AMPLA Queensland Toolkit Seminar 7 October 2010 Queenslands new land access laws for resources tenements [does not inclu

1. AMPLA Queensland Toolkit Seminar7 October 2010Queensland's new land access laws for resources tenements[does not include Natural Resources and OtherLegislation Amendment Bill (No. 2) 2010]

2. Your presenters Warwick Squire, Manager, Mining Policy, DEEDI Daniel Gosewisch, Vice President Legal, Arrow Energy Martin Klapper, Partner, HopgoodGanim

3. Land accessnegotiations

4. Agenda for this seminar Martin Introduction to topic and content; brief outline of the new legislative structure Warwick The land access rules from perspective of State policy, policy development and "how did we get here�; land access consultations over the last few years Daniel � The land access rules for petroleum; by default this covers all sectors, including minerals once that part of it commences; the new 'compensatable effect' Martin Minerals exploration - the same regime will apply but the differences from the existing regime are greater; description of and rationale for the DEEDI model agreements Questions and discussion

5. Introduction Petroleum and gas Carbon capture and storage Geothermal Minerals (exploration only) Acts amended by the Geothermal Energy Act 2010: Petroleum and Gas (Production and Safety) Act 2004; Petroleum Act 1923; Mineral Resources Act 1989; Greenhouse Gas Storage Act 2009; Geothermal Exploration Act 2004

6. The principal amendments Geothermal: new exploration and production regime replaces existing exploration regime, with transitional provisions New land access regime for CCS and petroleum, with related changes eg protection of landowner from liability Similar changes for minerals (exploration only) Comment on transitional provisions

7. A broad overview of the new land access rules Preliminary activities and advanced activities For advanced activities, compensation must be addressed before an entry notice can be given The new �compensatable effect� The new timelines � 50 business days

8. Warwick Squire Perspective on policy development

9. The new land access rules A single regime for land access The Land Access Code Compensatable effects Limitation of tortious liability

10. Single Regime for accessand compensation Consistency - similar land access requirements and compensation liabilities across petroleum, mining, greenhouse gas storage and geothermal The Land Access Code has also been introduced This mandatory Code will form part of the conditions of all tenements issued under mining, petroleum, greenhouse gas storage and geothermal legislation Breach of a provision of the Land Access Code

11. General comment about amendments The amendments ensure consistency in definitions of �compensatable effects� for which tenement holders must compensate land holders Also specifically require compensation to be paid for the land holders accounting, legal and valuation costs in negotiating compensation and specified consequential loss as a �compensatable effect�

12. Compensatable effects Means �all or any of the following � All or any of the following relating to the eligible claimant�s land � Deprivation of possession of its surface Diminution of its value Diminution of the use made or that may be made of the land or any improvement on it Severance of any part of the land from other parts of the land or from other land that the eligible claimant owns Any cost, damage or loss arising from the carrying out of activities under the [tenement] on the land Accounting, legal or valuation costs the claimant necessarily and reasonably incurs to negotiate or prepare a Conduct and Compensation Agreement , other than the costs of a person facilitating an ADR Consequential damages the eligible claimant incurs because of the above paragraphs�

13. Getting access under the new regime (1) The amendments replace existing notice and compensation provisions under the petroleum, minerals and greenhouse gas storage legislation The process begins with a determination of whether the proposed activity is preliminary or advanced

14. Preliminary activity A Preliminary Activity is an authorized activity that will have no impact, or only a minor impact on the business or land use activities of any owner or occupier of the land on which the activity is to be carried out Examples: Walking the area Driving on the existing road or tracks Taking soil or water samples Geophysical surveying without site preparation Aerial, electrical or environmental surveying Survey pegging

15. Preliminary activities (2) Activities that are not preliminary activities are: Activities on land that is less than 100 hectares and is used for intensive farming or broadacre agriculture Activities that are carried out within 600 metres of the school or an occupied residence Activities that affect the lawful carrying out of organic or bio-organic farming All other activities are �Advanced Activities�

16. How will it work? If the resource tenement holder owns the land on which the activities are to take place, or if it has a right apart from under the tenement to enter the land: then it can enter the land by exercising its existing rights Limited exceptions exist with respect to entry to preserve life or property or in an emergency Leaving such issues to one side, the tenement holder must decide whether the activities it proposes to conduct are preliminary or advanced What if some of each are proposed?

17. The process for preliminary activities Where an existing Conduct and Compensation Agreement is in place, or where simply a waiver a entry notice is in place, the tenement holder can enter the land in accordance with that agreement or notice The tenement holder must still compensate the land holder but that can happen later, either under an agreement or by determination of the Land Court Without a waiver of entry notice, an entry notice must be given to the land holder

18. Preliminary activities (cont.) For a first entry notice, the land holder is also entitled to a copy of the Land Access Code as well as a copy of the tenement holder�s tenement and EA Detailed content requirements for entry notices A copy of the entry notice must be given to the relevant departmental officer immediately and before entry Entry can then occur at least 10 business days after the notice is given or a shorter time if agreed by the land holder

19. Entry for advancedactivities Process is more complex for advanced activities. Unlike the old rules, it is not possible to begin the process by giving an entry notice Compensation must be addressed first Once that has happened, an entry notice may be given The process begins with this question: are the parties in agreement on the conduct and compensation terms under which the tenement holder may enter the land and undertake activities

20. Process for Entry for Advanced Activities (2) If yes, and an agreement has been signed that satisfies the requirements of the relevant Act for a Conduct and Compensation Agreement then: If the agreement contains a waiver of entry notice, the tenement holder can start its activities If the agreement does not contain a waiver of entry notice the tenement holder can start its activities as soon as the landholder is given an entry notice and the notice period is ended

21. Process for Entry for Advanced Activities (3) If the answer is no, the tenement holder can give the land holder a negotiation notice This notice says the tenement holder wishes to negotiate a Conduct and Compensation Agreement or a Deferral Agreement with the �eligible claimant� �Eligible claimants� means the landowner or occupier Giving this negotiation notice marks the formal start of the process under the legislation, even if the parties started to negotiate earlier

22. Timeline Assuming the day in which the negotiation notice is given is day 0, the parties must then negotiate over a Conduct and Compensation Agreement or a Deferral Agreement for a minimum of 20 business days ie 1 month If the parties enter into an agreement within 20 business days, a �cooling off period� for the balance of that 20 business day period applies In that cooling off period, Advances Activities cannot commence, even if the land holder agrees to the contrary If a negotiation notice has been given no activities will can start on the ground for at least 20 business days whether or not an agreement is reached

23. Timeline � 20 business days have now passed Assuming an agreement is reached on conduct and compensation or deferral, the tenement holder can then begin to address the entry notice requirements If there is a Conduct and Compensation Agreement and that Agreement contains a waiver of entry notice, the tenement holder can enter the land and commence activities At the earliest, then, advanced activities can begin on the day after 20 business days have elapsed since the negotiation notice was given (assuming the parties have entered into an agreement and the land holder is given a waiver of entry notice or has agreed to reduce the 10 business day requirement under an entry notice)

24. Timeline � 20 businessdays + 1 day have passed If the parties can�t agree? At any time after this point, either party can give a notice to the other electing either to refer the negotiation to a relevant officer appointed under the relevant Act for a conference, or to start an independently conducted ADR process (conciliation, mediation or similar) A party that nominates an independently conducted ADR process must pay the costs of the person conducting the ADR

25. 20 Business days + 1 day have passed (2) The relevant officer is the person appointed in that capacity by DEEDI under the relevant Act No doubt this will be a resourcing issue for DEEDI The negotiation conference/ADR process must be completed within the further 20 business days That period can be extended if the parties agree Assuming no agreement is reached by the end of the mediation process, at least 40 business days will have passed since the tenement holder gave the negotiation notice

26. 40 Business days have passed At this point, if no agreement is reached a party that attended the negotiation conference or ADR can apply to the Land Court for the determination and compensation and the tenement holder can give an entry notice Unless the landholder agrees, the 10 business day minimum period between giving the entry notice and when the entry can occur then applies

27. Timeline -50 Businessdays have passed There are detailed rules relating to the negotiation process for Conduct and Compensation Agreements and giving entry notices Eg a tenement holder that fails to attend the negotiation conference or ADR during the second 20 business period cannot start Land Court proceedings and therefore cannot give an entry notice The legislation does not say what happens to a party that misses this important step It may have to go back to the beginning by giving a new negotiation notice Clearly this is a serious consequence of failure to abide by the provisions

28. Summary For Preliminary Activities: An entry notice must be given and if the land holder agrees entry can occur immediately Compensation must be determined and paid For Advanced Activities: In the absence of an agreement a negotiation notice must be given and a minimum of 20 business days must pass between the time when the negotiation notice is given and when entry occurs and before Advanced Activities can commence (even if the land holder agrees to allow entry earlier) Assuming the tenement holder complies with all the necessary steps along the way and that it does not reach an agreement with the land holder on a Conduct and Compensation Agreement, Deferral Agreement or reduction in the entry notice period, entry for an advanced activity can be delayed by 50 business days or more after the tenement holder gives a negotiation notice

29. Minerals exploration Distinguish EPs and MDLs from other MR Act tenements � mining leases, prospecting permits, mining claims The transitional provisions Contrast with the existing access provisions The DEEDI model agreements � the deferral agreement and the conduct and compensation agreement

30. The �old� Mineral Resources Act legal framework Ss 145 and 191: compensation for exploration activities is payable for damage, injury and loss No requirement for agreement or determination up front and provision for agreement Mining leases are treated differently under the �old� rules Mining leases cannot be granted or renewed unless and until compensation has been agreed with the relevant landowner, or determined by the Land Court

31. New regime compensation for exploration activities Under the new rules in the MR Act, the compensation regime for exploration activities will be brought into line with that under the Petroleum and Gas Act, with some changes to both Compensation must now be addressed prior to entry for exploration Mining lease compensation regime however has not been altered in the new rules

32. New regime � tortious liability provisions Introduction of limitation on the tortious liability of a landowner where someone other than the tenement holder carries an activity on the land The MR Act already contains a tortious liability provision limiting the liability of landowners at s 397 S 397 will be amended by a new Act

33. Standard agreements Two standard agreements prepared by the State for the purposes of assisting the resources industry and land holders to deal with land access, compensation and deferral matters: Conduct and Compensation Agreements; and Deferral Agreements There is one set of exceptions for the compensation and access for tenements under the MR Act (prospecting permits, mining claims and mining leases) The compensation regime for these tenements will continue as before and have not been amended

34. Conduct and CompensationAgreement This agreement deals with issues relating to the use of the same land by resource tenement holder and land holders for different purposes It also deals with compensation to be paid to the land holder for the access by the tenement holder to the land An agreement must address a number of specified matters under the legislation in order to comply. The agreement can also deal with other matters Will commonly contain a waiver of entry notice Entry notices can be agreed to be dealt with separately if the parties agree

35. Deferral Agreement An agreement by the resource tenement holder and the land holder to defer the resolution of matters relating to conduct and compensation to a later agreed time Usually entered into because the parties recognise it will take some time to resolve and agree all the necessary issues between them In the meantime the tenement holders activities can begin while they negotiate the terms of the final agreement The State standard Deferral Agreement provides if the parties agree and a waiver of entry notice will also be given at the same time as the Deferral Agreement is signed.

36. Resource Tenement Holder The resource tenement holder can be an individual or it can be a company Could be the holder of an exploration tenement Could be the holder of a production licence Activities on the land of course can be very concentrated activities such as open cut coal mining

37. Land Holder Consistently across all the Acts continues with which they deal references are made to �owners� and �occupiers� (in this presentation together called land holders) Land holders have similar rights in relation to conduct and compensation of a resource tenement holder and include the right to receive an entry notice or a right to agree to waive that requirement For public land the owner would usually be the state or public entity that controls the land For private land the owner will be the person who owns the land (either freehold or lease hold) and the occupier would be the person who�s lease is registered on the freehold title or who obtains the right of occupation from a private owner

38. Multiple land owners and occupiers It is possible for a Conduct and Compensation Agreement or a Deferral Agreement to be entered into between the tenement holder and all owners and occupiers or only between some of them Whatever happens, an agreement must be entered into with each owner or occupier whether alone or together The model agreement prepared by the State assumes all tenement holders and all land owners and occupiers enter into the one agreement Clauses must be amended if this is not the case

39. Purpose and functionof standard agreements It is a model only The parties may elect to base an agreement on the standard The parties must bear in mind the range of circumstances in which a Conduct and Compensation Agreement or a Deferral Agreement might be entered into The tenement might be for geothermal, carbon capture and storage, minerals or petroleum access Exploration or production

40. Purpose and function ofstandard Agreements (2) The land use affected by activities might be high intensity agriculture The land might carry a grazing operation The land might not be used for any purpose at a given time A standard agreement will have to be capable of application in this extremely wide set of potential circumstances

41. Purpose and function ofstandard Agreements (3) The Deferral Agreement and Conduct and Compensation Agreement were designed to be capable of application in any conceivable combination of resource tenement and land use They recognize they need to be adapted to suit particular circumstances No standard document can ever be capable of applying un-amended in all possible circumstances It is a starting point in negotiations only It is useful to have it as a starting point nevertheless should the parties wish to avail themselves of it

42. Preparation of standard Agreements Designed and prepared by the State Extensive consultation with resources industry and land holder representatives The agreements aim to provide as even and as balances an approach as possible to the issues that arise in respect of conduct, compensation and deferral

43. Mandatory requirements A Conduct and Compensation Agreement must include these things: How and when the tenement holder may enter the land to which the land holder is the eligible claimant; How authorised activities under the tenement to the extent they relate to the land holder must be carried out The tenements holders compensation liability to the land holder or any future compensation liability that the tenement holder might have to the land holder

44. Other possible provisions that could be included in a Conduct and Compensation Agreement Agreement can include other matters other than the mandatory conditions Agreement cannot contain provisions that are inconsistent with the relevant resources legislation a condition of the resources tenement or a mandatory provision of the Land Access Code If the agreement does provide for matters that are inconsistent with the Land Access Code then the Conduct and Compensation Agreement will be unenforceable by the tenement holder

45. Dealing with all or part of the compensationliability A Conduct and Compensation Agreement can deal with all or part of a tenement holder�s compensation liability If it deals with part of the liability, it has to specify which part For activities that relate to any other part of the compensation liability, the tenement holder must again comply with the legislation requirements for Conduct and Compensation Agreements

46. Compliance of the CCA with the legislation First it must provide for: The conduct conditions (in the special conditions) Authorised activities and how they are carried out (see schedule 1) The compensation liability (see schedule 3) Second it must be written and signed by and for the tenement holder and the landholder Third it must state whether it is for all or part of the compensation liability If it is for part of the liability it must state the details of the activity and effect for that part

47. Compliance of the CCAwith the legislation Must provide for how and when the compensation liability will be met The standard Conduct and Compensation Agreement does all these things

48. Discussion of some issues Disclosure Infrastructure (clause 9) Liability Compensatable effects Rehabilitation (clause 16) Insurance (clause 17) Dispute resolution (clause 18) Assignment (clause 19) Confidentiality (clause 20)

49. Comments on modelCCA in general There can be no one document that is the best standard in all circumstances The model Conduct and Compensation Agreement prepared by the State aims to provide for a fair balance and to deal with matters that commonly arise in negotiations between tenement holders and landholders without limiting the ability of the parties to agree to matters that differ from the standard

50. Mandatory provisionsof the deferral agreement These include: It must be written and signed by or for the tenement holder and each owner and occupier; It must state a number of things, including that: the landholder has been told that the landholder is under no obligation to enter into the agreement the authorised activities proposed to be carried out under the tenement on the land the period during which the land will be entered when and where the activities are proposed to be carried out the period for which the deferral agreement has effect when it is proposed to enter into a conduct and compensation agreement

51. Non-mandatory provisions of a deferral agreement The optional provisions contained in the model draft Deferral Agreement prepared by the State are included for: Insurance in clause 9; Dispute resolution in clause 10; Assignment in clause 11 The parties can include in the special conditions any agreed conditions for how notices before each entry are given and any agreed amendments to the general conditions

52. Comments about using the draft agreements in negotiation conferences There are benefits and costs in using a template agreement at the start of negotiations. The benefits are: Much work has already been done so there are time and cost savings (potentially); The agreement can be provided to the other side in advance and this allows an issues list to be generated of matters to be agreed; Can be quicker to finalise overall; Demonstrates that someone else has �been there before� so the task of agreeing the terms of an agreement may not seem so daunting; Helps the parties to be better informed about the kinds of issues they need to think about and address; If used well, a model or template agreement can be a significant tool for a seasoned negotiator to speed up the process

53. Costs of using a draft agreement in negotiation A draft agreement can mask the conceptual, philosophical and values differences between the parties It might be seen by the party receiving the draft agreement as an already �done deal� It prevents the early �yesses� which help to create a climate of agreement Prevents hastening slowly, which can actually be faster in the end (ironically) It is necessary to unpick the assumptions and concepts underlined in the drafting, otherwise confusion can result