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Financial assurance, provisioning and rehabilitation for environmental authorities
Financial assurance is a security deposit held by the administering authority to ensure the holder of an environmental authority (EA) complies with the conditions of the EA and to cover potential rehabilitation costs.
There are 2 types of financial assurance:
- scheme assurance for resource activities
- and
- Environmental Protection Act 1994 (EPA) assurance for prescribed environmentally relevant activities (ERAs).
The Mineral and Energy Resources (Financial Provisioning) Act 2018 (MERFP Act) came into force on 1 April 2019 and establishes the Financial Provisioning Scheme (FPS) administered by the Scheme Manager. The FPS will hold all scheme assurance provided by the resource sector under the Environmental Protection Act 1994.
If you hold an EA for a resource activity or small scale mining tenure you are required to provide scheme assurance to the FPS.
All resource activity EAs and small scale mining tenures with existing financial assurance will be transferred to the FPS.
The holder of an EA for a prescribed environmentally relevant activity (ERA) is required to provide EPA assurance to the administering authority.
Financial assurance or scheme assurance is held while your operation is underway and must be provided to the administering authority or the Scheme Manager before you begin operating.
You must pay financial assurance to cover the likely costs and expenses to:
- prevent or minimise environmental harm or rehabilitate or restore the environment
- or
- secure compliance with an EA or prescribed condition for a small scale mining activity.
From 1 November 2019 (known as the PRCP start date) there is a requirement for a Progressive Rehabilitation and Closure Plan (PRC plan) for all site-specific EAs relating to mining activities.
If you have an EA for a resource activity, progressive certification is a way for you to reduce the amount of scheme assurance required by rehabilitating disturbed areas while you conduct a resource project. It allows you to:
- apply for progressive certification of areas of your tenure
- surrender part of your resource tenure over time to reduce this amount.
This guide includes information on how to:
- calculate and pay financial assurance
- apply for a PRCP schedule
- apply for progressive certification.
Financial assurance for resource activities
Environmental authority (EA) holders for a resource activity may be required to contribute financial assurance (or security deposit) to the Financial Provisioning Scheme (FPS) that started on 1 April 2019.
You will need to calculate your estimated rehabilitation cost (ERC) for your resource activity and apply for an ERC decision.
Note: A major review of the ERC framework has been undertaken. The revised ERC documents took effect on 1 October 2022.
Learn more about the Financial Provisioning Scheme.
Applying for an estimated rehabilitation cost decision
If you hold an EA for resource activities, you must apply for an ERC decision using the Application for a decision on the estimated rehabilitation cost (ESR/2018/4426) (DOCX, 170KB). The application may need to include third party quotes. Use the form Third party quotes for estimated rehabilitation cost (ESR/2021/5691) (DOCX, 130KB) to complete all third party quotes.
Your ERC application must meet the minimum information requirements set out in the estimated rehabilitation cost guideline (ESR/2018/4425) (PDF, 916KB).
Further requirements for submitting spatial data as part of an application for an ERC decision, including details on the submission process, can be found in the Spatial information submission guideline (ESR/2018/4337) (PDF, 989KB).
Applications can be made at any time after the EA has been granted and can be lodged on Online Services, or by mailing your form to the Department of Environment, Science and Innovation business centre for your resource.
Calculating your ERC
Your ERC is based on the likely costs and expenses that the Queensland Government may incur when taking action to rehabilitate or restore and protect the environment because of environmental harm that your activity may cause.
To calculate your ERC, you must use the following guideline and calculator.
Guideline
Calculator
User guides
- ERC calculator user guide – mining (ESR/2019/4626) (PDF, 1.7MB)
- ERC calculator user guide – petroleum and gas (ESR/2019/4627) (PDF, 2.1MB)
Training videos
Scheme assurance lodgement
The Scheme Manager will handle all lodgement and release of scheme assurance. Learn more about how to lodge your scheme assurance.
Claims on your scheme assurance
Your administering authority can claim or use your scheme assurance to prevent environmental harm or rehabilitate the environment after it has been disturbed.
You will be notified before any claim is made on your scheme assurance, and you can respond with a written argument against the claim.
Amending your ERC decision
As the EA holder, you can apply to have your ERC decision amended at any time by making an application to your administering authority.
You will need to re-apply for an ERC decision if:
- there is an increase in the likely maximum amount of disturbance to the environment as a result of the resource activity
- there is a change relating to the carrying out of the resource activity that may result in an increase in the ERC decision
- you have stated a change to the carrying out of the resource activity in your annual return that may affect the ERC decision
- or
- the administering authority:
- approves an application to amalgamate the EA with another EA
- directs a holder to re-apply for an ERC decision.
Read the information sheet Re-application for estimated rehabilitation cost decision (PDF, 268KB) for more information on when you need to re-apply for an ERC decision.
De-amalgamating your EA
If an ERC decision is, or has been, in effect, for an EA, an application for the de-amalgamation of that EA must be accompanied by an ERC application for each proposed de-amalgamated authority. This ensures that the ERC accurately reflects the rehabilitation liability immediately following the de-amalgamation.
For a de-amalgamation relating to a tenure transfer, the de-amalgamation will not take effect until the proposed holder of each de-amalgamated EA has paid a contribution to the scheme fund or provided a surety to the Scheme Manager for the EA and the tenure has been transferred.
Releasing your scheme assurance
The Scheme Manager will handle all release of scheme assurance. Learn more about the release of scheme assurance.
Estimated rehabilitation cost (ERC) calculator training videos
As part of the estimated rehabilitation cost (ERC) framework review in 2022, updates have been made to the ERC calculators to reflect current market costs and improve functionality for users.
View the series of training videos below that have been developed to support implementation of the revised mining and petroleum and gas ERC calculators.
Mining ERC calculator
Module 1—Purpose and changes
Module 2—How to prepare
Module 3—General use concepts
Module 4—Sheets
Module 5—Focus items
Module 6—Eligible mining and exploration
Module 7—Infrastructure and process equipment
Module 8—Water storage and treatment
Module 9—Waste structures
Module 10—Pits and underground mines
Module 11—Ports
Module 12—Miscellaneous sheets
Petroleum and gas ERC calculator
Module 1—Purpose and changes
Module 2—How to prepare
Module 3—General use concepts
Module 4—Sheets and domains
Module 5—Main sheet
Module 6—General land rehabilitation
Module 7—Wells
Module 8—Seismic and infrastructure
Module 9—Pipelines
Module 10—Process facilities
Module 11—LNG facilities
Module 12—Water storage
Module 13—Investigation and contamination
For more information on the ERC, read about financial assurance for resource activities.
Financial Provisioning Scheme for resource activity environmental authorities
From 1 April 2019, financial assurance requirements for resource activities under the Environmental Protection Act 1994 were replaced with the Financial Provisioning Scheme (FPS) under the Mineral and Energy Resources (Financial Provisioning) Act 2018.
The Mineral and Energy Resources (Financial Provisioning) Act 2018 applies to small scale mining tenure holders and all resource activity environmental authority holders.
If you hold a resource activity environmental authority (EA), you will need to know about the estimated rehabilitation cost (ERC) for an EA to understand how the FPS applies to you.
You are required to provide surety (financial assurance) equal to the value of the estimated rehabilitation cost for your permit or authority. There is no risk assessment for small scale mining tenures or environmental authorities with an ERC less than $100,000.
If there is an increase in your surety (or it is a new tenure) the FPS will send you an invoice equal to the increase in ERC with:
- the amount of surety required
- a due date for payment of the surety
- bank details for the electronic payment of cash surety (if you are providing cash)
- information on how to lodge non-cash surety.
If there is a decrease in the ERC or your environmental authority is successfully surrendered, the FPS will contact you to organise any return of surety.
For information on providing surety, read the:
- Forms of surety guideline (PDF, 1.6MB)
- Financial institution undertaking (non-cash surety template) (DOCX, 42KB)
- Cash surety deed template (DOCX, 697KB)
- Surety check list (DOCX, 726KB).
A small scale tenure permit or an environmental authority may be transferred to a new holder as a result of an asset sale with the tenures being sold to a new entity or shares in a company holding the tenures/environmental authority being sold. The Financial Provisioning Scheme processes for a transfer are set out in the Environmental authority transfer processes (Information sheet 4) (PDF, 406KB).
The environmental authority will be required to undertake a risk category allocation assessment process annually.
Based on the risk category allocation, you will be required to pay either a contribution to the financial provisioning fund or to provide surety.
We will send you, as the holder or 'relevant holder' (where there are multiple holders), a letter about the assessment and a request for information.
For information on the assessment process:
- Forming the Scheme Manager's opinion guideline (PDF, 1MB)
- Risk category allocation information sheet (Information sheet 1) (PDF, 1MB)
- Requiring surety to preserve the financial viability of the Scheme Fund (PDF, 970KB)
Find out how the Scheme Manager assigns the relevant holder in the Assigning an authority to a relevant holder guideline (PDF, 995KB).
Following the risk category allocation assessment, we will send you an invoice including:
- the amount of the contribution, assessment fee and/or the amount of surety required
- a due date for payment
- bank details for you to make electronic cash payments
- information on how to lodge non-cash surety.
For information on providing surety, read the:
- Forms of surety guideline (PDF, 1.6MB)
- Financial institution undertaking (non-cash surety template) (DOCX, 42KB)
- Cash surety deed template (DOCX, 697KB)
- Surety check list (DOCX, 726KB).
An environmental authority may be transferred to a new holder as a result of an asset sale with the tenures being sold to a new entity or shares in a company holding the tenures/environmental authority being sold.
The Financial Provisioning Scheme processes for a transfer are set out in the Environmental authority transfer processes (Information sheet 4) (PDF, 406KB).
Fees
If you hold an EA with an ERC of $100,000 or more, you will be charged an annual assessment fee as set out below and prescribed in the Mineral and Energy Resources (Financial Provisioning) Regulation 2019.
At least $100,000 and less than $1 million | $250 |
At least $1 million and less than $10 million | $1,250 |
At least $10 million and less than $50 million | $5,000 |
At least $50 million and less than $100 million | $22,500 |
$100 million and over | $45,000 |
Surety information sheets
- Realising surety provided by multiple holders (Information sheet 2) (PDF, 970KB)
- Financial institution paying out a surety instrument (Information sheet 3) (PDF, 1.1MB)
Mandated notification forms
The Act requires holders to notify the Scheme Manager in certain circumstances. The circumstances and relevant notification form to use are below.
- Form FPS1 (DOCX, 100KB) – this form is to be completed by a holder, who has been allocated to a risk category and applies under s33 of the MERFP Act to the scheme manager for a proposed changed holder review allocation.
- Form FPS2 (DOCX, 99KB) – this form is to be completed by a holder who has been allocated to a risk category, to give notice to the scheme manager under s42 of the MERFP Act that there has been a direct/indirect change of holder for an authority.
- Form FPS3 (DOCX, 95KB) – this form is to be completed by a holder to give notice to the scheme manager under s43 of the MERFP Act that production in relation to an authority has ceased.
Contact
For more information about the Financial Provisioning Scheme, phone (07) 3035 3551 or email FPS@treasury.qld.gov.au.
More information
Read about the reforms to improve rehabilitation and financial assurance outcomes in the resources sector.
Progressive rehabilitation and closure plan for mined land
Progressive rehabilitation and closure plan (PRC plan) requirements for resource activities took effect from 1 November 2019 (PRC plan start date) to implement key elements of the Mined Land Rehabilitation Policy (PDF, 1.3MB).
All mines with a site-specific environmental authority (EA) must prepare a PRC plan.
All site-specific mining EA applications that were granted prior to 1 November 2019 (PRC plan start date) will be required to transition to the PRC plan framework.
If you are the relevant holder of the EA, you will receive a transition notice from the administering authority requiring you to submit a PRC plan within a time frame of at least 6 months.
If you are applying for a new site-specific EA application for mining leases, you will be required to submit a PRC plan with any EA application submitted after 1 November 2019.
PRC plan
A PRC plan requires you, as the EA holder, to plan for how and where activities will be carried out on the land in a way that maximises the progressive rehabilitation of the land to a stable condition.
A PRC plan consists of 2 parts:
- A rehabilitation planning part
- PRCP schedule.
As an applicant, you will submit a proposed PRC plan with a completed PRCP schedule to the administering authority. The administering authority then assesses the plan and decides whether to approve the PRCP schedule.
PRCP schedule
A PRCP schedule includes a final site design map that identifies the post-mining land uses (PMLUs) and any non-use management areas (NUMAs). The PRCP schedule also includes a table of milestones and any conditions imposed by the administering authority.
Just like an EA, it is an offence for an EA holder to contravene a condition of a PRCP schedule. To help you complete a PRCP schedule use the template: Progressive rehabilitation and closure plan schedule (ESR/2019/5103) (XLSX, 37KB).
Applying for a PRCP schedule
If you are required to submit a PRC plan, you must apply using the Submission of a progressive rehabilitation and closure plan (ESR/2019/4957) (DOCX, 214KB) form.
Your PRC plan must meet the requirements set out under the Environment Protection Act 1994 (EP Act) and the progressive rehabilitation and closure plan guideline (ESR/2019/4964) (PDF, 2.3MB). Further assistance in preparing a PRC plan is also provided in the common issues with progressive rehabilitation and closure plan applications (ESR/2021/5775) (PDF, 199KB) information sheet.
Applications can be made at any time unless your project is captured by the transitional provisions. Your completed PRC plan can be lodged to the Department of Environment, Science and Innovation business centre appropriate to your resource.
For further information on the requirements for your PRC plan, read the following information sheets:
- Voids in flood plains (ESR/2019/4966) (PDF, 375KB)
- Non-use management area (ESR/2019/4954) (PDF, 293KB)
- Incorporating greenfield sites and exploration disturbance into progressive rehabilitation and closure plans (ESR/2024/6766) (PDF, 336KB).
For help with submitting your PRC plan, it is recommended that all applicants contact your relevant business centre to arrange a pre-lodgement discussion.
Amending a PRCP schedule
As the holder of a PRC plan you may, at any time, apply to the administering authority to amend your PRCP schedule (an amendment application). An application may be made to amend only the PRCP schedule, or as part of an amendment application for an EA.
An amendment application may be:
- a minor amendment (PRCP threshold) as defined under section 223 of the EP Act
- or
- a major amendment, which is an amendment that is not a minor amendment.
Surrendering your PRCP schedule
If you are an EA holder you cannot surrender a PRCP schedule on its own. However, on approval of an EA surrender application, the PRCP schedule will cease to have effect (section 269A of the EP Act).
If you surrender your EA, and there is a PRCP schedule in place, you must submit a post-surrender management report (ESR/2020/5434) (DOCX, 293KB) with your surrender application.
The surrender application must also include a compliance statement for the EA and the PRCP schedule. The compliance statement must state:
- the extent to which the relevant activities carried out under the EA have complied with the conditions of the authority
- whether the rehabilitation milestones and management milestones under the schedule have been met
- the extent to which conditions imposed on the schedule have been complied with
- the extent to which the post-surrender management report is accurate.
Contact
Minerals Business Centre
Phone: (07) 4222 5352
Email: ESCairns@des.qld.gov.au
Coal Business Centre
Phone: (07) 4987 9320
Email: CRMining@des.qld.gov.au
Forms and fees
Find out more about the forms and fees involved in PRC plans.
Frequently asked questions
- For more information on PRC plans and schedules, check the frequently asked questions (PDF, 178KB).
- Read information on the release of PRC plan documents on the public register portal (PDF, 509KB).
- Read about the community consultation regarding PRC plans (PDF, 239KB).
- For more information about transition notice timeframes and potential amendments to transition notice timeframes, read amending timeframes of PRC plan transition notices (ESR/2021/5678) (PDF, 294KB).
PRCP Audits
The holder of a PRCP schedule must commission an audit of the schedule by a rehabilitation auditor every 3 years starting on the day the schedule takes effect.
As the holder you must, within 4 months after the end of each audit period, give the administering authority the rehabilitation auditor's report (an audit report) about the audit that complies with section 286 of the EP Act. The audit report must be submitted using the approved form (DOCX, 228KB).
All PRCP audits are published on the public register.
For more information about the requirements for a PRCP audit, read Information sheet - Requirements for PRCP schedule audits (PDF, 256KB).
Rehabilitation auditor
Under section 288 a person may be commissioned to carry out an audit of a PRCP schedule only if the person meets the requirements decided by the chief executive.
The rehabilitation auditor requirements specify the minimum education, work experience and technical expertise a rehabilitation auditor must have to carry out a PRCP audit.
The rehabilitation auditor requirements are outlined in Appendix A of the Information sheet - Requirements for PRCP schedule audits (PDF, 256KB).
Financial assurance for prescribed activities
Not all prescribed activities are required to provide financial assurance. If you are required to supply a financial assurance, this requirement will be included as a condition of your environmental authority (EA).
You must pay financial assurance before carrying out any activities authorised by your EA.
In addition to requiring financial assurance for an EA, the administering authority may also request a financial assurance payment as a condition of a transitional environmental program.
Calculating financial assurance
Financial assurance is based on the likely costs and expenses that the Queensland Government may incur when taking action to rehabilitate or restore and protect the environment because of environmental harm that your activity may cause.
You have to calculate financial assurance in accordance with the methodology approved in the Queensland Government's guideline Financial assurance under the Environmental Protection Act 1994 (ESR/2015/1758) (PDF, 916KB).
The guideline includes details on:
- when financial assurance is required
- calculating financial assurance (you can use the mining or petroleum and gas financial assurance calculator)
- applying for a discount on your financial assurance
- paying financial assurance
- amending, discharging or claiming financial assurances
- mandatory information requirements when applying for a decision on financial assurance by your administering authority
- mandatory decision criteria that the administering authority must consider when making a decision.
Applying for a discount on your financial assurance
If you meet the eligibility criteria, you can qualify for a discount on the amount of financial assurance you are required to pay.
The maximum discount that can be awarded is 30%.
Discount categories
- Financial discount – available where an EA holder submits certified documentation to demonstrate sound financial health and a declaration that the costs of rehabilitation have been adequately budgeted for. Read the Declaration for application of financial discount on financial assurance (ESR/2015/1822) (DOCX, 167KB) and Appendix B (Discount System) of the financial assurance guideline for more information.
- Progressive rehabilitation and certification discount - available for EA holders who avoid impacting areas of remnant vegetation or where areas of significant disturbance are being proactively rehabilitated.
- Waste management discount – available where an EA holder can demonstrate they are not undertaking significant high risk storage activities (waste rock dumps, regulated dams, brine and landfill waste) or they have implemented measures that reduce the amount of waste that would otherwise be stored in onsite high risk storage activities.
Read the guideline Financial assurance under the Environmental Protection Act 1994 (ESR/2015/1758) (PDF, 1.24MB) for more information on how to apply for a discount.
Applying for a decision on financial assurance required
For all prescribed EAs that contain financial assurance conditions, you must apply to your administering authority for a decision about the amount and form of your financial assurance (ESR/2015/1754) (DOCX, 132KB).
Read the guideline Financial assurance under the Environmental Protection Act 1994 (ESR/2015/1758) (PDF, 916KB) for more details on information requirements and how to calculate financial assurance.
Lodgement of financial assurance
A decision notice on the amount and form of financial assurance will be issued to you by the administering authority, which will specify the amount and form of financial assurance required, and the contact information for lodgement.
The administering authority will require financial assurance to be provided in the form of cash or a bank guarantee. If a bank guarantee is provided, it must be presented on the letterhead of an approved financial institution with the exact wording of the approved Pro-forma for financial institution's undertaking (ESR/2016/1980) (DOCX, 128KB). Any deviation from the pro-forma template will need to be submitted for approval by the administering authority before lodgement will be accepted.
Read the guideline Financial assurance under the Environmental Protection Act 1994 (ESR/2015/1758) (PDF, 916KB) for more information about the lodgement of financial assurance.
Claims on your financial assurance
Your administering authority can claim or use your financial assurance to prevent environmental harm or rehabilitate the environment after it has been disturbed.
Your administering authority will notify you before making any claim on your financial assurance. You will be allowed to respond with a written argument against the claim.
Amending or discharging financial assurance
As the EA holder, you can apply to have the financial assurance amended or discharged (changed or returned) by making an application to your administering authority.
The EA holder can apply to amend or discharge the financial assurance, even if the funds have been provided by a third party (e.g. a bank).
You may be required to submit a compliance statement specifying how much your activities have complied with EA conditions.
Your financial assurance will only be discharged if the administering authority decides that no claim is likely to be made on the assurance.
Contact your administering authority for advice on how to apply.
Changing the amount of financial assurance
The administering authority may ask you to change the amount of financial assurance.
You will be sent a notice with the new amount of financial assurance and the form the financial assurance must take (e.g. bank guarantee).
You can make a submission about this new amount and form, which the administering authority will consider when making its final decision.
Replenishing financial assurance
The administering authority can direct you to replenish the financial assurance if all or part of it has been used.
You will be sent a notice stating how much of the financial assurance has been used and how to replenish it.
Also consider...
- Find more forms and fees for environmental authorities, including for financial assurance.
Progressive certification for an environmental authority
Progressive certification allows you, as the holder of an environmental authority (EA) for a resource activity, to reduce the amount of financial assurance held for your EA. You can also apply for progressive certification if you want to surrender part of your resources tenure.
Progressive certification involves the staged restoration of disturbed areas during the exploration, construction or development and resource extraction phases of your project, instead of large-scale works at the end of your project.
Further information is available in the Progressive certification for resource activities guideline (ESR/2022/5900) (PDF, 259KB).
Applying for progressive certification
As the EA holder, you can apply to request progressive certification over parts of the area of the resource tenure during the life of the project.
This allows you to reduce your financial assurance payment.
With your application, you must submit a progressive certification report (ESR/2015/1616) (DOCX, 233KB).
The report must include a compliance statement, which you must use to document the extent to which activities in or near the proposed certification area have complied with your EA conditions.
The Application for progressive certification (ESR/2015/1563) (DOCX, 192KB) includes details on how to complete a compliance statement.
Residual risk payments for an environmental authority
You may be required to make a residual risk payment after lodging an application to surrender an environmental authority (EA) for your resource activity.
Your residual risk payment covers the likely costs and expenses incurred by Queensland Government to manage and remediate your resource activity after financial assurance has been returned to you.
When surrendering your environmental authority, you will be required to carry out a risk assessment in compliance with the Residual risk assessment guideline (ESR/2020/5433) (PDF, 786KB). The risk assessment will provide you with an estimate of the residual risk payment.
The administering authority will decide on the residual risk payment amount by calculating all potential costs and expenses associated with managing, rehabilitating, restoring and protecting the environment after your resource activity is complete, and your environmental authority has been surrendered.
The Queensland Government may also require a residual risk payment as a condition of a site management plan for land that is recorded in the contaminated land register.
© The State of Queensland 1995–2024
- Last reviewed: 08 Sep 2021
- Last updated: 08 Sep 2021