In our November 2017 Landholder Update we reported on the proposed changes to the statutory negotiation process for Conduct and Compensation Agreements (CCA) and Make Good Agreements (MGA) under the Mineral, Water and Other Legislation Amendment Bill 2017 (introduced into Parliament on 22 August 2017) (2017 Bill).

Since that time there has been an election and a reconstitution of the Queensland Parliament. As a result, the 2017 Bill lapsed but not before the Infrastructure, Planning and Natural Resources Committee (IPNRC) of the 55^th Parliament held a public consultation process and substantially considered that Bill.

The Mineral, Water and Other Legislation Amendment Bill 2018 (2018 Bill) was reintroduced into the 56^th Queensland Parliament on 15 February 2018 with some minor amendments to clarify some of the concerns raised in the IPNRC consultation.

The 2018 Bill was passed by the Queensland Parliament on 18 October 2018 as the Mineral, Water and Other Legislation Amendment Act 2018 (Act).

Changes to CSG Statutory Process

The Act will introduce changes to the negotiation of CCAs and MGAs, which will commence at a future date to be fixed by proclamation.

These changes were made in response to the recommendations of the Independent Review of the Gasfields Commission Queensland and the IPNRC consultations. The changes will make the negotiation of these types of agreements more flexible and efficient for both landholders and resource companies.

The changes will:

• remove departmental conferences as an alternative dispute resolution (ADR) option for the statutory negotiation process;
• refer disagreements about the type of ADR which should be undertaken or the preferred ADR facilitator to the Land Court or a prescribed ADR institute;
• establish an optional and distinct arbitration process as an alternative to making an application to the Land Court if a CCA or a MGA has not been reached following the statutory negotiation process;
• fix the current issues around costs of negotiations by:
  • ensuring resource authority holders will be obligated to pay a landholder’s necessarily and reasonably incurred negotiation and preparation costs (being legal, accounting, valuation and agronomist fees) even if negotiations do not result in an agreement;
  • ensuring the costs of the ADR practitioner are paid for by the resource authority holder regardless of who issues the ADR election notice; and
  • enabling landholders to recover from the resource authority holder the necessarily and reasonably incurred costs of an agronomist engaged to assess the impact the resource activities may have on their land.

Who is an eligible claimant for compensation

The Act amends section 81 (that is, the general liability to compensate) by changing the definition of “compensatable effect” by removing the term in relation to the eligible claimant’s land and substituting it with the term on the eligible claimant’s land.

During the recent consultation on the Bill at the Committee stage, there was significant concerns raised by legal and landholder advocate stakeholders that this redrafting of section 81 would reduce the ability for landholders to claim compensation where impacts occurred on neighbouring lands.

Our view has always been that any owner or occupier of land within a resource tenement would be eligible to claim compensation for any compensatable effects suffered because of, for example, activities on a neighbouring property.

The view of the Department of Natural Resources, Mines and Energy and the Queensland Government is that it was always the policy intention of the gas legislation to compensate landholders with resources activities on their land and not neighbouring property owners. The government says that any compensation for the effects of resource activities on neighbouring properties can be dealt with through alternative arrangement compensation agreements under the Environmental Protection Act 1994, which is limited to compensation for noise and sometimes dust, vibration, light or other environmental nuisances.

This is a disappointing outcome for landholders whose properties neighbour CSG developments but who do not have activities on their land. Those landholders will need to look to enforcing environmental compliance permits where they suffer impacts from CSG development.

20 November 2018