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Gas companies need code of conduct

CSG law firm Dalby

Since the 2010 “land access” amendments to the P&G Act, landholders have had to negotiate access and compensation terms directly with Coal Seam Gas (CSG) companies.

Landholders are now forced into a process of negotiating important, long lasting contracts to accommodate the forced intrusion. Well conducted Conduct and Compensation Agreements (CCA) negotiations with well-represented, empowered and informed landholders can result in good outcomes, however companies will still take every advantage they can.

Most people think the government should protect the disadvantaged from exploitation, especially where there is significant imbalance in power between the consumer and commercial entities. Large organisations like banks, insurance companies, credit providers, telecommunication companies and utility companies are often subject to industry-specific codes of conduct and compulsory dispute resolution processes.

We repeatedly deal with agreements that are negotiated without landholders having received adequate assistance or where the assistance is undermined by highly aggressive conduct on the part of the companies. Critically however we also see the behaviour of the companies deteriorating as money gets tighter, or in areas where there are gaping holes in the negotiation process such as with “make good negotiations”.

Government has laws that protect its royalties, it has bonds to draw on to address losses from breaches of its laws, and it has processes in place to address breaches of its lease conditions – and a truckload of “free” lawyers to enforce them.

Such protection is not mirrored for landholders, notwithstanding that government forces the dealings and the “co-existence” upon them.

There are no industry-specific Codes of Conduct in place, no Ombudsman procedures and no bonds that landholders can access to ensure good behaviour, let alone address bad behaviour. Unreasonable and belligerent conduct on the part of companies is thereby indirectly rewarded. Misconduct leads to negotiation fatigue and capitulation.

Landholder recourse for company misconduct in and after the negotiation process is limited to the prohibitively time consuming process of engaging lawyers.

Furthermore, under the existing Act, pre-CCA negotiation misconduct is only able to be raised if the negotiations fail and are referred to court. Misconduct that works (obviously the most serious kind), means the CCA never gets to court so the misconduct never sees light of day. Post-CCA misconduct (usually breaches of it) are obviously determined by the content of the CCA, which again rewards misconduct leading up to it.

Surely the most basic sense of fairness dictates that it is time to remedy this injustice and implement sensible protection of landholders urgently by the introduction of clear Codes of Conduct and an Ombudsman process mirroring the likes of the banking industry as a basic “consumer protection” measure.

 

Written by Peter Shannon.

Peter Shannon is a Principal of Shine Lawyers’ Landholder Law Team. To read further insights into the CSG industry from Peter, register for Shine’s free Energy Insights newsletter by emailing landholderlaw@shine.com.au or contacting us.

Click to read information about our coal seam gas legal services.

Written by Shine Lawyers on . Last modified: January 10, 2017.

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