First step towards a Common Resources Act in Queensland

In brief

New legislation has been introduced into the Queensland Parliament that will mark the first stage of a program that will attempt to rationalise the regulatory regime for all types of resources tenure in that state. The new legislation also introduces a number of major reforms to the land access and restricted land framework, overlapping coal and coal seam gas tenure, and to the mining lease application and objection process. Partner Ben Zillmann, Senior Associate John Hedge, Lawyers Andrea Moffatt and Hannah Lilley, and Law Graduate Daniel Bradford report.

Common provisions for all resources tenure

The Mineral and Energy Resources (Common Provisions) Bill 2014 (the Bill) is, following eight consultation papers,¹ the first major stage of the Modernising Queensland's Resources Acts Program (the MQRA Program), which ultimately intends to produce a single 'Common Resources Act' to largely replace the separate legislation that exists for minerals, petroleum, geothermal energy and greenhouse gas storage tenure. However, as shown in the diagram below,² this is intended to be achieved through a staged approached continuing until 2016-17.

Diagram courtesy of Queensland Department of Natural Resources and Mines.

The initial common provisions introduced into the Bill (and removed from the existing five resources Acts) are provisions relating to:

• dealings (such as transfers of ownership, mortgages and subleases) caveats and associated agreements;
• land access;
• restricted land; and
• administrative issues (including practice manuals, provisions regarding fees and regulation making powers).

The dealings, caveats and associated agreements provisions largely reflect the existing resources Acts, which had previously had those provisions streamlined and harmonised in preparation for the Bill.

Land access and restricted land reforms

The Bill gives effect to the three recommendations made by the Land Access Implementation Committee (LAIC):

• To expand the jurisdiction of the Land Court to allow it to examine and make determinations on the behaviour of parties during the negotiation of a conduct and compensation agreement (CCA).
• Permitting landholders to elect to opt out of the requirement for a resources tenure holder to negotiate a CCA (subject to prescribed requirements, but with such an opt-out agreement not negating a tenure holder's liability to compensate an eligible claimant).
• Requiring the existence of an executed CCA or an opt-out agreement to be noted on the relevant property title, with the holder of the resource authority responsible for the costs associated with registering and removing the CCA from the title.

Following the discussion paper, the Bill also introduces a new 'restricted land' framework across all resources tenure types (including for petroleum tenure to which this concept has not previously applied). The distances from specified types of buildings and infrastructure which will define what is restricted land (in which resources activities cannot be conducted without consent of the relevant owner or occupier) are left to be prescribed by regulation. Additional types of buildings or infrastructure for which surrounding land will constitute restricted land can also be prescribed by regulation. However:

• as proposed in the discussion paper, certain types of restricted land previously recognised by the Mineral Resources Act 1989 (Qld) (the MRA) have been removed; and
• the Explanatory Notes indicate that the current requirement under the MRA for a CCA to be negotiated for no, and low impact activities within 600 metres of a residence or school will be replaced at some time in the future³ (although the Bill will not alter that requirement).

As part of the MQRA Program, a common set of land access provisions are included in the Bill that will apply to all tenure types (except prospecting permits, mining claims and mining leases under the MRA) and repealed from the existing resources acts. In particular, common to the new regime will be:

• Entry notice to enter public land – has established a common framework for all resource authorities (subject to the MRA exclusions noted above) in relation to who receives the entry notice, when the entry notice must be provided; and the rights of the public land authority (and removing the different treatment of access of reserves compared to other public land).
• Access to cross land within the area of another resource authority – harmonises rights and obligations of resource authority holders (subject to the MRA exclusions noted above) that need to access land within the area of another resource authority in order to reach their own authority area. For access to the area of exploration resource authorities, consent from the holder is not required where crossing the land is reasonably necessary, but the access must not adversely affect authorised activities being carried out on the land. For access to the area of leases, access is not permitted without prior written consent of the lease holder.
• Access to private land outside a resource authority – extends existing rights and obligations in the petroleum, geothermal and greenhouse gas storage legislation regarding access to private land outside a resources authority to now apply across all resource authority types (subject to the MRA exclusions noted above and an additional exclusion for mineral development licences under the MRA). Further, the definition of 'eligible claimant' has been harmonised to ensure that owners and occupiers of public and private land being used for access to a resource authority will be able to seek compensation should a compensable event occur on their land.

Changes to the mining lease application and objections process

Following the discussion paper, the Bill introduces amendments to the mining lease application and objection process. In particular:

• Boundary marking application area – The Bill removes the requirement to physically 'peg' the proposed mining lease boundaries and permits the use of geospatial and other mapping systems as alternatives.
• No public notification for mining lease – The Bill removes public notification and restricts notification for mining lease applications to affected persons (landholders and land occupiers, local government bodies and providers of certain infrastructure on the mining lease area). Practically, due to the notification requirements of an environmental authority, there will effectively still need to be public notification regarding a medium- to large-size mine.
• Limited public notification for environmental authorities – The Bill restricts the requirement for public notification of mining lease related environmental authority (EA) applications to 'site-specific' applications for which the environmental impact statement (EIS) process is not yet complete. It is likely that only small-scale mines would not require a site-specific EA and therefore any medium- or large-sized mine will likely continue to require public notification as part of its EA process.
• Limited objectors to mining leases – The Bill would limit the types of parties that would be able to object to a mining lease to only 'affected persons' (being land holders of land that is subject to the mining lease or necessary for access and local government bodies). However, the grounds for objection are limited, as discussed below. Despite these changes, any person who has first made a submission for a site-specific EA, either through the notification process for that EA or an associated EIS process, will be entitled to appeal to the Land Court concerning the grant of an EA. Therefore, the public will still be able to object to the grant or conditions of an EA for any medium- to large-size mine that requires a site-specific EA.
• Limited objection criteria for mining leases – The Bill has restricted the grounds upon which objections can be lodged to a mining lease application (now owners of land necessary for access may only object on the basis of whether the Act has been complied with and the proposed access is reasonable). Local governments are restricted to objecting based on compliance with the Act and the effect on local government infrastructure. The Bill also reduces the factors to be considered by the Land Court in considering any objections.

The Bill does not reflect the proposals in the discussion paper that the Land Court should be given the final decision in relation to the granting of environmental authorities (in other words, retaining the right of the Minister to make the final decision based on the Land Court's recommendation) or that mining leases could be granted without compensation agreements having been finalised.

Coal/CSG overlapping tenure regime

As previously reported, at the time of the initial consultation paper on this issue, the new regime for coal/coal seam gas (CSG) overlapping tenure is intended to reflect the four foundation principles from the Queensland Resources Council's Maximising Utilisation of Queensland's Coal and Coal Seam Gas Resources A New Approach to Overlapping Tenure in Queensland (the White Paper), namely providing:

• a direct path to grant for coal and CSG production tenure;
• coal mining lease holders with a 'right of way' subject to notice periods, compensation for lost CSG production and certain infrastructure, and petroleum tenure holders having a first right of refusal in respect of any incidental CSG produced in the overlap area;
• an ongoing obligation for overlapping coal and CSG tenure holders to exchange relevant information; and
• the flexibility for the parties to enter into alternative arrangements.

The provisions remain largely in the form described in our previous report in relation to the April consultation draft (subject to drafting improvements), although there are some material changes including:

• the compensation provisions being further developed (particularly in relation to what is to be compensated for, and the terms of the offers to be made, under the first right of refusal in respect of incidental CSG) to more accurately reflect the White Paper, but with areas of critical importance (like how 'lost production' is calculated and how required matters are to be included in the contract for supply of the incidental CSG) to be prescribed in the regulations;
• the Ministerial powers being scaled back to amendments of joint development plans (removing the ability to impose new terms and conditions to existing tenure);
• the expedited land access provisions (for authority to prospect holders accessing land within the area of a mining lease) now being included; and
• some of the changes to the transitional provisions for undecided production tenure applications overlapping existing exploration tenure of the other resource type (see below for further details).

There are some issues where the statutory 'default' position can be changed by agreement of the overlapping tenure holders, but, on the whole, there is less flexibility for agreement on bespoke arrangements that vary the statutory position than the White Paper envisaged. There is still no express preservation of existing co-development and coordination arrangements (except to the extent the transitional arrangements below would preserve them as part of the previous regime applying in some circumstances).

The health and safety provisions in respect of operations in the overlap area have not been included in the Bill, as they will be the subject of consultation and legislated for separately in Bills to be introduced in August 2014.

The transitional arrangements have been altered slightly, to be as follows:

Existing overlapping exploration tenureNew framework applies to any application for production tenure occurring post-commencement.

The Surat Basin Transitional Area provisions have also been retained. There continues to be no express statutory framework for how the Department will manage the timing of grant for concurrent coal and CSG production tenement applications.

Finally, while not in the overlapping tenure provisions, section 318CN of the MRA will also be amended by the Bill to allow coal mining lease holders to commercialise incidental coal seam gas (albeit still in specified ways), without having to apply for a petroleum lease themselves (subject to having complied with the overlapping tenure regime's first right of refusal requirements in respect of such incidental CSG where that right applies).

Next steps

As noted above, the Bill is only the first stage of the MQRA Program, with reforms continuing until 2016-17 and with two major amendment Bills still to come. Queensland tenure holders will therefore continue to need to keep up to speed with the implications of amendments occurring to the resources legislation of relevance to their projects over the next two to three years.

More immediately, the Bill has been referred to the Agriculture, Resources and Environment Committee of the Queensland Parliament for review. We anticipate that the committee will invite submissions to be made (such that resources industry participants will have one final chance to put forward their views before the Bill is passed), but no deadline for such submissions has yet been set.