Important changes to Queensland's mineral resource legislation

In brief

On Thursday, 18 October, the Queensland Parliament passed the Mineral, Water and Other Legislation Amendment Bill 2018, which will make important changes to the various Acts governing resource activities in that state. Partner Ben Zillmann and Senior Associate Giselle Kilvert consider the changes to mineral resources legislation.

Background

With respect to mineral resources legislation, the primary policy objectives of the Mineral, Water and Other Legislation Amendment Bill 2018 (the Bill) were to:

• give effect to the Queensland Government's response to four recommendations of the 2015 Independent Review of the Gasfields Commission Queensland and Associated Matters (the Independent Review); and
• remove the automatic referral of compensation matters to the Land Court of Queensland under the Mineral Resources Act 1989 (MRA).

However, several important other important amendments have also been made to resources legislation, designed to improve the operation of the Acts and Regulations.

Some of the key changes are discussed below.

Amendments to Land Access Agreements under Common Provisions Act – Recommendations of Independent Review

The recommendations of the Independent Review related to the statutory process for the negotiation of a conduct and compensation agreement (CCA) or a make good agreement (MGA) under the Mineral and Energy Resources (Common Provisions) Act 2014 (Common Provisions Act) and chapter 3 of the Water Act 2000, respectively.

CCAs are required to access land for most activities on tenements other than mining leases.

The explanatory memoranda for the Bill describes these amendments as improving efficiency for resource authority holders trying to obtain access to land, but whether this will be achieved is debatable. The process for determining conduct and compensation disputes has been extensively changed, and may result in a more lengthy process to resolution where an agreement cannot be reached. There appears to have been a clear motivation to strongly encourage alternative dispute resolution and discourage resort to the Land Court, which is curious because relatively few CCAs are referred to the Land Court for resolution.

Under the pre-existing regime in the Common Provisions Act for CCAs:

• Where a resource authority holder sought access to land for the purpose of carrying out advanced activities, it was required to issue a negotiation notice, which initiated a 20 business day minimum negotiation period.
• At the end of the minimum negotiation period, if no agreement was reached, either party could issue an election notice, electing to proceed with a conference facilitated by an authorised officer (for which no fees were charged) or calling on the other party to agree to an alternative dispute resolution (ADR) process. If the parties proceeded with ADR, the party that issued the ADR notice was responsible for the ADR facilitator's costs. In practice, the option of a conference facilitated by a DNRME officer was often preferred, as it was generally more expedient and less expensive.
• The parties would then proceed with the supervised conference or ADR for 20 business days, at which point either party could apply to the Land Court to determine conduct and compensation.

Under the new regime:

• Where a resource authority holder seeks access to land for the purpose of carrying out advanced activities, they will still be required to issue a negotiation notice, which initiates a 20 business day minimum negotiation period.
• At the end of the minimum negotiation period, if no agreement is reached, either party may still initiate a supervised conference by issuing a conference election notice; however, completion of a conference will not qualify a party to apply to the Land Court for a determination of conduct and compensation. Rather, if the parties wish to pursue a Land Court determination, they will first need to undergo non-binding ADR. Alternatively, they may agree to arbitrate their dispute.
• An ADR election notice or arbitration election notice may be issued after the end of the minimum negotiation period, whether or not a conference election notice has been issued. If a conference has commenced, the conference must end.
• If an ADR election notice is issued, it must propose a form of ADR (eg mediation) and ADR facilitator. If the proposed ADR or ADR facilitator is not accepted by the other party within 10 business days, the party proposing ADR may make another proposal or obtain a decision from the Land Court or a prescribed ADR institute, about the matter not accepted. There is no statutory timeframe for obtaining such a decision.
• Once an ADR facilitator has been appointed, the minimum ADR period is 30 business days. An ADR process is non-binding, so a resolution at this stage still requires agreement of the parties.
• The resource authority holder is liable for the costs of the ADR facilitator in all instances, although it may apply to the Land Court for its 'reasonable costs of attending' if the landholder issued the ADR election notice and did not then attend ADR without a reasonable excuse.
• If the parties do not agree terms of conduct and compensation via ADR during the usual period, either party may apply to the Land Court for a determination, or a party may issue an arbitration election notice and, if both parties agree, they may arbitrate their dispute.
• If an arbitration election notice is issued (which can be done directly after the initial 20 business day minimum negotiation period or after a failed ADR), it must propose an independent arbitrator. The other party must respond to the notice within 15 business days, accepting or refusing the request for arbitration.
• If that other party accepts the request for arbitration but does not agree to appoint the proposed arbitrator, a prescribed arbitration institute will appoint the arbitrator. If the other party does not accept the request for arbitration, the arbitration cannot proceed.
• If both parties agree to arbitration, the parties may not then elect to pursue a Land Court determination.
• Where an arbitrator is appointed, the arbitrator must decide the matter and issue an award within six months of their appointment.
• The arbitrator's decision will be final, and will be treated as though it were an agreement between the parties. Accordingly, an arbitral award cannot be appealed (although there is scope to challenge a jurisdictional error).
• Costs of the arbitrator will be borne by the resource authority holder where the parties have not participated in an ADR first.
• Otherwise, the arbitrator's costs will be shared by the parties unless the arbitrator decides otherwise. The parties must also bear their own (other) costs, unless they agree, or the arbitrator decides, otherwise.

A flow chart of this process is set out below.

Further, with respect to costs, the amendments:

• Extend the resource authority holder's liability to pay the landholder's necessary and reasonable costs incurred in negotiating and preparing a CCA (currently legal, valuation and accounting costs) to include the cost of an agronomist;
• Provide that the resource authority holder is liable to pay a landholder's necessary and reasonable costs incurred in negotiating and preparing a CCA, whether or not a CCA is actually signed (that is, landholders' costs will be covered where either party abandons negotiations); and
• Provide the Land Court jurisdiction to determine the liability for necessarily and reasonably incurred negotiation and preparation costs in preparing a CCA.
• Transitional provisions are included to deal with negotiations/ADR processes that have already commenced, and the costs associated with those.

Key amendments to MRA

Key aspects of the Bill, as passed, with respect to the operation of the MRA include:

• Flexibility in the coal and exploration tenure system for existing 'coal mining projects'.
  • Where additional land is necessary for the operation of an existing coal mining project, an eligible claimant will be able to apply for an exploration permit for coal over up to six sub-blocks that adjoin the existing project 'over-the-counter', rather than going go through the competitive tender process.
• Clarification of what activities may lawfully be carried out on access land for mining tenements.
  • These amendments resolve legal uncertainty arising from the recent Land Court decision in Byerwen Coal Pty Ltd v Colinta Holdings Pty Ltd & Anor, which questioned the lawfulness of mineral haulage and other activities on access land for a mining lease.
  • The amendments clarify that the construction of road transport infrastructure on, and the conduct of mineral haulage by road across the surface of, land outside the tenement area is lawful.
• Reinstatement of the requirement to hold a pre-requisite tenure, or have the consent of the holder of the pre-requisite tenure, in order to apply for a coal mining lease. Pre-requisite tenures are either a prospecting permit, an exploration permit for coal or a mineral development licence. This requirement was unintentionally removed by an amendment in 2014.
• Relaxation of the requirements for including restricted land in a mining lease. Pursuant to the amendments:
  • The landowners' consent to the inclusion of restricted land may be obtained at any time (rather than only before the last objection day for the mining lease application); and
  • An application for surface of restricted land to be included in a mining lease will no longer be treated in the same manner as a new mining lease application. Instead, an application to add the restricted land may be granted provided the landowners' written consents have been lodged, and compensation for the land has been agreed.
• Removing the provisions for automatic referral of mining lease compensation matters to the Land Court for determination. Under the amended MRA, if compensation is not agreed between a mining lease applicant and a relevant landowner within the relevant three-month period (after objections are resolved), and no application for a Land Court determination has been made, the Minister may refuse to grant the mining lease. Essentially, this shifts the burden of bringing mining lease compensation matters before the Land Court from the chief executive to mining lease applicants.
• Insertion of provisions to enable the chief executive to publish, and make available to any person for a fee, information about authorised activities carried out under the mining tenement that its holder has lodged under this Act, after the expiry of a 'confidentiality period' to be prescribed by regulation.

Other amendments have also been made to:

• Phase out hard copies of mining instruments. The electronic MyMinesOnline resource authority register will be the authoritative source of information relating to mining tenements.
• Give the DNRME greater flexibility to tailor reporting requirements, by shifting reporting obligations from the MRA to the associated regulations.
• Clarify ownership and provide for transfer of ownership of water monitoring bores, and provide for decommissioning of water monitoring bores.

Amendments to Overlapping Tenements Regime

Other amendments to safety legislation resolve omissions and uncertainty as to the application and requirements of the regime for the preparation of joint interaction management plans.

Next steps

The Act is yet to receive Royal Assent, although this is expected to occur shortly. Most of the provisions will commence on a date to be set by proclamation.