The arbitration process for access to land

Agriculture and resource production are both vital industries in NSW, and share many common beliefs and interests. The successful coexistence of these industries has enormous benefits for the state, particularly in regional areas.

While landholders in NSW own the surface land of their properties, most resources that exist below the earth's surface belong to the state of NSW. The production of these resources contributes royalties, economic benefits and energy security for the people of NSW.

The purpose of land access arrangements is to ensure the orderly search for resources, while recognising the rights of landholders to conduct their activities free from unreasonable interference or disturbance. Thousands of access arrangements are successfully negotiated between titleholders and landholders for their mutual benefit.  Very few progress to mediation, arbitration and to the courts.

Both landholders and explorers have clear legal rights regarding access to land for resource exploration.

The Mining Act 1992 and the Petroleum (Onshore) Act 1991 provide specific landholder protections in respect of dwellings, gardens and significant improvements. The legislation also provides a statutory right to compensation for any 'compensable loss' suffered due to exploration carried out under an exploration licence or assessment lease.

The vast majority of relationships between explorers and landholders are positive. Courtesy, respect and honesty go far in building relationships between explorers and landholders.

All access arrangements should be based on the understanding that explorers are 'visitors' on private land, and an appreciation by landholders of the needs and rights of mineral explorers.

Overview of the land access arbitration framework

Under New South Wales law, the holder of a prospecting title (an exploration licence or an assessment lease) must not carry out prospecting activities unless it is in line with an access arrangement agreed with the landholder or determined by an arbitrator.

An access arrangement is also required with native title holders, unless:

• the licence was granted or renewed after compliance with the 'Right to Negotiate' provisions of the Commonwealth Native Title Act 1993

or

• a registered indigenous land use agreement provides that an access arrangement is not required

or

• after diligent enquiry the native title holder cannot be found or identified. Refer (s.383B(3) Mining Act 1992).

The Mining Act 1992 and the Petroleum (Onshore) Act 1991 set out a clear arbitration framework for the resolution of land access disputes in cases where parties are unable to agree on an access arrangement through their own negotiations.

Dispute resolution

Changes to the Mining Act 1992 and the Petroleum (Onshore) Act 1991 that commenced in 2016 introduce a clearer pathway for the resolution of land access disputes.

If an access arrangement cannot be agreed during negotiation between a titleholder and a landholder, the legislation requires parties to enter into mediation. The holder of the prospecting title may, through written notice to the landholder or landholders concerned, request their agreement to the appointment of a mutually agreeable mediator or arbitrator to preside over the mediation.

If parties have been unable to agree on an appointment, either party can apply for an assistance from a panel of arbitrators. This option is available to parties at both mediation and arbitration.

If agreement is not reached at mediation, parties proceed to arbitration where the arbitrator will make a final determination. This determination may be appealed in the Land and Environment Court.

Both parties have an express right to legal representation at mediation and arbitration.

The arbitration process is covered by sections 143 to 158B in the Mining Act 1992 and by sections 69F to 69X of the Petroleum (Onshore) Act 1991.

Arbitration Procedure

In his 2014 report into land access arbitration in NSW, Senior Counsel Bret Walker recommended that procedural guidance be developed to clearly set out information relating to land access arbitration and the role of arbitrators. In line with this recommendation, the NSW Government has released a guideline that sets out detailed guidance on the process including:

• the roles and responsibilities of parties and the arbitrator
• the steps involved at mediation and arbitration
• timeframes for both stages
• pre-hearing matters
• information relating to an arbitrator’s determination of an access arrangement
• managing any conflict or bias declared by an arbitrator
• performance criteria for arbitrators.

This document is made under section 148A of the Mining Act 1992 and section 69KA of the Petroleum (Onshore) Act 1991 and covers both mediation and arbitration procedures. It is published in the NSW Gazette.

View the Land Access Arbitration Procedure.

Appointment of arbitrator

Arbitrators can be appointed in two ways:

• by mutual agreement between the parties
• by the Secretary of the Department of Planning and Environment upon the application of either party.

In the first case the arbitrator will be a person agreed to by both parties and has the same rights, protection and obligations as an arbitrator appointed by the Secretary.

Alternately, an arbitrator is appointed by the Secretary from a panel of arbitrators appointed by the Minister.

Eligibility criteria for members of the NSW Arbitration Panel

Panel arbitrators appointed by the Minister must meet minimum eligibility criteria. A person is eligible for appointment as a member of the arbitration panel if they:

• are either an accredited mediator under the National Mediator Accreditation System, or hold practitioner or advanced practitioner membership with LEADR & IAMA (ACN 008 651 232, trading as Resolution Institute)
• have extensive arbitration experience (in the opinion of the Minister)
• have either extensive agricultural or resources industry experience, or are an Australian legal practitioner of at least seven years’ standing with extensive litigation experience (in the opinion of the Minister).

How are arbitrators appointed to the panel?

A nationwide application process is undertaken by the Department of Planning and Environment. Advertisements will be placed in at least one national newspaper, as well as with at least one arbitration body recognised in NSW. Eligible arbitrators who meet the criteria are encouraged to apply.

Following the nationwide call for applications, an assessment panel evaluates candidates based on the eligibility criteria set out in the regulations, and makes recommendations to the Minister.

The assessment panel comprises three members:

• one person who is an Australian legal practitioner of least seven years’ standing who has, in the opinion of the Minister, extensive arbitration experience
• one person nominated by the Minister for Primary Industries
• one person nominated by the Minister for Resources.

The Minister considers the recommendations of the assessment panel and consults with the Minister responsible for Aboriginal Affairs and the Minister responsible for Primary Industries on any proposed appointee. Following consultation, the Minister may formally appoint members to the arbitration panel. Appointments to the panel are for a maximum of three years.

For a list of arbitrators, visit the Current arbitrators webpage.

Arbitrator training

New members of the Arbitration Panel participate in a one day induction session delivered by the Department of Planning and Environment. The induction focuses on the key aspects of the role, understanding the legislation, and includes presentations on landholder and industry perspectives delivered by key stakeholder representatives.

Arbitrators also attend training seminars provided by the Department of Planning and Environment as required to keep up to date with changes in legislation and any policy initiatives.

Arbitrators must maintain minimum qualifications and undertake continuous education and training consistent with their formal accreditation requirements.

Duties of the arbitrator

Arbitrators can preside over both mediations and arbitrations. They can manage the mediation process where their role is not to provide legal advice or to adjudicate between the parties, but rather to manage the mediation process and provide support to the parties, assisting them to resolve the dispute themselves.

If parties are unable to reach agreement through mediation, the next step is arbitration. The mediator can continue to oversee the arbitration if both parties agree. Alternatively the mediation can be terminated and either party may apply to the Secretary for a member of the arbitration panel to be appointed.

In relation to access arrangements, the role of the arbitrator is to determine the conditions upon which a titleholder may enter, access and undertake activities on and in another person's land in line with their title rights under the legislation. At the end of the process the arbitrator is required to write an access arrangement between the parties to the arbitration.

Part of the arbitrator’s role is also to make an assessment of the landholder’s reasonable costs in participating in the mediation and arbitration. In making this assessment, the arbitrator considers landholder conduct and the requirement for parties to act in good faith. Explorers are required to pay the landholder’s reasonable costs as assessed by the arbitrator.

Refer to the Land Access Arbitration Procedure for more information on the role of the arbitrator.

Matters to be determined by the arbitrator

The legislation set out matters that can be addressed by access arrangements. The matters that can be determined by the arbitrator include:

• periods during which the holder of the prospecting title is permitted access to the land
• parts of the land in or on which the holder of the prospecting title can prospect and the means by which the holder can gain access to those parts of the land
• types of prospecting operations that can be carried out in or on the land
• conditions to be observed by the holder of the prospecting title when prospecting in or on the land
• compensation to be paid to any landholder as a consequence of prospecting operations in or on the land (this can be monetary or in-kind)
• the manner of resolving any dispute arising in connection with the arrangement
• the manner of varying the arrangement
• notification to the holder of the prospecting title of particulars of any person who becomes an additional landholder

This is not an inclusive listing and not all of the matters have to be covered in an access arrangement.

Compliance with the arrangement

If the holder of a prospecting title contravenes an access arrangement, section 141(4) of the Mining Act 1992 and Section 69D(4) of the Petroleum (Onshore) Act 1991specifies that access may be denied until the:

• title holder ceases such contravention

or

• the contravention is remedied to the reasonable satisfaction of, or in the manner directed by, an arbitrator appointed by the Secretary.

An access arrangement represents a contract between the parties and any breach may also be remedied by appeal to the Land and Environment Court.

Compensation

Land access arrangements can set out the compensation to be paid to landholders as a consequence of carrying out prospecting activities on the land.

In addition, explorers are also required to pay landholders compensation for any loss or interference resulting from exploration or production work on their land.

Compensation need not always be monetary in nature. Often what is provided in-kind by the explorer may be worth more than the actual monetary compensation. For example, the explorer might agree to upgrade a farm road, renew a fence or replace a gate with a cattle grid.

For petroleum explorers and producers, access arrangements must specify the compensation that is payable to landholders. IPART’s online tool provides benchmarks which can help landholders in negotiating compensation agreements.

Note compensation payments are separate to the requirement for explorers to pay the landholder’s reasonable costs in reaching a land access arrangement.

The arbitrator's costs

The costs of the arbitrator are borne by the explorer. This includes travel, accommodation, meal and car allowances as well as remuneration including the cost of any support staff such as a typist or stenographer.

These costs are not paid directly to the arbitrator by the explorer. Instead, the Department of Planning, Industry and Environment acts as an intermediary to keep these matters at arm's length.

Liability

The arbitrator is protected against legal action for any action directly authorised by the relevant Act as long as the arbitrator acts in good faith.

Review of the arbitrator's determination

Within 14 days of the interim determination being served, either party can approach the arbitrator seeking a reconsideration of the question of access or variation to the draft access arrangement.

If the parties do not approach the arbitrator within this time, the interim determination becomes the arbitrator's final determination. If a review is requested, the arbitrator sets a time and place to continue the hearing. Once the process is completed, the arbitrator serves the written decision as a final determination.

Once the arbitrator's final determination is served, either party may lodge a request to the Land and Environment Court for a review of the determination. The request must be accompanied by a copy of the arbitrated arrangement. The arbitrator is not involved in this review process.

Arbitrated Access Arrangements

As soon as practicable after an access arrangement is determined by an arbitrator, the holder of the prospecting title must provide the Secretary with a copy of the access arrangement.

A register of all completed arbitrated access arrangements made under the amended legislation introduced on 1 December 2016 is maintained by the Department of Planning and Environment and is provided below.

Personal information (within the meaning of the Privacy and Personal Information Protection Act 1998) about an individual and confidential information is not included on the register.

Arbitrated Access Arrangements Register

Duration of access arrangements

An access arrangement is usually for the duration of the exploration work planned. It may be varied or terminated:

• in accordance with the terms of the access arrangement
• with the agreement of all parties
• by the arbitrator, with the consent of all parties
• on application by any of the parties, by order of the Land and Environment Court if the arrangement was determined by a court or an arbitrator.

Where there has been a change in the landholder/s, the access arrangement may be varied or the existing access arrangements may continue – refer to section 158 of the Mining Act 1992 and section 69 U of the Petroleum (Onshore) Act 1991 for further information in relation to this issue.

For further information

Contact Resource Operations