16 March 2021.
AgForce has renewed its commitment to secure a Code and Conduct Agreement with an indemnity clause on coal seam gas (CSG) that better suits the needs of agriculture.
The announcement comes in the wake of a recently negotiated clause on indemnity that AgForce says contains a mix of positive and less positive outcomes for landowners.
Key representatives from AgForce, the Insurance Council of Australia, Queensland Farmers Federation, Cotton Australia, the Australian Petroleum Production & Exploration Association, and relevant government departments met to discuss CSG Code and Conduct Agreements after a major insurer, IAG, announced their intention to withdraw from the market in mid-2020, jeopardising public liability cover for landowners with CSG infrastructure on their properties.
AgForce CEO Michael Guerin said that while his organisation was appreciative of Gas Fields Commission Queensland taking a facilitation role in moving the gas, agricultural, and insurance industries towards a resolution on the issue of public liability insurance for landowners, the recent agreement still hadn’t addressed all their concerns.
“The amended clause on coal seam gas provides a measure of confidence for IAG and its subsidiaries including WFI to re-join the farm insurance market for properties with CSG infrastructure on them. And that in itself, is a good outcome,” Mr Guerin said.
“But landowners may still face issues with their cover because they have CSG infrastructure on their properties or from CSG activities carried out on their land.
“AgForce’s legal advice is that deficiencies exist in the proposed clause around the fact that indemnity is capped at an amount to be negotiated between the landowner and the CSG company.
“But there is no reason we can see for any cap on indemnity – the bigger the problem a tenement holder causes, the bigger the problem for which it should accept responsibility.
“We don’t believe it should be the landowner’s job to assess the risk they are being asked to take on.
“This is an additional burden for landowners who already juggle excessive amounts of bureaucracy on top of trying to produce food and fibre and leaves them, if they get it wrong, at risk of being underinsured.”
Mr Guerin said AgForce also had legal concerns around some of the terms used in the current CSG Code and Conduct Agreement and would continue to question the State Government and the CSG industry about the ongoing, long-term third-party risks associated with CSG sites and infrastructure remaining on properties post surrender of Environmental Authorities.
“Ultimately, AgForce and its members are keen to address the challenges of coexistence of agriculture with the resource sector,” Mr Guerin said.
“We have our own set of Land Use Protection Principles and we would hope for amendment of the Code so that it aligns more closely to these.”
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For media comments contact: AgForce CEO Michael Guerin 0488 002 092