Monday, 20 June 2016

A new Approach to Tiwi Land Development

A media release from the NT Chief Minister presages a new development in NT Land Rights policy development. It links to a joint announcement with the Tiwi Land Council (TLC).

The release refers to a 2013 Memorandum of Understanding between the NT Government and the Tiwi Land Council, to support economic development on the Islands.

The NT Government and the TLC have entered into a strategic partnership to encourage commercial development on the Tiwi Islands, and have now released a suite of documents outlining the proposed processes.

 The key NT Government agency is the Land Development Corporation (LDC), described on its web site as the NT Government’s strategic land developer, and the Tiwi Land Council and Tiwi Land Trust.

The key document outlining the proposed approach is titled Tiwi Islands Investment Opportunity: Private Sector Investment Opportunities . There are links to a range of other fact sheets and background materials. The document outlines the existence of the Tiwi Development Framework Agreement, entered into in 2015 between the NTG and the Tiwi Land Council and the Tiwi Land Trust. This agreement apparently provides for a process of identifying potential development sites, agreement for prospective developers to inspect potential sites, and for a template approach to leasing development sites for commercial development.

Central to the proposed approach is a lease of up to 99 years to the Land Development Corporation, which will then sub-lease the proposed commercial site to the business proponent. The prospectus suggests there are opportunities in tourism, aquaculture, agriculture and industry available.

The core of the proposed approach, and the new element in NT land rights policy which is implicit, is that the LDC, and thus the NTG, propose to act as an intermediary between commercial proponents interested in pursuing opportunities on Aboriginal land and Indigenous interests represented by the Tiwi Land Council.

The proposed approach has strong similarities with the Township Leasing model established in 2007, and which operates on the Tiwi Islands and Groote Eylandt. That model interpolates a Commonwealth statutory office, the Director of Township Leasing between traditional owners and residents and land users within particular townships. Its rationale is effectively to streamline negotiations over leases within townships and thus reduce transaction costs. However the model has not been supported by the two major land councils and thus its take up has been quite limited. This article discusses some of these issues in greater detail.

It will be interesting to observe whether the new approach, which potentially applies across all Aboriginal land on the Tiwi Islands (and not just within townships) will be taken up by the other NT Land Councils.

On its face, there appear to be advantages insofar as the LDC will have a pre-existing relationship with the Tiwi Land Council and the key traditional owners which will operate to build the trust necessary to facilitate effective negotiations. The LCD will also have an interest in ensuring that its proposed sub-lessors are serious and above board, with viable proposals. The LCD may also operate to persuade external investors to consider adding Indigenous owned equity to their proposals thus ensuring that Indigenous interests have both a stake as ‘’landlord’ and as commercial operator.

Nevertheless, there are also risks which may be harder to discern and guard against. Perhaps the most significant is that the implementation of the framework agreement model may precondition the Land Council to seek to find ways to approve commercial proposals which either are not supported by the Traditional owners, or even if they are supported which do not drive the best possible commercial outcome for traditional owners. There is a history on Tiwi of failed or flawed commercial projects being approved following significant hype and considerable doses of back-room politics. The fiasco of the Tiwi forestry project and the separate fiasco of the later port development are stark reminders of the risks for all involved.

Accordingly, the quality of financial governance within the Land Council will be of increasing importance, and potential risks (which are unfortunately very real in remote communities – see this post) involving conflicts of interest, fraud, and just poor financial and legal advice all need to be managed effectively. The regulator for the NT Land Councils is effectively the Federal Minister for Indigenous Affairs and his Department, and there would be merit in the Minister initiating a forward looking internal review of the quality and capacity of his Department to provide regulatory oversight of the land councils given the increasing shift to commercial land use decision-making.

It is too early to form a considered judgment on the merits of the new approach proposed by the NTG and the TLC. Implicit in the policy however is a recognition that commercial development of Aboriginal land in the NT is not impossible, but does require tailored approaches which acknowledge the rights of traditional owners and which opens up options for Indigenous participation in economic activity. This in itself is a good outcome.