NATIONAL LAND ACCESS - THE IMPACTS BETWEEN INDUSTRIES AND

THE LESSONS FOR A CONSISTENT APPROACH

LAND ACCESS CONFERENCE

CONTENTS

Context

Enterprise Planning

Project Strategy

Project Governance

Scoping

Project Key

Project Plans

The Key Contacts from Flinders Hyder for this report are:

John Cotter

Director

(07) 3221 1371

(+61) 438 338 171

jcotter@flindersgroup.com.au

Inherent Limitations

This presentation of project approach is given subject to the written terms of Flinders Hyder engagement. This presentation has been prepared as outlined in the Context section. The services provided in connection with this engagement

comprise an advisory engagement which is not subject to Australian Standards on Review or Assurance Engagements, and consequently no opinions or conclusions intended to convey assurance have been expressed.

The observations in this presentation are based on a qualitative study and the reported results reflect a perception of the client only to the extent of the workshop conducted and with the client’s approved representatives sample of

management and selected members. Any projection to the wider management and stakeholders is subject to the level of bias in the method of workshop outcomes.

No warranty of completeness, accuracy or reliability is given in relation to the statements and representations made by, and the information and documentation provided by management and selected workshop members consulted as part

of the process. Flinders Hyder have indicated within this presentation the sources of the information provided. We have not sought to independently verify those sources unless otherwise noted within the presentation. Flinders Hyder is

under no obligation in any circumstance to update this presentation, in either oral or written form, for events occurring after the presentation has been issued in final form. The findings in this presentation have been formed on the above

basis.

Third Party Reliance

This presentation has been prepared in accordance with the terms of Flinders Hyder engagement dated 27-8-14. Other than our responsibility to the conference, neither John Cotter nor any member or employee of Flinders Hyder

undertakes responsibility arising in any way from reliance placed by a third party on this presentation. Any reliance placed is that party’s sole responsibility. This slide pack is provided solely for the benefit of the parties identified in the

contract and are not to be copied, quoted or referred to in whole or in part without Flinders Hyder prior written consent. Flinders Hyder accepts no responsibility to anyone other than the parties identified in the engagement letter/contract

for the information contained in this presentation.

BACKGROUND

Flinders Hyder is a leading provider of project and professional

services through environment, project management and community

relations.

Recent projects include

Aurizon National Land Access Framework

Arrow Energy EPC Corridor Preparation and Framework

QGC (BG-Group) Bowen Basin Exploration

THE MARKET – NATIONAL FRAMEWORKS

Behaviours

Contractors

Design

Corporate Risk

Compensation

Industry benchmarks

METHODOLOGY – FLINDERS NAVIGATE

Using a risk based approach we defined the short and longer term

goals of the business at the levels of the organisation

Adopted from the Investment Logic Standards of Victoria Treasury

OBJECTIVES

Risk - Enterprise

Internal Risk Control / Contracting Strategies through Risk Based Approach

Risk Mitigation Tools / Messages

Commercialisation & Internal Design Approach

Converting land and community into an effective route selection / site selection process; industry differences

Contracting Documentation

General commitments and interface descriptions

Risk allocation

Contractor / Operator Approach

Assessment of Critical Management Plans

Land Access Management Plan (Template provided)

QA Tools – Integration of Tools to Contractor Tools (Critical to Success)

WHY BOARDS ARE NERVOUS ABOUT LAND

Adopted from Nous Group 2014

PRACTICAL APPROACH

PHASES ACTIVITIES

PHASE 1Process Analysis

Existing Situation Desktop study of Reports and Compliance Manual

Enterprise analysis

Staff Attitude Individual interviews to determine existing process, attitudes to early

engagement and readiness for change

Early Engagement Brainstorming workshop

Planning Conceptual planning for early engagement model

Identify skill sets

PHASE 2Review

Risk Workshop Risk matrix

Key drivers and personnel

Risk Management Tool

Quantitative and Qualitative Probability Based Risk Model

consistent with Corporate Risk profile

Price assumptions and behaviour tools through risk mitigation

Conversion of unplanned risk into planned and managed risk

Engagement Model Finalise model

PHASE 3Culture and Change

Communication Plan

Key messages

Communication tools

Rewards – KPIs

Communication callateral

Training Identify training required

Evaluation Determine success

Benefits realisation reporting

RISK BASED ASSESSMENT (EXAMPLE)

Key Risk Description Consequence Likelihood Risk Mitigation Strategies

Delays in

land access

1 Landholders consult lawyers who

actively frustrate process

Insignificant Almost

Certain

• Prepare information packages for

landholders that explain the process

• Ensure adequate legal resources and

templates of responses to teams

2 The landholders negative

perceptions of compensation (time)

affects the timeliness of land access

negotiations during construction

Medium Almost

Certain

• Implement a land access compensation

framework and company wide policy

• Ensure community benefits and messages

are consistent from enterprise to each

project

• Improve compensation position across

company to ensure consistency

3 Landholders group to collectively

bargain or stall project

Major Almost

Certain

• Approach group through Community

Engagement Team as soon as possible to

try and reach agreement

• Negotiate quick wins on group concerns

and react quickly to address grievances.

4 Failure to forward plan resulting in

cross messages and separate land

access meetings

Medium Almost

Certain

• Development of Land Access Strategy,

Land Access Compensation Framework

and Land Acquisition Management Plans

(LAMP)

• Develop Enterprise Approach to resourcing

and management

• Change Project Management Guidelines to

include LAMP

5 Commitments in field made my

uncoordinated parties.

Major Almost

Certain

• Complete an LAMP and resourcing

strategy as dictated by overarching land

access strategy

• Utilisation of land management tool (CMS)

to capture and prioritise key landholders

Key Risk Description Consequence Likelihood Risk Mitigation Strategies

Delays in

land access

6 Inaccurate instructions

or incomplete data leads

to poor decision making,

interactions with wrong

landholders or

ineffective planning

Minor Likely • Produce and implement manual of Land Access

Framework

• Utilisation of a prioritisation tool for landholder meetings

including a mandatory risk assessment of stakeholders

Reputation 7 Failure to comply with

HSSE policies results in

a major injury or fatality

of an employee or

landholder

Major Rare • Diligent reporting of all threats and issues management

through a single landholder hotline

• Ensure all employees are aware of the policies and

have training

• Align KPIs to framework

• Develop a process of educating landholders about

safety requirements

8 Landholders will use

media and publish

compensation

frameworks (competing

against commercial

payments rather than

compensation).

Minor Almost Certain • Publish a land access framework and engage a public

engagement strategy on fairness of framework

• Outline key messages on compensation approach

Quality of

Project

Delivery

9 Failure to close

Environmental

conditions / compulsory

acquisition and or

judicial review

Major Likely • Implement tracking systems and records of

conversations

• External review of application process

• Develop stronger ties with landholders and lawyers to

avoid adverse legal actions

Alm

ost

Cert

ain

H H E E E

Lik

ely

M H H E E

Possib

le

L M H E E

Unlik

ely

L L M H E

Rare

L L M H H

Insignificant Minor Medium Major Severe

1 2 34 5

7

8

6 9

CORRIDOR DESIGN

WORKFLOW PLANNING

Plan Land

Access

Request Land

Access

First Call to

Introduce ProjectEvaluate Site Negotiate Access

Finalise

Agreement

Undertake Field

Survey Works

Finalise &

Monitor Access

Request Land AccessFirst Call to Introduce

ProjectEvaluate Site Negotiate Access Finalise Agreement

Conduct Title Search

Establish CMS Entry

Complete GIS Check and

Issue Property Map

Draft Initial Landholder

Packs

Landholder Information

Packs

Make Initial contact with

the landholder

Provide landholder with

information kit via mail

Establish a time to meet

Conduct assessment of

compensation liabilities

Draft final agreement

Third Party Legal

Assessments

Fill out property evaluation

form

Conduct site inspection

and issues register

Confirm project field

requirements

Bank Authorities and

occupier details

Undertake final signing

Authorised signing bodies

Arrange landholder set-up

payment forms

Provide final landholder

executed copy

Issue to project team for

field access

Plan Land

Access

Request Land

Access

First Call to

Introduce

Project

Evaluate SiteNegotiate

Access

Finalise

Agreement

Land Access Process

Interval 1 Interval 2 Interval 3 Interval 4

Request

Form is

satisfactory

Initial

Landholder

Contact

Landholder

Risk & First

Meeting

Access

Planning

complete

Agreement of

Compensation, legal

& field Access

STAKEHOLDER MAPPING

RequestorsThose in the business that request land

access

Service ProvidersThose in the business that provide a

service to support Land Access end to

end

End UsersThose in the business that will perform

activities once access has been granted

Network

Land Access Stakeholders

Capital Projects

Operations

ERE / Cultural Heritage

GIS

HSSE

Legal / FinanceCommunity & Stakeholder

Relations

Community & Stakeholder

Relations

EIS Consultants

Contractors

Third Party Cultural Heritage

Survey & Geotechnical

Consultants

ENGINEERING PLANNING

Field Access

Agreement

Land Access Request

Project Commencement

Induction of Team to Golden Rules

Appoint your Land Access Officer

Conduct your Landholder Risk

Assessment

Complete the Land Access Request Form

Conduct your Land Access Review

Send Package to Landholder

Confirm Project Requirements of

Work Order

Negotiate with Landholder

Complete Agreement with Landholder and

Third Parties

Conduct Site Briefing, Golden Rules and

Conditions of EntryConduct Site Activities

Complete Field Studies

Project Director Land Access Checklist

REVIEW OF THE MARKET

Land Access Risk Review

Competing with

Resource Companies

ALA - Base Land Compensation

Grazing Land:

50% of $ / Ha x Size of Impact

Cultivation land:

75% of $ / Ha * Size of Impact

Nil Loss in Value

Nil Loss in Business

Land Area Impacted

Land Value Considerations

Business Impact Considerations

De

live

r cla

rity

on

th

e f

un

ctio

na

l re

sp

on

sib

ilitie

s a

nd

en

su

re

co

nsis

ten

cy o

f a

pp

roa

ch

wh

en

de

alin

g w

ith

sta

ke

ho

lde

rs t

hro

ug

h a

co

nsis

ten

t m

essa

ge

an

d e

qu

ita

ble

in

du

str

y b

ase

d a

pp

roa

ch

to

la

nd

acce

ss.

Land Access Compensation

Grazing Land:

50% of $ / Ha x Size of Impact

Cultivation land:

75% of $ / Ha * Size of Impact

Project Impact on Potential

Purchase

Disruption to Lifestyle

All Other Impacts and Costs

Heads of Compensation

because of the

potential impact

of future rail corridor

Disruption to Lifestyle

(Quiet Enjoyment of Property)

Loss in Value due to construction

disturbance and previous projects

(brownfield legacy)

Professional Services

Land holder business loss and

employee loss (in time) due to

facilitation of land access

UNDERSTAND YOUR COMMERCIALS

1

7

ActivitySquare Metres of

Impact (SIZE)Relevant Head of Compensation No of Impacts

Size of Impact

(Units of Measure)Time (Months) Total Comments

Qty of HA $/HA Type

35 Geotech Pads (42 Core Holes) of 10m wide by 10m (100sqm/10,000) 100 Loss in surface of land 35 0.35 $ 1,000.00 $ 350.00 Grazing 12 Months $ 175.00

5 kilometers of access tracks 4 metres wide with 10m of disturbance for dust (15,000 x

10m / 10,000)50,000 Loss in surface of land 1 5 $ 1,000.00 $ 5,000.00 Grazing 12 Months $ 2,500.00

35 Geotech Pads (42 Core Holes) 100 Loss in value of property 42 0.42 $ 1,000.00 $ 420.00 Grazing 12 Months $ 210.00

1 km of Access Tracks impact on operations (1,000 x 10m / 10,000) 10,000 Disturbance 1 1 $ 1,000.00 $ 1,000.00 Cropping 14 Months $ 750.00

$ - $ -

Business Impacts

Low Impact (Access without Consent) 0 $250 12 Months $ -

Low Impact (Access that results in complant) 0 $500 12 Months $ -

High Impact (Access that results in business loss

in time i.e. mustering of cattle)0 $1,200 12 Months $ -

High Impact (Access that results in loss in

business revenue or loss in stock / crop / weeds)0 $1,500 12 Months $ -

Landholder Business Mangement Disturbance 5 3 $ 100.00 12 Months $ 1,500.00

5,135.00$

Compensation Rate

Physical Disturbance

Landholder Business Mangement (Risk Impact)

MOVING LAND TO A UNDERSTOOD CONTRACT

Arrow Energy - Corridor Risk Assessment (Land / Community / Environment / Cultural Heritage)

27-08-14

9:36

Qualitative Risk Assessment

Pro

ject C

yce

Ris

k ID

I

D

Risk Name Description Internal

Workshop

Notes

Risk Descriptors

(Arrow System)

Prima

ry

Risk

Owne

r

Second

ary

Risk

Influen

cer

Conse

quence

Likeliho

od

Normal Risk

Rating

Arrow

Risk

Score

Comment

s

(Tender

Criteria)

Desired

Outcomes

Quant

itative

Asses

sment

?

Risk

Mitigation

N

PV

Ca

pe

x

Dela

y

Reputati

on

Quantitati

ve Risk

Assessme

nt

Resultant Risk Level after

MitigationTender Assessment

Planned

Risk or

Unplanne

d Risk?

Systematic

Risk

Mitigation

Tools

In Place at

ITT

Cost

Estimate

Consequ

ence

Likelihoo

d

Rating

Basis of Cost

Calculation

Delay

Costs

Other

Costs

Units Occurren

ce

Base

Estimate

Optimistic Most Likely Pessimistic

Timing Duration Construc

tion/

Operatio

nal Costs

Loss of

Revenue

Based on

Pessimistic

Against

Total

Project

Value

Against

Total

Project

Value

Against

Total

Project

Value

Assum

ed

Rate

Phase Weeks $A'000s/

week

$A'000s/

week

$A'000s $A'000s % % % % Expect

ed

Value

CONTRACTOR TENDER RESPONSE

Risk Allocation Mitigation Risk Pricing (Pool)

EPCM ARROW EPCM ARROW EPCM ARROW 5 KPIs PER REGION RISK POOL Reported TD

MIN MAX DRAW DOWN

% % % % $A $A KPI Score Lowest Highest Incentives

GENERAL CONTRACT TERMS (EXAMPLES)

Land acquisition

The Principal’s preferred approach is to negotiate with landholders and their representatives in order to reach an agreed outcome to acquire the land or an interest in the land, or obtain access to the land required for the Project.

For land affected by the Pipeline, the Principal is the agency acquiring the land or easements over the land. The Principal will negotiate and secure options to procure the nominated 30m construction easement over the majority of the alignment and other portions of land required to accommodate the design.

The Principal is negotiating with the owners of the Mines for a construction easement that is exempt from the onerous requirements of that mine’s SSE. For the purpose of submitting a Tender, Tenderers should assume that access to this section of the Pipeline easement is the same as for any other landowner.

The Principal has contacted all affected landholders and is in ongoing discussions to secure the necessary easements or interests.

The Contractor will require parcels of land in addition to those negotiated by the Principal for the purposes of construction camp establishment, laydown areas, miscellaneous storage areas, turnaround areas and the like. The Contractor must notify in this tender the size, duration and layouts of the camps and laydown yards required.

CONTRACTOR APPROACH

Critical Project Plans

The Project Plans generally listed in tender deemed to be "Critical

Project Plans" and must be approved by Arrow should included (in

accordance with the Review Procedure before the Contractor

accesses the Site) a Land Access Management Plan.

This allows a clear understanding of the QA systems and an auditable

method for tracking non-compliances

EXAMPLE PRE-START LIST

CONSTRUCTION PRE-START

VERIFICATION CHECKLIST

Sheet: 1 of 4

Revision: 0

Date: 20/01/2011

Form No.: ARROW-CON- FRM-

000001VC No.: _______-________-_________

VC Preparation Date Works Within the RoW Works Outside the RoW

Activity Commencement Date From KP: To KP: Description:

Activity Completion Date RoW Boundary Left: Right: Boundary Size:

Project Component

Export Line, Gas Collection Header, Others: Pls specify

Engineer and Contact No.:

Supervisor and Contact No.:

Description of Activities

EXAMPLE SIGNOFF CONDITIONS

ITP

REF.INSPECTION / APPROVAL ACTIVITY

RECORD ‘s

VERIFYING

Conforming

/ Required

Not

Applic

able

PRINT NAME

(Responsible Person)SIGN DATE COMMENTS

1.0 Company & Third Party Approvals

1.01

Ground Disturbance Activity Approval Provided by

Arrow (Application 60 Business Days in Advance of

Works)

Original

DocumentsProject Engineer

1.02Permit to Enter Provided by Arrow (Application 60

Business Days in Advance of Works)

Original

Documents Project Engineer

1.03 Advance Notification provided to ArrowCorrespondenc

e Construction Manager

2.0 Social Performance

2.01Social Performance has been notified of planned

activities.

Correspondenc

e Social Performance

2.02

Access roads in and out of area been checked for

impacts on community (in cases where use is not

been canvassed in EIS, agreement with Arrow Social

Performance team needs to be applied. Social Performance

2.03Discussion Held with Communications and Land

Liaison Team Representative

Meeting

Records Social Performance

2.04 Dilapidation Survey carried out Report Social Performance

2.05 Landowner Line Lists sourced from Arrow LLL Social Performance

3.0 Environment

3.01 Pre-construction Environmental Checklist Attached CopyEnvironment Rep.

3.02Site walk through & Environmental Checklist hand

over meeting with Project Engineer

Pre-start

record or

signed VC Environment Rep.

4.0 Construction

4.01DBYD, received and current. Service Location /

Potholing has been undertakenRecord

Project Engineer

4.02Approved Construction Method Statement (CMS) for

each activity (latest revision)Copy

Project Engineer

4.03 Approved ITP for each Activity CopyProject Engineer

4.04 Draft Safe Work Method Statement (SWMS/JSEA) CopyProject Engineer

4.05Traffic Management Plan / Traffic Control Plan /

Permit in place Copy

Project Engineer

4.06 Current Drawings (Issued for Construction) Copy Project Engineer

4.07 Pre-construction survey Dwg Project Engineer

4.08 Police, Fire and Ambulance services been informed Notice Social Performance

4.09Third Party Approval obtained, Conditioned

complied with and been Notified.Copy

Project Engineer

4.10 Supervisors’ Package Completed and Verified Work Package Engineer / Supervisor

4.11 Limits of clearing/stripping set out Dwg Engineer / Supervisor

5.0 Safety

5.01 HSSE Management Plan Copy HSSE Rep.

5.02 Delivery of Safety Equipment & Signage On site Engineer/Supervisor

Attendance

GRAPHICAL BASED CONSTRUCTION SIGNOFFS