.

• Subsidence Compensation Levy Reduced: The coal mine subsidence compensation levy and fund will be reduced to primarily fund compensation claims arising from historical underground coal mining activities. All coal mine operators will continue to contribute to the fund but it will be at a significantly reduced rate mainly to cover claims arising from historical mining operations.

• Claims Independently Assessed:  Claims will now be assessed by an independent assessor from a panel of technical experts.  The claimant will select an independent assessor from the panel to undertake an investigation to assess the damages attributable to mine subsidence as indicated in the claim. The independent technical assessor will typically be a geotechnical or structural engineer with an understanding of mine subsidence, or a quantity surveyor, depending on the nature of the damage. The assessor will prepare a claim evaluation report outlining the damage as well as supporting data, scope of works to repair the damage and cost estimates for repairs. Mine operators will then be required to compensate property owners in accordance with these reports.

• New Dispute Resolution Process:  A dispute resolution process will be introduced, allowing claimants and mine operators to seek an independent review by the Secretary of the Department of Finance, Services and Innovation, without having to resort to litigation. The right to appeal against the decision of the secretary to the Land and Environment Court remains where claimants and mine operators are dissatisfied with the independent review process. 

• Compliance Impact on Project Approvals: Compliance with the new Coal Mine Subsidence Compensation Act will be taken into account when applying the fit and proper person test under the Mining Act 1992. This means a mine operator’s record of compliance with the Act and their performance in upholding community protections will be considered to determine whether the mine operator is a fit and proper person.

• New Approved Procedures: Underpinning the bill, a series of approved procedures will provide details on the claims management process, compensation eligibility and dispute resolution. The legislation requires mine operators to comply with the approved procedures when dealing with claimants.

• Mine Subsidence Board to be disbanded:  The Government will legislate to disband the Mine Subsidence Board, in line with broader Government commitments to reduce the number of Government boards. The Mine Subsidence Board will be retained for an initial 12-month period from the commencement of the legislation to oversee the transition, then an advisory group will be established to allow continued industry visibility of the fund. 

The Bill and Minister’s speech can be accessed here.

Contact: Craig Milton