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Resources

Focus: Streamlining resources legislation in Queensland

9 August 2012

In brief: As part of its Streamlining Approvals Project, the Queensland Government has introduced new legislation to address a range of issues arising in the resources sector. Partner Ben Zillmann (view CV), Senior Associate Tracey Davern and Lawyers Giselle Kilvert and Caitlin Wilson look at the new Bill in detail and its proposed amendments to the State's resources legislation.

How does it affect you?

  • For some time there has been a legal question over the effect on resources tenements where the underlying land is compulsorily acquired by the State. This Bill provides that resource tenements can be acquired along with the land, but that this will not happen automatically on every occasion.
  • There are proposed changes to the 'dealings' provisions in the Queensland Geothermal Energy Act 2010, Greenhouse Gas Storage Act 2009, Mineral Resources Act 1989, Petroleum Act 1923 and the Petroleum and Gas (Production and Safety) Act 2004 (collectively, the Resources Acts) that will standardise those provisions. Financiers will no longer need to obtain ministerial consent for mortgages of resources tenures.
  • The Bill introduces provisions that will give petroleum lease holders the ability to change the production commencement date.
  • Holders of petroleum leases and pipeline licences will now be able to construct certain infrastructure across various tenements, including where that infrastructure benefits an adjacent tenure only. 

Background

As a culmination of the Streamlining Approvals Project launched in January 2009, the Queensland Government introduced the Mines Legislation (Streamlining) Amendment Bill 2012 into Parliament on 2 August 2012. This Bill has four main aims. It is hoped it will:

  • implement part of the Streamlining Approvals Project, to establish a common structure, terminology and assessment process for the various resources tenures in Queensland, and reduce approval timeframes. This is dealt with below, in the discussion on dealings, and with respect to some of the specific Acts to be amended by this Bill;
  • clarify the legislative framework relating to compulsory acquisition of land and overlying resources tenements;
  • provide increased regulatory certainty and protection for parties involved in the coal seam gas and liquid natural gas industry in Queensland; and
  • confirm and clarify jurisdictional arrangements in relation to the regulation of hazardous chemicals, major hazard facilities and operating plants. This Bill confirms that the Work Health and Safety Act 2011 provisions relating to hazardous chemicals and major hazard facilities will not apply to mines in Queensland, instead the existing legislation (including the Mining and Quarrying Safety and Health Act 1999 and the Coal Mining Safety and Health Act 1999) will operate.

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Compulsory acquisition

The Bill amends the Resources Acts to permit the compulsory acquisition of a resources tenement when the underlying land is compulsorily acquired. However, compulsory acquisition will only occur where the continuation of the resources tenement is incompatible with the intended use of the acquired land.

Transitional provisions will apply to compulsory acquisitions which occurred prior to the Bill becoming law. These will deem that resources tenements over previously acquired land have not been acquired with the land unless the acquisition was for a transport infrastructure purpose or an acquirer has taken specific action to effect the compulsory acquisition of the resources tenement (for example by negotiating compensation with the resource tenement holder).

The Bill provides that compensation will not be payable for the value of the resources (or in the case of the Greenhouse Gas Storage Act 2009, the storage reservoir) known or thought to be within the area of the resources tenement. Rather, compensation will be limited to the costs incurred by the resource tenement holder to date.

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Dealings

The Bill proposes to make a number of amendments to the Resources Acts which would make transfers, mortgages and other dealings with the various resources interests and tenements issued under those Acts, simpler and reduce approval timeframes. The provisions are also proposed to become largely consistent across all of the Resources Acts. The key features of the proposed provisions are:

  • the dealings provisions have been consolidated and therefore the same provisions apply across the different types of resources tenements within each relevant Act. For example, in the Mineral Resources Act 1989 the one set of provisions apply across mining claims, exploration permits, mineral development licences and mining leases, whereas previously each type of tenement had separate and different provisions regulating dealings;
  • dealings have been defined as transfers, mortgages (including releases, transfers and surrenders of mortgages), changes to the name of the holder, or subleases and transfers of subleases;
  • these dealings are expressed to have 'no effect' until they are registered, however other commercial arrangements that do not constitute a 'dealing' with a tenement are not affected (eg, private royalty arrangements);
  • the types of dealings requiring Ministerial approval have been limited to transfers of resources tenements and transfers of applications for resources tenements;
  • while the dealings will still need to be registered, the transfer of a part of a holder's interest to another current holder will not require approval from the Minister (for example, where respective joint venture interests change) and Ministerial approval will no longer be required for mortgages or subleases; and
  • Ministerial approval will be deemed to have been given if an indicative approval is obtained, the transfer documentation has been lodged within three months of the indicative approval and any conditions are complied with.

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Mineral Resources Act amendments

In addition to the amendments discussed above, the Bill proposes other notable changes to the Mineral Resources Act 1989 (the MRA). Generally, these amendments aim to simplify and streamline the application process in order to reduce the time taken to approve new resource tenements. In particular, the Bill proposes to:

  • enable the introduction of an online service delivery platform by removing the legislative requirement to lodge applications in person or by post. The new system, to be known as MyMinesOnline, will increase the transparency and efficiency of the assessment process by allowing persons to lodge and track applications online using an authenticated customer access facility;
  • amend the regime for prioritising applications lodged on the same day from a time-based to a merits-based assessment. This will ensure fairness between online and paper applicants in light of online applications being able to be made outside office hours;
  • introduce powers to require an applicant for the grant or renewal of a mining tenement to progress an application by doing anything required under an Act to allow the application to be decided;
  • simplify the process of Land Court referrals by specifying a process for withdrawing objections and removing the requirement for assessment by the Land Court where all objections have been withdrawn;
  • transfer various powers that currently reside with the Governor-in-Council, such as the power to grant and renew mining leases, to the Minister and thereby reduce processing and grant times;
  • clarify land access entitlements by specifying that the holder of an exploration permit may enter private land, the subject of their permit, to conduct environmental studies for the purpose of preparing an application for an environmental authority or preparing an environmental impact statement for a proposed mining lease or mineral development licence;
  • reduce and standardise the number of relinquishment milestones for both mineral and coal exploration permits. Under the new provisions, an exploration permit holder will be required to relinquish 40 per cent of the original tenement area within three years of grant. A further 50 per cent of the remaining area will need to be relinquished by the five year mark. Similar provisions will apply to renewed exploration tenements; and
  • expand and standardise provisions on 'substantial compliance' to clarify that applications may be received and allowed to proceed where they substantially comply with the requirements of the MRA.

The Bill adopts many of the amendments originally proposed in the Resources Legislation (Balance, Certainty and Efficiency) Amendment Bill (now lapsed), which was introduced to Parliament last year by the previous State Government. Notably, however, the provisions of the earlier Bill relating to Urban Restricted Areas (that is, two kilometre zones around towns where mining was to be prohibited) have not been included in this Bill.

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Petroleum and gas tenures

In order to 'streamline' the process for obtaining and using a petroleum (or gas) tenure, in particular the Bill:

  • allows a pipeline licence holder to register an easement in gross for a pipeline, without obtaining 'public utility provider' status. This overcomes a longstanding legal prohibition that was inhibiting 'private' pipeline owners from securing appropriate pipeline land tenure. However, there is arguably a gap in the Bill in that it does not allow for an existing public utility easement to be transferred to a pipeline licence holder;
  • allows petroleum lease holders to seek Ministerial consent to a change in production commencement. Such an application may only be made where there is an arrangement in place to supply petroleum produced from the lease, and where there is at least one year before the production commencement date;
  • amends the processes relating to the transport and processing of CSG water and brine. Common user water treatment and brine processing facilities may now be constructed on petroleum leases, and approvals under a pipeline licence will be extended to allow the transport of CSG water and brine between and off permit areas. The existing provisions regarding environmental approvals, water regulation, land access and health and safety will apply with respect to this infrastructure. For example, the taking of produced water still requires an authority under the Water Act 2000; and
  • allows for water pipelines and other incidental activities (such as roads, electricity lines and fibre optic cables) to be constructed on a petroleum lease, or across adjacent petroleum permit areas where they are incidental to authorised activities on at least one such permit area.

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What are the next steps

Public hearings on this Bill are scheduled for Friday, 10 August. Given the limited opportunity which was available for public submissions it is anticipated that the Bill will come back before the Parliament shortly.

For further information, please contact:

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