Background – additional authority now required
Petroleum and mining companies operating in Queensland will soon be required to hold a ‘Regional Interests Authority’ (RIA). The RIA is required in addition to any existing resources leases, licences, permits, or environmental authorities held. An RIA may be required for existing operations as well as new activities. The recently introduced Regional Interests Planning Act 2014 (Qld) (RIPA) is due to commence on 1 July 2014. This new legislation has been introduced following ongoing pressure from rural and environmental groups. While primarily a response to extensive coal seam gas developments, the RIPA will apply to most resource activities in Queensland and is one in an ongoing series of statutory steps taken and proposed by the State to protect land holder interests and to minimise impacts of resources projects on rural communities and the environment.
There are a number of express exemptions which relate to particular activities which are detailed below.
This article is intended to give a brief overview of the exemptions that could apply to resource companies as well as flagging some of the less obvious implications of the RIPA. Of most immediate concern is the effect of the RIPA on existing pipeline activities. In certain areas, resource companies may need to apply for an RIA for their existing activities or automatically be in breach of the RIPA.
Areas of Regional Interest
An RIA is required if resource activities affect an Area of Regional Interest. There are four Areas of Regional Interest:
- Priority Agricultural Area;
- Priority Living Area;
- Strategic Cropping Area;
- Strategic Environmental Area.
These areas are either specifically defined in the RIPA or are to be defined in Regulations. However the names are generally self-explanatory in terms of areas to be protected.
Exempt resource activities
There are four ‘exempt resource activities’ under the RIPA which apply and may be relevant to resource activities, being:
- agreement of land owner if the area is a Priority Agricultural Area;
- pre-existing resource activity;
- activity carried out for less than 1 year; and
- small scale mining activity.
Agreement of Land Owner – Priority Agricultural Area
A resource authority holder (or applicant) will be exempt from requiring an RIA in relation to a Priority Agricultural Area if all of the following circumstances exist.
The resource authority holder is not the owner of the relevant land and either:
• A Conduct and Compensation Agreement (CCA) ‘requirement’ applies to the resource authority holder and the land owner and the resource authority holder are parties to a CCA (the exemption will not apply if the CCA was the result of a court order); or
• The land owner has voluntarily entered into another form of written agreement with the resource authority holder.
Additionally, the resource activity must not be likely to have a significant impact on the Priority Agricultural Area nor be likely to have an impact on land owned by another person who is not the land owner (presumably a neighbouring land owner). Due to this requirement this exemption is more likely to apply to low-impact petroleum activities as compared to mining activities.
It is important to reiterate that the exemption cannot apply to an existing resource activity which runs through a Priority Living Area, a Strategic Cropping Area or a Strategic Environmental Area. For these areas, a resource authority holder will need to obtain an RIA unless one of the other express exemptions apply.
Curiously, as the legislation is drafted, if a resource authority holder owns the land on which a resource activity will, or does, operate, then this exemption does not apply and the resource authority holder will need an RIA in addition to the resource authority.
Consequently, resource authority holders which own affected land should consider holding their land interests and resource authorities in Queensland in separated subsidiary companies in order to be able to rely on this exemption (to the extent it otherwise applies).
Pre-existing resource activity
An existing resource activity will be exempt from requiring an RIA in any regional interest area if:
- the activity is being carried out in accordance with a ‘resource activity work plan’; and
- the land was not in an Area of Regional Interest when the resource activity work plan took effect.
A resource activity work plan is defined under the RIPA by reference to a specified list of resource authorities. This list includes the more common licences and permits for petroleum and mining activities. Most notably the list does not currently include Pipeline Licences. Despite submissions by industry groups, the State has not addressed this apparent anomaly. Therefore any pipeline built pursuant to a pipeline licence under the Petroleum Acts will not obtain the benefit of this particular exemption. The definition of resource activities in the RIPA does not include distribution pipelines and reticulation pipelines (governed by the Gas Supply Act 2003 (Qld)).
The exemption for existing activities does not apply when activities are increased under a more advanced stage resource tenure. For example, when moving from an ATP to a Petroleum Lease, an RIA will be required for the Petroleum Lease.
Activity carried out for less than 1 year
A resource activity will be exempt from requiring an RIA if generally, the resource activity is being, or will be, carried out within the 12-month period from undertaking the first activity. There must not be any lasting impacts which extend beyond this period. This exemption will only be relevant to surveying and initial exploration activities.
The RIPA outlines the process to apply for an RIA however the RIPA is silent as to the time frame for approving an application. The main criterion for a decision regarding the application is the extent of the impact that the resource activity is expected to have on an Area of Regional Interest. There may be further criteria when the Regulations are finalised. The Minister may also impose conditions on the approval of an RIA which limit or restrict the resource activity.
There are also notice provisions which a resource company must comply with even if it is exempt from obtaining an RIA. It is important that resource companies operating in Queensland become acquainted with the RIPA as there can be significant financial penalties for breaching the RIPA (up to $687,500 for a wilful breach). The RIPA also introduces the possibility of imprisonment for persons breaching its provisions.
As the RIPA now addresses strategic cropping land, the Strategic Cropping Land Act 2011 (Qld) will be repealed.
The Queensland Resources Council has voiced its concerns with the RIPA saying that there is an issue of “de-authorising” existing activities, and that more than 1000 tenures would face the prospect of seeking new approvals.
A number of submissions for changes were lodged by pipeline industry participants. However changes were not made in the Bill introduced.
The RIPA has the strong support of the Deputy Premier (the Hon. Jeff Seeney) and the main agricultural industry groups.
Petroleum and mining companies should consider current and proposed activities to determine if an RIA is or will be required and whether notices of existing activities are now required to be given. Additionally companies should consider how land holdings and resource authorities are held and seek to separate ownership to the extent practicable.