Pastoral Land Management and Conservation (Renewable Energy) Amendment Bill

Second Reading Pastoral Land Management and Conservation (Renewable Energy) Amendment Bill

(Continued from 22 May 2014.)

The Hon. J.M.A. LENSINK(15:26:17): I rise to make some comments in relation to this bill. First, I would like to thank the minister for organising a briefing for us—which the members for Stuart and Chaffey also attended—and also for providing additional information, including a list of frequently asked questions and a map of the transmission lines, which are the most likely locations for renewable energy development on pastoral lands.

I note from preceding government speeches that they have banged on a lot about this government's record on clean energy but they have failed to acknowledge the role that the Howard Liberal government played in kickstarting the initial investment in renewable energy technology, that target being 20 per cent of renewable energy by 2020. I note that South Australia has 28 per cent of its energy coming from the renewable sector.

The Clean Energy Regulator, which the federal government tasked with overseeing the RET, has advised that at the end of 2011 the investment in renewable energy power stations totalled around $10 billion nationally and there were more than 1.3 million installations of solar panels and solar water heaters.

In my view Labor has exploited the climate change agenda for as long as they thought it was popular. Over the last 12 years, particularly under the previous premier, we had numerous media releases promoting solar panels on government buildings, many wind turbines that did not work and broken promises of greener schools. We also had some fairly dubious promises about the carbon neutrality of the desalination plant, and no Labor minister has ever been able to explain that one, and a carbon neutral cabinet.

This particular policy was promulgated by the previous premier, the Hon. Mike Rann, in Cancun, Mexico, in December 2010. He announced a series of ideas. This one is four years in the making, apparently. The other ideas included capping the amount of carbon emitted by new power plants, providing funds for community solar farms, having a target of 10 per cent improvement in air-conditioning, and also helping to part pay the spectacularly unsuccessful vehicle recharging station at the Central Market together with the Adelaide City Council.

The Advertiser ran a headline attached to an article on 9 December 2010, 'Drive for clean energy'. The opening paragraph states:

Huge areas of pastoral land across the state will be opened up to allow faster and easier access for companies wanting to establish solar and wind farms.

So here we are with this bill.

At a state level, the previous Liberal government had a strong record of leadership on greenhouse gas emissions. In 1998, the Liberal government launched South Australia's first government greenhouse target program, wind farm developments were supported, the Osborne cogeneration plant was constructed and the Pelican Point combined cycle power station, which significantly reduced the amount of carbon dioxide emitted during electricity production. We have also (in opposition) consistently supported targeted reduction of greenhouse gas emissions of 60 per cent by 2050. During the debate on the Climate Change and Greenhouse Emissions Reduction Bill 2007 we inserted an amendment to that bill that would seek independent verification from the CSIRO on the reporting of greenhouse gas emissions targets.

In relation to the details of this bill, we are advised that renewable energy development cannot currently occur on pastoral leases because the Pastoral Land Management and Conservation Act 1989 was drafted prior to it being envisaged. So, while this may be the first legislation of its type in Australia, its uniqueness is not so much in its being innovative, because there are already provisions on other types of land tenure to provide for renewable energy development, however, there are specific obstacles within this act which prevent it.

This particular bill has the effect of allowing the coexistence of pastoral activities, wind farm development and mining. There was a bill that was put out for consultation in 2011, which has been amended, and 21 parties lodged submissions, including pastoral lessees, wind farm developers, peak bodies, legal bodies representing native title holders and defence representatives. I would like to commend the member for Stuart who was very involved in that process. The consultation period had, at that stage, only been two months, but after requests from him on behalf of his constituents that was extended and I acknowledge the amount of work that he put into ensuring that those views were represented.

Under the provisions within the bill, wind farm developers will be able to obtain a licence to build and operate on pastoral land, which will expand the amount of land which is currently available to potential renewable energy development. The most likely location of such developments is in proximity to transmission lines. It is believed that wind farm development cannot operate outside a 30-kilometre radius of these lines.

The minister is to negotiate the lease conditions and payments on behalf of the Crown, the lessee and any other interested parties, which can include pastoralists, native title parties and mining tenement holders. I am advised that this is based on the same principles as the development on freehold land, with the payment generally ranging from $8,000 to $12,000 per turbine, although I note that the bill contains a provision for a discount for the remoteness of it, which I think is probably of some concern to those interested parties.

In the original draft in 2011 there was no specification on the amount of compensation the pastoralists or native title holders would receive, which has been amended to provide those interested parties with 95 per cent of the total payment, with 5 per cent accumulated by the state government for administrative purposes. Prior to a licence being granted the minister can grant the developer access to pastoral land in order to undertake preliminary activities, which includes conducting investigations or tests, temporary installation of devices, taking samples, etc., and 14 days' notice must be given to the pastoralist.

During this process, the developer must satisfy the minister within 2½ years that a clear plan has been developed. If they have satisfied the minister, a further three years will be granted for investigation. During this period, no other developer will be given access to that portion of land. A licence is granted for a minimum of 25 years with an option to extend for a further 25 years, and the licence gives the developer the right to fence off any infrastructure where necessary, and build access roads and other necessary infrastructure. The minister has the authority to impose conditions on the licence.

The wind farm development licensee must reach two milestones in order to keep their licence. Within three years, a developer must demonstrate that they possess adequate financial backing and have executed contracts for the construction of the major components. They must erect the turbines within five years and commence testing. Appeals can be made to the ERD Court if one of the parties is dissatisfied and, when renewable energy development and pastoralism are incompatible, as is the case for solar, the minister can authorise the land to be surrendered by the pastoralist in a process known as redemption. If the lessee agrees, the developer and the lessee have one month to come up with the terms. However, the matter of redemption (or taking back that lease) is amended by this bill from six months to two months.

We have a number of questions which I would like the minister to respond to. A number of these have been put by the member for Stuart, Mr Dan van Holst Pellekaan. The payment is probably one of the key issues of concern. Firstly, in relation to the negotiations, that is something that the minister does. I note that this Minister for Environment is also the Minister for Aboriginal Affairs and one of the prescribed interested parties is Indigenous people through native title declarations, so my first question is: how does the minister manage that process, which has a potential conflict of interest when he is negotiating on behalf of the Crown but also wearing his minister for Indigenous affairs hat for those Indigenous people?

Furthermore, I think the government has a general conflict as the negotiator. I think it is fair to say that they were pretty keen proponents of this proposal. Where does that leave some of the people on whose behalf it is negotiating? I think it is a little bit untidy as far as those processes are concerned and it is certainly of concern for the Liberal Party. The government's 5 per cent will be an annual payment so, for the 25 years plus 25 years, I wonder if they have a particular amount that they think that is going to come to. Perhaps the minister could outline how they arrived at 5 per cent and whether there is any comparable jurisdiction. I understand that they say that this is the first legislation of its type in Australia, but is there any kind of comparison with these sorts of agreements on other types of tenure?

Indeed, in relation to the issue I was talking about with the payment, how does the minister envisage any disputes between it and any of those parties might be managed? For instance, there may be a pastoralist who is against having wind turbines on their lease. What sort of process is the government going to go through to negotiate with them, and what appeal rights will they have beyond just having consultation with the minister?

What is the situation when there is more than one pastoral lease involved in a single development, because various sites may be held by different lessees? Will the payment be made to one lessee or not another? Does it depend on where the actual turbines are located? For instance, if substations or transmission lines have to be constructed on a separate title, will the ones with the infrastructure also receive some sort of payment or compensation? In relation to the 25 years plus 25 years, is there an option to extend past that 50 years? Why did the government arrive at those two particular periods?

If the renewable energy developer goes broke, what happens to the clean-up and removal at the end of the working life of those turbines, etc.? In relation to the resumptions, that is an existing provision in the act. Section 32 of the Pastoral Land Management and Conservation Act states that 'the minister must give written notice of intention'. Within that existing provision, I am just wondering if the minister can provide any details about whether these resumptions have taken place and whether when that has taken place a reason has been given. I assumed that there would have to be a pretty good reason for that to take place if that occurs. However, is there a different situation with resumption under these provisions? Is the minister required to give a reason or do they just gazette it and that is the end of that?

Are the prescribed interested parties entitled to be represented by legal counsel in relation to these negotiations? There is something that parliamentary counsel mentioned to me when I spoke to them, and I would like it if the minister could confirm this is true or not. The prescribed interested parties in the bill include the following:

(a)the lessee;

(b)the holder of a resources tenement—

so mining interests—

(c)if there is a native title declaration for the land—the registered representative of the native title holders and the relevant representative Aboriginal body;

(d)if there no native title declaration for the land—all persons who hold, or may hold, native title in the land;

which is a pretty open ended situation. Parliamentary counsel said that if (d) was not included in the legislation, it was a breach of the commonwealth Native Title Act, and I would like it if the minister could confirm that or not. It does provide a situation where there can be considerable uncertainty about the payment. In relation to the payment, we were advised in the briefing that that potentially could be split between the native title holders—and obviously that is the situation.

However, there is the potential for native title holders who do not yet have a declaration to participate in that process. I think that may impact on pastoral lessees in relation to how they perceive this legislation and whether they are going to be keen on having wind turbines on their property if they are not able to confirm what their portion of the payment is going to be into the future, acknowledging that those payments can be quite useful for them to supplement their income, particularly when the pastoral country can be pretty unreliable.

I was hoping that the minister might be able to clarify new section 49E of the bill—Rights under licence, which states:

A wind farm licence may grant such rights as the Minister considers necessary for the proper functioning of the wind farm to which the licence relates and may include the right to exclude the lessee or any other person from infrastructure associated with the wind farm…

I would like the minister to provide the sorts of circumstances under which that might take place. That section has to be there for a reason, and I wonder whether the minister might be able to provide that to us.

Another question we have is in relation to whether the payments which are made to any of the parties exclude any payments the developer might wish to make directly to any of those parties. New section 49K talks about payments. In brackets, it states:

(and the prescribed interested parties are not entitled to any other payment or compensation under this Act in respect of the wind farm).

For instance, there may be a fence or a shed or some other piece of the pastoralist's infrastructure that is knocked over in the process or, if it is a native title holder's, there would be items they would have some issues with if they were destroyed. Is that the only payment that can be made under section 49K of this bill or are there any other, if you like, side deals which do not come via the fund?

We also have a query about 49F(6) because it talks about, in determining the licence fees payable, the minister must not take into account the value of any other improvements on the land that do not belong to the Crown; there again, there may be stockyards, fences or watering points. Can the minister explain why that subsection is there, because there may be specific issues on certain sites that might mean that that subsection is unfair.

In relation to the period provided for the developer to start the process before the wind turbines need to be erected, the first milestone is for two years and six months, and then there is an additional three years. They seem like awfully long periods of time for a developer to have exclusive access to their potential proposal. If the minister can explain why those periods were chosen, that would be appreciated.

During the initial periods when the payments can be made, we noted that 49K(1)(a) provides that payments can be made during the initial access period. Presumably, licences fees are not being paid at that stage because it is still in the development phase, before it has been completed. So, where is that funding coming from and under what circumstances does the minister envisage that that might actually take place? Also, if there is a tenement, some sort of potential or actual mining interest, is any compensation payable to those interests and under what circumstances? Another issue is 49M—just a query as to why the wind farm licence is exempt from stamp duty.

So that the minister is aware, we are generally supportive of this piece of legislation, but we do have some concerns. We are likely to have some amendments; I have had a couple drafted already, and I thank parliamentary counsel for its advice and assistance. Other amendments are on the way and will be filed at the earliest opportunity. We are generally supportive of the bill but have some concerns.

It is fair to say that, given our representation in the party room, a lot of concern has come from the pastoral sector as to what are their rights during the negotiation process, what are their rights in terms of the minister having so much of the final say on a number of parameters of how this will operate, and just to ensure that their voice will not just be heard adequately but that they might actually have some say about how potentially this may impact on them. With those comments, I commend the bill to the house.