Resource companies must compensate land owners and occupiers for the effect of activities carried out on their land. But negotiating a Conduct and Compensation Agreement that satisfies both the resource company and the owner is not always easy.
When negotiations stall, what are the dispute resolution options available to parties and which is best?
Resource companies generally cannot enter private land to undertake advanced activities under a petroleum authority unless they have first negotiated a Conduct and Compensation Agreement (CCA) with each owner and occupier of the land.
The statutory negotiation process commences with the resource company issuing a “Notice of Intention to Negotiate” to each owner and occupier of the land.
Once this notice is issued, the negotiation period begins and runs for an initial minimum period of 20 business days. During this period, the resource company and each owner and occupier must use “all reasonable endeavours” to negotiate a CCA.
If the initial negotiation period expires without a CCA being concluded, either party may issue an Election Notice:
- asking an Authorised Officer of the Department of Natural Resources and Mines to call a conference to assist the parties negotiate a CCA; or
- calling upon the other party to agree to an alternative dispute resolution (ADR) process to negotiate a CCA.
If an Election Notice is issued seeking a conference, the Authorised Officer will issue a notice to the parties asking them to attend the conference. The Authorised Officer may also ask any other person whose interests may be affected to attend. During the conference, the Authorised Officer will assist the parties to reach “an early and inexpensive” settlement of the dispute.
The lack of legal involvement means conferences are usually less formal than ADR processes which may promote an agreement being reached between the parties.
Cost is also an advantage of conferencing. Unlike ADR processes, parties are not charged for having an Authorised Officer conduct the conference nor are legal representatives permitted to attend (unless the parties agree to that representation).
Although a variety of ADR processes can be used to negotiate a CCA, mediation is the most common process adopted in land access and compensation matters.
A party may choose mediation over conferencing on account of it being more flexible. Parties can choose and agree upon the mediation procedures and processes, such as the format of the mediation and the exchange of documents and submissions.
Parties can also nominate a mediator who has legal experience and expertise in relation to land access and compensation. This is useful in disputes involving technical legal issues.
However, mediation does have potential drawbacks. The unavailability of the mediator could cause delays and mediation is likely to be more formal than a conference.
Which process to choose?
The circumstances of each matter will dictate whether a conference or ADR process is the preferred option.
Conferencing may be the better option where the parties have a strong working relationship and they wish to mutually discuss matters of concern directly with one another in a relatively informal setting. Conferencing allows the parties to take a lead role in the negotiations with assistance from the Authorised Officer.
Mediation may be preferable if the legal issues are particularly complex and the parties would benefit from legal representation and an impartial expert. Mediation may also be preferable where the relationship of the parties is such that an agreement is more likely to be reached in a formal and structured setting.
Ultimately, the decision on which option is best will be made on a case-by-case basis.