On 5 June 2014, the Mineral and Energy Resources (Common Provisions) Bill 2014 (Qld) (Bill) was released, firing the starting gun for the complete legislative overhaul facing Queensland’s resources sector.
The Modernising Queensland’s Resources Acts Program (MQRA Program) proposes to replace the five existing resources Acts1 and their associated regulations (Resources Acts) with a single, common resource Act that unifies tenure administration across all sectors of Queensland’s resources industry. The MQRA Program is a staged reform process, anticipated to take three to four years to complete, targeting a reduction in existing regulatory burdens and related compliance costs, consistent with the Newman Government’s election promise to cut red tape by 20%. The Bill represents stage one of the reform process, creating the “shell” for the final common resources Act into which provisions will incrementally be transferred from the Resources Acts. Once enacted, the Mineral and Energy Resources (Common Provisions) Act will coexist alongside the Resources Acts and apply to the different “resource authorities”2 across all of the Resources Acts until such time as the final common resource Act is in place and the separate Resources Acts are ultimately repealed. This article highlights the key matters covered by the Bill. Land access (public and private land) The land access regime set out in the Bill is generally the same as that which applies under each of the separate Resources Acts. (A separate land access regime applies for prospecting permits, mining claims and mining leases under the MRA which, at present, has not been changed by the Bill.) The land access regime has not been significantly altered from that which exists under the current Resources Acts. However, some changes have been made to ensure greater consistency of approach across the different resource authorities and to introduce some of the recommendations from the Land Access Implementation Committee Report. These are discussed below. Opt-out agreements The Bill introduces the ability for landowners to elect to opt out of the requirement to enter into a conduct and compensation agreement or deferral agreement. The election to opt out arises if the owner or occupier of land and the resource authority holder have entered into an
agreement (an opt-out agreement) which complies with the prescribed requirements for the agreement. An opt-out agreement is entirely a matter for negotiation by the parties. There is no ability for the Land Court to make an opt-out agreement if the parties fail to agree themselves. There is a cooling off period of ten business days from the date the signed copy of the agreement is given to the owner or occupier of land within which the opt-out agreement can be terminated by either party. Once the parties have entered an opt-out agreement, it will end if it is terminated according to its terms, when the resource authority ends, if it is terminated during the cooling off period or if the parties enter into a deferral agreement, a conduct and compensation agreement or another opt-out agreement. If an opt-out agreement is entered into, the resource authority holder may enter the land the subject of the agreement to carry out advanced activities. The Explanatory Notes to the Bill (Explanatory Notes) note that, even where an opt-out agreement is entered into by the parties, the resource authority holder is still liable to compensate an eligible claimant for the land. This is presumably a reference to the preservation of the general provision that a resource authority holder is liable to compensate each owner and occupier of private land or public land that is in the authorised area of, or is access land for, the resource authority (each an eligible claimant) for any compensatable effect3 the eligible claimant suffers which is caused by authorised activities carried out by the resource authority holder or a person authorised by the holder. It is however unclear what process applies for agreeing or determining that compensation once the parties have entered into an opt-out agreement since the process set out in the Bill is predicated on the resource authority holder negotiating a conduct and compensation agreement or a deferral agreement with the eligible claimant. Access agreements for access land The Bill allows parties to enter into access agreements that relate solely to access land (ie land not comprising part of a resource authority but over which the resource authority holder must pass in order to gain access to the area of the resource authority). Previously such provisions only existed in relation to some resource authorities. Under the Bill, provisions relating to access authorities will now apply to all resource authorities except prospecting permits, mining claims, mineral development licences and mining leases under the MRA. Owners and occupiers of land can require reasonable and relevant conditions to be included in any access agreement. Where the parties are unable to agree after 20 business days, the access agreement can be referred to the Land Court for a determination in relation to access (including any conditions on access). Restricted land The Bill introduces the concept of restricted land to all resource authorities. The new regime for restricted land will only apply in relation to resource authorities applied for, and granted, after the commencement of the Bill (once enacted). Under the Bill, the holder of a resource authority may not enter restricted land to carry out a prescribed activity without the written consent of each relevant owner and occupier of that restricted land (noting that the relevant owner or occupier may be the owner of adjacent land where the restricted land extends into the area of the resource authority). However, for mining leases, where the holder of the mining lease has entered into a compensation agreement with the relevant owner or occupier of the land, the written consent of the relevant owner or occupier is not required before the mining lease holder may enter the land. Restricted land is defined as land within a prescribed distance4 of any of the following: (a) a permanent building used, at the date the resource authority was granted, for the purpose of a residence, a place of worship, or a childcare centre, hospital or library; (b) an area used, at the date the resource authority was granted, for the purpose of a school, a cemetery or burial place or used for aquaculture, intensive animal feedlotting, pig keeping or poultry farming within the meaning of the part 1 of schedule 2 of the Environmental Protection Regulation 2008 (Qld); (c) a building used, at the date the resource authority was granted, for a business or other purpose if it is reasonably considered that the building cannot be easily relocated and the building cannot co-exist with authorised activities carried out under resource authorities; or (d) another building or area prescribed by regulation. A regulation may also prescribe buildings or areas that will not constitute restricted land. When compared with the existing definition of restricted land in the MRA,5 the new definition of restricted land arguably widens the scope of what is restricted land. For example, an area used for aquaculture, intensive animal feedlotting, pig keeping or poultry farming is not currently within the definition of restricted land in the MRA and, whilst the MRA’s definition of restricted land protects permanent buildings used mainly for business purposes, the new definition in the Bill potentially captures both permanent and temporary buildings where they cannot be easily relocated and cannot co-exist with authorised activities carried out under the resources authority. Further, neither the Bill nor the Explanatory Notes provide any other guidance on how to determine whether a building can be “easily relocated” or not. Given that one of the stated principles of the MQRA Program is that there will be “no disadvantage unless agreed”, it will be interesting to see if the concept of restricted land will be clarified or refined as the Bill progresses through parliament or by subsequent regulations. A prescribed activity for a resource authority means an authorised activity for the resource authority that is carried out: (a) on the surface of the land; or (b) below the surface of the land in a way that is likely to cause an impact on the surface of the land, including, for example, subsidence of the land, but does not include: (c) the installation of an underground pipeline or cable if the installation, including the placement of backfill, is completed within 30 days; (d) the operation, maintenance or decommissioning of an underground pipeline or cable; (e) an activity that may be carried out on land by a member of the public without requiring specific approval of an entity; or (f) an activity prescribed by a regulation. The Land Court may, on application from an owner or occupier or a resource authority holder, make a declaration whether or not particular land is restricted land. Express jurisdiction in relation to conduct The Bill includes a provision which expressly provides that the Land Court may decide obligations or limitations on the carrying out of authorised activities by the resource authority holder when on particular land. (This jurisdiction of the Land Court had previously only been assumed to exist under the Land Court’s general jurisdiction.) In making such a determination, the Land Court may have regard to the behaviour of the parties in the process leading to the Land Court proceedings. Recording of agreements on land title If the parties enter into a conduct and compensation agreement or an opt-out agreement, then the agreement is to be recorded on the register of title for the land. The resource authority holder must give the registrar notice of the agreement and notice of the expiry of the agreement and must bear the costs of doing so. It is unclear why the Bill does not also require that a deferral agreement be recorded on the register of title for the relevant land. Overlapping coal and petroleum (CSG) resource authorities With the growth in the coal seam gas (CSG) industry and changes in the nature and scope of both the CSG and conventional coal mining industries in Queensland since the current legislative framework for managing overlapping coal and CSG tenures was first introduced in 2004, it was recognised that changes to the current regime are needed to more comprehensively address the concerns of industry while facilitating the ongoing development of both resources.
The Bill introduces a new approach to managing overlapping coal and CSG resource authorities in response to the joint industry report on Maximising Utilisation of Queensland’s Coal and Coal Seam Gas Resources: A New Approach to Overlapping Tenure in Queensland (May 2012). Corrs has prepared a separate article on these changes. Mining lease over restricted land The MRA currently excludes areas of restricted land from being included in the surface area of a mining lease without the landowner’s consent (which must be given before the last objection day for the mining lease application). Under the current regime, if such consent is not obtained before the last objection day, but the landowner and mining lease holder subsequently enter into an agreement allowing the restricted land to be included in the surface area of a mining lease, a separate mining lease application must be lodged for each area of restricted land. The Bill proposes to amend the MRA to allow a mining lease to be granted over the restricted land on the basis that the owner’s consent is still required before any authorised activity can take place within the restricted land. However, if: (a) a mining lease application includes any restricted land in the surface area of the mining lease or any surface access to the mining lease land; and (b) the Minister considers that the purpose of the resource authority and the existing use of the restricted land are inconsistent, the mining lease cannot be granted unless compensation has been determined (whether by agreement or by determination of the Land Court) with each person who is the owner or occupier of the restricted land. These amendments to the MRA effectively remove the right of veto which the owners of restricted land had under section 238 of the MRA and arguably represents a significant win for mining companies in reducing resource sterilisation caused by the presence of restricted land. This victory is however tempered somewhat by the fact that the new definition of restricted land in the Bill is potentially wider than the existing definition in the MRA6 and compensation must be determined for both the owner and occupier of the restricted land (ie as opposed to just the owner of the land under the current requirements in section 279 of the MRA). Notification of EAs for mining leases and objections by affected par ties The Bill, by way of amendment to the Environmental Protection Act 1994 (Qld) (EP Act), amends the notification requirements of an environmental authority (EA) application so that the notification stage only applies if the application is a site-specific application7 and part of the application is for a resource activity. This brings the EA applications for a mining activity in line with the EA applications for a geothermal activity, GHG storage activity or petroleum activity. Under the existing provisions of the EP Act, every EA application for a mining lease is subject to public notification (and consequently, third party appeal rights) regardless of the associated environmental risks. The rationale supporting the amendment in the Bill is that public notification of EA applications for mining activities should only occur for the higher risk activities that are most likely to attract public comment.8 The Bill also amends the MRA so that only an affected person may lodge an objection to an application for the grant of a mining lease. An affected person is limited to an owner of land the subject of the proposed mining lease (or an owner of land necessary for access to such land) or the relevant local council. The grounds on which an affected person may object are also limited to matters which the Land Court must consider when hearing an objection to a mining lease application. The Bill also amends the EP Act to remove the duplication which occurs where an EIS has been completed under the State Development and Public Works Organisation Act 1971 (Qld). Grants without prerequisite tenures The Bill amends the MRA to allow mining claims and mining leases to be granted over an area of land to any eligible person, without limiting it to parties that have a prerequisite tenure such as a prospecting permit, exploration permit or mineral development licence. The removal of this is consistent with the Government’s commitment to reducing red tape for the mining industry. Where an application for a mining lease is over land which is within the area of an existing exploration permit, mineral development licence or mining lease (existing authority) held by another person, the existing authority holder remains protected by section 248 of the MRA which provides that: (a) where the mining lease application is for the same minerals as the existing authority or the mining lease application is for a specific purpose mining lease, the mining lease applicant must obtain the written consent of the existing authority holder; or (b) where the mining lease application is for different minerals to those covered by the existing authority, the mining lease applicant must obtain the existing authority holder’s written views on the application. These proposed changes to the MRA are however a little anomalous when they are considered in light of the competitive tender processes for the grant of exploration permits for coal which was introduced by the Government in March 2013 to ensure that “the most appropriate explorer with a commitment to resource development secures available land for exploration”. With the proposed amendments to the MRA, it may be possible to effectively bypass the competitive tender process applicable to exploration permits for coal and apply directly for a mining lease (this may be especially relevant in areas where the resource is well understood due to past exploration activities). Dealings, caveats and associated agreements The dealings, caveats and associated agreements sections of the Resources Acts are considered to be the most lengthy and complicated when compared with equivalent Acts in other Australian jurisdictions. Building on the first harmonisation efforts implemented by the Mines Legislation (Streamlining) Amendment Act 2012 (Qld), the Bill seeks to further streamline these provisions by introducing one set of simplified administrative processes that focuses on outcomes, leaving the specific prescriptive processes to be covered off by regulations. Dealings The Bill does not deviate greatly from the Resources Acts with respect to dealings. It provides for a general concept of a dealing which is broadly defined to mean any transaction or arrangement that cause the creation, variation, transfer or extinguishment of an interest in a resource authority.9 While the concept of dealing is broadly defined, it is only those dealings prescribed by regulations to be a “prescribed dealing” which must be registered. Ministerial approval is required to register a prescribed dealing. The Bill also retains the existing position that the transfer of a divided part of a resource authority’s authorised area is a prohibited dealing unless the dealing is either: (a) a sublease of a resource authority that is a lease; or (b) a transfer of such a sublease (or of a share in that sublease). It also enables the regulations to prescribe additional types of dealings as prohibited dealings. Prohibited dealings must not be registered and are deemed to have no effect. The Explanatory Notes indicate that the regulations are likely to include the following dealings as prescribed dealings and prohibited dealings:10
Transfer of the resource authority (or of a share in the resource authority) Mortgage over the resource authority (or over a share in the resource authority) Release, transfer or surrender of a mortgage Change in resource authority holder’s name even if the holder continues to be the same person after the change If the resource authority is a lease: • sublease of the lease • transfer of a sublease of the lease (or of a share in a sublease of the lease) • ending of a sublease
Transfer of a survey licence Transfer of a pipeline authorised under section 33 or 110 of the P&G Act or section 31 or 111 of the GHG Act Transfer of a pipeline licence, unless the pipeline the subject of the licence and the pipeline land for the licence are also to be transferred to the transferee of the pipeline licence Transfer of a petroleum facility licence, unless the petroleum facility and the petroleum facility land the subject of the licence are also to be transferred to the transferee of the petroleum facility licence Transfer of a water monitoring authority or of a share in a water monitoring authority, other than by operation of law under section 201 of the P&G Act Transfer of a data acquisition authority or of a share of a data acquisition authority, other than a transfer by operation of law under section 182 of the P&G Act or section 240 of the GHG Act
The Bill introduces an “ordinary rule” that only the affected resource holder or an entity with the affected resource holder’s consent can apply for Ministerial approval to register a prescribed dealing, although regulations may prescribe different applicants and timing requirements for specific prescribed dealings applications that must be executed due to the operation of law (eg a transfer of an interest in a resource authority due to the death of the holder). The Bill maintains the status quo that: (a) the Minister’s approval of a prescribed dealing may be given subject to conditions; (b) the Minister must not approve a prescribed dealing if any royalty payable by the resource authority holder remains outstanding;11 (c) security may be required for prescribed dealings that transfer a resource authority (or a share in a resource authority); and (d) registration does not, of itself, give the dealing any more effect or validity than it would otherwise have. In relation to indicative approvals, the Bill follows substantially the same format as the existing regime in the Resources Acts. The Bill gives legislative recognition to the standard practice that an indicative approval may include conditions (referred to in the Bill as “preconditions”) and that the Minister is not bound to approve the registration of the prescribed dealing if those preconditions in the indicative approval are not satisfied. An indicative approval, once given, is valid for a period prescribed by the regulations. It remains to be seen whether the regulations will cover off on existing industry concerns that an indicative approval may lapse before a resource authority holder is able to lodge the relevant transfer application due to circumstances outside its control (eg delays in other regulatory approval processes or applicable assessments for transfer duty). Transfer of mining lease applications An important omission from the dealings framework in the Bill is the process for transferring mining lease applications. Transfers of mining lease applications (or of an interest in a mining lease application) will remain in the MRA for the time being and will be transferred once the tenure framework is migrated to the final common resources Act. The amendments to the dealing provisions in the MRA are largely a consequence of their reduced scope although one relevant change is that Ministerial approval for a transfer of a mining lease application will now be deemed to have been given if an indicative approval for the proposed transfer has been given, the proposed transferee is an eligible person and a registered suitable operator under the EP Act and, within six months after the indicative approval is given, the applicant gives the chief executive a statement that there has been no material change relevant to the matters for which the indicative approval was given and, within three months after the indicative approval is given, an application for approval of the transfer is made and any conditions to that indicative approval have been complied with. Transfer of applications for other resource authorities The Discussion Paper on Reducing Red Tape for Small Scale Alluvial Mining (July 2013 – Stakeholder Discussion Paper) identified as a potential area for reform the alignment of the processes in the Resources Acts for changing the applicant for a resource authority before the grant of that resource authority.12 At this stage, no changes have been introduced by the Bill in relation to this area of potential reform. Caveats The provisions relating to caveats in the Bill substantially replicate those in the Resources Acts and cover the following issues: (a) lodging of a caveat, including the effect of lodgement; (b) lapsing, withdrawal and removal of a caveat, including that further caveats are not available to the same person; and (c) compensation for lodging a caveat without reasonable cause. Further, the regulations will prescribe prohibited caveats, as well as the types of instruments that may be registered despite the lodgement of a caveat. According to the Explanatory Notes, these may include:13
If the caveat is over a resource authority for which: • an application has already been lodged for indicative approval • an indicative approval has already been granted by the Minister • an application has already been lodged for approval to register a prescribed dealing • a change to the resource authority holder’s name has been made even if the holder continues to be the same person after the change
Types of instruments lodging a caveat does not prevent
An instrument: • stated in the caveat as an instrument to which the caveat does not apply • if the caveator consents, in the approved form, to its registration and the consent is lodged with the chief executive • executed by a mortgagee whose interest was registered before lodgement of the caveat if: –– the mortgagee has power under the mortgage to execute the instrument; and –– the caveator claims an interest in the resource authority as security for the payment of money or money’s worth • of transfer of mortgage executed by a mortgagee whose interest was registered before lodgement of the caveat (does not apply to the resource authority holder) Another interest that, if registered, will not affect the interest claimed by the caveator
Associated agreements The Bill substantially replicates the provisions relating to associated agreements in the Resources Acts, covering what can and cannot be an associated agreement, as well as the recording and effects of associated agreements. The Bill also enables regulations to prescribe agreements which cannot be considered associated agreements (in addition to prescribed dealings). During the consultation process, the Government sought feedback on whether a process to remove an associated agreement from the register should be included in the Bill.14 This mechanism has now been specifically included, with the Bill allowing the holder of a resource authority to which an associated agreement relates to apply to the chief executive for the removal of the associated agreement. Applications and lodging documents Similarly to the provisions on dealings, caveats and associated agreements, the Bill introduces one set of simplified administrative procedures for the processing of applications and lodging of documents, to be supported by regulations which will set out any specific prescriptive requirements. The broad framework of the Bill will apply to any application made under an authorising provision of the Bill (once enacted), provided all requirements of that authorising provision (and any applicable regulations) have been complied with. It is intended that regulations will be used to prescribe the requirements for amending an application, processes for lodging documents and the criteria against which applications will be considered. Similarly to the existing Resources Acts, the Bill grants a discretion to the deciding authority to allow an application to proceed where there is substantial compliance with the relevant requirements, and enables the deciding authority to issue directions about applications (for example, direct the applicant to provide further information). While the ability to withdraw an application does exist in some of the Resources Acts,15 it will now be a universal concept provided by the Bill and supported by the regulations.
The “new” register and practice manual The Bill consolidates the matters recorded in registers under the Resources Acts into one central register which is accessible by the public. It also consolidates the provisions in the Resources Acts on the practice manual which may be kept by the chief executive.16 In both cases, the provisions in the Bill are generally the same as those which applied under each of the separate Resources Acts.17 Alternatives to pegging and land available for mining lease applications During the MQRA Program, additional opportunities to reduce costs associated with the existing mining lease application process were identified. Originally canvassed in the Discussion Paper on Reducing Red Tape for Small Scale Alluvial Mining (July 2013 – Stakeholder Discussion Paper), the Bill proposes several key amendments to the MRA that will benefit the wider mining sector more generally. The Bill introduces an alternate, outcome based boundary identification framework available for mining claims, mineral development licences and mining lease applications under the MRA. The existing prescriptive rules (including physically pegging boundaries using posts or stones) will be replaced by a general requirement to unambiguously define the boundaries of the proposed mining tenement so that it can be accurately located on the ground. Under the proposed amendments, the chief executive still maintains the discretion to require boundaries to be physically marked out. The introduction of this new boundary identification framework enables applicants to use modern mapping technologies (eg GPS coordinates), potentially saving both time and expenses when compared with the existing prescriptive rules covering boundaries. The Department of Natural Resources and Mines has indicated that it will provide guidance on what boundary identification techniques are acceptable via its practice manual. Additionally, the Bill also removes the 50 hectare per mining lease application restriction for land previously subject to an exploration permit (during the two month moratorium on new exploration permits), but maintains the 300 hectare cumulative ceiling per mining lease applicant. This amendment enables applicants to lodge a single application for contiguous areas of up to 300 hectares, reducing additional application related costs. Broad transitional regulation-making power The Bill includes a broad transitional power whereby regulations can be made for any matter which is necessary or convenient to assist in the transition to a simplified common framework for managing resource authorities in relation to the particular matters dealt with in the Bill (once enacted) and which is not sufficiently covered by the Bill. Such transitional regulations may operate retrospectively (provided it is not earlier than the commencement of the Bill (once enacted)). These transitional regulations, along with the transitional regulation-making power, will expire one year after the commencement of the Bill (once enacted). Other matters The Bill also deals with a number of other matters including: (a) Legacy boreholes: The Bill amends each of the Resources Acts to facilitate Government and industry action to deal with uncontrolled gas emissions from legacy boreholes by providing the statutory means for tenure holders and other authorised persons to access and remediate legacy boreholes. (b) P&G Act amendments: The Bill makes a range of other amendments to the P&G Act and 1923 Act to clarify definitions and operational provisions, and correct other minor anomalies that have been raised by industry. (c) Schedule 1A of the MRA: The Bill removes schedule 1A of the MRA and makes a number of consequential changes to other Acts as a result. According to the Explanatory Notes, there are now less than five mining lease applications that remain subject to these historic provisions for progressing applications for exploration and mining tenements under the MRA. (d) Repeal of the Coal Super Act: The Bill repeals the Coal and Oil Shale Mine Workers’ Superannuation Act 1989 (Qld). (e) Mount Isa Mines Limited Agreement Act: The Bill amends the Mount Isa Mines Limited Agreement Act 1985 (Qld) to reflect various matters specific to that special agreement Act.
(f) Transitional provisions: As would be expected given the wide ranging nature of the amendments in the Bill, the Bill includes a number of transitional provisions. Where to from here? The Bill only represents stage one of the reform process and there are a number of issues covered by the Government’s discussion papers in the MQRA Program which have not yet been addressed (eg overlapping tenures other than coal and CSG). There are also many other provisions of the Resources Acts which will still need to be transitioned to the common framework (eg investigations and enforcement, compliance and reporting, judicial functions, appeals and reviews, penalties and offences). The changes and additions introduced by the Bill will require some careful consideration and attention by resource companies, particularly around the transitional provisions when the Bill comes into force. Further, with the move towards an Act based on broad, outcome-based principles supported by regulations, the devil will be in the details of the regulations which underpin many of the provisions in the Bill.