Resources and Energy Update February 2017

Damian Roe, Jonathan Fulcher, and Paul Harley / 08 February 2017

This Resources and Energy Update, prepared by HopgoodGanim Lawyers’ Resources and Energy team outlines some important recent developments in the Resources and Energy Sector:

Chain of Responsibility Guidelines

The recently published Chain of Responsibility Guidelines detail the factors that DEHP will take into account when determining whether to issue an EPO pursuant to the recently introduced Chain of Responsibility provisions of the EP Act.

  • Why this may be important to you: if you have a “relevant connection” with a company undertaking an environmentally relevant activity, you may be issued with an EPO if that company fails to comply with its obligations under the EP Act.
  • Recommended action: ensure compliance with obligations to lodge financial assurance and train directors and officers to be aware of and to address the risks arising under these guidelines and the Chain of Responsibility provisions.

Temporary certainty for Land Court functions and powers

The recent notification of transitional regulations under the Land Court Act 2000 are intended to temporarily address procedural uncertainty arising from the decision in BHP Billiton Mitsui Coal Pty Ltd v Isdale [2015] QCS 107 in certain Land Court matters, such as mining lease objection matters.

  • Why this may be important to you: if you are a party to a matter referred to the Land Court under a “recommendatory provisions”, new processes that were previously unavailable will apply.
  • Recommended action: be aware that the Land Court now has the power to make a cost order and exercise other powers against parties involved in a mining lease objection process.

FIFO Bill process continues

The parliamentary process for the Strong and Sustainable Resource Communities Bill 2016, more commonly known as the FIFO Bill, continues with public hearings of the Infrastructure, Planning and Natural Resources Committee continuing this week.

  • Why this may be important to you: if this regime applies to your project, certain restrictions will apply to who you can employ.
  • Recommended action:  assess whether this regime is likely to impact your project and prepare its likely introduction.

Doubt surrounding registered Indigenous Land Use Agreements

The Full Federal Court’s decision in McGlade v Registrar National Native Title Tribunal [2017] FCAFC 10 casts doubt on the validity of the registration of some Indigenous Land Use Agreements and acts undertaken pursuant to those agreements.

  • Why this may be important to you: the Full Federal Court has determined that the previously accepted doctrine relating to the requirements for registration of an ILUA is incorrect and more prescriptive requirements apply.
  • Recommended action: review existing ILUA to assess whether all registered native title claimants signed the document and, if not, seek legal advice as your resource extraction activities may not be properly authorised.

#1Chain of Responsibility Guidelines

The Queensland government announced on 27 January 2017 the publication of the statutory guideline entitled “Issuing "Chain of Responsibility” Environmental Protection Orders under chapter 7, part 5 division 2 of the Environmental Protection Act 1994” (CoR Guidelines).

As set out in our previous alerts (Environmental Protection (Chain of Responsibility) Amendment Bill 2016 and Financial assurance decision stayed without 75% payment), the Chain of Responsibility (CoR) amendments to the Environmental Protection Act (EP Act) were introduced early last year.  The CoR provisions give the Department of Environment and Heritage Protection (DEHP) the power to issue environmental protection orders (EPOs) to “related persons” with a “relevant connection” to a company that is carrying out the environmentally relevant activity.

The CoR Guidelines will be used by DEHP to guide decision making and enforcement in relation to CoR EPOs.

In summary the guidelines outline the considerations and relevant factors that will be taken into account by DEHP in assessing whether a person has a “relevant connection” with the company, which may arise if:

  • the person is capable of significantly benefitting financially, or has significantly benefited financially, from the carrying out of the relevant activity by the company; or
  • the person is, or has been at any time during the previous two years, in a position to influence the company’s conduct in relation to the way in which the company complies with its obligation under the EP Act.

The CoR Guidelines also provide various examples of when DEHP will consider a person has obtained a significant financial benefit or was in a position to influence the company’s compliance.  Such an assessment will include considering whether the related person took all reasonable steps in the circumstances to ensure the company complied with the EP Act and sets out some examples of what will be considered reasonable steps.

A copy of the guidelines can be located here.

#1Temporary certainty for Land Court functions and powers

On 5 May 2015 Justice McMurdo of the Supreme Court in Queensland handed down his decision in BHP Billiton Mitsui Coal Pty Ltd v Isdale [2015] QCS 107 (BHP Case) which confirmed significant limitations on the Land Court’s powers in relation to matters referred to it under the Mineral Resources Act (MR Act). 

As a result, numerous categories of matters that are referred to the Land Court under various laws were determined not to be “proceedings” for the purposes of the Land Court Act with the effect that various processes and powers that are available under the Land Court Act and the Land Court Rules were no longer available for those matters.  This has caused considerable disruption to the operations of the Land Court in hearing and determining matters referred to it including objections to the grant of mining leases pursuant to the provisions of the MR Act.

However, on 27 January 2017 the Queensland government notified the Land Court (Transitional) Regulation to address the impact of the BHP Case. 

The effect of the regulation is to apply various provisions of the Land Court Act, relating to the jurisdiction and powers of the Land Court, such as the ability to make directions or order a party to pay the other party’s costs, to the exercise of function or power conferred on the Court under a “recommendatory provision”.

A recommendatory provision is defined as various provisions of various Queensland Acts including the Aboriginal Cultural Heritage Act 2003, the Environmental Protection Act 1994, the Mineral Resources Act 1989 and the Petroleum and Gas (Production and Safety) Act 2004.

Whilst it is no doubt the intention of the Queensland government to give certainty to both the Land Court and parties involved in matters before the court pursuant to recommendatory provisions, as the transitional regulation expires on 23 July 2017, those parties should “watch this space” as it is reasonable to expect that legislative change is likely prior to these regulations expiring.

#1FIFO Bill process continues

The Queensland government introduced the Strong and Sustainable Resource Communities Bill into the Queensland Parliament in late 2016.

Our Insurance and Risk team’s previous alert on the bill is located here.

The Queensland Parliament’s Infrastructure, Planning and Natural Resources Committee are currently conducting public hearings in relation to the Bill with a report to the Queensland Parliament due on 7 March 2017.

#1Doubt surrounding registered Indigenous Land Use Agreements

On 2 February 2017 the Full Court of the Federal Court of Australia delivered its decision in McGlade v Registrar National Native Title Tribunal [2017] FCAFC10.

The Full Court’s decision related to a number of Indigenous Land Use Agreements (ILUAs) forming part of the South West Settlement in Western Australia.

The applicant’s challenged the validity of the registration of a number of ILUAs on the basis that a number of registered native title claimants had not executed the ILUAs.  The Full Court determined that the ILUAs could not be registered by the NNTT as they did not comply with section 24CD(1) of the Native Title Act (NT Act) and, in doing so, indicated  it would not follow the decision of QGC Pty Ltd v Bygrave (2) (2010) 189 FCR 412 (Bygrave) which had been one of a series of cases considered the leading authorities dealing with the process of registering ILUAs. 

Section 24CD(1) provides that all persons in the “native title group” must be parties to the ILUA.  “Native title group” is defined, in the circumstances of the case, as meaning “all registered native title claimants” in relation to the land or waters in the area that is subject to the ILUA. 

The previous practice, as a result of the decision in Bygrave, was that if a registered native title claimant was deceased or refused to execute the ILUA despite the fact that the native title claim group had “authorised” the ILUA in accordance with the provisions of the NT Act, the ILUA could be registered.  The Full Court found that all persons constituting the registered native title claimants, namely all of the persons named as applicant for the registered native title claim, must execute the ILUA prior to it being registered. 

Whilst the Full Court recognised that its decision may cause inconvenience, it indicated that where a registered native title claimant was deceased or had refused to sign the ILUA the appropriate mechanism to address that issue was to replace that registered native title claimant using the processes set out in section 66B of the NT Act.

The Full Court’s decision has significant implications for both previously registered ILUAs and those that are contemplated in the future.

Given the previous practice based on the decision in Bygrave there are a number of ILUAs registered where one or more of the registered native title claimants has not executed the ILUA.  Any future acts undertaken under the purported authority of those ILUAs may be at risk and potentially invalid. 

In relation to ILUAs that are contemplated or are currently in the process of seeking registration, those ILUAs must be signed by all registered native title claimants.  Where a registered native title claimant is deceased or is refusing, despite the ILUA being authorised by the native title claim group, to execute the ILUA, it will be necessary to replace the deceased or recalcitrant registered native title claimant in order to obtain the registration of the ILUA.  This will lead to significant costs being incurred to authorise the replacement of and obtaining orders replacing the registered native title claimant in the Federal Court.

Given the significance of this decision and the implication for acts undertaken by the States, Territories and the Commonwealth in the past, we anticipate that an appeal to the High Court of the Full Court’s decision is likely. 

For more information or discussion, please contact HopgoodGanim Lawyers' Resources, Energy and Projects team.

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Damian Roe
Damian is a Partner of our leading Resources, Energy and Projects practice.
Jonathan Fulcher
Jonathan is a Partner and the head of our leading Resources and Energy practice in Brisbane and is also the leader of our Native Title practice.
Paul Harley
Paul is a Partner and the head of our leading Resources and Energy practice in Perth.

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