The State Government has standardised the ground water “make good” obligations applying to mining and gas tenement holders.

Previously, there have been different approaches under the mining and gas legislation when a bore is adversely affected by a mining or gas project.

As the gas industry developed in Queensland, the Water Act 2000 was amended to include:

  • the need for an underground water impact report and baseline assessments to be carried out for landholders’ bores;
  • ongoing reporting requirements; and
  • importantly, an obligation on a gas tenement holder to enter into “make good” agreements with landholders whose bores would be adversely affected.

Generally, “make good” agreements can be used to ensure that a landholder is provided with compensation from a tenement holder by way of a replacement bore, compensation or a mechanism to purchase the landholder’s land if the volume or quality of water drawn from a landholder’s bore diminishes. Such agreements can be used to ensure that the rights of landholders are established before the development of the project.

However, the obligations set out in the Water Act 2000 only applied to tenements issued under the gas legislation and did not apply to mining projects. Under the mining legislation, tenement holders were instead required to obtain water licences for the use of water associated with the mine project and were not required to enter into “make good” agreements in advance.

Earlier this year in the case of Hancock Coal Pty Ltd v Kelly and Department of Environment and Heritage Protection (No 4), the Land Court imposed additional “make good” obligations on a mining tenement holder by expanding the scope of the Environmental Authority to include additional bores which were not originally caught by it. This practice of “make good” agreements being included as a condition of an Environmental Authority had become commonplace and the Court’s decision highlighted the inconsistency between the approaches seen in the gas industry and the mining industry on the same issue.

The new amendments to the Water Act 2000 make both mining and gas tenement holders subject to the same “make good” requirements and provide the Land Court with clear jurisdiction upon which to deal with “make good” agreements between gas or mining tenement holders and landholders.

Thynne + Macartney welcomes the amendments which will commence early in 2015 and has significant experience in assisting landholders to negotiate “make good” agreements.

Click here to download a full copy of the Agribusiness December 2014 Newsletter.

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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