Coal Acquisition Amendment (Fair
Compensation) Bill 2005

This explanatory note relates to this Bill as introduced into Parliament.

Overview of Bill

The Coal Acquisition Act 1981 (the principal Act) vested all coal in the Crown and
enabled the Governor to make arrangements for the payment of compensation to
claimants. The Coal Ownership (Restitution) Act 1990 provided that certain
successful claimants could apply to have the coal restored to them rather than accept
the compensation. The principal Act then enabled the Governor, by proclamation, to
revest the coal that had been restored under the Coal Ownership (Restitution) Act
1990 in the Crown and to make arrangements for the payment of compensation to
claimants in those cases.

The object of this Bill is to amend the principal Act:

(a) to ensure that if royalty is included in the determination of compensation for
any claim that has not been finally determined under the principal Act the
royalty will be calculated on the same basis on which other claims have
previously been determined rather than in accordance with the new scheme for
the payment of royalty recently introduced under the Mining Act 1992, and

(b) to make it clear that compensation for loss of “super royalty” can be paid in
relation to appropriate claims, but only for periods occurring before the repeal
of the provisions of the Mining Regulation 2003 that allowed the payment of
super royalty, and

(c) to provide that a payment of compensation under the principal Act is not to
take into account any arrangements required to be entered into under the
Mining Act 1992 by the holder of a mining lease or similar authorisation that
deal with the supply of coal at a particular price.

Outline of provisions

Clause 1 sets out the name (also called the short title) of the proposed Act.

Clause 2 provides for the commencement of the proposed Act on the date of its
assent.

Clause 3 is a formal provision that gives effect to the amendments to the principal
Act set out in Schedule 1.

Schedule 1 Amendments
Schedule 1 [4] inserts proposed section 6A into the principal Act to achieve the
object outlined in the Overview above.

Proposed section 6A (1) makes it clear that the provisions of the new section prevail
over section 6 of the principal Act (compensation arrangements by the Governor) and
the arrangements that have been made under that section.

Proposed section 6A (2) provides that if royalty is to be included in the
determination of any claim for compensation under section 6 of the principal Act it
is to be calculated in accordance with the provisions of the Mining Act 1992 and the
regulations under that Act, as in force immediately before 1 July 2004. The
significance of that date is that on 1 July 2004 the provisions relating to the payment
of royalty for coal under the Mining Act 1992 were changed and a new scheme
introduced for the payment of royalty. The new scheme replaced the rates of royalty
payable on coal, which were based on a rate per tonne of coal recovered, with a rate
based on a percentage of the value of the coal recovered, with the rate to vary
according to the method of mining used to recover the coal. The effect of proposed
section 6A (2) will be to preserve the previous method of determining royalty for the
purposes of compensation claims that have not yet been finally determined.

Proposed section 6A (3) enables the Coal Compensation Board to include, in
appropriate cases, “super royalty” in the determination of compensation claims under
the principal Act. Super royalty is the term commonly used to refer to additional
payments of royalty that were provided for in certain circumstances under the former
Coal Mining Act 1973 and until 1 July 2004 under the Mining Act 1992. The
calculation of super royalty may only relate to a period occurring before 1 July 2004.

Proposed section 6A (4) provides that any calculation of super royalty is to be done
in accordance with the relevant provisions under the Mining Act 1992, as in force
immediately before 1 July 2004. The provisions relating to super royalty under the
Mining Act 1992 were repealed on 1 July 2004.

Proposed section 6A (5) ensures that the determination of compensation under
section 6 of the principal Act will not include any amount in respect of arrangements
entered into by the holder of a mining lease or other authorisation under the Mining
Act 1992 in order to fulfil a requirement for the grant of the lease or other
authorisation or a condition of the lease or other authorisation if the arrangements
relate to the price at which coal is to be supplied.

Proposed section 6A (6) provides that the proposed section extends to claims for
compensation that have not been finally determined, including any claim that is the
subject of an appeal, judicial review or redetermination.

Proposed section 6A (7) makes it clear that the proposed section does not affect any
payment of compensation that has already been made in relation to a claim that has
been finally determined or entitle any person who has received such a payment to any
further compensation in relation to the claim.

Proposed section 6A (8) enables the arrangements under section 6 of the principal
Act to make provision for the circumstances in which a claim is taken to be finally
determined for the purposes of proposed section 6A.

Proposed section 6A (9) provides that a reference to a claim in the proposed section
includes a reference to an application.

Schedule 1 [1]–[3] make consequential amendments.

Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.

 

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