Controlling the flow

Blog by earthrade director Thomas Key

Let’s say you’re a developer in Queensland, be it mining, gas, renewable energy, infrastructure etc, and you’re looking to meet your obligations to satisfy biodiversity offset requirements.

Offsets don’t necessarily play nicely into the multitude of agencies and groups the project may already be dealing with through its development approval process. Furthermore, beyond federal government requirements, state government and local governments are seeking to or are being forced to get involved in the biodiversity offset process more and more. Not to mention traditional owners, bodies corporate representing them, environmental stakeholders, clashes with tenure etc, and don’t forget the financiers! This is all before even considering landholders and their legal representatives.

Consultation with community, consultation with regulators, consultation with stakeholders, consultation with government – by and large, these can be done without confusion, without lawyers and often in a very structured and potentially expedited fashion.

Offset negotiations with landholders or specialist property owners will involve complex legal negotiations however – this occurs in a space and over a transaction that  interacts with multiple disciplines of law all at once. Planning and environment, property, commercial, tax – potentially also entailing family and succession planning. If not handled properly, a transaction originally started based on good and fair intentions can spiral into a legal debacle.

This issue is only magnified from the landholder’s point of view. Most landholders will have a lawyer in the next regional centre: Toowoomba or Rockhampton or Townsville for example. These lawyers will have a business, a reputation and a level of trust developed over many years with their clientele. Often they will be helping their clients on the traditional aspects of rural landholdings – property transactions, general contracts, succession planning – maybe high level environmental law as it relates specifically to farming and pastoral operations.

Most development companies, and even the Tier Ones of the world, will have an internal legal team who may devolve the work to larger firms that will have their own teams of specialist lawyers in each field.

If not managed appropriately, this can lead to situations whereby landholder lawyers become overloaded, internal and external legal can over complicate, and in general, expenses for both parties can skyrocket without ever getting closer to a final deal.

Managing the commercial flow of a biodiversity offset transaction is therefore not just a want, but a need to have when it comes to negotiating between developers, regulators and landholders simultaneously. Changes in a contract have real and lasting ramifications to the end result of the environment on the ground. And similarly, regulatory negotiations need to be appropriately reflected in commercial contracts otherwise developers run the risk of noncompliance. It is not just fee-making, tick in the box and farmer gets a million bucks type of thing.

It is a process that needs to be guided, streamlined and, at the end of the day, focused on something that can be implemented by everyone.