15 September 2015

Mining and petroleum tenure reform in Queensland

Material changes are proposed to the tenures under which minerals and petroleum are explored for in Queensland. The Department of Natural Resources and Mines recently released a policy position paper titled ‘Innovative resources tenures framework’ (Reform Policy). Consultation with the industry and interested parties is proposed for September and October 2015. Importantly, submissions on the policy position paper are due 16 October 2015.

Separately, we note the recently altered status of the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld). As a consequence of the Mineral and Energy Resources (Common Provisions) (Postponement) Regulation 2015 (Qld) (Regulation), the balance of the Common Provisions Act will automatically commence on 27 September 2016 (if not commenced, amended or repealed beforehand). However, the release of the Reform Policy suggests that the Common Provisions Act will be amended or repealed before 27 September 2016.

The Reform Policy proposes to set maximum terms for exploration licences for minerals and petroleum with no renewals and a default relinquishment of 50% of the area at the prescribed time. Under transitional arrangements (to be developed further after consultation) renewals will be limited in duration, there is capacity to opt-in to the new framework and a change to ‘higher tenure’ may alter timelines and processes for projects to be developed in the short term.

We recommend that these reforms be closely monitored against a company’s matrix of tenure, having particular regard to: relinquishment; any long term retention proposals; and development horizons for projects.

Please contact William Oxby, Partner, Brisbane, +61 7 3258 6469, if you require additional information or your usual Herbert Smith Freehills contact.

Amendments to the Aboriginal Land Rights Act 1983 (NSW) – Project and transactional implications

The Aboriginal Land Rights Act 1983 (NSW) (Land Rights Act) has been recently amended to include a framework for reaching agreements with Aboriginal Land Councils. The new framework and capacity to reach Aboriginal Land Agreements (ALAs) is important for project development and transactional due diligence.

ALAs are formal agreements between an Aboriginal Land Council, the Crown Lands Minister and potentially any other third party (after invitation and approval by the parties). The agreement may provide for the exchange, transfer or lease of land to an Aboriginal Land Council, or an undertaking by an Aboriginal Land Council not to lodge a claim, or to withdraw a claim, in relation to specified land (see section 36AA). The parties may also choose to include any other matter in the agreement. Negotiations may commence at any time with notice in writing.

Land subject to an unresolved claim under the Land Rights Act can cause delay and uncertainty in relation to access to Crown land. Until now there has been no formal agreement process in the Land Rights Act to manage this. The new framework provides greater certainty and should therefore assist project proponents in securing access to claimed land (or land potentially subject to a claim in the future). It is possible ALAs will become more commonplace, especially considering there are some 20,000 plus undetermined claims.

Finally, and from a transactional perspective, the due diligence process can now, if warranted, include a search of the newly established register of ALAs to determine whether there is an agreement registered for any Crown land covered by a project.

Please contact William Oxby, Partner, Brisbane +61 7 3258 6469, if you require additional information or your usual Herbert Smith Freehills contact.

1 September 2015

Update on transparency reporting – compliance with EU reporting requirements by extractive companies on government payments is determined to be an acceptable substitute for Canada

In an earlier post we noted that the Canadian federal government had brought new legislation into force on 1 June 2015, the Extractive Sector Transparency Measures Act, which establishes reporting requirements of payments made to governments by mining (and other extractive) companies. This followed the earlier implementation by Norway and the UK of similar reporting obligations of payments to governments.  We have previously posted updates on the UK regime for extractive companies with debt or equity securities listed in the UK and large, unlisted companies incorporated in the UK (including subsidiaries of non-UK parent companies) to produce annual reports on payments to governments for financial periods starting on or after 1 January 2015. If you would like a copy of our detailed briefings on the EU Directives and on early UK implementation, please contact Jennifer Bell or Sarah Hawes.

Draft guidance now issued for comment

The Canadian federal government has now released its draft Guidance and Technical Reporting Specifications for review and comment (comments may be provided until 22 September).  These tools have been developed in consultation with industry, civil society organisations, Aboriginal experts and provinces, and provide general information on (a) who is subject to the Act (b) which entities must report (c) what payments should be reported.

EU reporting requirements determined acceptable substitute

Section 10(1) of the Canadian Act allows the Minister of Natural Resources Canada to determine that the reporting requirements of another jurisdiction are an acceptable substitute for the reporting obligations in the Act.  As of July 31, 2015, the EU's Accounting and Transparency Directives were determined to be an acceptable substitute, so that reports submitted to European Union and European Economic Area member-states that have implemented those 2 directives at a national level (eg the UK) may be submitted to the Canadian Minister as a substitute.  Companies seeking to use this substitution determination must comply with the reporting requirements in the EU/EEA member country, submit a substitution report to the Canadian government and follow the Canadian Act's publication requirements.

For further information, please contact Jennifer Bell, Partner, London or Sarah Hawes, Professional Support Consultant, London.