The land access provisions of the Mining Act 1992 (Mining Act) and the Petroleum (Onshore) Act 1991 (Petroleum Act) were amended on 9 June 2010 with the commencement of the Mining and Petroleum Legislation Amendment (Land Access) Act 2010 (Amendment Act).
The amendments seek to ‘restore certainty for landholders and exploration title holders over land access arrangements’1 following the recent NSW Supreme Court (Court) decision of Brown & Anor v Coal Mine Australia: Alcorn & Anor v Coal Mine Australia Pty Ltd (Brown) and highlight the increasing competition between the agricultural and mining sectors for access to land and related resources.
The Brown case
This case considered the validity of land access agreements affecting farming properties in the Liverpool Plains region, near Gunnedah.
The plaintiffs, Brown and Acorn, each owned farming properties that were subject to an exploration licence held by the defendant, Coal Mines Australia Pty Ltd (CMA) and known as the Caroona Coal Project. Both properties were mortgaged.
In the first instance, the plaintiffs challenged the access arrangements granted to CMA by an arbitrator appointed under the Mining Act in the (former) Mining Warden’s court2. An appeal of the Mining Warden’s decision was then lodged in the Court on the (then) Mining Warden’s jurisdiction in the matter, the construction of various provisions of the Mining Act relating to land access arrangements and conditions under the access arrangements.
Ultimately, the Court had to consider the validity of the land access arrangements for mining exploration where the defendant failed to give the relevant notices required to be given under the Mining Act to ‘all landholders’, which in this case, included the registered mortgagee. The significant issue to be considered was whether:
- the Mining Act permitted a prospecting title holder to access land the subject of its prospecting title under a single access arrangement to which all landholders were parties, or
- there could be a number of access arrangements reached with different landholders, when there was more than one landholder of the property to which access was being sought.
The Court referred to section 140 of the Mining Act (as previously drafted) which provided that a prospecting title holder must enter into ‘an access arrangement’ with each ‘landholder’, either by agreement or arbitration, before conducting prospecting operations on the relevant land together with the definition of ‘landholder’.
The notice provisions of the Mining Act were also considered and in particular section 142 of the Mining Act (as previously drafted) which requires prospecting title holders to give notice of their intention to obtain an access arrangement ‘by written notice served on each landholder of the land concerned’.
After consideration of the relevant legislative provisions the Court ultimately held that a mortgagee was a ‘landholder’ for the purposes of the Mining Act and that the Mining Act required that each and every landholder (including mortgagees) be a party to one single access arrangement before the prospecting title holder could conduct exploration on relevant land.
Consequently, the access arrangements determined by the arbitrator under the Mining Act were held to be invalid on the basis that they had been reached without the necessary notices being given to all landholders.
In relation to the conditions upon which land access should be given, the Court also held that the Mining Warden was required to properly consider the landholders' request to incorporate certain conditions into the access agreement in accordance with section 141 of the Mining Act.
Those conditions could be imposed regardless of whether it resulted in duplication of the exploration licence conditions, noting that in the event of any inconsistency with exploration licence conditions, the exploration licence conditions would prevail.
Implications of Brown Case
The Brown case led to significant concerns within the mining and oil and gas industries.
In particular, it was perceived that the decision raised questions as to the validity of other existing access arrangements and would complicate negotiations between land owners and exploration companies in relation to land access.
In response to these and similar concerns raised as a result of the Brown case, the NSW Government introduced the Mining and Petroleum Legislation Amendment (Land Access) Bill into to NSW Parliament on 21 April 2010.
The Amendment Act was subsequently assented to on 9 June 2010 following a period of stakeholder consultation and various parliamentary amendments.
The Amendment Act seeks to simplify land access arrangements by removing, amongst other things, the obligation under the Mining Act and the Petroleum Act for an access arrangement to be made with ‘secondary landholders’3 who have a registered interest in the land.
This includes a financial institution holding a registered mortgage over the land (with the exception of a mortgagee in possession, which falls within the definition of a ‘landholder’) and a utility company that has a registered easement over the land.
Prospecting title holders are also now able to enter into separate land access arrangements where there are multiple ‘landholders’ of the particular land, as set out in section 140 of the Mining Act and 69C of the Petroleum Act, as amended.
Despite there being no requirement to obtain an access arrangement from ‘secondary landholders’, the Mining Act and the Petroleum Act continues to offer protection to this class of landholder under other provisions.
For example, prospecting titleholders are required to pay compensation in accordance with Part 13 of the Mining Act for compensable loss and compensation under Part 11 of the Petroleum Act, Secondary landholders are also entitled to immunity from any liability arising from the actions of titleholders under section 383C and 141 of the Mining Act and the Petroleum Act, respectively.
Arguably, owners of significant improvements such as utility companies that own valuable infrastructure are also offered protection from both exploration and mining operations under provisions such as section 31 of the Mining Act and section 72 of the Petroleum Act.
The Amendment Act sought to resolve some of the many issues currently being faced by government authorities in managing competition between stakeholders for access to land, water and mining resources.
The NSW government’s rapid response to the Brown decision also demonstrates a commitment to achieve an appropriate balance between exploration rights, owners of land and third parties that have an interest in the land but may not physically use the land.
This response includes ongoing regulatory reform, with the recent public exhibition of the:
- draft Mining Regulation 2010, which is proposed to replace the Mining Regulation 2003, and
- draft NSW Code for Routine Exploration Activities with Low Environmental Impact.
Given the steady stream of legal challenges before the Courts involving mining companies, landholders and non-profit organisations we expect there to be further reforms in this area.