Energy & Resources 29 September 2010

A new regime for land access and compensation in Queensland

29 September 2010

altPDF DOWNLOAD

A new regime governing land access and compensation arrangements in Queensland is being introduced that has wide reaching implications for anyone engaged in exploration activities in Queensland.

Resource companies and their contractors and agents should familiarise themselves with the timing, planning, management and cost implications of the new regime, so that land management and stakeholder strategies, procedures and documentation can be conformed with the new regime. This update explores the scope of the new rules.

Legislative background – What the new rules apply to

The Geothermal Energy Bill 2010 (the Bill) was passed by the Queensland Parliament on 19 August 2010.

The Bill introduces a new regime for land access and compensation arrangements in Queensland which will apply to all tenures and authorities under the Petroleum Act 1923, the Petroleum and Gas (Production and Safety) Act 2004 and the Greenhouse Gas Storage Act 2009 and to exploration permits and mineral development licences under the Mineral Resources Act 1989.

The existing land access and compensation provisions for other tenures under the Mineral Resources Act 1989, including prospecting permits, mining claims and mining leases, will continue and will not be affected by the new regime.

The date of commencement of the new provisions under each relevant statute has not been fixed, but it is expected that they will commence in late 2010.

What you need to know

The key features of the new regime include:

  • different procedural requirements depending on whether an authorised activity carried out is a “preliminary activity” or an “advanced activity”;

  • a general requirement for a tenure/authority holder to give an entry notice before a preliminary activity or an advanced activity can be carried out;

  • a general requirement for a tenure/authority holder to enter into a Conduct and Compensation Agreement or a Deferral Agreement before an advanced activity can be carried out;

  • liability on the part of tenure/authority holders to compensate each owner or occupier of the relevant land for the “compensatable effect” of preliminary and advanced activities;

  • a statutory process for triggering the negotiation of a Conduct and Compensation Agreements or a Deferral Agreement that can potentially lead to mediation involving relevant officers of Queensland Mines and Energy;

  • a process for the determination of compensation by the Land Court where agreement on compensation cannot be reached and the ability to seek a review of agreed compensation, including where there has been a material change in circumstances since an agreement was entered into or a Land Court decision made;

  • a requirement for tenure/authority holders to comply with mandatory provisions under a new Land Access Code; and

  •  monetary penalties for non-compliance by tenure/authority holders with the requirements of the new regime.

While some of these features are variations or modifications of provisions formerly found under the relevant Acts, in particular, the petroleum legislation, taken together they effect significant changes to existing requirements and practices.

Preliminary activities vs advanced activities

An authorised activity carried out under a relevant Act will be subject to different requirements depending on whether the activity is relevantly a “preliminary activity” or an “advanced activity.”

Preliminary activities

A “preliminary activity” is an activity that has no impact or only a minor impact on the business activities of any owner or occupier of the land on which the activity is carried out.

Examples of preliminary activities include:

  • walking the area of the permit;

  • driving along an existing road or track;

  • taking soil or water samples;

  • drilling without constructing earthworks;

  • geophysical surveying without physical clearing;

  • aerial, electrical or environmental surveying;

  • seismic surveying without using explosives; and

  • survey pegging.

Activities which are not considered to be preliminary activities include carrying out authorised activities on land that is less than 100 hectares in area size which is used for intensive farming or broadacre agriculture.

Advanced activities

An “advanced activity” is an activity “other than a preliminary activity.”

In practice, an advanced activity is likely to be an activity that has a significant impact on the business activities of the owner or occupier of the land on which the activity is carried out.

Examples of advanced activities include:

  • levelling of drilling pads and digging sumps;

  • earthworks associated with pipeline installation;

  • vegetation clearing;

  • constructing an exploration camp, concrete pad, sewage or water treatment facility or fuel dump;

  • carrying out a seismic survey using explosives;

  • constructing a track or access road; and

  • changing a fence line.

Compensation liability

A tenure/authority holder will be liable to compensate each owner or occupier for any “compensatable effect” that the owner or occupier suffers which is caused by the relevant preliminary activity or advanced activity.

Each of the following matters is relevant to the determination of compensatable effect:

  • deprivation of possession of surface of the land;

  • diminution of land value;

  • diminution of use of land and improvements;

  • severance of any part of the land; and

  • any cost or loss incurred from the conduct of the relevant activities.

Entry notice requirements

Before either a preliminary activity or an advanced activity can be carried out, unless an exemption applies, a tenure/authority holder must give an entry notice to each owner or occupier at least 10 business days before entry onto the relevant land (unless a shorter period is agreed to in writing).

The entry notice must provide details of the relevant land, the period of entry, when and what activities will take place and the tenure/authority holder’s contact details.

The period during which the land can be entered cannot be longer than 6 months (unless a longer period is agreed to in writing).

If the entry notice is the first entry notice given to the owner or occupier, the tenure/authority holder must give the owner or occupier each of a copy of the Land Access Code, any code of practice under the relevant statute applying to authorised activities for the tenure/authority and a copy of the relevant environmental tenure documentation.

After the entry notice has been to the owner or occupier, a copy of it must also be given to Queensland Mines and Energy.

There are limited circumstances where an entry notice is not required, including, where the owner or occupier has given a waiver of the requirement or the tenure/authority holder owns the land or has a legal right to enter the land to carry out operations other than under the relevant statute under which the tenure/authority was granted. The waiver of the entry notice requirement can be written into the terms of a Conduct and Compensation Agreement or in a standalone document.

Conduct and Compensation Agreements and Deferral Agreements – advanced activities

Before an advanced activity can be carried out, unless an exemption applies, a Conduct and Compensation Agreement must be entered into between the tenure/authority holder and each owner or occupier.

A Conduct and Compensation Agreement must cover how and when the tenure/authority holder may enter the land, how authorised activities must be carried out, and how the tenure/authority holder’s “compensation liability” to the owner or occupier will be met. It may provide for a waiver of the entry notice requirement.

Importantly, a Conduct and Compensation Agreement cannot be inconsistent with the relevant statute under which the tenure/authority is granted, a condition of the tenure/authority or a mandatory provision of the Land Access Code.

A Conduct and Compensation Agreement will not be required in circumstances where:

  • the tenure/authority holder owns the land;

  • the tenure/authority holder has authority under other legislation to enter the land to carry out the activity;

  • a Deferral Agreement has been entered into; or

  • entry by the tenure/authority holder is necessary to preserve life or property or because an emergency exists or may exist.

Where a tenure/authority holder is not in a position to finalise a fully termed Conduct and Compensation Agreement with an owner or occupier before entry onto the relevant land, the tenure/authority holder can seek to enter into a Deferral Agreement with each owner or occupier.

A Deferral Agreement must include, among other things, an indication of the period for which the Deferral Agreement has effect and when it is proposed that the parties will enter into a Conduct and Compensation Agreement.

The negotiation process for Conduct and Compensation Agreements and Deferral Agreements

A tenure/authority holder can enter into a Conduction and Compensation Agreement or Deferral Agreement either by agreeing the terms of the relevant agreement with the relevant owner or occupier or, in the absence of agreement, by initiating a statutory negotiation process.

It is critical to note that initiating the statutory negotiation process locks in a prescribed timeline for the parties to attempt to reach agreement. It also gives rise to a party’s rights to seek determination of compensation through the Land Court.

The statutory negotiation process is commenced by issuing a negotiation notice on each owner or occupier to whom the tenure/authority holder has a compensation liability. The minimum negotiation period must be at least 20 business days from the issue of the negotiation notice.

Even if a Conduct and Compensation Agreement or a Deferral Agreement is entered into within the 20 business days, the tenure/authority holder cannot enter the land until the relevant 20 business day period ends.

Throughout the negotiation period, each party is obliged to use all “reasonable endeavours” to negotiate the relevant agreement.

Mediation conferences

At the end of the minimum negotiation period, if a Conduct and Compensation Agreement has not been executed, either party can seek a mediation conference. This is done by referring the matter to an authorised officer of Queensland Mines and Energy (relevant officer).

The relevant officer must take all reasonable steps to ensure that the mediation conference is finished within 20 business days after it was requested.

Referral to the Land Court where an agreement on compensation liability cannot be reached

Where a mediation has been called but is not completed within 20 business days after being called, or no Conduct and Compensation Agreement is reached within 20 business days after the mediation was called, either party can apply to the Land Court for a determination of the compensation liability to each relevant owner or occupier.

Importantly, at this point in the process, a tenure/authority holder can enter the relevant land to carry out an advanced activity provided that an entry notice giving 10 business days notice in advance of entry is given.

In addition, an owner or occupier or a tenure/authority holder can seek a review of compensation which has been agreed to, including where there has been a material change in circumstances since an agreement was entered into or a decision made by the Land Court.

Land Access Code

Underpinning the new regime is a Land Access Code of Conduct (Land Access Code) which will apply to each relevant type of tenure/authority.

The Land Access Code is intended to provide best practice guidelines for communication between owners and occupiers of private land and tenure/authority holders. It sets out general principles for tenure/authority holders and owners or occupiers to follow when undertaking their discussions and negotiations about land access and compensation.

In addition, and in contrast, for example, with the Code of Conduct under the Mineral Resources Act 1989, the Land Access Code also imposes mandatory provisions governing the conduct of authorised activities on private land which tenure/authority holders will need to comply with.

If a condition of an existing tenure/authority is inconsistent with a mandatory provision of the Land Access Code, the mandatory provision will prevail.

If you need any assistance with a matter arising under the new regime, please do not hesitate to contact any of the following Holding Redlich lawyers below:

Contact details

Brisbane

Philip Vickery
Partner
T: +61 (0)7 3135 0632
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Michael Byrom
Partner
T: +61 (0)7 3135 0616
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Sydney

David Walker
Partner
T: +61 (0)2 8083 0446
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Richard Abbott
Partner
T: +61 (0)2 8083 0421
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Andrew Fisher
Senior Associate
T: +61 (0)2 8083 0480
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.