Surface coal mine restoration: final report to opencast coal task force

Final report on regulation by Scottish Opencast Coal Task Force's compliance and finance subgroups.


Coal Task Force - Towards Better Regulation Report: Meeting with HOPS, COSLA and Scottish Government - 15 April 2015

Workstreams to be completed (additional to those identified in draft report AND NOW REFERRED TO IN THIS REPORT). These were largely proposed by Scottish Government to enhance visibility and oversight.

… … … …on monitoring

  • Site visit proforma developed
  • Completed proformas submitted to SG (recipient to be identified)
  • Guidance on non-material variations produced
  • Material variations regulated
  • Compliance officers employed
  • Timetable for site visits secured
  • Tests and accreditation of compliance officers produced
  • PAN 50 Noise annexe revisited

… … … …on finance

  • Quarterly bond review proforma developed (guided by LA finance officers)
  • Bond review conducted and submitted to SG
  • Agreed bank guarantee statement for all planning authorities drafted
  • Meeting with banks, LA risk and finance officers to be held ( RG)

… … … …on enforcement

  • SG ability to serve an enforcement notice and if so would it be a useful lever?
  • Minerals section of Enforcement Circular revised
  • [an action that submits an indicator to SG was not agreed but it was later considered by SG that this could concern enforcement charter or planning performance framework indicators on sector-specific breaches and resolutions: provided in summary updates]

… … … …on community liaison

  • Structure for periodic community meetings including mandatory site visit (retrospective) developed
  • Community meeting reports submitted to SG

… … … …on COSLA political buy-in

  • has been stalled by the timing of Task Force meetings and COSLA Leaders' meetings but will be pursued at official level.

Coal Task Force - Towards Better Regulation Report: Meeting with SOCA, CoalPro, SOLAR and Scottish Government - 17 April 2015

Workstreams to be completed (additional to those identified in draft report AND NOW REFERRED TO)

  • Regulation needs to be fit for purpose in the worst of market conditions
  • Balance between local democracy and central oversight
  • A single checklist with the local authorities about reporting quarterly to Scottish Government on site activities, financial guarantees, enforcement and community liaison may be possible arising from discussion on 15 April 2015
  • SG and SOLAR to explore time-limited consents
  • A more forceful position on enforcement of financial guarantee provisions insofar as they relate to mine phasing and restoration funding.
  • Better development planning picture of coal in future
  • Shared website
  • The sub-group report to task force should be fit for purpose as a platform for a ministerial statement
  • Bank guarantee template - joint work with HOPS
  • Recognised that Escrows also affect bank liquidity
  • A financial guarantee is not a payment so SOLAR and SG looking at whether a condition or a legal agreement is appropriate.
  • Recognise that a future developer inheriting legacy sites may suffer increased exposure
  • Community liaison would benefit from technical working group insights.

Coal Task Force - Towards Better Regulation Report: Meeting with RBS Group, SOLAR, HOPS, Hargreaves, and CMS Law and Tax - 29 April 2015

The purpose of the meeting was to bring further clarity to the group about the effectiveness of bank guarantees as a financial instrument concerning the restoration of surface coal mines in the event of a default on condition or insolvency situation.

A discussion was held covering bank, corporate, local authority and Scottish Government risk. The transfer of risk to the bank underpins the rationale of a bank guarantee, removing other parties to the agreement (namely planning authority, operator and/or landowner) from the liability to incur and/or recover costs. The usual milestones and governance (monitoring) processes apply but the advantage of a bank guarantee is that it is an on-demand irrevocable instrument. The guarantee takes account of all up-front mining costs conducted and calculated by an appropriate professional.

After further discussion about skills shortages, bank due diligence, corporate structures and legal concerns, it was agreed that HOPS and SOLAR would agree headings for a draft guidance note on bank guarantees. That would then be shared with the RBS representative's technical team for further consideration, report back and shaping into a final note which accommodates the necessary explanation of sometimes unfamiliar terms, the appropriate planning and legal connections for circulation amongst local authorities.


Email: Graham Marchbank

Back to top