Shared Knowledge

Audit on CSG Regulators

One of P&E Law’s key concerns representing landowners affected by the coal seam gas (CSG) industry over the last decade  has been the lack of enforcement of environmental authority conditions by the Department of Environment and Science (DES), including conditions relating to noise, weeds, dust and land rehabilitation.

As a result, P&E Law have always emphasised the importance of including strong contractual obligations into a Conduct and Compensation Agreement (CCA) requiring CSG companies to comply with environmental authority conditions so that landowners themselves have the power to enforce compliance.

The Queensland Audit Office has recently audited the Department of Natural Resources, Mines and Energy (DNRME), DES and the Gasfields Commission Queensland in relation to compliance with their regulatory roles and functions in managing CSG activities.

In summarising the audit findings on the regulation of the CSG industry, the report states:

The regulators currently report on activities and status rather than on outcomes. The regulators do not monitor or report on how effectively they enforce compliance of the coal seam gas industry. DNRME does not track and report the number of operators who were found to be non‑compliant but were subsequently brought back into compliance. DES does track and report on this at an aggregate level, but it does so collectively for all industries it regulates. It, therefore, does not know and cannot report on how effectively it enforces the coal seam gas industry. 

The regulators have limited data sharing capabilities. This reduces their effectiveness in monitoring all phases of coal seam gas activities (see Figure A in the introduction). As a result, the regulators cannot provide government with a collective understanding of regulatory effectiveness and industry compliance.

Regulation of the CSG industry is relevant to not only landowners with CSG development on their land, but landowners who experience offsite impacts and who struggle to obtain remedies or compensation. The Audit Report reminds readers that concerns surrounding offsite impacts was raised by the Queensland Parliament’s State Development, Natural Resources and Agricultural Industry Development Committee in April 2018 and notes that, 18 months on from that report, it is now timely for DNRME, DES and the Gasfields Commission to evaluate the effectiveness of the ‘alternative arrangements’ process to provide adequate rights to people affected by offsite impacts such as noise, dust, light and vibration.

In its assessment of the Gasfields Commission, the Queensland Audit Office found that the Gasfields Commission is not currently fulfilling its legislative function to review the effectiveness of government entities in implementing regulatory frameworks that relate to the onshore gas industry. The Queensland Audit Office suggested that the government consider the effectiveness of the Gasfields Commission in delivering value, given its findings that the Gasfields Commission is not fulfilling all of its legislated functions and because stakeholders question its effectiveness and independence.

In our view, without reliable oversight of the coal seam gas industry by an independent  regulator, in practice, oversight and enforcement functions will continue to fall onto individual landowners in their effort to co-exist with the CSG industry. The findings by the Queensland Audit Office highlight P&E Law’s continuing concern that good environmental law requires effective enforcement and the importance of landowners maintaining their own contractual protections in CSG related agreements.

Published 2 April 2020