Diversification leases introduced by the Land and Public Works Legislation Act 2023.

The Land and Public Works Legislation Amendment Act 2023 (Amendment Act) recently passed through State Parliament and on 24 March 2023 the Amendment Act received Royal Assent.

The Amendment Act provides a range of changes to the Land Administration Act 1997 that are aimed at modernising and streamlining land tenure arrangements on Crown land. A key change from the Amendment Act is the introduction of a “diversification lease.”

Diversification leases:

The Minister for Lands (Minister) will be able to grant diversification leases over large areas of Crown land. The State intends to use diversification leases to facilitate a broader range of land uses on Crown land such as:

• environmental projects including conservation, carbon farming, hydrogen projects, and other renewal energy uses;

• tourism;

• concurrent uses (such as renewable energy projects coexisting with agriculture and tourism); and

• projects which support Aboriginal economic development.

The State hopes that these uses will support achievement of its net zero emissions by 2050 target.

Key features of diversification leases:

Purpose:

A diversification lease may be granted for any purpose or multiple purposes. This is distinct from a pastoral lease which may only be used for “pastoral purposes” unless a permit is granted for specified additional uses (which may only be granted in certain circumstances). Importantly, diversification lease holders will not be subject to the permit system as the use will be governed by the conditions of the lease.

Non-exclusive:

The diversification lease will not be exclusive. The diversification leases will coexist with other rights such as native title and access for mining tenement holders. Therefore, an important part of obtaining a diversification lease will be negotiating with other interest holders. Further, before the lease is granted, approval from the Minster for Mines and Petroleum is required and proponents will generally be required to have a registered Indigenous Land Use Agreement.

Application process:

Grants of diversification leases will be at the Minister for Land’s discretion. The Amendment Act does not set a process for applying for a diversification lease. However, the Department of Planning Lands and Heritage (DPLH) have advised that DPLH will manage application and that both market-led bids and State requests for proposals could occur. Applications will be assessed on a case-by-case basis.

Lease terms:

The lease will be subject to a lease on terms and conditions determined by the Minister. As the Amendment Act does not stipulate the terms of lease, the terms can be adapted to suit the particular use. A project proponent can negotiate with the Minister on the rent payable, lease conditions and options to renew.

Term of Lease:

Unlike pastoral leases, which have a maximum 50-year term, a diversification lease does not have a maximum term. This allows flexibility so that the term may be determined on the basis of the use.

Opportunities:

As a wide range of uses can be carried out under a diversification lease, currently under-utilised Crown land will now be available to be used for new projects and activities. This presents a range of opportunities including:

• Proponents and developers of large-scale renewable energy projects have a new opportunity to use Crown land for their projects.

• Hydrogen projects proponents may particularly benefit. The State has indicated a specific interest in supporting large scale hydrogen projects in its recently released Renewable Hydrogen Policy and Renewable Hydrogen Guidance.

• Current pastoral lease holders interested in diversifying their operations may seek to replace their pastoral lease with a diversification lease.

• Pastoral lease holders may also receive proposals from project proponents if their land is suitable for renewable energy projects.

Other projects suggested by the State are tourism, land rehabilitation, and carbon farming.

 
If you would like more information on diversification leases, converting a pastoral lease to a diversification lease, or other recent amendments to the Land Administration Act 1997, please contact us by telephone on (08) 6460 5179 or email at admin@mfhlaw.com.au