No agreement? No worries – landholders reimbursed for the cost of negotiating CCAs even when agreement is not reached

New reforms to the Mineral and Energy Resources (Common Provisions) Act 2014 have made it clear that Queensland landholders can be reimbursed for out of pocket expenses reasonably and necessarily incurred in preparing and negotiating a conduct and compensation agreement (CCA) regardless of whether an agreement is reached.

The new laws, which commenced on 19 April 2019, have also clarified that landholders may be reimbursed for the costs of an agronomist, when previously it was arguable that landholders were only entitled to be reimbursed for legal, valuation and accounting fees.

The Minister for Natural Resources, Mines and Energy stated that ’the new laws acknowledge that negotiation is part of a business transaction and landholders should be compensated accordingly’, further enhancing ‘the fairness and the rights of landholders’ while ’balancing economic opportunities’ from the State’s resource industry.

However, the new laws may not apply to all current CCA negotiations and their associated costs. Whether landholders have the benefit of the new cost recovery provisions will depend upon what stage in the negotiation process the parties are at and what agreements landholders may have reached with resources companies.

In addition, the new laws mean that Queensland landholders:

• are not required to attend a conference held by an authorised officer before applying to the Land Court
• do not have to pay for the costs of an alternative dispute resolution facilitator to help negotiate a CCA, as resource authorities are now solely liable for this expense
• can, by agreement with a resource authority, attend arbitration instead of applying to the Land Court to decide any unresolved dispute regarding a CCA.

Arbitration will result in a binding outcome that cannot be overturned or appealed.

Notably, the new laws also change the dispute resolution process and associated timeframes for determining CCA disputes, which may result in a lengthier resolution process and increased costs for landholders.

Should you require further information or wish to discuss the implications of these new laws and whether they apply to you, please contact Leanne O’Neill.