Make good obligations—frequently asked questions
How are impacts from resource activities on underground water identified?
Chapter 3 of the Water Act 2000 (Water Act) provides the framework for managing impacts on underground water that are associated with resource operations, including coal seam gas (CSG) and mining activities. This underground water management framework ensures that a bore owner is not disadvantaged by such operations.
A key part of this framework is the requirement for resource tenure holders to prepare an underground water impact report (UWIR). An UWIR makes predictions of groundwater impacts, and sets out future monitoring obligations and spring impact management strategies for the resource tenure. The UWIR must include predictions of impacts to underground water that are likely to occur in both the immediate and long term.
As resource operations are constantly changing, how and when are new development plans reflected in UWIRs?
Resource tenure holders must review the predictions and maps included in its UWIR each year, and submit a summary of this review to the department. The summary must include any details about substantial changes to the information or predictions included in an UWIR. If a material change in information or predictions is found, the department may require the resource tenure holder to amend its UWIR.
Resource tenure holders are generally also required to submit a new UWIR every three years. Any new development plans must be reflected in the updated UWIR.
How are cumulative or overlapping impacts managed?
A cumulative management area (CMA) may be declared in an area where, due to the exercise of underground water rights by two or more resource tenure holders, it is likely that there will be overlapping impacts on underground water. A CMA may be declared, depending on overlapping impacts, for petroleum and gas tenures, mining tenures, or a mix of both petroleum and gas and mining tenures.
Declaring a CMA enables the assessment of future impacts using a regional modelling approach and the development of management responses that are relevant to the potential cumulative impacts. The independent Office of Groundwater Impact Assessment (OGIA) is charged with preparing the UWIR for a CMA and assigning responsibilities to resource tenure holders to implement the requirements contained within the UWIR.
OGIA is required to review the predictions and maps included in its UWIR each year, and submit a summary of the review to the department. If a material change in information or predictions is found, the department may require OGIA to amend its UWIR.
One CMA has been declared for the Surat and Southern Bowen Basin areas, including the Condamine River alluvium. This CMA applies to petroleum and gas tenure holders only.
What is an immediately affected area?
An ‘immediately affected area’ is an area where the water level in an aquifer is predicted to decline by more than the bore trigger threshold, within three years of the release of the UWIR for consultation, due to the extraction of water associated with resource operations.
Maps of immediately affected areas must be included in an UWIR.
What is a long term affected area?
A 'long term affected area' is an area where the water level in an aquifer is predicted to decline by more than the bore trigger threshold at any time (beyond three years) due to the extraction of water associated with resource operations.
Maps of long term affected areas must be included in an UWIR.
What is the bore trigger threshold?
The bore trigger threshold is the amount of water level decline predicted for an aquifer caused by the exercise of underground water rights by a resource tenure holder, which could pose a risk to bore water supply. This does not include seasonal or climatic water level fluctuations.
The trigger thresholds for different aquifers are:
- a five metre decline for consolidated aquifers, such as sandstone; and
- a two metre decline for unconsolidated aquifers such as shallow alluvial aquifers.
A regulation may also prescribe the trigger thresholds for specific aquifers, however this has not been necessary to date.
What is a bore assessment?
A bore assessment is undertaken by the resource tenure holder to establish whether a water bore has an impaired capacity, or is likely to have an impaired capacity, as a result of a resource activity.
What bores require a bore assessment?
For Chapter 3 of the Water Act to apply to a water bore, the bore must:
- be authorised to take or interfere with water under the Water Act (i.e. possess a relevant water authorisation); and
- have a relevant development approval, if required (i.e. possess the requisite approval under the Sustainable Planning Act 2009).
Bores that do not meet the above requirements do not require a bore assessment as Chapter 3 of the Water Act does not apply.
When must a bore assessment be undertaken?
Bore assessments must be undertaken in the following situations:
- A bore is located in an immediately affected area of an UWIR; or
- The resource tenure holder is issued a notice by the department directing it to undertake a bore assessment as the chief executive of the department reasonable believes the bore:
- can no longer supply a reasonable quantity or quality of water for its authorised use or purpose; or
- is affected or likely to be affected by the exercise of underground water rights; or
- has an impaired capacity (including the release of free gas).
A bore assessment must be undertaken for all authorised water bores identified in the immediately affected area of an UWIR within 60 business days after the UWIR takes effect. In certain circumstances, the department may agree to a longer period to conduct the bore assessment, if the tenure holder requests an extension.
A bore assessment directed by the chief executive of the department must be undertaken by the date stated in the direction notice, although the department may agree to a longer period if the tenure holder requests an extension.
How are bore assessments undertaken?
All bore assessments must be carried out in accordance with the guideline Bore Assessment —ESR/2016/2005 (formerly EM1178) which is published on the department's website. The guideline provides resource tenure holders and bore owners with details about the minimum requirements for undertaking bore assessments, including the requirement for bore assessments to be completed by an independent third party, or certified by an independent third party.
For bores being assessed which are identified in an immediately affected area, the tenure holder is only obliged to determine whether the bore is or is likely to be impaired due to water level decline and not free gas.
For bores that are the subject of a direction notice, the notice will outline which investigation – water level decline or free gas – the tenure holder must undertake in determining whether the bore is or is likely to be impaired. Both investigation pathways are outlined in the guideline.
A resource tenure holder must notify the bore owner at least 10 business days before conducting the assessment, stating when the bore assessment is to be undertaken and who will be performing the bore assessment.
The bore owner will need to provide relevant information about the water bore to allow the resource tenure holder to undertake an investigation to determine if the bore is being impacted by resource operations (e.g. bore location, historical data etc.). While substantive information will assist the investigation, the bore owner is not required to undertake testing as this is the resource tenure holder's responsibility.
Are bore owners notified of the outcome of bore assessments?
After a bore assessment has been undertaken, the resource tenure holder must give the bore owner a notice of the outcome of the bore assessment within 30 business days of undertaking the bore assessment. The notice of outcome must include whether the bore has, or is likely to have, an impaired capacity.
It should be noted that a bore assessment is considered to be undertaken after data obtained from the in-field assessment has been analysed to determine whether the bore has or is likely to have an impaired capacity.
What is impaired capacity and how is it determined?
Make good measures must be included in a make good agreement where the bore assessment concludes that the bore has or is likely to have an impaired capacity due to the resource tenure holder’s exercise of underground water rights.
Chapter 3 of the Water Act recognises two situations in which a water bore may become impaired from resource activities:
- Water level decline, due to the exercise of underground water rights by a resource tenure holder, impairing the bore’s ability to provide a reasonable quantity or quality of water for the bore’s authorised use or purpose; and
- The water bore is adversely affected by free gas derived from the carrying out of authorised resource activities.
Impaired capacity is determined through the bore assessment, which must be undertaken in accordance with the guideline Bore Assessment—ESR/2016/2005 (formerly EM1178) . When determining impaired capacity, existing and new bores are treated differently.
Water Level Decline
An existing water bore (a bore in existence before the first UWIR for the area took effect) is considered to have an impaired capacity where:
- there is decline in the water level of the aquifer at the location of the bore and the exercise of underground water rights has or has likely caused or materially contributed to the decline; and
- because of the decline the bore can no longer provide a reasonable quality or quantity of water for its authorised use or purpose.
A new water bore has an impaired capacity where:
- the requirements for establishing an impaired capacity for an existing water bore are met; and
- the decline is more than the decline predicted at the location of the bore in the relevant report (that is, the UWIR which is in effect at the time the bore is drilled).
In addition to the above, both new and existing bores are taken to have an impaired capacity where:
- there is evidence of any of the following adverse effects due to the exercise of underground water rights by a resource tenure holder:
- damage to the bore or the bore’s pumps or other infrastructure;
- the bore poses a health or safety risk; or
- the bore can no longer, or it is likely the bore can no longer provide a reasonable quantity or quality of water for its authorised use or purpose; and
- free gas derived from the carrying out of authorised activities under a resource tenure, has or has likely caused or materially contributed to the adverse effect.
Certainty that the exercise of underground water right has caused or will likely cause the bore to be impaired is not needed; it is sufficient that the resource operations has likely caused or materially contributed to the decline or adverse effect.
What is a make good agreement and when is it required?
A make good agreement is a legally binding agreement entered into by a resource tenure holder and a bore owner about a water bore. A make good agreement is required for all bores that have had a bore assessment undertaken (not just those with an impaired capacity). Make good agreements are separate contractual arrangements from conduct and compensation agreements required under resource legislation for access to private land.
If the bore assessment has shown that a bore will not be impaired by a resource activity, the make good agreement is only required to state the findings of the bore assessment. If the bore assessment has shown that the exercise of underground water rights has, or has likely, caused or materially contributed to the decline, the make good agreement must include make good measures negotiated by the resource tenure holder and the bore owner to ‘make good’ the impact. As make good agreements are legally binding, it is important that appropriate independent professional legal advice is sought when making this agreement.
What are make good measures and what can make good measures include?
Make good measures are required for a make good agreement where a bore has or is likely to have an impaired capacity.
As part of the negotiation process, a bore owner is free to seek make good measures other than those proposed by the resource tenure holder during the negotiation process. Make good measures may include:
- ensuring the bore owner has access to a reasonable quantity and quality of water for the water bore’s authorised purpose for example:
- adding a rising main to lower the pump setting in the bore;
- increasing the water column above the pump;
- improving the pressure at the bore head, including new headworks and piping;
- changing the pump so that it is better suited to the decreased water level in the bore;
- deepening the bore to allow it to tap a deeper part of the aquifer;
- reconditioning of the water bore to improve its hydraulic efficiency;
- drilling a new bore; or
- providing an alternate water supply
- carrying out a plan to monitor the water bore, for example, by undertaking periodic bore assessments
- providing the water bore owner compensation (monetary or otherwise) for the bore's impaired capacity.
However the above is not an exhaustive list and other measures can be agreed.
If monetary compensation is accepted as a measure instead of a new water supply, bore owners are encouraged to fully consider how this will affect the long-term viability of the land use, and the affect that this might have on land value. Monetary compensation could also be used to improve other water infrastructure on the land.
Why are existing and new bores treated differently for make good obligations?
A person who constructs a bore after the first UWIR takes effect, would be aware of the potential impact of the resource operations and would need to take this into account in deciding to drill a bore.
In particular, the definition of impaired capacity for new bores allows for the recognition of predicted impacts at a point in time, and any water bore constructed after this point will only be considered to have an impaired capacity when the impact exceeds the predicted impact outlined in the relevant UWIR.
If make good obligations applied equally to existing and new bores, resource tenure holders could be perpetually required to make good bores that are not yet in physical existence. For example, a bore could be sunk deliberately in an impacted area to initiate the requirement for compensation.
Can a make good agreement be changed?
The impact on a bore caused by a resource activity may change for a number of reasons. For example, a resource tenure holder may change production plans, or a newly released UWIR might predict new impacts. There may also be situations where a bore owner discovers that a previously agreed make good measure is ineffective.
Because of the potential for change over time, a bore owner or a resource tenure holder can seek to vary a make good agreement under the Water Act in three specified situations:
- there is a material change in circumstances;
- one or more of the make good measures is ineffective; or
- another effective and more efficient measure is available.
In any of these situations, both the resource tenure holder and bore owner must negotiate using their best endeavors to vary the agreement. This statutory right seeks to ensure that any impacts on a bore are properly 'made good'. A make good agreement may also be varied for reasons other than the three specified situations if both parties agree to the variation.
In addition to the above situations, a bore owner has a five business day cooling off period to terminate a make good agreement without penalty.
What is the status of existing make good agreements between mining tenure holders are bore owners?
Existing agreements between a mineral development license or mining lease tenure holder and a bore owner about a water bore affected or likely to be affected by the take of underground water from activities on tenure are deemed to be a make good agreement for the purposes of Chapter 3 of the Water Act.
Therefore, these agreements are subject to the provisions of Chapter 3 of the Water Act, including the right to vary a make good agreement if the agreement is no longer appropriate.
What do I do if I have a complaint about how a resource company is handling their make good obligations?
Concerns regarding the undertaking of bore assessments, entering into make good agreements, or negotiating a change or variation to a make good agreement can be referred to the Department of Natural Resources and Mines’ CSG Compliance Unit on:
Phone: (07) 4529 1500
Additionally, if there is a disagreement about a make good agreement, either party may seek a conference or independent alternative dispute resolution (ADR) to negotiate a resolution of the dispute. To seek a conference or ADR, the requesting party must complete an election notice—ESR/2016/2066 (formerly EM110) and provide a copy to the CSG Compliance Unit and the other party.
If a conference is sought, an authorised officer from the CSG Compliance Unit will facilitate a conference between the parties to try and negotiate a resolution of the dispute. If either party elects to undertake an ADR process with the resource tenure holder to negotiate an outcome to the make good agreement, the costs of the ADR facilitator will be borne by the resource tenure holder.
What are bore owners legally entitled to be reimbursed for when negotiating a make good agreement?
The resource tenure holder must reimburse the bore owner for any accounting, hydrogeological, legal or valuation costs the bore owner necessarily and reasonably incurs in negotiating or preparing a make good agreement.
Hydrogeology costs must only be incurred for work performed by an appropriately qualified hydrogeologist. An appropriately qualified hydrogeologist means a person:
- with a minimum of two years professional experience in at least one of the following fields and have a practical knowledge of water bore construction and infrastructure.
- underground water level monitoring programs, including monitoring of water level in bores equipped with pumping infrastructure;
- the conduct of underground water quality sampling programs; or
- hydrogeology and/or engineering
- have a practical knowledge of water bore construction and infrastructure.
The resource tenure holder is also obliged to pay the costs of the ADR facilitator, should ADR be elected by either party.
What happens if the UWIR does not properly predict all impacts or I believe my bore is impaired by free gas?
If a bore owner is concerned that their bore is experiencing an impact that is not predicted in the UWIR, or is being adversely affected by free gas, the bore owner should initially contact the resource tenure holder in relation to their concerns. If there are ongoing concerns then the bore owner should contact the Department of Natural Resources and Mines' CSG Compliance Unit on:
Phone: (07) 4529 1500
Where appropriate, a direction notice may be issued to the resource tenure holder requiring a bore assessment be undertaken and a make good agreement negotiated, even where an impact has not been predicted in the UWIR. The immediately affected area and long term affected area in an UWIR predicts a decline in water level only.
What measures are in place to regulate water quality impacts from direct contamination?
The Environmental Protection Act 1994 regulates impacts on water quality because of direct contamination of an aquifer. A resource tenure holder must operate in accordance with the conditions of its environmental authority. This includes strict regulation of chemicals used in accessing gas in coal seams.
The department will investigate and deal with any contamination of groundwater aquifers that impact on a private water supply in accordance with the department’s Enforcement Guidelines , including taking enforcement actions and prosecution where necessary. At this point in time, the department is not aware of any issues of groundwater contamination from CSG activities that have affected private water supplies.