Australia: First tranche of new resources laws passed by Queensland Parliament

HG Resources and Energy Alert: 12 September 2014

On 9 September 2014, the Queensland Parliament passed the Mineral and Energy Resources (Common Provisions) Bill 2014 (Qld) (we will call this the Common Provisions Act).

Key points

  1. The Common Provisions Act makes significant changes to Queensland's laws relating to mineral and energy resources: the Mineral Resources Act (MR Act), the Petroleum and Gas (Production and Safety) Act and the Petroleum Act, the Geothermal Energy Act, the Greenhouse Gas Storage Act, the State Development and Public Works Organisation Act (SDPWO Act) and Environmental Protection Act (EP Act).
  2. The Common Provisions Act will commence by proclamation, which is not expected to occur until 1 January 2015, so there is still time to get up to speed on how the changes will affect your business.
  3. Many key details for the Common Provisions Act amendments will be determined by Regulations yet to be released – we will keep you updated as this occurs.

The Common Provisions Act is the first tranche of new resources laws being rolled out under the Queensland Government's "Modernising Queensland's Resources Acts Program" (MQRA program).

The purpose of the MQRA program is to consolidate Queensland's disparate, lengthy and industry-focused resources statutes (there were five, respectively for minerals, petroleum (two Acts), geothermal resources and greenhouse gas capture and storage) under a single common resources law, so far as is possible.

Due to the enormity of that task, the reforms are carried out in stages, with the amendment of existing legislation until all of the existing laws have been migrated into a single statute.

In the lead up to the Common Provisions Act's commencement, we will be working with you (including in workshops) to explain how it will impact on your specific project and operations.

Preliminary to that specific consultation, we have set out below some of the key areas of reform.

Notification and objection

The existing mining lease notification and objection processes were highly (and arguably redundantly) regulated, with smaller operations that are unlikely to have a significant or widespread impact being required to follow the same processes under the MR Act and EP Act as large projects. There was further duplication for large projects with similar notification and objection requirements under the SDPWO Act.

The Common Provisions Act removes duplication and provides for a level of assessment and scrutiny that is suitable to a project's potential scale, risk and impact.

Notification is a good example. Presently, miners have to publicly notify all mining lease applications, irrespective of the scale, risk and impact of the project. Under the Common Provisions Act, only "affected persons" which includes landowners who own land within the boundary of the mining lease or whose land is to be used for access to the mining lease, land occupiers, infrastructure providers and the local government will be sent notification of mining lease applications.

The changes also mean that the general public, including environmental groups, cannot lodge an objection to a mining lease. Like notification, these rights are reserved for the parties who are directly affected by the proposed project - the owners of land the subject of the proposed mining lease, owners of land necessary for access to the mining lease, and the relevant local government. It is important to note here that this does not extend to land occupiers or infrastructure providers, although these entities are to be notified about the application. However, objections made on environmental grounds to the proposed environmental authority for a project will remain open to the public.

In a last minute amendment to the Common Provisions Act, land owners who share a common boundary with the proposed lease area now also have the right to receive a copy of the application and to object to the project on limited grounds. The grounds on which an adjoining land owner may object have yet to be addressed in the Common Provisions Act.

The Land Court retains the function of hearing objections and making recommendations to the Minister with regard to mining lease applications. However, the changes require that there be clear grounds for objection and hearings will exclude technical, financial and commercial-in-confidence matters. The changes provide for the Land Court to strike out objections which are vexatious, frivolous or an abuse of the Court process.

A significant change is in relation to the SDPWO Act in circumstances where the Coordinator General's report for a project states conditions for the proposed environmental authority and the Coordinator General is satisfied that these conditions address the proposal's environmental effects. In this case, the amendment provides that a submitter under the EP Act to an environmental authority application may not request that its submission be taken to be an objection to such application.

New overlapping tenements regime

The Common Provisions Act sets up a new regime for overlapping coal and petroleum resource authorities in Queensland. A key objective of this reform is to remove the 'first mover advantage' obtained by the party which was granted its production permit first, enabling that party to effectively 'lock out' the second party, by restricting the resource activities that the second party can undertake in the overlapping area. This meant that resources are unlikely to be developed to their full potential, resulting in an economic loss to the State. The issue is addressed by the Common Provisions Act by establishing a 'right of way' for coal production subject to notice and compensation requirements in favour of the gas party (which can be more flexible during production).

The new regime will not apply to overlaps with production tenure granted before the commencement of the Common Provisions Act. The coal and petroleum tenure holders may also contract out of the new regime (however, note there are some mandatory provisions).

Exploration overlaps

No substantial change to the current law is proposed.

Holders of coal exploration tenure may undertake activities in the area of an authority to prospect for petroleum (ATP) as long as those activities do not adversely affect the activities of the ATP tenure holder that have already started in the overlap area (and vice versa).

Exploration/production overlaps

The Common Provisions Act now extends the same 'adverse affect' test that applies to exploration overlaps to the activities undertaken by:

  • an ATP holder in the area of a mining lease (ML); and
  • coal exploration tenure in the area of a petroleum lease (PL).

This is different to the existing law that requires the ATP holder or coal exploration tenure holder to obtain the written consent of the relevant overlapping production tenure holder.

Production/Production overlaps

Elements of the new regime Comments
A direct path to grant for coal and petroleum production tenure Although there is now a direct path to grant, the parties are still required to agree a joint development plan.
The coal party must give the gas party at least 10 years' notice prior to the gas party being required to abandon an area The gas party can extend the 10 years notice period in 'exceptional circumstances'. If the parties cannot agree, the petroleum tenure holder may apply to arbitrate the dispute.
Compensation payable by coal party

Is available:

  • for replacement of PL connecting infrastructure or PL major gas infrastructure where that is impacted by coal activities; or
  • where the relevant notice period is shortened, for lost CSG production and replacement of minor gas infrastructure.
Dispute resolution If the parties cannot agree on the matters set out above, then in each scenario the relevant party can apply for arbitration of the dispute. This may cause extensive delay and costs for each party.
Surat Basin transitional provisions The overlapping tenure regime operates differently in the Surat Basin for PLs granted after commencement but not later than 31 December 2016. For example the coal party must give the gas party 16 years notice (the gas party cannot seek to extend that for exceptional circumstances and the coal party cannot shorten the relevant notice period).

Restricted Land

The concept of restricted land applies where there is infrastructure that cannot readily coexist with resource activities and cannot readily be relocated. Because of the sensitivity of these areas, the resource company needs the consent of the landholder before access is obtained.

Currently, there are different requirements in relation to these areas depending on the resource type. The Common Provisions Act implements a consistent restricted land framework across all resource types, while ensuring that restricted land requirements apply only to appropriate types of infrastructure.

The key changes include:

  • altering the definition of 'restricted land'. The concept has been expanded to apply to any building if it is reasonably considered that the building cannot be easily relocated or cannot coexist with the resource authority. However the water-related features (such as bores, dams, artificial water storage and connection structures) are no longer specifically included in the definition of restricted land;
  • potentially increasing the buffer zone for restricted land. It is currently 100 metres for permanent buildings like residences and businesses and 50 metres for less significant features such as stockyards or burial places. This distance is to be prescribed by regulation; and
  • introducing the concept of restricted land to petroleum tenements for the first time. Currently, low-impact petroleum exploration activities can be conducted on land without the consent of the landholder where those activities are at least 600 metres from an occupied residence or school. This regime has been replaced in the Common Provisions Act by the 'restricted land' provisions, a significant change for the petroleum industry which previously did not require consent to access these types of areas.

Land Access

Land access provisions for public and private land have been migrated to the Common Provisions Act. There are subsets of these provisions that deal with various access requirements and landholders, for example: public land, private land and notifiable road use.

The key changes to the private land access framework include:

  • allowing parties, at the election of the landholder, to opt-out of negotiating a conduct and compensation agreement;
  • requiring a conduct and compensation agreement or opt-out agreement to be noted on the relevant property title; and
  • enabling the Land Court to make determinations on matters relating to conduct issues in relation to the negotiation of a conduct and compensation agreement.

These amendments have been harmonised across each of the resources statutes and migrated into the Common Provisions Act. We note that there remain alternative processes for MLs, mining claims and prospecting permits under the MR Act.

Dealings, caveats and associated agreements

The way in which dealings (such as transfers of ownership, mortgages and subleases), caveats and associated agreements are managed in Queensland was largely harmonised by the Mines Legislation (Streamlining) Amendment Act in 2012, where amendments were made to achieve consistency between the different resources statutes and to facilitate the online lodgement of applications.

The Queensland Government, through the Common Provisions Act, is now seeking to further standardise the approach to dealings, caveats and associated agreements by consolidating provisions across the five resources laws to deal with the following:

  • "prescribed dealings" which require registration prior to taking effect;
  • identifying when the Minister may or must not approve an application in respect of a dealing;
  • the process to make, amend or withdraw an application for a dealing, caveat or associated agreement;
  • the powers of the deciding authority in relation to an application for a dealing, caveat or associated agreement;
  • the keeping of the register, access to the register, supply of data and correction of the register;
  • information to be recorded on the register and maintenance of the register;
  • the introduction of a practice manual; and
  • the fees payable by an applicant to apply for the registration of a dealing, caveat or associated agreement on the register.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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