July 22, 2019
Landholders and resource authority holders take heed: Landholders are now entitled to be reimbursed by resource companies to pay for the negotiation and preparation costs of entering a conduct and compensation agreement (CCA) even where an agreement is not reached. This is reflected in the recently enacted sections of the Mineral, Water and Other Legislation Amendment Act 2018 (Qld) (MERA) into the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) (MERCPA).
Landholders previously could be left out of pocket
Previously, landholders could only receive compensation if a CCA was reached with the resource holder. The change incorporates some of the recommendations of the Independent Review into the Gasfields Commission Queensland (December 2016) and recognises the considerable time and out of pocket costs which would have previously been incurred by landholders where a CCA was not agreed.
Impacts of the new regime:
The amendments to the MERA now include the following changes to the previous regime:
- resource companies negotiating CCAs with Queensland landholders are now liable to pay the negotiation and preparation costs necessarily and reasonably incurred by a landholder in entering or seeking to enter into a CCA;
- in addition to legal, accounting and valuation costs, a resource company is also liable to pay the costs of an agronomist if those costs are incurred by the landholder after 19 April 2019;
- if at the end of the minimum negotiation period, the resource authority holder and landholder have not entered into a CCA, either party may then give the other an Alternative Dispute Resolution (ADR) election notice requiring the other party to participate in an ADR process. This amendment removes the requirement for parties to attend conferences run by an authorised officer before being permitted to make an application to the Land Court for a decision;
- the resource authority holder is liable for the costs of the ADR facilitator; and
- by agreement with a resource company, the parties can attend arbitration, rather than go to the Land Court for a decision in relation to any dispute about a CCA that remains unresolved between the parties.
The new regime will not apply in circumstances where an election notice for a conference or ADR has been given prior to 19 April 2019 and the conference or ADR has not been completed prior to 19 April 2019. The previous land access regime will continue to apply in these circumstances to the conference, ADR and any Land Court proceeding, whether started before or after 19 April 2019.
Resource companies currently in negotiations or looking to enter into a CCA with landholders will need to ensure that they have adequately budgeted to reimburse landholders even if no agreement is reached.
If you have any questions about CCA’s please contact Tim Smith, Senior Associate and Bobby Pallier, Solicitor.