19 Jul 2012

Near enough not good enough when consulting with land owners

by Mark Geritz, Tosin Aro, Tim Nielsen

Energy and resources proponents should be very careful in the descriptions that they provide to owners in negotiation notices, Consultation Notices and notices of entry under the various pieces of resources legislation.

Legislative land access amendments introduced progressively across all energy and resources sectors in Queensland over the last two years have been designed to facilitate continued growth in exploration and development activity across key parts of the State, while ensuring access to private land is appropriately regulated and occurs in a transparent and equitable manner. This land access regime includes requirements for proponents, prior to carrying out certain activities, to issue various notices to affected landowners and occupiers.

A recent Supreme Court decision illustrates the level of detail that energy and resources proponents will need to ensure they are including in these notices in order to comply with the statutory land access requirements.

Background

Prior to the introduction of the most recent legislative amendments, there was authority as to the level of precision required to be included in notices. O'Connor & O'Connor v Arrow (Daandine) Pty Ltd [2009] QSC 432 is an example of a case on point that was decided before the commencement of the current land access regime.

In that case, the Supreme Court was called upon to consider the lawfulness of an entry notice issued to landowners under what was then section 497 of the Petroleum and Gas (Production and Safety) Act 2004 (PAG Act). The entry notice listed the activities proposed to be carried out on the land as the construction of vertical wells as well as gas and untreated water pipelines.

Justice Wilson held that an entry notice in these terms was not able to confer a lawful entitlement on the gas company to enter the landowner's land to construct a third pipeline to carry treated water from a reverse osmosis plant to another nearby property. While this decision dealt with a notice issued before the present land access regime was introduced to the PAG Act, we believe the principles stated would continue to apply under the new regime.

Part 5 Permissions

It is an offence in Queensland to construct or operate a petroleum transmission pipeline other than as authorised under the PAG Act. This generally outlaws the construction or operation of a pipeline without a pipeline licence (PPL) granted under the PAG Act.

However, in addition to needing a PPL, a person will only be able lawfully to construct or operate each pipeline the subject of the PPL on "pipeline land" for the PPL (and on "public land" in the area of the PPL). Relevantly, "pipeline land" means land that the PPL holder owns or in respect of which the holder has (for the construction or operation of the pipeline) an appropriate easement, the owner's written permission or a "Part 5 Permission".

Where a person applies to the Minister for a Part 5 Permission over particular land, then, in addition to making the application, the person must give each owner notice (called a Consultation Notice) of the application. A Consultation Notice must describe the land in respect of which the Part 5 Permission is sought and also state various matters, including that there will be a consultation period of at least 20 business days' duration during which:

  • the applicant will consult with each owner about the proposed Part 5 Permission; and
  • an owner can lodge submissions about the proposed Part 5 Permission with the Department.

The Minister may decide, after the consultation period has ended, to grant or not to grant the Part 5 Permission (or to grant it subject to conditions). The matters of which the Minister must be satisfied before granting a Part 5 Permission include that a Consultation Notice was given (and received), reasonable attempts at consultation were made and the applicant has decided the site of the pipeline.

Baker's case

On 22 June 2012, Justice Dalton delivered her judgment in Baker v Minister for Employment Skills and Mining [2012] QSC 160, declaring void a Part 5 Permission granted by the Minister to QCLNG Pipeline Pty Ltd (QGC) over land owned by Baker.

QGC applied to the Minister for a Part 5 Permission on 20 January 2012, having failed in its negotiations with Baker to obtain "voluntary" pipeline land.

Shortly prior to the making of this application, on 16 January 2012, QGC had given Baker a Consultation Notice. However, neither the Consultation Notice nor QGC's application had identified the part of Baker's land in respect of which the Part 5 Permission was being sought (Subject Land).

Despite repeated requests, it was only on 10 February 2012, two business days before the expiry of the consultation period, that QGC provided to Baker's lawyers a map with sufficiently precise geographical co-ordinate points to enable precise identification of the location of the Subject Land.

In declaring the Part 5 Permission void, Justice Dalton held that the Consultation Notice should have specified the Subject Land. This was because the details of the Subject Land were so fundamental to the matters to be consulted about during the 20 business day consultation period that to only have provided these details two business days before the end of that period rendered the consultation exercise futile, and denied Baker his right to be afforded procedural fairness.

Lessons

Baker makes it clear that:

  • in order to be compliant, a Consultation Notice must allow it to be ascertained from the description (or map) contained in (or included with) the Notice the precise location of the pipeline on the land; and
  • a Consultation Notice containing a map with sufficiently precise geographical co-ordinate points to enable precise identification of the location of the proposed pipeline land would suffice for this purpose.

Given the conclusions in Arrow Daandine and Baker, project proponents should be very careful in the descriptions that they provide to owners (and occupiers where relevant) in notices (including negotiation notices, Consultation Notices and notices of entry) under the various pieces of resources legislation. The lack of such precision could result in the notice being found to be void and the activities subsequently conducted being unlawful.

That said, it should be remembered that a Consultation Notice (as with a negotiation notice issued under the land access regime) heralds the beginning of a period of consultation. While it is necessary to include a precise description of the relevant land as it is proposed at the date of issue of the notice, much of the ensuing consultation will concern the site of the pipeline (or, in the case of negotiation notices, activities proposed to be conducted on the land). Genuine efforts in this respect could well therefore result in a change in the pipeline site (or, in the case of negotiation notices, activities proposed to be conducted on the land) being negotiated to accommodate an owner's requirements.

We do not consider that the requirement to be precise in identifying the proposed land upfront will hamper the parties' freedom to consult in relation to location of the activities. In particular, we do not believe that the prospects of a Part 5 Permission being issued will be harmed by the desired site of the pipeline at the end of a consultation period being any different from its location at the date the Consultation Notice was given, provided that the change is the result of consultation and agreement with the owner.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.