15 Sep 2016
New overlapping tenement regime to commence on 27 September 2016 - are you ready?
By Mark Geritz, Jasmin Singh
12 October 2016 will be D-Day for many tenement holders who are subject to the new overlapping tenement regime.
The new overlapping coal and coal seam gas (CSG) tenement regime in the Mineral and Energy Resources (Common Provisions) Act 2014 will commence on 27 September 2016.
Some tenement holders will be required to take action under the new regime as soon as 12 October 2016.
Will the new regime apply to you?
There have been minor adjustments to the transitional provisions since 2014, but the key requirements remain the same.
It won't apply to: Overlaps with an existing granted production tenement (ie. a mining lease or petroleum lease). However, the parties may agree to opt into the new regime.
It will apply to: All other coal and CSG tenement overlaps (subject to one limited exception). However, the parties may agree to opt out of the new regime (except for some mandatory provisions).
For tenements to which the new regime applies, existing co-development agreements will effectively be preserved (subject to the mandatory provisions of the New Regime).
What has changed since Common Provisions Act was passed?
Since 2014, amendments to the new regime have been made in the Water Reform and Other Legislation Amendment Act 2014 and the Mineral and Other Legislation Amendment Act 2016.
While those amendments were mainly for clarification and do not alter the fundamental requirements of the New Regime, there are some important amendments. For example, the requirement to have a joint development plan will now only apply where there are overlapping production tenures (ie. a mining lease and a petroleum lease).
We understand that a consolidated version of the new regime (incorporating these subsequent amendments) will not be available until its commencement.
When will the Regulations commence?
Many aspects of the new regime rely on key detail that is to be contained in the Regulations (such as in respect of the calculation of compensation). Government has undergone industry consultation on many aspects of the Regulations, however some aspects are yet to be seen by industry.
It is understood that the Regulations will be gazetted on 23 September 2106.
When will the Joint Interaction Management Plan requirements commence?
The Water Reform and Other Legislation Amendment Act 2014 contains amendments to the safety regime applicable to mining and petroleum tenements in an overlap area between a coal mining and CSG tenement (including exploration tenements). A key requirement is that a Joint Interaction Management Plan be agreed (though there is a six-month grace period).
It is expected that the amendments will commence on or about the same time as the commencement of the new regime.
Immediate actions required to get ready for the new overlapping tenement regime
Most tenement holders will have already taken steps to prepare for the commencement of the new regime.
For those tenement holders who are subject to the new regime, the key immediate requirements are:
- Mining lease applicants who overlap ATPs (except where the ATP was applied for after the date of the mining lease application) will be required to give an advance notice to the ATP holder by 12 October 2016.
- Petroleum lease applicants who overlap EPCs or MDL will be required to give a petroleum production notice to the EPC/MDL holder by 12 October 2016.
- Mining lease applicants and petroleum lease applicants that overlap (where there is no approved co-ordination arrangement) will be required to give each other an advance notice and petroleum production notice (respectively) by 12 October 2016.
- Agreement of a Joint Interaction Management Plan for tenements in an overlapping area by 27 March 2017 (assuming the safety amendments commence at the same time as the New Regime).
In addition, the information exchange provisions of the new regime (which apply to require tenement holders for an overlapping area to exchange certain information) apply within 20 business days of the overlapping area coming into existence (as well as at least once each year). For many tenements, the transitional provisions deem the relevant overlap area to come into existence on the commencement of the new regime. Parties will need to make contact with their respective counterparts to make the necessary arrangements for such an exchange.