Client Update: Resources Land Access Regime Review – Findings released
20 June 2012
In brief: Yesterday, the Queensland Government released the Report of the Land Access Review Panel into the state's current land access regime that applies to the resources sector. The report reviews the current land access regime and assesses its effectiveness in achieving its original objectives. The report also contains recommendations on how the land access framework could be improved. Partner Ben Zillmann (view CV) and Lawyer Giselle Kilvert consider the key findings of the panel.
- Background
- The key themes
- The key findings on 'Optimal Process'
- Reform recommendations
- Where to from here?
Background
In December 2010, the Queensland Government introduced substantial amendments to a range of legislation regulating the means by which resource companies could obtain access to land for the purpose of carrying out exploration and production activities. This new 'land access regime' sought to provide a consistent approach to land access across a range of 'resource authority' activities, including coal and mineral mining, coal seam gas/petroleum, greenhouse gas storage and geothermal tenement holders. The one exception to these changes was in regard to the grant of mining leases, which retained its own unique access and compensation regime under the Mineral Resources Act 1989 (Qld).
The changes were made at a time when there was considerable public and political debate over the issue of land access, triggered in part by the expanding resources sector in Queensland, including the rapid increase in the coal seam gas sector which was moving into areas where historically land owners had been largely unaffected by the activities of the resources sector.
There seems little argument (as evidenced by the findings of the review) that the introduction of this regime, while on the one hand providing a more structured process, also has resulted in the land access process becoming generally more complicated, time consuming, legalistic and expensive for all parties concerned.
The former Labor Government had undertaken to review the operation and effectiveness of the new land access provisions after one year of operation.
The key findings and recommendations of the review panel are summarised below.
The key themes
The panel identified a broad range of land access issues of concern. These broadly fall into the following categories:
- process complexity,
- legal and professional representation;
- diversity in land use and resource activities;
- conduct and compensation; information and education; and
- technical issues.
The key findings on 'Optimal Process'
Throughout the consultation process, the panel identified that there were some key steps that were common to successful negotiations between landholders and resource companies. The report compiles these steps in what it describes as an 'optimal process' that essentially distils what it considers to be 'best practice' for communication between landholders and resource companies.
Reform recommendations
After considering the key issues and the optimal process, the panel made the twelve recommendations to improve the current land access framework:
Government to notify all landholders covered by a tenure or authority at the time of grant.
Intent: to ensure all parties are informed that a resource tenure process has commenced and what that means.
Government to review existing information, guidelines and education programs, and develop new material and programs that are better targeted to appropriate audiences.
Intent: to improve the quality and availability of information about land use, resource activity and the land access arrangements.
Government to establish an independent panel to make binding determinations of disputes arising in negotiating a conduct and compensation agreement (CCA).
Concern addressed/intent: During the consultation process, various stakeholders complained that the alternative dispute resolution process mandated by the current regime is time-consuming and ineffective in that often fails to produce an agreed outcome. Further, the Land Court determination process was found to be drawn-out and expensive, and compromised the resource company/landholder relationship.
The panel's recommendation to establish an independent determination panel aims to provide parties with a simpler and faster way to facilitate a definitive resolution of land access disputes.
Government to implement a mechanism to support landholders and resource companies to develop and use a detailed work plan describing both parties' activities on the land.
Intent: to ensure that parties are provided with appropriate information to understand the activities to be undertaken on the property, identify the impacts and provide certainty for future planning.
Government to appoint an independent third party or organisation to clarify what are 'reasonable and necessary professional costs to negotiate a CCA', initially by establishing a database of legal and other professional fees.
Concern addressed/intent: During the consultation process, there was feedback from resource companies that the requirement to pay legal and other professional fees for landholders was too onerous and ill defined, and had potentially encouraged drawn out negotiations and excessive legal costs. Further, there was much uncertainty as to what comprises 'reasonable and necessary costs to negotiate a CCA.
The panel's recommendation is to establish the range or 'scale' of professional fees (similar to the Supreme Court scale) being paid by resource companies in relation to the negotiation of CCAs. It is intended that resource companies will be able to use the information, but for guidance purposes only. The panel did not suggest that a fixed or 'capped' amount should apply.
Government to work with the resource and agricultural sectors to develop 'standard Conduct and Compensation Agreements' by industry for coal, CSG and minerals.
Concern addressed/intent: The report notes there are marked differences in the exploration practices across the coal, mineral and CSG sectors. Similarly, there is great diversity in agricultural land use and farming methods across Queensland. Both landowners and resource companies expressed concerns about the 'one size fits all' approach in the current 'pro-forma' CCA, which parties may elect to use. The panel's recommendation aims to develop sector-specific standard CCAs that reflect the diversity of the resource sector and the land areas in which the sector operates.
Government to progress the development of a mechanism to enable notification of CCAs on land titles.
Intent: to ensure that prospective purchasers of a property are able to find out if a CCA has been entered into for resource activities on that property.
Government to introduce a way for parties to opt-out of the requirement to sign a CCA for advanced activities.
Intent: to simplify the process for two willing parties who do not wish to sign a formal agreement.
Government to review the scope of 'compensatable effects'.
Concern addressed/intent: At the time when the panel's report was published, there was little guidance as to the meaning or limits of 'compensatable effects', especially with regard to claims for diminution in value of land. Since the report was published, the Land Court has delivered its judgment in Peabody West Burton Pty Ltd & Ors v Mason & Ors [2012] QLC 0023, which clarifies that diminution in land value is unlikely to be a compensatable effect in the context of exploration activities. That said, there is still a degree of uncertainty as to what costs, and which amounts, can reasonably be claimed. The panel suggests that matters such as a landowner's time, or the cost of hiring technical specialists, such as agronomists and farm management consultants, could be costs that are recoverable. The panel's recommendation aims to ensure the meaning of 'compensatable effects' clearly defines what a landholder can be compensated for.
Government to review technical issues to make improvements in the process.
Intent: to provide certainty in the land access arrangements and identify technical and legislative improvements, particularly relating to definitions.
Government to review the Land Access Framework in three years.
Intent: to ensure the land access arrangements are functioning properly and review the implementation of the recommendations in this report.
Government to note the various issues raised that were outside the scope of the panel's review.
Intent: to inform government of the issues raised by stakeholders that fell outside the Land Access Review's terms of reference – for example, the strategic cropping land legislation, urban restricted areas and CSG water impacts.
Where to from here?
The report is yet to be considered by the Newman Government and the Department of Natural Resources and Mines.
The Department has invited interested stakeholders to provide direct comment on the report to the Department within 30 days.
Following this, it is expected the Department will make its own recommendations to the Government as to what, if any, of the panel's recommendations the Government should seek to implement.
If you have any questions or concerns about the land access framework or the impact of proposed changes on your business, please contact us.
For further information, please contact:
- Ben ZillmannPartner,
Brisbane
Ph: +61 7 3334 3538
Ben.Zillmann@allens.com.au