LAND ACCESS FREQUENTLY ASKED QUESTIONS

 

This section provides answers to some of the questions frequently asked by landholders about land access arrangements and negotiating a land access arrangement with a mineral or petroleum explorer.

 

Q: What is a land access arrangement?

A land access arrangement is a contract which a minerals or petroleum explorer must negotiate with you before it can explore for minerals or petroleum on your land.

 

A land access arrangement includes details of when, where and how an explorer will access your land and how it will conduct its operations while on your land.

 

For more information on negotiating a land access arrangement see the page:

Land access

 

Q: Can I deny a mineral or petroleum explorer access to my land?

The NSW Government may grant mineral and petroleum explorers an exploration licence to explore in an area which may include your land.  If the explorer wants to access your land to undertake exploration under the title it must first negotiate a land access arrangement with you. 

 

If you refuse to allow access and the explorer chooses to pursue land access, then the law provides for a process of arbitration and potential hearings in the Land and Environment Court. While it states in legislation that an arbitrator can decide to deny access to your land, the circumstances under which this can occur are limited.

 

Some explorers have made a commitment they will not force access against a landholder’s wishes.     

 

An explorer can only access your land for exploration once a land access arrangement is in place. Penalties of up to $11,000 may be incurred if you obstruct access by an explorer which has an access arrangement in place. You can deny access under a land access arrangement only if the explorer breaches the land access arrangement, and then only until the company rectifies the breach.

 

Q: When can an explorer access my land?

An explorer can only access your land when it:

 

  • has been granted an exploration licence by the NSW Government,

  • has completed the relevant environmental assessments, and

  • has negotiated a land access arrangement with you.

 

If the explorer does not have an exploration licence from the NSW Government or a land access arrangement with you, the explorer cannot explore on your land.

 

Q: Are there circumstances where an explorer can access land without a land access arrangement?

Yes.

 

An explorer may obtain a permit from the NSW Government to enter land to undertake environmental assessments required of it without the need to enter into a land access arrangement with you.

 

An explorer may also obtain a right of way between their operations and a public road.

 

Q: How will I know if an explorer wants to access my land? 

If an explorer wants to access your land to explore for minerals or petroleum it will contact you and inform you of its intention to negotiate a land access arrangement with you.

 

An explorer may contact you informally to attempt to negotiate a land access arrangement, but to initiate the formal legal process the company must serve you with a notice of its intention to obtain land access.

 

By law, this notice must include:

  • a description of the exploration methods that will be used,

  • a plan, and

  • a description of the area of land over which access is sought.

 
Q: What if I don’t want the explorer to access my land under any circumstances?

Explorers have certain legal rights to access land to explore for resources, and you may not be able to lawfully stop them accessing your land. Some companies have committed to not access land against landholders’ wishes. .

 

If you would rather not have exploration activity on your land, you should ask the explorer if it will respect your wishes. However, you should remember that an explorer may seek to have an arbitrator appointed if you and the explorer cannot agree on access or the terms of the access arrangement. The arbitrator will decide whether access will be granted and, if so, will determine the terms and conditions of the access arrangement. 

 

While the arbitrator has the ability to decide whether or not access will be granted, access has generally been granted to the explorer at arbitration.

 

No arbitrations for land access for coal seam gas exploration have been conducted to date in NSW.

 
Q: Do I have to sign a Land Access Arrangement given to me by an explorer? 

No.

 

An explorer company which seeks access to your land will often provide a generic land access arrangement of their own for you to sign when the explorer first makes contact with you.

 

You are under no obligation to sign this access arrangement and should not sign this arrangement but use it as a starting point for negotiations.

 

Don’t be rushed into signing any land access arrangement and take your time to obtain independent advice and consider your interests.

 

For more information on what factors to consider when negotiating a land access arrangement see the page:

Land access checklist

 

A template land access arrangement for minerals exploration which can provide some guidance as to what should be included in a land access arrangement has been developed by the NSW Government. However, you should consider it a guide only and carefully consider your own circumstances and obtain independent legal advice before entering into any land access arrangement.

For a copy of the NSW Government’s template land access arrangement for mineral exploration visit:

Template Land Access Arrangement for Mineral Exploration

 
Q: Should I get legal advice before signing a land access arrangement?

Yes.

 

A land access arrangement is a contract between you and an explorer. Once you sign a land access arrangement with an explorer you will be legally bound by the arrangement.

 

An explorer will often be more experienced in negotiating land access arrangements and be better resourced which will give it an advantage in negotiating a land access arrangement.

 

It is important you obtain independent legal advice before signing a land access arrangement to ensure your interests, land, farming operations and the environment are protected.

 

If you prefer not to deal direct with an explorer you may even want to nominate your legal representative as your agent. If you do this the explorer will need to communicate with you through your legal representative during negotiations.

For more information on obtaining legal advice see the chapter:

Getting legal advice

 

Q: How do I pay for legal advice when negotiating a land access arrangement?

An explorer company which has advised you of its intention to negotiate a land access arrangement with you must pay your reasonable legal costs of obtaining initial advice about the arrangement.

 

However, in July 2013 the NSW Government announced its intention to amend the law so that exploration companies must pay your reasonable legal fees for the entire negotiation period.

 

The Government further committed to amending the law in response to the Walker Review of the arbitration framework in NSW in 2015.

 

You should get a quote from a legal practitioner and see if the explorer will agree to pay their costs.

For more information on the Walker Review of the arbitration framework in NSW:

Walker Review of the Arbitration Framework

 
Q: Are there any areas on my land where an explorer cannot explore?

Yes.

 

There are areas on which exploration activity can’t occur on your land without your consent.

 

Without your consent an explorer cannot explore:

 

  • on or within 200 metres of a dwelling house that is your principal place of residence

  • on or within 50 metres of any garden (for coal and minerals)

  • on or within 50 metres of any garden, vineyard or orchard (for petroleum, including coal seam gas)

  • on any significant improvement, which can include a substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work, or valuable work or structure.

 

You should note that if you consent to exploration activity on these restricted areas then the restrictions no longer apply and you are bound by the arrangement to the extent that normal contract law applies.

For more information on restrictions on exploration see:

Restrictions on exploration

               

Q: What happens if the explorer and I cannot agree on a land access arrangement?

Once an explorer has notified you of the intention to negotiate a land access arrangement with you, you have 28 days to commence negotiations on the terms and conditions.

 

If you have not commenced negotiations within 28 days, the explorer can ask you to agree to appoint an arbitrator.

 

If you do not agree within a further 28 days to appoint an arbitrator, the explorer can apply to the Secretary of the NSW Department of Industry to appoint an arbitrator.

 

In practice, negotiations will often go beyond 28 days. However, these time periods are specified in legislation and are intended to prevent the negotiations process from stalling. 

 

For more information on the process of negotiating a land access arrangement see the page:

Land access

 

Q: What is arbitration?

Arbitration is a form of dispute resolution which occurs outside of the courts.

 

It involves a hearing where the arbitrator will hear from both you and the explorer seeking access to your land.

 

The arbitrator’s job is to try to bring you and the explorer to agreement on a land access arrangement.

 

Where this is not possible, the arbitrator will decide whether the explorer will be granted access to your land and the terms of that access. Generally arbitrators have decided to grant access.

For more information on arbitration see the page:

Arbitration and the Land and Environment Court

 

Q: What if I’m not happy with the arbitrator’s decision?

If you’re not happy with the arbitrator’s decision to grant access to your land or any terms in the access arrangement, you can appeal to the Land and Environment Court for a review of the arbitrator’s decision.

 

Q: What happens if I sell my land or I buy land over which an explorer has a land access arrangement?

The effect of you selling land which is subject of a Land Access Arrangement will depend on whether you are the sole landholder or whether the land is owned by two or more landholders, and whether any of the existing landholders remain an owner of the land subject of the arrangement.

 

A Land Access Arrangement is a contract between a landholder and an explorer and does not run with the title of the property. Any new landholder does not become a party to the land access arrangement merely because the person becomes the owner of the land.

 

If you sell land over which a land access arrangement is in place, the new owner will have 28 days from the date they are given a copy of the land access arrangement to object to it. If the new landholder objects to the land access arrangement within 28 days of receiving a copy, the arrangement ceases to be in force over the land until such time as a new access arrangement is agreed, an arbitrator is appointed to determine new access arrangements, or after 60 days from the date the new landholder objected to the arrangement. If the new landholder does not object to the land access arrangement after 28 days then the arrangement remains in force.

 

In the case that two or more landholders owned the land subject of the Land Access Arrangement and one or more of the landholders continues to be a landholder, then the land access arrangement will remain in place.

 

Q: How does the Australian Tax Office treat compensation for taxation purposes?

The taxation treatment of compensation payments under a land access arrangement will vary depending on whether the payment is characterised as income or capital.

 

If compensation is paid for the loss of value or damage to the land, this will generally be a capital payment, which reduces the cost base of the land and means no tax is payable on the compensation payment. This is generally the best outcome for the landowner.

 

If compensation relates to other matters, landowners will generally get the best after-tax result if the payment is regarded as being a capital receipt, as they will be able to take advantage of various capital gains tax concessions.

 

If the compensation is for loss of income, it will be fully taxable.[i]

 

 

[i]     Cooper Grace Ward Lawyers Land access checklist for landowners negotiating with coal seam gas operators released (7 February 2014).

 

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