Senate debates

Wednesday, 6 July 2011

Bills

Carbon Credits (Carbon Farming Initiative) Bill 2011, Carbon Credits (Consequential Amendments) Bill 2011, Australian National Registry of Emissions Units Bill 2011; In Committee

10:46 am

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

by leave—I, and on behalf of Senators Birmingham and Colbeck, move coalition amendments (1) to (7) on sheet 7080:

(1)   Clause 5, page 14 (after line 2), after the definition of Kyoto unit, insert:

land, in relation to an eligible interest in an area of land, includes the surface and the subsurface of the land.

(2)   Clause 5, page 16 (after line 26), after the definition of native title, insert:

native title future act provisions means the provisions of Division 3 of Part 2 of the Native Title Act 1993.

[consequential – application of native title future act provisions]

(3)   Clause 44, page 70 (lines 24 to 29), omit subclause (7), substitute:

(7)   For the purposes of this Act, if the area of land is land rights land in a State or Territory, the Crown lands Minister of the State or Territory holds an eligible interestin the area of land.

[consent of State or Territory minister]

(4)   Clause 45, page 71 (lines 4 to 8), omit subclause (2), substitute:

(2)   For the purposes of this Act, the Crown lands Minister of the State or Territory holds an eligible interest in the area of land.

[consent of State or Territory minister]

(5)   Clause 45, page 72 (lines 27 to 32), omit subclause (7), substitute:

(7)   For the purposes of this Act, if the area of land is land rights land in a State or Territory, the Crown lands Minister of the State or Territory holds an eligible interestin the area of land.

[consent of State or Territory minister]

(6)   Clause 301, page 301 (line 26), before "This", insert "(1)".

[consequential – application of native title future act provisions]

(7)   Clause 301, page 301 (after line 26). at the end of the clause, add:

(2)   To avoid doubt, the native title future act provisions apply to any consent under this Act in relation to native title land.

[application of native title future act provisions]

These amendments are essentially designed to improve what is currently bad legislation because there are some important issues which have been identified by the WA state government and others around Australia. There is the potential for some real negative ramifications for states with significant areas of crown land if these amendments are not approved by the Senate. Of course, the Senate is the states house, so I am sure that senators on all sides of the chamber will reflect on their responsibilities to act as representatives of the states and will very carefully consider the amendments that the coalition is putting forward and, of course, then support them. They are sensible amendments that would improve what is currently somewhat flawed legislation.

I will go through the amendments in detail. As a senator for Western Australia, I will focus a little bit on some of the circumstances in WA to make a point, but it does have broader application. Of WA, 36 per cent is vacant crown land. The amendments that we are proposing would make the following changes. States need to have what would be described as an 'eligible interest' over crown land. Under the bill as drafted it is not clear at all that state governments would have an eligible interest over all crown lands and, given that the state could incur residual liabilities as a third party under the carbon maintenance obligations in the bill, for example, the coalition believes it is only reasonable that state governments should have a declared eligible interest in the land and be consulted before a carbon farming scheme is allowed. So amendments (3), (4) and (5) ensure that the relevant state minister in all states has an eligible interest over projects on crown lands.

There is also the issue of subsurface rights. It is important to make clear that subsurface rights are protected in the bill, particularly to avoid negative impacts on petroleum tenements. Amendment (1) addresses the subsurface rights issue by expanding the definition of eligible rights in land to include subsurface right interests in land.

Further, in relation to native title, exclusive possession native title holders under the bill have an eligible interest in carbon sequestration. This effectively gives them a right of veto and requires further consultation in addition to that required under the Native Title Act 1993 future act process. This kind of veto power would have negative ramifications on development and as such would not be in the national interest or in the interests of respective state economies. The amendment makes clear that the Native Title Act 1993 future act provisions apply to native title consents under this proposed legislation. The issue is addressed in amendments (2), (6) and (7).

In this context, I will read relevant correspondence that I received from the Minister for Mines and Petroleum, Minister for Fisheries, Minister for Electoral Affairs and the Leader of the Government in the Legislative Council in the great state of Western Australia. I will just read it in part:

I am writing to express the concerns of the Western Australian State Government with regards to the content which is intended to be drafted into the Commonwealth Government's Carbon Credits (Carbon Farming Initiative) Bill 2011 (CFI bill). I believe it is important that you … are aware of the potential implications of the proposed legislation to Western Australia's land and tenure system, and resource exploration and production. The concerns contained in this letter were expressed by the following State Departments: the Department of Regional Development and Lands, the Department of Mines and Petroleum, and the Office of Native Title.

According to the Proposed treatment of native title and land rights land under the CFI Bill discussion paper circulated by the Commonwealth Department of Climate Change January 2011, there are three ways that land interests are relevant to projects under the CFI bill:

        So this bill will:

        … deem that exclusive possession native title holders are eligible to participate in the carbon sequestration scheme; i.e. exclusive possession native title holders have 'eligible interests'. Further, no other person is taken to hold the applicable carbon sequestration right in relation to the project area or the legal right to carry out the project. As the holders of an eligible interest, the native title holders would need to provide their consent before any sequestration project may proceed on the land.

        In Western Australia ownership of minerals and petroleum resources are vested in the State. Mineral exploration and mining entities may access rights to minerals, subject to payment of rents and royalties, by obtaining mining titles to exclusively explore and develop the mineral resources. Mining in Western Australia is administered under the State's Mining Act 1978. Similarly, exploration and production of petroleum is permitted only under the provisions of the Western Australian Petroleum and Geothermal Energy Resources Act 1967.

        In the same way as an owner of freehold land has an interest in that freehold land, the State of Western Australia has an underlying interest in Crown land, including Crown land that is determined to be exclusive possession native title. The CFI bill however makes no provision for the State to be consulted or, as the holder of an interest in Crown land, to give consent for sequestration projects. As with any other party with an interest in Crown land, the State should also be required to give consent to any CFI scheme including any CFI scheme proposed on exclusive possession native title land.

        There is potential for the State of Western Australia to have liabilities to third parties if a carbon sequestration project is created over Crown land without the State's consent. For example, the land could have been allocated for a major resource or other development, or the area may be subject to a contract to give tenure over that land. Conflicts may arise if mining or petroleum tenements are granted over areas where native title parties intend to or already have implemented carbon farming projects. There is no mechanism under the proposed legislation to address the potential conflict between a carbon sequestration project and existing and future mining and petroleum tenements. Therefore, the State of Western Australia would require notification and consent provisions in any carbon sequestration project to effectively prevent conflict with any other existing interests in the land.

        If the legal right to carry out a CFI project ceased to exist or the project participant ceased to be eligible to participate in the CFI scheme, the State could incur residual liabilities as the owner of the land under the carbon maintenance obligation (CMO). The CMO will require that carbon stocks be maintained by subsequent owners. As persons having an interest in land could be affected by a CMO, one of the underlying principles of the CFI scheme is to ensure these persons provide their consent to the land being a part of the scheme. Accordingly, the Commonwealth proposes that native title holders and claimants must provide consent to use of the land for a carbon sequestration project, but fails to acknowledge the State's ongoing interest in Crown land.

        As exclusive possession native title holders are going to be regarded as having an eligible interest in carbon sequestration and must give consent before any sequestration project may proceed on the land, this requires consultation and negotiation on top of that already required by the Commonwealth Native Title Act 1993 (NTA) future act process. Under the NTA future act process, arbitration is available to resolve disputes. However, under the Commonwealth's CFI scheme the native party effectively has the power to veto any proposed carbon sequestration projects. This is so, even if they only have future act procedural rights as a native title claimant, rather than rights of a determined exclusive possession native title holder. This right of veto would have negative ramifications in Western Australia and therefore the State Government strongly urges the continued use of the NTA future act provisions to apply to native title consents.

        An additional issue is that the draft CFI legislation—

        which has been transported into this bill—

        does not indicate whether the scheme will affect subsurface rights or how any implications are to be managed if they were to occur. Accordingly, to avoid the scheme impacting on petroleum tenements, the State requests that protection of subsurface rights and access to these interests be guaranteed in the legislation.

        And here is the important bit in relation to this:

        Currently, 26.5% of Western Australia constitutes determined exclusive native title land. Within the boundaries of this land, there are 1059 mining tenements impacted by determined exclusive native title claims. Of these, 432 are live tenements and 627 are pending tenements. The total area of mining tenements over the determined exclusive native title claims is 18,740,919 ha, of which 5,197,420 ha are live tenements and 13,543,499 ha are pending tenements. Also, there are 23 granted petroleum titles impacted by determined exclusive native title and 20 under application.

        The relationship between native title holders and other stakeholders needs to be the subject of careful consideration in the context of the Commonwealth's CFI proposal. The State has grave concerns that the current formulation of the Commonwealth's proposed CFI legislation could create considerable difficulties for the administration of Crown land in Western Australia. This is due to, firstly, Western Australia's unique position with regard to the extensive amount of land subject to determined exclusive possession native title … and the potential for significantly more land to become exclusive possession native title. Also, the State's concern is a result of the nature of Western Australia's land tenure system and the importance of resource exploration and production to the State. Accordingly, these circumstances need to be considered and addressed before the draft bill is finalised.

        The State through its ownership of minerals and petroleum has interests in Crown land and therefore any scheme that enables any interest in carbon sequestration should require the State's consent.

        And he goes on.

        The reason I have read all of this into Hansard is this. The government is proposing legislation which the coalition supports in principle but which seriously needs to be amended to address these issues. We do not want to have negative, unintended consequences when it comes to economic development in this context in the state of Western Australia, because keeping econo­mic development strong by keeping the mining industry strong, and through strong development of our petroleum and mineral resources is, of course, in the national interest.

        But this government is pushing ahead with a national mining tax which seeks to collect about 65 per cent of its revenue out of iron ore production in Western Australia over the next decade. If that were to go ahead, this government would of course have a very significant interest in what happens with minerals exploration and production in Western Australia. But that is separate legislation and I am not going to get too distracted. It is bad legislation which we will oppose because it is deeply flawed and comes out of a flawed process.

        However, there are some issues here, in the context of the interaction between the carbon farming initiative legislation and native title legislation, and various other provisions that are relevant to state and territory governments, that have not been adequately addressed in this legislation. They should be addressed, in the interests of making sure that this legislation can operate effectively. But they also should be addressed to ensure the ongoing strong economic development in states like Western Australia, because that is in the national interest. Finishing off where I started, given that this is the states' house and the Senate was set up by our forefathers as the chamber of this parliament with a particular focus on the interests of states—every single senator in this chamber represents a state or territory in Australia—the issues raised by the Western Australian government are legitimate. They are issues that senators should consider very carefully. On behalf of the coalition and, in particular, Senators Birmingham and Colbeck, who join me in proposing these amendments for the coalition, I commend these amendments to the Senate. I hope that all senators will support them.

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