Shared Knowledge

Keeping Gas Companies Honest – Enforcing the CCA Terms

As the CSG industry in Queensland continues to grow, more and more landowners are entering into CCAs with gas companies that authorise CSG development on their land. For many landowners, negotiating a CCA is a time-consuming and stressful process. The campaign to be compensated fairly and to adequately protect your land, business and lifestyle both now and into the future can be incredibly taxing for landowners and their families.

Unfortunately, the work is not necessarily complete upon the execution of a CCA.

Not infrequently resource companies and their contractors act contrary to the terms of a CCA and it is usually falls to landowners to take appropriate action. For example, if a contractor leaves a gate open on your land and cattle stray onto the adjoining property and you are required to spend time mustering, then you should be compensated for the loss you have suffered ie. the reasonable costs of your mustering including your time.

Why take action?

A primary reason to take action is so that the resource company is aware of its failings and improves its performance. By putting a resource company on notice every time a breach occurs, you are promoting the improvement of the company’s conduct.  This is important because a CCA may impact the land for 20 – 30 years.

Ensuring things are done correctly from the start will set the trend for the remainder of the agreement. Even if the breach is minor, you should immediately bring it to the attention of the resource company.

Another key reason to take action is to be reimbursed for any loss you have suffered as a result of the breach.

Determining a breach

Before you can determine whether there is a breach of the terms of the CCA, you need to understand the conduct required of the resource company and check the terms of your CCA and any access rules (which should form part of your CCA). What does the agreement say about pest and weed management, the location of infrastructure, the requirements for dust suppression, the responsibility for shutting gates, the timing and extent of rehabilitation to be carried out, the duration for construction of infrastructure, damage to property?

You may want to seek some preliminary legal advice to determine whether a breach has occurred.

Suffering loss as a result of the breach

If a breach of the terms of the CCA can be established, you should then determine what loss you have suffered as a result of the breach ie. the cost to repair damaged fencing, the cost to muster stray stock, the cost to restore contaminated country. You may be required to present evidence of the loss you have suffered. This might be an invoice for additional mustering work performed or a contractor’s tax invoice for repairing fencing.  Alternatively it may be a loss that is capable of being compensated but is hard to quantify – such as the impacts of excessive noise that cause sleeplessness or anxiety.

What am I covered for?

Your CCA should provide an indemnity from the resource company for any loss you suffer as a result of its activities. It should also set out the process for making a claim for loss. You should be aware of these provisions as you may need to call upon them during the life of the agreement.  Even if your CCA doesn’t expressly include an indemnity you still may have rights to seek reimbursement or damages for the loss you have suffered.

Disputes

If you have raised the issue of a possible breach with a resource company and it responds by denying the breach took place, you should consider invoking dispute provisions in your CCA. This process will bring the parties together to work on finding mutually acceptable outcomes. If these negotiations are unsuccessful then you may need to attend mediation to have the matter resolved. Again, we recommend you seek legal advice.

Persistent breaches

In the event that a persistent serious breach is occurring on your land, it may be that the resource company has “repudiated” the CCA. Repudiation refers to conduct by a party to an agreement which evinces an unwillingness or an inability to render substantial performance of the contract or an intention to be no longer bound by the contract. You should obtain legal advice if persistent breaches of the CCA are occurring.

Covering the field

There are various ancillary agreements and contracts being entered into as part of the emerging CSG industry. If you have entered into an easement for a pipeline, gravel agreement or another land use agreement for instance, or if your land has been resumed for a powerline, you should consider these tips if you need to enforce the terms of an agreement.

 This information provides advice of a general nature only and should not be relied upon as legal advice.