The existing regime eliminates court expenses but arbitrators have been suspected of having conflicts of interest, while there has also been unhappiness over legal costs.
The state government consequently commissioned an independent review, undertaken by Bret Walker SC, and has accepted all 32 of his recommendations.
“Landholders currently pay their own legal costs despite being once-only participants, but for explorers this is more often a regular practice,” NSW Resources Minister Anthony Roberts said.
“Explorers will now bear all costs associated with arbitration, set and capped by an independent expert. Timeframes will also be capped, providing greater certainty for landholders and industry.
“Walker also recommended changes to the appointment of arbitrators, new governance arrangements to manage conflicts, ongoing training and monitoring of the performance of arbitrators.
“It is crucial both sides receive a fair hearing but protracted disputes only increase costs and erode relations between the two parties.”
The minister said the issue of a “significant improvement” to a property has been repeatedly contested in land access disputes.
“An arbitrator will be allowed to make a non-binding decision for both parties,” the state government said.
“Landholders and explorers will then decide if they want to challenge the matter in court.”
“We will request the Land and Environment Court determines disputes quickly in relation to ‘significant improvements’ so that arbitrations can be settled in shorter timeframes,” Roberts added.
Other changes to arbitration system include:
- A new panel of arbitrators to be appointed for a maximum of three years;
- The number of members will be increased from five to 10;
- An eligibility criteria will be established for arbitrators, including minimum qualifications and accreditation;
- A person who is involved in the initial mediation cannot also oversee the arbitration process (current arbitrations will still be completed);
- Public disclosure requirements for arbitrators will be placed on a public register with relevant employment and financial dealings;
- New procedural and compensation guidance will be developed; and
- All documents will be published on the Division of Resource and Energy’s website www.resourcesandenergy.nsw.gov.au to ensure anyone can access information on the arbitration process and its principles.
APPEA eastern Australia chief operating officer Paul Fennelly said Walker’s recommendations delivered a sensible, workable and clear process for arbitration should it ever be required.
“Arbitration or court action has historically not been used in NSW or in Queensland where a $70 billion industry has been founded on voluntary land access agreements and community support,” he said.
“However, such reforms provide an additional layer of certainty for all stakeholders and are important if NSW is to start producing its own gas for businesses and households without having to rely on 95% of its supply from other states.
“The framework accepted by the NSW Government also reflects similar arrangements in Queensland where more than 4600 voluntary land access agreements have been signed between natural gas companies and landholders since 2011.
“Agriculture and gas production are working side-by-side despite misinformation put forward by professional protesters intent on stopping resource production and the growth of jobs and additional income streams for farmers.”
