Queensland resource legislation is 'back to the future'

In brief

The Queensland Government is continuing its review of mineral and energy resource legislative reforms, with proposed amendments currently before Parliament, many of which undo earlier proposed reforms. Partner Ben Zillmann, Senior Associate Giselle Kilvert and Associate Andrea Moffatt consider the changes and what they mean for resource developers in Queensland.

Background

The Queensland Government has introduced the Mining and Other Legislation Amendment Bill 2016 (Qld) (MOLA Bill) to amend the Mineral & Energy Resources (Common Provisions) Act 2014 (Qld) (MERCP Act) and other resources legislation. As noted above, many of the changes proposed by the MOLA Bill undo reforms proposed by the MERCP Act.

The MERCP Act was enacted in September 2014. While some provisions of the MERCP Act have commenced, the majority (including those sections proposed to be amended by the MOLA Bill) are not due to commence until 27 September this year.

The MERCP Act was introduced by the former Newman-led Coalition Government. It was meant to be the first step in a staged program to reform, standardise and consolidate Queensland's various resource-related Acts (see our publications Focus: First step towards a Common Resources Act in Queensland and Client Update: First step to implement a Common Resources Act in Queensland). The reforms introduced by the MERCP Act covered extensive and important areas of law, including regarding:

• objections to mining leases (MLs);
• objections to environmental authorities for major mining projects;
• the coal/coal seam gas (CSG) overlapping tenement regime; and
• restricted land.

The Act followed a series of stakeholder consultations and discussion papers (see our publications Focus: Queensland reviews mining lease objection process and land access regime and Focus: Queensland's coal and CSG overlapping tenure regime getting a makeover), including the Queensland Resources Council's May 2012 paper, Maximising Utilisation of Queensland's Coal and Coal Seam Gas Resources – A New Approach to Overlapping Tenure in Queensland (the White Paper) , which was the outcome of a joint working group comprising representatives of the coal and CSG industries. Not all of the provisions of the MERCP Act, however, reflected the White Paper's original intent.

In the lead-up to the Queensland State election in February 2015, the Labor Party promised to reform the MERCP Act, to reinstate broad public objection rights and protect restricted land.

Shortly following the Labor Party's election success, the new Annastacia Palaszczuk-led government announced measures to make good its campaign promises. The first step was the repeal of section 47D of the Public Works and Organisation Act 1971 (Qld), which removed the ability of certain large projects to bypass some aspects of the public objection process (see our Client Update: Queensland Government broadens scope for mining project objections). The introduction of the MOLA Bill is the next legislative step in the Government's resources law reform initiative.

Scope of MOLA Bill

The content of the MOLA Bill relates primarily to:

• objections to MLs and associated environmental authorities;
• restricted land; and
• overlapping coal and CSG tenements.

The changes the Bill proposes are extensive; however, a number of them merely seek to preserve the status quo, by repealing provisions of the MERCP Act that have not yet commenced, and that sought to amend the current provisions of the Mineral Resources Act 1989 (Qld) (MRA) and, to a lesser extent, the Petroleum & Gas (Production & Safety) Act 2004 (Qld) (PGPSA).

Other provisions seek to clarify the MERCP Act's intended operation in relation to overlapping tenements, consistent with the White Paper. In addition, some changes extend the MERCP Act's original reforms.

Public notification and community objection rights

As noted above, the MOLA Bill seeks to amend several parts of the MERCP Act (which have not yet commenced) to preserve the status quo (under the current MRA) regarding public notification and objection rights for MLs. In essence, the amendments will mean the broad public objection rights will remain in place for applications for MLs. In particular, under the MOLA Bill:

• Existing public notification and objection rights for standard or variation applications for environmental authorities relating to MLs under the Environmental Protection Act 1994 (Qld) will continue to apply. Public notification must occur simultaneously with the associated resourced tenure application.
• ML applications under the Mineral Resources Act 1989 (Qld) (MRA) will continue to be required to be publicly notified via a newspaper notice. The requirements relating to 'certificates of application' and 'certificates of public notice' will continue to be combined for a single 'mining lease notice'.
• An objection to a ML application can still be made by any person on, basically, any ground.

Restricted land framework

The MOLA Bill also seeks to preserve (through amendments to the MERCP Act) several features of the current (MRA) restricted land regime (although the application of the general restricted land provisions will continue to apply to all resource types under the MERCP Act). In particular:

• The Act will repeal the provisions that allowed the Minister to 'extinguish' restricted land for MLs when coexistence is deemed not to be possible, and enable the Minister to grant MLs over restricted land where no consent has been provided by the landowner.
• The Act will reinstate the MRA provision that allows a ML to be granted over restricted land where the landowner's consent has been obtained.
• Key agricultural infrastructure will now be protected under the restricted land framework (as is currently the case under the MRA). The MOLA Bill proposes to amend the definition of 'restricted land' under the MERCP Act to include land within 50 metres of a principal stockyard, dam, bore or artesian well and artificial water storage connected to a water supply. The Bill expressly clarifies that a water storage facility does not include an interconnecting water pipeline.

In addition, the MOLA Bill proposes several important changes to the MERCP Act's restricted land regime, which differ from the current position under the MRA:

• Restricted land distances are proposed to be specified in the MERCP Act itself, rather than prescribed by regulation. For exploration resource authorities and production resource authorities, restricted land is proposed to mean land within 200 metres of a range of residential and community services, and certain farming activities (the MRA currently only protects a radius of 100 metres), and land within 50 metres of agricultural infrastructure and cemeteries. For all other resource authorities, restricted land is land within 50 metres of any area, building or structure in any of these categories.
• ML applicants will now be required to specifically define, and provide a visual representation of, the boundaries of all restricted land within a proposed ML area.

Overlapping mining and petroleum tenure regime

The MOLA Bill makes several important changes to the MERCP Act's overlapping tenure regime (which itself materially altered the overlapping tenure regime applicable under the current MRA and PGPSA). These amendments are described in the relevant Explanatory Memorandum as 'non-contentious' and for the purposes of:

• clarifying the operation of relevant provisions;
• aligning the MERCP Act with the original policy intent of the White Paper; and
• responding to stakeholders' concerns.

It is accurate to say that many of the changes align the legislation more closely with the White Paper.

The changes of note are as follows:

• limit the requirement for JDPs to production tenures. A joint development plan (JDP) will only be required in situations involving overlapping production tenures (ie a ML and a petroleum lease (PL)). Accordingly, a JDP will not be required where a production tenure overlaps with an exploration tenure (although a ML (coal) holder will still need to give 'advance notice' of its activities to an overlapping authority to prospect (ATP) (CSG) holder , which must specify the 'initial mining area' and any 'rolling mining areas' in the overlap area).
• clarify the mining commencement date. The Bill replaces the concepts of 'proposed' and 'agreed' mining commencement dates with a single ‘mining commencement date’, which is nominated by the coal resource authority holder. This is consistent with the position proposed in the White Paper. It allows a ML (coal) holder to effect its right of way and establish sole occupancy in an overlapping tenure area in the absence of agreement with the overlapping petroleum tenure holder. That said, the minimum notice periods for commencing authorised mining activities must still be observed, subject to the (existing) provisions concerning 'exceptional circumstances' and 'acceleration notices', or where there is an existing industry commercial arrangement in place (this is a new exception – see the information below on transitional provisions.
• strengthen requirements for information exchange between overlapping tenure holders, including by requiring an exchange of relevant information between overlapping resource authority holders within 20 business days of an overlapping area (being an area the subject of both a coal resources authority and a petroleum resource authority) coming into existence (even when relevant notices are not required for the relevant overlap).
• clarify the operation of the dispute resolution process, including by limiting an arbitrator's discretion to have regard to subjective criteria in deciding disputes, and providing that jurisdictional questions may be decided by the Supreme Court.
• clarify transitional provisions and other minor miscellaneous provisions, including for the provision of notices to the relevant department, and the application of the MERCP Act's overlapping tenure framework to existing resource tenures. In particular, the MOLA proposes to amend the MERCP Act so that:
  • Where there is an inconsistency between a term in an existing agreement between resource authority holders and the non-mandatory provisions in Chapter 4 of the MERCP Act, the resource authority holders are deemed to have agreed that the non-mandatory provisions do not apply (unless they otherwise expressly agree). It should be noted, however, that all resource authority holders in the new overlapping tenure framework must comply with certain mandatory provisions, regardless of whether they have a pre-existing agreement.
  • Where a ML or PL existed before the commencement of the MERCP Act's overlapping tenure regime, that regime will not apply to any overlapping tenures unless both resource authority holders jointly choose to opt in to the new framework (opt-in was not previously available).
  • Where there was no overlap area when a ML (coal) application was lodged, but an ATP application was subsequently lodged and granted before the new framework's commencement, the ML (coal) holder will not be required to comply with sections of the MERCP Act relating to 'advance notices' and '18 month notices' in order to establish their right of way in the overlapping area. Instead, the ML (coal) holder must simply provide a notice of its intention to start mining its initial mining area at least three months before its mining start date.

These amendments will result in direct changes to the MERCP Act itself and are proposed to commence on assent. However, before the overlapping tenement provisions can commence, important detail still needs to be provided by way of regulations, and therefore it is not expected that these provisions will commence until the second half of 2016.

Next steps

The Bill is currently before the Infrastructure, Planning and Natural Resources Committee for consideration.