Almost all of Thynne + Macartney’s agribusiness clients have been confronted by resource industry projects on their properties since the former Queensland Government overhauled the land access laws for resource exploration in October 2010.

Over three years on, resource industry statistics show that a disturbingly large number of agreements between landholders and resource companies are being signed before landholders seek legal advice. Given that the legislation obliges resource companies to pay landholders’ reasonable legal costs, many landholders are missing a no-cost opportunity to engage an expert to fix the flaws in the agreements that many resource companies continue to present for signing.

Resource companies, particularly the smaller explorers looking to prove-up their tenements at the lowest possible cost before selling them in the international marketplace, are citing case law, such as the Land Court’s decision in Peabody West Burton Pty Ltd v Mason, to justify low offers of compensation and encourage landholders to sign proposed agreements quickly to avoid Land Court proceedings.

Thynne + Macartney’s agribusiness team is aware of some resource companies even offering landholders an additional “sign-on bonus” if they choose not to engage lawyers to review a proposed agreement. In those situations, landholders should question what it is the resource company is trying to hide.

No landholder should feel pressured to sign an agreement under threat of Land Court proceedings. The statutory process compels both landholders and resource companies to use all reasonable endeavours to negotiate an agreement. Land Court proceedings are a last resort. In fact, when the Queensland Government’s Land Access Review Panel handed down its final report in February 2012, only two cases had been referred to the Land Court.

A resource company that tries to rush the process towards the Land Court can be challenged. In short, there is always an opportunity for landholders to seek independent legal advice and landholders who do so invariably secure better agreements.

At some stage in the future, the Queensland Government may improve the “standard” conduct and compensation agreement to better address the problems that Thynne + Macartney identified when it was introduced in 2010. Those problems include a lack of protection against certain unexpected consequences of a resource company’s activities and the prospect of the agreement covering all future activities, whether or not they are included in the plans shared by the resource company when the agreement is signed.

For as long as resource companies continue to use the Government’s template or their own defective “standard” agreements, we continue to negotiate changes to restore the balance and protect landholders’ rights.

Thynne + Macartney’s agribusiness team has acted for landholders in negotiations with over 80 different resources companies in the past 24 months. Many companies will reissue their “standard” agreements incorporating our usual amendments upon hearing that a landholder has engaged us.

Queensland’s primary producers should be reminding their neighbours to never sign a “standard” conduct and compensation agreement.

This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

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