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Australia – Is It RIP For Resource Activities Under The RPI Bill?

17 February, 2014

 

Legal News & Analysis – Asia Pacific – Australia – Energy & Project Finance

 

Some concerns for mining and gas companies under the Regional Planning Interests Bill 2013 (Qld)


WHAT YOU NEED TO KNOW

 

  • As advised in our alert on 22 November 2013, the Regional Planning Interests Bill 2013 (Qld) (RPI Bill) was introduced into Queensland Parliament on 20 November 2013.
  • Under the RPI Bill, if enacted in its current form:The draft regional plan for Cape York has highlighted the potential for mining and gas companies to be adversely affected by the RPI Bill.
    •  it will be an offence for mining and gas companies to carry out their activities in an area of regional interest, unless the activities are exempt resource activities (ie, conducted under a current plan of
    • operations) or are conducted under a regional interests authority (RIA); and  even current mining and gas tenements may be caught by the restrictions.
  • The draft regional plan for Cape York has highlighted the potential for mining and gas companies to be adversely affected by the RPI Bill.

 

WHAT YOU NEED TO DO

 

  • An activity under a current mining or petroleum tenement will be an exempt resource activity for all areas of regional interests if it is carried out under a “resource activity work plan” in place before the relevant area became an area of regional interest.
  • Therefore, be aware of new draft regional plans and of reviews of current regional plans and, where appropriate:
    • for production tenements, lodge plans of operation; and
    • for authorities to prospect, seek approval for proposed plans of operation (or for amendments to existing work programs),

 

so the activities under those plans of operations will be exempt resource activities under new or reviewed regional plans.

 

Introduction


The Queensland Government has stated that it is committed to delivering a new generation of statutory regional plans. The regional plans will be subject to the RPI Bill when it is enacted.


To date, only the Darling Downs Regional Plan and the Central Queensland Regional Plan have been made in contemplation of the RPI Bill. However, a draft Cape York Regional Plan has been released for public consultation and the South East Queensland Regional Plan is being reviewed.


The draft Cape York Regional Plan raises concerns because it identifies some areas of regional interest which overlap with current mining leases and other resource authorities.
As new regional plans are developed and the other 10 current regional plans are reviewed to be in line with the RPI Bill, they are also likely to identify areas of regional interest which overlap with resource authorities.

 

Unpredictable Areas Of Regional Interest


Under the RPI Bill, there are four categories of areas of regional interest:

 

  • priority agricultural areas;
  • priority living areas;
  • strategic cropping areas; and
  • strategic environmental areas.
 

Both the Darling Downs Regional Plan and the Central Queensland Regional Plan have identified areas of regional interest. However, the areas identified are somewhat predictable in that they are either priority agricultural areas or priority living areas.


Areas identified as strategic cropping land in regional plans might also be considered somewhat predictable given the Strategic Cropping Land Act 2011 (Qld) has been in force since 2011.


The draft Cape York regional plan however identifies strategic environmental areas. This categorisation for some of the areas might have been difficult to predict because it has not recognised previous environmental impact assessments or other extensive scientific work undertaken in the relevant areas.


No Compensation For Loss Of Rights
Resource activities (ie, activities for which a resource authority is required) may be conducted on areas of regional interest only under an RIA or if the activity is an exempt resource activity. This applies to both current and future resource authorities.
The processes for obtaining an RIA in the RPI Bill are complex. In addition:

 

  • there are no statutory timeframes to drive the decision-making process for an RIA; and
  • many of the details for obtaining an RIA are to be contained in regulations which are not yet available for review.
 

The ability of a resource company to obtain an RIA and the limitations and conditions to which any RIA might be subject are therefore uncertain.


Even if all the rights of the holder of a current resource authority are negated by the enactment of the RPI Bill, no compensation will be payable – this is specifically provided in the RPI Bill.


Is There A Way To Achieve Certainty?


Unless the holder of a resource authority is able to obtain an RIA, the holder may carry out its resource activities on areas of regional interest only if the activities are “exempt resource activities”.


Controversially, there are no transitional arrangements in the RPI Bill to provide that any activities conducted under the authority of existing resource tenements are “exempt resource activities”. (The government’s position is that no current resource projects will be affected by the RPI Bill and consequently no transitional requirements are required. However, this fails to take account of the fact that new regional plans can be made and existing plans reviewed at any time.)


“Exempt resource activities” are only:

 

  • activities conducted under a voluntary conduct and compensation agreement or other agreement with the landowner – but this applies:
    • only with respect to priority agricultural areas; and
    • only if the activities are unlikely to impact on the suitability of the land to be used for priority agricultural land use;
  • activities carried out, and the impact of which is restored, within 12 months of the first activity under the relevant resource authority – but this applies only with respect to priority agricultural areas and strategic cropping areas;
  • activities carried out in accordance with a “resource activity work plan” that took effect prior to the categorisation of the relevant area as an area of regional interest – this applies for all areas of regional interest but with some exceptions relating to water sources.
 

Consequently, the most certainty is to be gained if proposed activities are set out in a pre-existing “resource activity work plan”.


Only activities in a “resource activity work plan” current before the relevant area became an area of regional interest will be exempt resource activities. The timing of approval or lodgement of “resource activity work plans” vis-à-vis the making of new regional plans or the review of current regional plans could therefore be important in ensuring certainty for a project.

 

What Is A Resource Activity Work Plan?


Under the RPI Bill, a “resource activity work plan” includes:

 

  • for an authority to prospect, a work program (or an amendment to an existing work program) which has been approved by the Minister in accordance with Chapter 2, Part 1, Division 3 (sections 45 to 63) of the Petroleum & Gas (Production & Safety) Act 2004 (Qld);
  • for a mining lease or a petroleum lease, a plan of operations lodged under section 287 of the Environmental Protection Act 1994 (Qld); and
  • for a mineral development licence, the statements which accompanied the mineral development licence application.
 

The definition also includes work programs for geothermal permits, GHG permits and mining claims.

 

No Coal Or Minerals Exploration On Some Areas Without An RIA


Under the RPI Bill, there are no “resource activity work plans” for exploration permits under the Mineral Resources Act 1989 (Qld).


Consequently:

 

  • coal and minerals exploration cannot be an exempt resource activity on:
    • priority living areas; or
    • strategic environmental areas; and
  • on those areas, an appropriate RIA will be required.
 

The Status Of The RPI Bill


The Parliamentary Committee for State Development, Infrastructure and Industry is held public hearings on the RPI Bill in the week commencing 10 February 2013 and is due to report to Parliament by 17 March 2014. It is expected that some amendments will be made before the RPI Bill is passed, but it is likely that risks for resource companies will remain.

 

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For further information, please contact:

 

Caroline Ammundsen, Partner, Ashurst
caroline.ammundsen@ashurst.com

 

Lucy Bretherton, Ashurst
lucy.bretherton@ashurst.com


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