NSW mining and petroleum laws are in for major changes, which will affect current and future mining, CSG and petroleum projects, if five Bills introduced into Parliament late last week are passed.

The changes in the package of mining and petroleum Bills will impact:

  • how prospecting titles are granted;
  • the granting, renewal, cancellation, suspension or transfer of mining and petroleum titles;
  • the administration of titles and compliance and enforcement; and
  • land access arrangements for exploration titles.

As there is a lot in these Bills, and much of the detail is being left to regulations and codes of practice, this Alert is only going to deal with the key changes. We'll explore them in more depth as further details are released.

The background to NSW's mining and petroleum changes

The Bills are a key part of the NSW Government's response to last year's report by the Chief Scientist & Engineer on coal seam gas, and also draw on recommendations from the recent ICAC inquiry into coal exploration licences and the examination of the land access arbitration framework by Bret Walker SC.

The Bills support the Improved Management of Exploration Regulation (IMER) which was a key step in a significant overhaul of NSW exploration regulation being phased in this year, and the NSW Gas Plan, which provided the Government's initial response to the Chief Scientist.

Mining and Petroleum Legislation Amendment (Grant of Coal and Petroleum Prospecting Titles) Bill 2015

The Bill proposes a new system for the granting of various mining and petroleum prospecting titles, which includes:

  • designation of areas of the State as "controlled release areas" for particular minerals and CSG, based on recommendations by an interagency advisory body, which will involve a strategic release assessment (the whole State would be designated a "controlled release area" for coal);
  • mandatory competitive tender processes for exploration licences in "controlled release areas" and for CSG, with a legislated tender process (although there is some recognition of "operational allocations" and companies whose CSG licences were expunged earlier this year);
  • a broader range of tender assessment criteria, including commitment to exploration and work programs.

Mining and Petroleum Legislation Amendment (Harmonisation) Bill 2015

The Bill provides a move towards greater consistency between mining and petroleum legislation, particularly in the administration of titles and compliance and enforcement. Key changes include:

  • clearer factors for consideration in determining whether to grant, renew, cancel, suspend or approve the transfer of mining and petroleum titles (eg. new minimum technical, financial and work program standards, and the applicant's compliance history);
  • clearer condition-making powers, comprising seven categories (ie. protection of the environment, rehabilitation of land and water, ensuring public safety, compliance, administration, and community relations);
  • greater scope to vary conditions during the life of a title;
  • provision for the making of codes or practice, and for the codes to be incorporated as conditions of titles;
  • a specific regime for "activity approvals" under exploration licences (so removing this from the standard licence conditions);
  • stricter controls on the land area which may be covered in a renewed exploration licence;
  • strengthening and broadening the investigation and enforcement powers in the petroleum legislation so they align with the powers in the mining legislation (which, in turn, are based on the very broad EPA powers under pollution control legislation);
  • enforceable undertakings, and an expansion of the range of offences for which penalty notices can be issued; and
  • a Community Benefits Fund framework, to require contributions from title holders to the community in which they operate.

Mining and Petroleum Legislation Amendment (Land Access Arbitration) Bill 2015

The Bill proposes an adjustment of the balance between mining and petroleum exploration titleholders and landholders. Key changes include:

  • extension of the current requirement for land access arrangements for exploration titles to include CSG production titles, and expansion of the list of mandatory elements to include compensation (among other things); and
  • a requirement for a landholder and prospecting title holder to negotiate on an access arrangement in good faith;
  • provision for the making of statutory access codes, which may include mandatory provisions for access arrangements;
  • significant changes to the land access arbitration process, such as: 
    • requiring mediation before arbitration;
    • providing a right to legal representation in mediation and arbitration;
    • requiring the title holder to pay the land holder's reasonable legal costs for each stage of the land access process, up to a published fee cap;
    • establishing a register of arbitrated land access agreements;
    • establishing new eligibility criteria and procedures for the Government's panel of arbitrators; and
  • revised definitions for key concepts such as "significant improvements" and "compensable loss".

Protection of the Environment Operations Amendment (Enforcement of Gas and Other Petroleum Legislation) Bill 2015The Bill would give the NSW EPA statutory responsibility for enforcement of "petroleum offences" under petroleum, planning and water legislation, in addition to the EPA's existing responsibilities under NSW pollution control laws.

Work Health and Safety (Mines and Petroleum) Legislation Amendment (Harmonisation) Bill 2015

The Bill would generally align work health and safety laws at CSG sites with existing laws for mine sites.

What you should do now

As the changes will be far-reaching, and will affect so much of a mining, CSG or petroleum project's life-cycle, proponents should be considering now their possible impact upon their business.