Introduction
- The Lands Acquisition Act 1989 (LAA) is the key legislation used by the Commonwealth to acquire and dispose of interests in land to support the delivery of Government priorities, services and outcomes. The LAA broadly defines interests in land. Accordingly, transactions involving interests in land have wider meaning under the LAA than simply purchasing or selling land, and include other property transactions such as leasing office space (see paragraph 10 below).
- The LAA applies to all non-corporate Commonwealth entities (NCEs) and corporate Commonwealth entities (CCEs), unless otherwise exempt (see the Lands Acquisition Act Regulations 2017 (LAA Regulations) for exempt authorities (entities)). Note, there are some entities which are exempt from the LAA under their enabling legislation rather than the LAA Regulations. Entities must follow their legal obligations under the LAA and are responsible for ensuring compliance.
- NCEs must comply with the Lands Acquisition Framework (the Framework) when undertaking transactions requiring authorisations under the LAA. CCEs should strongly consider referring to the Framework, including referenced policies and procedures, which are consistent with good practice.
- Acquisitions under the LAA are procurements. As a result, NCEs and prescribed CCEs must follow the Commonwealth Procurement Rules (CPRs) when undertaking acquisitions. To ensure value for money, entities that are subject to the CPRs must also comply with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and relevant policy aspects of the Commonwealth Property Management Framework (CPMF).
- When undertaking disposals, entities that are subject to them must refer to the Commonwealth Property Disposal Policy (CPDP) and relevant policy aspects of the CPMF.
- The Legal Services Directions require NCEs to consult the Department of Finance (Finance) on legal advice on the interpretation of the LAA.
Lands Acquisition Framework
- This Lands Acquisition Framework supports entities to meet obligations under the LAA and encourages informed decision-making for property acquisitions and disposals under the LAA. Requirements that must be complied with are denoted by the term ‘must’. The term ‘should’ indicates good practice.
- The Framework supports acquisitions and disposals of interests in land under sections 40, 41, 119 and 125 of the LAA. That is, those matters most likely to arise for entities in day to day activities. It doesn’t cover some of the other dealings described in the LAA, for example, in Part X concerning expungement of easements or mining activities on Commonwealth owned land. For information on these and other matters, please contact the Department of Finance at LAA@finance.gov.au.
- The Framework provides overarching guidance on the LAA and its requirements but is not intended to be a comprehensive guide. While the Framework provides guidance on legislative, policy and due diligence requirements that entities may need to consider when conducting acquisitions and disposals, entities will need to satisfy themselves that a sufficient assessment has been carried out to support the acquisition or disposal. This may include undertaking activities beyond the scope of the Framework.
- ‘Interest in land’ is defined broadly in the LAA. This means that the LAA applies to the acquisition and disposal of a wide range of rights and estates in land, including freehold interests in land and lesser rights and interests such as leases, easements or licences. For clarity, the acquisition and disposal of land, leasing of office space or land, licences and easements are subject to the LAA unless otherwise exempt.
For example, s21 and s117 of the LAA provide for circumstances in which an acquisition or disposal (respectively) of an interest in land can occur outside of the requirements of the LAA. This includes where the LAA regulations provide that the LAA does not apply to acquisitions and disposals in specified circumstances, and where acquisitions and disposals are appropriately authorised by another Commonwealth law.
- The Framework applies to all interests in land which are authorised under the LAA. It covers interest in land in Australia, external territories (excluding those territories that are outlined in section 5 of the LAA) and overseas. The Framework does not apply to transactions to which the LAA does not apply.
- The Framework promotes informed decision-making and value for money outcomes, demonstrated by ensuring:
- affected landholders are treated fairly and acquisitions represent ‘just terms’ outcomes for the landholder;
- responsiveness to stakeholder expectations;
- a foundation for achieving value for money and promoting the efficient, effective, economical, and ethical use of Commonwealth resources in relation to the acquisition or disposal of interests in land;
- accountability for all entities on the use of acquisition powers; and
- compliance with relevant legislation and Commonwealth policies, including with respect to the environment, heritage, native title, and use of public resources.
- NCEs and officials must establish and maintain appropriate systems and internal controls for the oversight and management of risk as required by the Commonwealth Risk Management Policy.
- Importantly, the Lands Acquisition Framework, including the LAA, does not operate in isolation. Relevant entities and officials should be mindful that they operate in an environment of legislation and Commonwealth policy and that they may be required to comply with relevant obligations under multiple frameworks. Within that broad context, the Resource Management Framework consists of the legislation and policy governing the management of the Commonwealth’s resources, including the acquisition and disposal of interests in land.
- Non-compliance with the requirements of the Resource Management Framework, including in relation to acquisitions and disposals of interests in land, may attract a range of criminal, civil or administrative remedies including under the Public Service Act 1999 and the Crimes Act 1914.
Public Governance, Performance and Accountability Act 2013
- Accountable authorities of Commonwealth entities have an obligation to promote the proper use and management of the public resources for which the accountable authority is responsible (see section 15 of the PGPA Act). This requires that public resources be used or managed in an efficient, effective, economical and ethical manner (see section 8 PGPA Act).
- Section 16 of the PGPA Act outlines an Accountable Authority's duty to establish appropriate internal control systems for their relevant entity. Accountable Authorities should draw on this Framework to establish Accountable Authority Instructions (AAIs) and operational requirements in relation to acquisitions and disposals of interest in land.
Commonwealth Procurement Rules
- NCEs and prescribed CCEs must comply with the CPRs when undertaking procurements, including acquisitions of interests in land under the LAA.
- For clarity, procurement of goods and services includes every type of right, interest or thing which is legally capable of being owned. This includes, but is not restricted to, physical goods and real property as well as intangibles such as contract options and goodwill.
Delegations
- The Finance Minister has portfolio responsibility for the LAA, and has delegated a number of functions and powers under the LAA to officers within Finance and other Commonwealth entities. Delegation allows entities to best manage the range of interests in land that fall within their administrative responsibilities.
- An acquisition or disposal of an interest in land must be authorised under the LAA, either by the Finance Minister or a delegated official.
- Some acquisitions or disposals can only be authorised by the Finance Minister or, in some cases, a Finance delegate. Examples include acquisitions under compulsory acquisition processes, and some disposals such as granting leases with a term in excess of 22 years. Entities should consult Finance early if the acquisition will require an approval by the Finance Minister or a Finance delegate under the LAA.
- The Finance Minister has directed that entities must notify Finance no later than 14 days after a delegate has exercised a power under the LAA delegations instrument (see section 8 of the delegations instrument).
- The Finance Minister’s directions also require entities to consider the CPMF, CPDP, PGPA Act and other legislation and policies relevant to decisions under the LAA (section 8 of the delegations instrument).
- The current delegations to officers can be found on the Finance website. Please contact LAA@finance.gov.au regarding delegations under the LAA. Entities should notify Finance at the above email address of any changes in positions that may impact on LAA delegations in force for inclusion in future updates to the delegations.
Obligations when interacting with external parties
- Entities engaging with parties that are external to government, such as landholders, valuers, and claimants, must act in accordance with the highest standards of probity and ethics, their entity’s AAIs and any requirements of the approved acquisition strategy for the transaction.
- At a minimum, the principles driving engagement with external parties would be expected to include requirements to:
- ensure that accurate records are kept throughout the acquisition and negotiation processes, including notes on all discussions and meetings;
- declare all real or perceived conflicts of interest and follow probity instructions in relation to declared conflict/s of interest; and
- have at least two officials present at meetings, with face-to-face meetings held at appropriate venues, taking into consideration the content planned to be discussed at the meeting.
