Landowners and the resources sector have spoken, but has the legislature listened?

After commissioning an independent review of the land access framework, the Government has seemingly aimed to please two masters, or at the very least appease them by introducing legislation that is intended to ease the regulatory burden on landowners and the resources sector alike – the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld).

The Act has been crafted to reduce the overlap in the suite of resource legislation that applies to the mining, petroleum and gas, greenhouse gas storage and geothermal energy sectors, including with respect to dealings, caveats, land access, coal and petroleum resource authorities.

The new framework is intended to provide a suitable environment to encourage investment in the resource sector by simplifying processes and avoiding duplication in terms of application processes as well as litigation risk.

WHAT IS THE PURPOSE?

According to the preliminary chapter of the Act, “It is the intention of Parliament that this Act be the first step towards the replacement of the Resource Acts with a simplified common framework that will apply to all resource authorities.” Ironically, to date this streamlining exercise has entailed the commencement of the Act without the repeal of any of the Acts that it is poised to replace, so don’t throw away your copies of the Mineral Resources or Petroleum and Gas Acts just yet. On this note, while it is the case that the Act has passed, virtually all of its provisions will continue to remain dormant until such time as the associated Regulation that is to sit underneath it has been finalised.

THE REACH OF THE COURT

Upon coming into operation the Act will be a game changer in a number of key respects, not the least of which is the increased jurisdiction of the Land Court, including empowering the Court to have regard to the behaviour of the parties leading up to the initiation of proceeding determine compensation liability where negotiations between the parties have broken down.

While the parties will be able to lawfully opt out of entering into a conduct and compensation agreement (CCA) where both are willing to do so, the Court will have an ability to decide liability, or future liability, to the extent not subject to a conduct and compensation agreement CCA.

The Court may order non-monetary compensation as well as monetary compensation, although non-monetary compensation is not a defined term, so the scope of this power is not clear. Based on our experience with these types of matters, an example of what may constitute non-monetary compensation may include the establishment of water infrastructure, such as monitoring and extraction bores.

With removal of duplication in mind, the Act requires the Court to direct that an objections decision hearing under the Environmental Protection Act (EP Act) be conducted at the same time as a hearing for an application for the grant of a mining lease and any objections to the grant under the Mineral Resources Act (MR Act). This has effectively halved the litigation risk for proponents who will no longer face the prospect of a fresh hearing after one piece of litigation has finished.

Only appeals underpinned by a genuine claim will be considered by the Land Court. Those without a relevant factual or legal basis will be dismissed. The Court can be expected to take a more active role in case management to identify and dismiss patently unmeritorious cases.

RECORD OF CCA ON PROPERTY TITLE

The Act introduces a new requirement for CCAs to be noted on certificates of title, apart from specified MR Act resource authorities. Formerly, given CCAs are essentially private dealings, the purchase of land entailed a greater element of risk because of the difficulties that may be encountered sourcing CCAs as part of the purchaser’s due diligence. In the resources sector this has been problematic because conduct and compensation agreements remain binding on future land owners.

The CCA itself does not need to be included on title, as a cross-referencing record will suffice. The responsibility and cost of ensuring that the CCA is included on title is to be borne by the resource authority holder and this also applies to the CCA requiring removal upon ceasing to apply.

PUBLIC NOTIFICATION

The dual notification processes under the MR Act and EP Act have been scaled back. The MR Act has been amended so that mining lease applications need not be publicly notified. However, a class of ‘affected persons’, which includes the landowner and occupiers of the subject land, as well as access land and adjoining land owners, local government and providers of infrastructure on the subject land must be given notice by the proponent. Each of these parties may lodge objections, but their scope to make objections is strictly confined to limited grounds specified in the Act.

Public notification is still required for applications for environmental authorities which pose a greater environmental risk due to the scale of the project. Importantly, projects whose environmental authority conditions have been imposed by the Coordinator-General under the State Development Act cannot be the subject of objections about those conditions.

NO GO ZONES

Prior to the Act, restricted land requirements were governed by the MR Act and the Geothermal Energy Act 2010 (Qld). The Act harmonises the legislation concerning restricted land by providing a single framework, incorporating all resource types. Under this unified framework the consent of a landholder is required prior to resources companies undertaking activities on restricted land near infrastructure.

This requirement is extended to include the consent of neighbouring Landholders. Applications for a mining lease are still required, however these can be lodged prior to consent being given. In addition to benefiting landholders, the new framework aims to benefit the resources industry by simplifying the process as a result of the consistent provisions.

OBJECTIONS IN QUEENSLAND

The Act has sought to align the process to reflect the potential risk of mining projects.

It seeks to provide greater certainty for the resources sector, by limiting legal rights of challenge in instances where the proponent has been through a rigorous EIS assessment, culminating in the Coordinator-General being satisfied with a project’s environmental bonafides.

The Act became effective on 24 October 2014, but is yet to fully commence. It is unlikely to do so until such time as the associated Regulation that will sit underneath it is finalised. For this reason, it is too early to say whether the legislation is a truly successful exercise in streamlining.