Vegetation Offsets

A means of generating additional income while effectively managing your land

All too often these days, landowners are being approached by resource companies seeking access to conduct activities that may disturb the landholder’s grazing or farming enterprise possibly having a lasting negative impact on the land.

Recently, however, we have been assisting some landowners to enter into a new type of arrangement with resource and infrastructure companies that compensate landholders for managing the vegetation on their land.

The driver behind this concept is a requirement for these companies to offset the vegetation they clear for their own projects by establishing remnant vegetation somewhere else to achieve long-term environmental sustainability. To do so, the companies engage landowners to manage the vegetation on their land in accordance with a vegetation management plan.

Is your land suitable?

If your land contains quality regrowth or remnant vegetation, offsets may prove beneficial to your enterprise. Generally, areas suitable for offsets need to:

  1. be larger than two hectares in size;

  2. adjoin existing remnant vegetation; and

  3. contain minimal weeds.

Commonly these areas will be the least productive grazing paddocks. Managing them for biodiversity purposes might already fit with your long-term plans for the property.

What is required?

Under the relevant legislation, companies undertaking an offset project are required to secure their offset. To do so, they will seek to enter into a legal agreement with the owner of the land on which suitable vegetation is to be preserved and managed.

In many cases, the compensation is paid upfront, for example, when a “voluntary declaration” is lodged on title. Sometimes a series of payments over the course of the offset management plan will be negotiated.

But keep in mind…

In order to establish an offset area, a resource company will require security for the offset. This is usually by way of registration of a voluntary declaration on title. Furthermore, for the term of the agreement there will be restrictions on how you use your land. For example, you may not be allowed to clear the offset area. Or, you might not be permitted to graze stock on that area all year round. These restrictions would be set out in what is called an “offset management plan”, and would depend on the individual circumstances required.

Recent Articles