On 22 January 2016, the Western Australian Government announced that Cabinet had approved plans to amend the Land Administration Act 1997 (WA) (LAA) in an effort to increase economic activity in the Western Australian rangelands, which comprise over 85% of Western Australia's total land mass (ie. over 2 million square kilometres).
The proposed reforms are the result of a Rangelands Reform Program that commenced in 2010, following reviews into the pastoral industry which concluded that the current land tenure laws impose unsustainable limitations on land use, particularly with regard to the narrow range of activities allowed under pastoral leases. The reforms seek to improve the existing pastoral lease system while also unlocking the development potential of the rangelands.
The Land Administration Amendment Bill 2016 is currently being drafted to effect the proposed reforms. The Draft Bill is to be released for public comment in early April 2016 and introduced to Parliament in June 2016.
New rangelands lease
Currently, pastoral leases occupy about 45% of the WA rangelands. Pastoral leases only allow use of the subject land "for pastoral purposes". Specific activities which are generally required to be related to pastoral use (eg. production of fodder and pastoral-based tourism) may also be permitted, via a non-transferable permit known as a diversification permit.
The highlight of the proposed reforms is the establishment of a new "rangelands lease" that may permit multiple and varied land uses. Other than grazing livestock, the kinds of permitted uses under a rangelands lease will include agriculture, horticulture, tourism, conservation purposes and "Aboriginal economic development and land management".
The rangelands lease is not intended to replace pastoral leases. However the Draft Bill will provide for the conversion of pastoral leases into rangelands leases, which would meet the policy objective of diversifying land use and encouraging development.
A future act process under the Native Title Act (most likely through the negotiation of an Indigenous Land Use Agreement) will need to be followed as part of the conversion of a pastoral lease to a rangelands lease, or the grant of a rangelands lease over "new" ground. Any conversion is also likely to involve a new, higher, rent being struck, based on the specific permitted use or uses for the relevant rangelands lease.
Similar standards of land management obligations as exist for pastoral leases will apply to rangelands leases. The requirements for annual returns and transfer approvals and the maximum area of lease holding restriction will be common to pastoral and rangeland leases. As with pastoral leases, rangeland leases will not confer exclusive possession and will be subject to a reservation providing for access for Aboriginal people.
Statutory right of renewal and increased term for pastoral leases
Currently, pastoral leases are issued for terms between 18 and 50 years, with no right of renewal. Under the Draft Bill there will be a statutory right of renewal for pastoral leases that comply with lease conditions and the LAA. The statutory right of renewal will remove the Minister's discretion whether to renew the lease if the relevant conditions are complied with, and will provide the lessee with a right of appeal to the State Administrative Tribunal if the Minister decides not to renew the lease. The Draft Bill also provides for pastoral leases of a shorter term to be increased to the maximum term of 50 years (subject to the necessary native title future act process).
These changes will provide better security of tenure and certainty for pastoral lessees, assisting in long term business planning and facilitating investment in the pastoral industry.
Transfer of diversification permits
At present, diversification permits are tied to the lessee and not to the lease. As a result, the asset value of the pastoral lease may not fully reflect income streams from diversified activities. The new provisions will allow pastoral lessees to transfer diversification permits to purchasers, ultimately allowing pastoral lessees to capture the full value of the business activity on the lease.
New Pastoral and Rangelands Advisory Board
The Pastoral Lands Board, which is currently responsible for administering pastoral leases, is proposed to be replaced with a new Pastoral and Rangelands Advisory Board. The new Board will have diminished powers. It will not be responsible for administering leases (that task will be assumed by the Minister), but rather will provide the Minister with strategic advice and guidance on rangelands matters, and will include representation from a range of areas of expertise in additional to pastoral, such as Aboriginal interests, tourism, natural resource management, conservation and mining, regional and business development.
Other proposed changes include:
- provisions that deem a breach of various land management Acts (such as the Environmental Protection Act 1986) a breach of the LAA and therefore a breach of the relevant lease, potentially resulting in forfeiture of the lease; and
- the increase of the maximum area of pastoral lease and/or rangelands lease holdings, from 500,000 hectares to 1,500,000 hectares.
The changes are intended to increase the value of pastoral/rangelands lease holdings and fuel investment in the rangelands. However, while the public feedback has largely been positive so far, some of the proposed amendments, such as the proposed dissolution of the Pastoral Lands Board and some of the additional compliance requirements, are likely to be controversial. Mining industry representatives have also expressed some concern that certain permitted uses under rangelands leases may restrict access for mining purposes.
What happens next?
The WA Department of Lands intends to release the Draft Bill in early April and organise a series of information sessions throughout April 2016 to explain the draft Bill. This will coincide with a four-week public consultation period, during which time the government will accept submissions from the public.
The Government plans to read the Bill into State Parliament in June 2016 and hopes that the legislation will be passed during the August sitting period (before the coming State election).
Anyone with WA pastoral lease interests should consider the details of the proposed reforms which have currently been released and keep up to date with the timetable for the release of, and submissions on, the Draft Bill.