Government clarifies existing regulatory protections relating to legacy infrastructure

Key Insights

At the request of the GasFields Commission Queensland, the State Government has provided assurances to landholders that, under the existing regulatory framework:

• landholders are protected from liability for harm caused by, or arising from, the failure of any legacy petroleum and gas infrastructure on their properties, unless they have contributed to the harm; and
• the State Government takes responsibility for legacy infrastructure. 

Despite the State Government's statements, proponents and landholders should of course also remain cognisant of any relevant contractual arrangements between the parties relating to legacy infrastructure (such as any conduct and compensation agreements).  In June 2020, a major insurer (WFI, a subsidiary of Insurance Australia Group) announced its intention to no longer provide insurance to landholders with any coal seam gas (CSG) activities (and infrastructure) on their property.

Landholders concerned about legacy infrastructure

Following concerns raised by the agricultural sector and landowners, a working group convened by the GasFields Commission Queensland released a new landholder indemnity clause in March 2021 to provide greater clarity for landholders and gas companies where farming and gas infrastructure coexists.  

Some useful background on these matters is contained in our Qld Land Access and Resource Approvals Year In Review 2020–2021 article "Key trends in land access negotiations", 27 September 2021.

The Commission recently identified that landholders were concerned about public liability risks stemming from legacy infrastructure, which is infrastructure that has been decommissioned, abandoned or rehabilitated at the end of petroleum and gas activities (including CSG activities).

During the working group's discussions about the indemnity clause, it became apparent that stakeholders would benefit from greater clarity and certainty about what protections are in place and the State's liability should landholders have any legacy infrastructure on their properties.   

The Commission identified that landholders were concerned about exposure to public liability risks resulting from failure of legacy infrastructure and potential implications for access to finance.

The Commission commenced a regulatory review and identified that the perceived insurance gap and financial exposure concerns of landholders were addressed under the existing regulatory framework.  As part of the review, the Commission found that the regulatory frameworks already in place outline the responsibilities of resource companies and the Queensland Government and protect landholders against public liability risks from legacy CSG infrastructure.  

A significant recommendation proposed by the Commission was that the State should (as the administrator of the resources legislation) publicly clarify both the protections offered to landholders and the State's liability regarding legacy CSG infrastructure.  

Government's response 

Consequently, the State Government confirmed that the current regulatory framework: 

• protects landholders from liability caused by, or arising from, the failure of any legacy CSG infrastructure unless the landholders caused or contributed to the harm; and 
• renders the State responsible for legacy CSG infrastructure.  

Further information on public liability regarding legacy infrastructure and the regulatory protections afforded to landowners is available on the Department of Resources' website. 

Authors: Roxane Read, Senior Associate and Dillon Mahly, Paralegal.