Agreement-making/negotiations

In this stage, the parties agree to an agreement-making process. Agreement-making with Prescribed Bodies Corporate (PBCs) is highly specialised, requiring legal, commercial, ESG (Environmental, Social and Governance) and Social Surroundings practice expertise.

PBCs and Renewable Energy Developers (REDs) need to consider all stages of the project (see stages 10 to 16) and the factors relevant to their project and incorporate them into the negotiations.

The agreement-making process will include mechanisms to manage changes that occur over time, manage expectations, and maintain a positive relationship.

Agreement-making

A Negotiation Framework Agreement (NFA) is used to:

negotiate with a PBC on behalf of Common Law Holders, or native title claim Applicants on behalf of a native title claim group;
negotiate an Indigenous Land Use Agreement (ILUA) with a PBC on behalf of Common Law Holders, or native title claim Applicants on behalf of a native title claim group.

It sets the ground rules for agreement-making and incorporates best practice mechanisms. These might include embedding: the International Finance Corporation’s performance standards; good faith negotiation requirements; and best practice agreement-making standards.

A NFA can:

supplement the Communications/“WoW” Protocol;
set the ground rules for how parties negotiate to allow a renewable energy project to proceed - there are often several options and pathways to consider;
lay the foundation for a positive and respectful working relationship, regardless of whether formal negotiations have commenced;
include provision for the engagement of external independent advisers to the PBC.

A Statement of Intent (SoI) is used to:

negotiate Head/Strategic Agreements;
negotiate commercial agreements with the PBC or their nominated representative entity.

The RED is responsible for funding its own costs in relation to negotiation and implementation of the agreement, as well as the PBC’s reasonable costs:

incurred by the PBC, based on the agreed budget estimate, including legal and other independent expert advisers;
incurred by the PBC’s engagement team;
related to the PBCs obligations at every stage of the agreement, including regular review.

Engaging independent advisers

The NFA provides for the engagement of external independent advisers with suitable experience and proven expertise in economic, environmental, hydrogeological, cultural heritage, anthropological, legal, commercial, business, and Social Surroundings.

Independent advisers are appointed by PBCs and funded by REDs. It’s the RED’s responsibility to facilitate discussions between experts and PBCs. Resourcing and the ongoing capacity of the PBC requires careful attention during this stage to support effective engagement with the RED and obtaining independent expert and other advice. YMAC has in-house expertise in several aspects of project negotiation that can be utilised by client PBCs.

Consent and approvals

Environmental Protection Authority (EPA) approvals and heritage approvals continue to progress during this stage, and a social licence to operate must be gained and maintained throughout the project.

Planning for change is essential because projects, their goals, RED representatives, PBC Boards, and other project partners can all change over time, as can agreements. Documentation of processes and outcomes, coupled with regular review at agreed intervals is vital, particularly when new information comes to light or when people or circumstances change. Sharing this with PBCs, in a timely manner, is an effective way to achieve free, prior, and informed consent (FPIC) at every stage throughout the process and keep the project on track. Consent and negotiation timeframes must be culturally appropriate and reflect decision-making processes that abide by the traditional Lore, customs, and governance requirements of the PBC e.g., community authorisation meetings where there can be great variation in consultation requirements between native title groups.