Farmer's CSG veto rights still the ultimate aim

The Petroleum Onshore Bill had its second reading last Tuesday in the NSW Upper House and debate is adjourned until Parliament sits in February next year.

When it reconvenes, the opposition and crossbench Shooters and Fishers parties are expected to propose amendments.

However, in its current form, the Bill includes a range of new measures to control land access negotiations.

It stipulates “reasonable legal” costs generated in negotiations leading to (not during) formal arbitration must be met by the CSG company; establishes the right for landowners to have legal representation during arbitration, and states the CSG company must make “reasonable efforts” to gain consent to conduct exploration.

It also contains new provisions for permits to prevent companies undertaking mining or prospecting when they access a property for surveying and geological sampling.

However, the Bill stops short of granting veto rights to property owners to lock the gate to CSG.

A code of practice for CSG companies, formulated in consultation with stakeholder groups, would also become mandatory if the Bill, on public exhibition until December 16, is enacted.

The code contains a raft of “best practice” provisions for CSG companies’ dealings with landowners and their activities on a property.

Clayton Utz partner energy and resources Graeme Dennis said the Bill would add rigour to land access arrangements.

“There is a further increase in the penalty regime for infringements of the laws for CSG license holders. The amendments make the laws the most rigorous in the country in terms of the potential level of penalty.”

However, Greens mining spokesman Jeremy Buckingham criticised the code of practice and said without granting landowners lock-the-gate rights, the Bill would lead to unfettered industry expansion.

“Without granting the power to landholders to veto exploration on mining on their land, this Code of Practice is simply a recipe for the coal seam gas industry to force its way onto farmland around NSW,” Mr Buckingham said.

NSW Farmers president Fiona Simson supports the measures in the Bill and code of practice saying they institute a “higher level of protection than what is there now”, but maintains that veto rights would be the “ultimate aim”.

However, Ms Simson identified three issues the association will continue to lobby for: payments of landowners’ legal fees during arbitration, protection of landowners’ legal liability if authorities need to access a property with CSG activity in the case of emergency, and resolution of provisions which would force CSG companies to share water data gathered during exploration and production.

Recent changes to NSW’s CSG regulations have installed the Environmental Protection Authority (EPA) as the responsible regulatory authority.

Environmental Protection Licences are issued by the EPA requiring resources companies, including CSG producers, to monitor their environmental impacts and submit the data to the EPA. In fact, the EPA relies on this data, as it only collects limited samples from the field itself.

Environmental Defenders Office principal solicitor Sue Higginson said the licensing of CSG activities can be described as “largely self regulation for CSG companies” and argues there is “scope for the regulator to be more involved”.

“We don’t have any experience yet with Environment Protection Licenses as a regulatory instrument for CSG activities (and) there is a heavy reliance on the companies to provide accurate reports and the monitoring programs required under the licence need to be sufficient to pick up the potential environmental impacts.

“The system fails if reports are not lodged in a timely manner, or if there is a failure to report particular information or if monitoring machinery isn’t working properly.”