08 Dec 2016

The GasFields Commission Review – the Queensland Government responds

By Dan Howard and Erica Flude

The State Government has accepted the majority of the GasFields Commission Review's recommendations, and consultation on legislative changes will begin soon.

The GasFields Commission Queensland is an independent statutory body established to manage and improve sustainable coexistence between rural landholders, regional communities and the onshore gas industry.

Commencing on 23 March 2016, an independent review of the Commission was undertaken by Mr Robert Scott, a former Land Court member, following the transition of the industry from rapid expansion to an operational phase. The review considered submissions from a variety of interested individuals and organisations, with the key topics raised being:

  • confusion about the roles and responsibilities of the Commission;
  • the lack of awareness about the work of the Commission behind the scenes;
  • the lack of an independent and accessible source of information for landholders about dealing with coal seam gas (CSG) companies; and
  • the need for a better way to reach agreement and deal with disputes about conduct and compensation than having to resort to court.

The GasFields Review concluded that, while the Commission has contributed substantially to the improved coexistence of landholders, regional communities and the onshore gas industry in Queensland, there are significant opportunities for improvement in the overall operation of the Commission and in the perception of it by a large number of stakeholders.

Recommendations to improve the GasFields Commission

The GasFields Review sets out 18 recommendations in total, including the following key recommendations:

  • amending the GasFields Commission Act 2013 to reflect its current purpose and functions;
  • amending the Petroleum and Gas (Production and Safety) Act 2004 (PAG Act) and the Water Act 2000 to provide for a distinct arbitration process (as an alternative to making an application to the Land Court if a conduct and compensation agreement or make good agreement has not been agreed following statutory negotiation or alternative dispute resolution (ADR));
  • amending the PAG Act and the Water Act 2000 to require the authority holder to pay the costs associated with negotiation and ADR;
  • establishing an Office of Petroleum and Gas Moderator to assist parties to a dispute about alleged breaches of make good agreements and conduct and compensation agreements;
  • increasing stakeholder confidence in the regulation of the CSG industry by publishing compliance and enforcement actions by the CSG Compliance Unit and the Department of Environment and Heritage Protection (DEHP) for the community's information; and
  • that the DEHP develop and implement an environment (air quality, noise, dust) monitoring plan in CSG fields, particularly in areas with sensitive receptors, and that outcomes be published and communicated to stakeholders.

Government response to the GasFields Review

The Queensland Government released a response in respect of each recommendation put forward by the GasFields Review, showing support in principle for the majority of the recommendations. In its response, the Queensland Government outlined a range of measures to be adopted, including:

  • establishing a Land Access Ombudsman to deal with disputes between landholders and resource companies in relation to conduct and compensation agreements;
  • structural and operational changes to the GasFields Commission that will enable it to work more effectively;
  • a renewed focus by the commission on extension and communication activities to improve the availability of information on the coal seam gas industry particularly for landholders; and
  • developing in consultation with stakeholders improved approaches to negotiation and alternative ways to resolve land access disputes.

In response to recommendation 9 of the GasFields Review, which suggested amending the PAG Act and the Water Act 2000 to require that costs associated with negotiation and ADR be paid by the authority holder, the Queensland Government noted that further consideration is necessary with the views of stakeholders to be sought in developing the legislative and policy packages required to give effect to the recommendations supported by government.

The response notes that it is essential that landholders do not have the perception that resource holders have "bought" and paid for an ADR facilitator that would be more favourable to a resource holder's case. The response also raises the concern that, if resource holders are required to pay all fees incurred in negotiation of a conduct and compensation agreement or make good agreement, the incentive to negotiate and conclude the agreement could be reduced and could result in additional disputes over what are considered necessary and reasonable professional fees.

Next steps

Consultation on legislative amendments to the GasFields Commission Act 2013 will be undertaken with key stakeholders. The Department of State Development expects a bill to be introduced into State Parliament by mid-2017.

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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.