Introduced to the Queensland Parliament in August, the Palaszczuk Government’s Mineral, Water and Other Legislation Amendment Bill 2017 (Bill) had not been passed by the time of November’s election. If revived, it will change the rules that govern relationships between landholders and resource companies seeking access to private land.
By introducing new mechanisms to encourage resource companies and landholders to reach agreement, the Bill should minimise the number of land access negotiations stalling and being referred to the Land Court. Further, it will give landholders more certainty around the circumstances in which their costs will be paid by the resource company. Unfortunately, it also contains a few surprises detrimental to landholders’ interests.
Exhausting the possibility of reaching agreement
The Bill proposes to introduce a new right for either a landholder or resource company to elect for an alternative dispute resolution (ADR) process if agreement has not been reached at the end of the 20-business-day “minimum negotiation period” after a resource company commences negotiations with a landholder. The type of ADR process (for example, mediation) and the identity of the facilitator is to be decided by the Land Court or a recognised institute if the parties cannot agree. The resource company must pay the costs of the ADR facilitator.
The Bill also introduces a new alternative to heading to the Land Court if agreement has not been reached at the end of the minimum negotiation period or the ADR process. An arbitrator can be appointed at the election of either party to make a binding determination on the issues in dispute, including the amount of compensation payable.
Worryingly, neither party is entitled to legal representation during the arbitration process unless the other party agrees. This is of particular concern to landholders given resource companies will often have specialist teams of negotiators in their ranks to represent them in arbitration. Without the same specialist “in house” skills and experience, landholders will be disadvantaged without the right to involve their lawyers.
Landholder costs paid even if agreement is not reached
One major flaw with the current laws is that a resource company only becomes liable to pay the accounting, legal and valuation costs a landholder incurs in negotiations once a conduct and compensation agreement is signed. Unless satisfying alternative arrangements are made, landholders can therefore be left significantly out of pocket if agreement is not reached, including if the resource company delays or cancels plans to access the landholder’s property.
The Bill proposes to establish a landholder’s right to recover necessarily and reasonably incurred negotiation and preparation costs regardless of whether agreement is ultimately reached. Further, the costs of an agronomist will be added to the list of costs that potentially can be recovered.
Threat to compensation for off-property activities
At present, a landholder is entitled to compensation from a resource company for certain impacts relating to the landholder’s land. To qualify for compensation, the landholder must own or occupy land within the area of the resource authority (or recognised “access land”). However, the claim for compensation does not have to relate to activities on the landholder’s property. It can be for impacts caused by the resource company’s broader project.
However, the Bill proposes a change to the definition of “compensatable effects” that will limit a landholder’s rights to compensation to the impacts of the resource company’s activities on the landholder’s land. Especially in the context of projects where significant disruptive infrastructure is installed on neighbouring properties (including those owned by the same landholder) or activities on neighbouring properties cause contamination in a broader area, this change could represent a significant erosion of landholders’ rights.