Australia: Queensland Resources and Energy Update - September 2017

Last Updated: 11 September 2017
Article by Damian Roe and Alyce Nielsen

100% fly-in fly out (FIFO) ban

The Strong and Sustainable Resource Communities Act 2016 commenced on 31 August 2017.

Large resource projects are prohibited from employing workers on a 100% FIFO basis. The Act also retrospectively prohibits large resource projects approved after 30 June 2009 from:

  • advertising positions in a way that stops residents in nearby communities from applying;
  • stating that residents of nearby communities are not eligible to be employees; or
  • discriminating against residents of nearby communities when recruiting workers.

When this may be important to you: if you have an interest in a large resource project.

Recommended action: ascertain firstly, whether your project is a "large resource project" for the purposes of the Act; and secondly, whether recruitment is a breach of the legislation.

You can read more about the impacts of the legislation here.

Material change of circumstances for a petroleum lease (PL)

On 18 August 2017, President Kingham of the Land Court of Queensland handed down her decision in Nothdurft & Anor v QGC Pty Limited & Ors [2017] QLC 41. This decision was the first to consider the review compensation previously agreed for activities under a PL.

The case established that in reviewing compensation for activities carried out pursuant to a PL, the Land Court must establish firstly that there has been a change in circumstances, and secondly, that the change is material.

If the Court finds that there has been a material change in circumstances, it must identify the compensable effect of the change and determine whether it warrants additional compensation. That is, the Court does not, as argued by the landholders in this case, reassess the compensation payable for the PL activities and award the difference, if one exists.

In this case, the landholder asserted, amongst other matters, that there was a material change in circumstances due to the exceedance of the environmental authority (EA) noise conditions. The evidence of the landholder was not accepted but the expert evidence found that there were exceedances of the noise conditions at his residence.

The Court found that there was a material change in circumstances due to exceedances of noise conditions under the EA.

  • When this may be important to you: if you are the holder of a resource authority.
  • Recommended action: ensure you are compliant with any conditions associated with a resource authority. Failure to comply may constitute a material change and warrant additional compensation to landholders, or even enforcement action.

The Workers' Compensation and Rehabilitation (Coal Workers' Pneumoconiosis) and Other Legislation Amendment Act 2017 (Qld) - Improved protections for coal workers suffering 'black lung'

On 23 August 2017, the Workers' Compensation and Rehabilitation (Coal Workers' Pneumoconiosis) and Other Legislation Amendment Act 2017 (Qld) commenced on 31 August 2017.

The Act improves compensation protections and entitlements for coal workers with 'black lung' (or a form of pneumoconiosis) by amending a number of Acts including the Workers' Compensation and Rehabilitation Act 2003 (Qld) (the WCR Act). In effect, the WCR Act now recognises the broad spectrum of coalmine dust lung diseases for the purpose of Queensland's workers' compensation scheme established under the WCR Act.

The amendments have several implications for both employers and employees in the coal mining industry.

Key changes for employers include:

  • Costs to be passed on to employers – if an employer engaged a former coal worker to work in an industry that deals with coal before 1 January 2017, WorkCover is entitled to retrospectively charge an additional premium on the insurance policy of the employer. The amount of this additional premium is to be determined by what WorkCover considers necessary.

Key changes for employees include:

  • Free medical examination - employees that have concerns about coal workers' pneumoconiosis can access free medical examination through the workers' compensation scheme. Workers can apply to their insurer for approval to undergo a lung disease examination unless, on consideration of the application, the insurer finds the worker was not exposed to coal dust for at least 6 months or that the exposure occurred outside of Queensland. Importantly, the cost of the examination will be borne by the insurer.
  • Lump sum compensation - the introduction of an additional lump sum compensation amount up to $120,000.00 for coal workers that have been diagnosed with, including silicosis or asbestosis.
  • Additional compensation for disease progression - workers diagnosed with a form of pneumoconiosis who have previously received compensation are also able to claim further lump sum compensation in circumstances where their condition progressively deteriorates.

Why this may be important to you:

  • for employees: the introduction of a lump sum compensation amount payable to coal workers diagnosed with a form of pneumoconiosis; and
  • for employers: the WCR Act permits WorkCover to pass the costs of this scheme onto relevant employers through their insurance premiums.

A copy of the Act can be found here.

Prohibition on underground coal gasification (UCG)

Strong and Sustainable Resource Communities Act 2016 (see above) also imposes a moratorium prohibiting UCG (also known as mineral (f)) in Queensland.

Following trials of the UCG technology and a technical report from the Queensland Independent Scientific Panel for Underground Coal Gasification, the government has concluded that the risks associated with UCG outweigh any potential benefits.

A copy of the technical report can be found here.

Further domestic gas supply

On 6 September 2017, Queensland Government has announced the release of 400 square kilometers of exploration land for tender in the Surat and Bowen Basin. The conditions attached to the exploration tenement ensure that any gas found and produced will need to be sold to the domestic market.

This comes the day after the Government announced Senex as the preferred tenderer to explore a previously released 'domestic gas' block.

Tenders for the new block will close on 8 December 2018.

More details regarding the tender can be found here.

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