The Mineral, Water and Other Legislation Amendment Bill was introduced into the Queensland Parliament on 22 August 2017. The Bill proposes a number of changes that will impact on the way conduct and compensation agreements (CCA) and make good agreements (MGA) are negotiated.
The Bill is in response to some of the recommendations of “The Independent Review of the Gasfields Commission Queensland and Associated Matter” conducted by retired member of the Land Court of Queensland, Robert Scott. Those recommendations sought to improve the statutory negotiation process of a CCA and a MGA under the Mineral and Energy Resources (Common Provisions) Act 2014 (MERCP Act) and chapter 3 of the Water Act 2000 respectively.
Proposed changes to the negotiation of CCAs
Of particular relevance to landholders will be the proposed changes to introduce an option for arbitration as an alternative to the ADR process. The amended process removes the “conference” with an authorised officer of DNRM as a necessary step prior to applying to the Land Court. The pathways for negotiation of CCAs under the new approach will still begin with a notice of intention to negotiate (Notice), but there will be different options if agreement is not reached. Arbitration is now proposed as an alternative to applying to the Land Court for a determination, but both parties will have to agree to submit the matter to arbitration.
If agreement has not been reached by the end of the statutory negotiation period under the Notice, landholders or resource authorities may now choose to issue an Alternative Dispute Resolution (ADR) election notice (limited to non-determinative ADR such as case appraisal, mediation or conciliation) or an arbitration election notice (which is a non-judicial determination of an arbitral award). There is no requirement to proceed through ADR prior to issuing an arbitration election notice. But there is also no prohibition on seeking arbitration after a failed alternative ADR.
The amendments will require the resource authority holder to pay the costs of the ADR practitioner if the parties choose to participate in an ADR process. Where an arbitrator is used to determine the agreement without a prior ADR process, the costs of the arbitrator will be the responsibility of the resource authority holder. Where a prior ADR process has failed, the costs of the arbitrator will be shared equally, unless agreed between the parties or the arbitrator determines otherwise. Parties will be responsible for their own costs of arbitration unless agreed otherwise.
The amendments also propose to make resource authority holders responsible for other professional fees necessarily and reasonably incurred, such as the costs of an agronomist. These costs will now be payable even if the negotiations of the CCA are abandoned rather than on execution of a CCA.
Proposed changes to the negotiation of MGAs
The Bill seeks to gain consistency between the negotiation of MGAs and CCAs by:
- excluding arbitration as a form of ADR; and
- including arbitration as an alternative to the Land Court if both parties agree.
Under these proposed changes it will be important to consider carefully whether arbitration is used as there will be no rights of appeal to the Land Court of an arbitral decision.
This Bill has been referred to the Infrastructure, Planning and Natural Resources Committee for consideration. That committee was required to report on the Bill by 3 November 2017. We will continue to monitor this Bill and any changes to the legislation that may occur as a result.