Mining and Petroleum Legislative Amendments

 

On 15 October 2015, the NSW Government introduced a package of five Bills into parliament which amended the state’s mining and petroleum legislation with the aim of implementing both the Walker Review into Land Access Arbitration Processes and the recommendations of the Chief Scientist and Engineer outlined in the NSW Gas Plan. These Bills have passed parliament and have commenced with the Land Access package, with the final component to commence later in 2016.  

 

Overview of the Legislation

The NSW Government has stated that the Legislative Amendments implement various recommendations from prior government consultations and expert reviews. These include:

  • Chief Scientist & Engineer’s review of NSW coal seam gas legislation (2014)

  • Bret Walker SC’s review of land access and compensation (2014)

  • Independent Commission Against Corruption’s (ICAC) recommendations from its corruption inquiry into coal licence allocation (2013)

  • Coal Exploration Steering Group on coal licence allocation (2014-15).[i]

 

Which laws are affected

The five Bills amend the following Acts (and makes minor changes to a few others):

  • Mining Act 1992 (Mining Act)

  • Petroleum (Onshore) Act 1991 (Petroleum Act)

  • Protection of the Environment Operations Act 1997

 

When the changes commence

As at March 2016 all components expect the Land Access package had commenced. The Land Access package is scheduled to commence later in 2016.

 

Mining and Petroleum Legislation Amendment (Grant of Coal and Petroleum Prospecting Titles) Act 2015
 

This Act changes how the NSW Government will identify and release new exploration and mining areas for coal and gas, and how the Resources Minister will assess and grant new exploration and mining title applications.

 

The Act amends the Mining and Petroleum Acts to establish a Strategic Release Framework for how land will be allocated for new coal and coal seam gas exploration areas. Instead of an ‘Expression of Interest and tender’ approach, the Bill also enacts a ‘competitive selection process’ for granting Exploration Licences and assessment leases for coal (and other ‘controlled minerals’) and CSG.

 

Strategic Release Framework

The Act amends the Mining and Petroleum Acts to create a Strategic Release Framework for how land will be allocated for new coal and CSG exploration. Instead of the old expression of interest and tender system, the Act enacts a competitive selection process for granting Exploration Licences and assessment leases for coal and CSG. The Strategic Release Framework requires community consultation and a ‘triple bottom line assessment’ of anticipated benefits for NSW to be undertaken by an advisory body before the release of new resources, and competitive allocation of any new coal or petroleum resources.

 

New areas to prospecting for resources

The Act makes all of NSW a ‘controlled release area’ for coal and petroleum. This means that the Strategic Release Framework will apply to the whole of the state, apart from existing titles.

 

Competitive application process

The Act requires that prospecting titles for all resources must be granted by a competitive selection process.

 

The Act sets out what the Minister must consider in determining a selection process. In addition, it allows the Minister to refuse all applications if this is appropriate.

 

Public notification of tender process

The Act changes the way that notification of prospecting licence applications will occur. Rather than individual applicants notifying of their applications in local newspapers, the NSW Government will publish an invitation for tenders to the competitive process in the Government Gazette, and individual applicants will be exempt from having to notify.

 

In addition, the NSW Government is now no longer required to notify in the Government Gazette when a prospecting title is granted.

 

Mining and Petroleum Legislation Amendment (Harmonisation) Bill 2015
 

The Harmonisation Bill makes a range of changes to both the Mining and Petroleum (Onshore) Acts in order to make them more consistent with respect to administration of titles, compliance and enforcement. The NSW Governments stated aim is that this is the first step towards a single resources Act in NSW.

 

The main changes made by the Bill are:

  • streamlining the administration of titles, including standardising matters that can be taken into account when determining an application for the grant of a title or renewal of a title; standardising grounds for refusing an application; standardising conditions that can be imposed on a title; and standardising grounds for cancelling or suspending conditions of a title

  • reducing the number of title conditions down to around 13 standard conditions for all new licences issued under IMER

  • providing for the decision-maker to take into account minimum standards regarding technical, financial and work programs standards before an application can be granted

  • implementing new compliance tools, including infringement notices, enforceable undertakings and a small number of new offences

  • increasing the maximum term of both a petroleum and mining prospecting title to six years

  • allowing for mineral title annual reports to  be publicly released after five years.

 

Mining and Petroleum Legislation Amendment (Land Access Arbitration) Bill 2015
 

The Land Access Bill makes changes to the process of coming to land access arrangements. The aim of the Bill is to implement the last of the Walker recommendations and makes a number of changes to both the Mining and Petroleum Acts.

 

Access Arrangements for Gas Production

The Bill now extends the requirement for and provisions around land access arrangements to apply to petroleum production leases. Previously they only applied in the exploration stage.

 

Expansion of Licence holder liability for Landholder costs of land access negotiation

The Bill extends what costs of the landholder the title holder must pay. The original position was that titleholders were required to pay the costs of obtaining initial legal advice by landholders. This definition has been expanded to cover the ‘reasonable costs of the landholder in negotiating a land access agreement and includes the costs of the time of the landholder, legal fees and other expert fees. The regulations Minister can cap this amount.

 

A separate provision also provides for the title holder to pay the reasonable costs of the landholder in participating in mediation and arbitration. This can also be capped by regulation.

 

In addition where landholders have acted unreasonably only costs reasonably incurred will be paid.

 

Changes to definition of Significant Development

The Mining and Petroleum Acts prohibit exploration activities within 200m of a dwelling house, 50m of a garden or on a ‘significant development’ without owner consent.

 

The bill replaces the existing definition of significant development with a four step test to determine if something is a significant improvement or not.

A significant development is a work or structure that:

  • is a substantial and valuable improvement to the land; and

  • is reasonably necessary of the operation of the landholders lawful business; and

  • is fits for it purpose (immediately or with minimal repair; and

  • cannot reasonably coexist with the exercise of rights under the resource title; and

  • cannot reasonably be relocated or substituted without material detriment to the landowner.

 

In addition the regulations can include or exclude specific kinds of works or structures.

 

The Bill also provides that the reasonable costs of the landholder will be paid by the title holder for Land and Environment Court proceedings in a dispute over whether resource title activities can occur near or on homes, gardens and significant developments.

 

Roadside seismic surveys

The Bill amends the Mining and Petroleum Acts to allow for title holders to do seismic surveys on public roads close to homes and gardens by providing 12 days’ written notice and without the consent of the landholder.

 

Changes to Arbitration Process

The Bill provides for a more detailed and regulated mediation and arbitration process. This follows on from the Walker Review into the Arbitration Process. There are a series of major changes including:

  • changes to the arbitration panel including eligibility criteria and creating a public register of arbitrators;

  • a right for arbitrators to inspect property provided they provide notice to landholders;

  • requirement that all parties to the arbitration act in good faith;

  • establishment of an online public register of arbitrated access arrangements; and

  • approved arbitration procedures to be detailed in regulations

 

Access code and mandatory provisions for access arrangements

The Bill also provides for an access code to be made under the regulations. The aim of the code is to guide negotiations between resource title holders and landholders. The code can also contain mandatory provisions for Land Access Arrangements. An access arrangement cannot weaken resource title holder obligations under the access code.

 

Exclusion of coverage of reckless conduct by landholders

The Bill also amends the landholders’ general immunity from liability under both Acts to exclude intentional reckless acts or emissions.

 
Protection of the Environment Operations Amendment (Enforcement of Gas and Other Petroleum Legislation) Bill 2015

 

The Bill extends the Environmental Protection Authority (EPA) existing powers of investigation and enforcement and extends them to petroleum offences under a number of acts.

 

It also allows the EPA to accept undertaking and to issue clean-up notices.

 

For more information of the role of the EPA in petroleum enforcement and regulation see:

Environment Protection Authority lead regulator of coal seam gas industry

 

Work Health and Safety (Mines and Petroleum) Legislation Amendment (Harmonisation) Bill 2015
 

This Bill aligns work health and safety requirements between mining and petroleum. 

 

[i] Environmental Defenders Office Mining and Petroleum Legislation Amendment Package 2015 (NSW) Briefing Note  (February 2016)

 

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