Indigenous land and economic development in northern Australia

 

I have been long a sleeper; but I trust

My absence doth neglect no great design

Which by my presence might have been concluded.

Richard III, Act 3, scene 4

 

The Parliament’s Joint Standing Committee on Northern Australia has recently released its report: The engagement of traditional owners in the economic development of northern Australia (link here). The inquiry was initiated, at the suggestion of North Qld MP Warren Entsch who chairs the committee, in late 2018, lapsed in April 2019, and restarted in August 2019. It has thus been in preparation for over two years (see paras. 1.43/44). The Terms of Reference were broad and relatively open ended, and cover a lot of ground both literally and metaphorically. The report comes in at over 100 pages, and is clearly written. The report is essential reading for anyone interested in the interplay of native title and economic development.

 

On my first scan of the recommendations, I was pleasantly surprised, as the Committee has focussed on some of the key challenges confronting the native title/land rights policy space in northern Australia (and beyond), and identifies the actions that Governments must take if they wish to see Indigenous communities across northern Australia contribute to and indeed drive the take up of economic opportunities over the coming decades. Implicit in the committee’s thinking (but not stated) is that the failure to grasp these opportunities will not merely be a lost opportunity, but will lead to the development of an Indigenous underclass excluded from economic participation, and will ultimately have an adverse impact on opportunities for mainstream economic development of the north.

 

In particular, the Committee recognises the crucial importance of effective Indigenous organisations in managing the Indigenous land estate in northern Australia.  Recommendation one which recommends increased funding for PBCs and native title Representative bodies, and to a lesser extent, recommendation two, which recommends increased support for capacity building of PBCs and NTRBs, are crucial to the future viability of the native title system nationally. The importance of the effectiveness of the native title system is made crystal clear if we consider that almost 80 percent of northern Australia is held under some form of Indigenous tenure or subject to an unresolved native title claim (para 1.42). Yet the report also notes that the Government was advised in a report conducted by Deloitte Access Economics in 2014 that the native title system required greater financial support (para 2.14). Paras 2.13 to 2.35 in the report lay out the case for increased funding in detail, but notwithstanding the unequivocal recommendation, the committee fails in my view to effectively portray the extent of systemic underfunding, and says nothing about why Government has ignored the issue for the past seven years.

 

Upon closer reading, the following eight recommendations usefully point the way forward on a series of issues that require attention, but each of them is framed in an equivocal fashion, that simultaneously would allow a government to accept the recommendation without necessarily committing it to action. So, recommendation three recommends a review of systems for appointment of PBC directors rather than recommending specific changes; recommendation four recommends that the Commonwealth should give consideration to crating an Indigenous strategy for northern Australia and a northern Australia Indigenous economic development body, recommendation five recommends the Commonwealth should support (unspecified) initiatives to make innovative use of land tenure systems to make land management effective (whatever that actually means)…and so on....Only recommendation ten is unequivocal. It recommends that the NT Aboriginal Land Rights Act be amended to reinstate separate vetos at exploration and mining stages, a policy change I support, but which I suspect has zero chance of being implemented.

 

The Committee’s report follows the standard model for these reviews: an introductory chapter describes the lay of the land (so to speak), then a series of chapters on the key issues. Each chapter sets out a high level narrative supported by extensive quotation from stakeholder submissions, and concludes with a Committee comment. The three substantive chapters in the report are titled: ‘strengthening representative bodies’; ‘role and performance of government entities’, and ‘pathways to economic development’, with a concluding chapter summarising the overall analysis.

 

The concluding chapter tells a coherent and valuable story, but it is a story that is far from new, and which doesn’t really break new ground. The Committee identifies the longstanding power imbalance between traditional owners and development proponents, argues that it can only be ‘redressed with resources and institutional capacity’ (para 5.3), which leads into the rationale for recommendations one and two. What the recommendations ignore however is the potential for governments to take seriously their role of representing the public and national interest (rather than particular corporate interests) and adopt and implement policies and legislative change that rebalances the playing field. In other words, we need to acknowledge and address structural exclusion and systemic power imbalances.

 

The report argues for increasing the transparency of decision making in representative bodies, (para 5.9) which I strongly support, but makes no mention of the reciprocal and arguably more important need for governments to increase their transparency.

 

The Committee’s analysis is somewhat confused and arguably one-sided when it seeks to address the tensions arising from the inalienability of both statutory and common law Indigenous tenures. At para 5.10/11, the Committee states, somewhat tautologically, that

 ‘A major barrier to the productive use of title to land under native title or land rights is land tenure….One of the key problems is the limited fungibility of land, especially that held under native title legislation, and the consequent problems of using land for investment…’.

 The Committee goes on to espouse the benefits of township leasing in the NT, making specific reference to the recent amendments that provide for community owned corporations to hold the headlease, which likely reduces the likelihood that banks and corporate lenders will take a mortgage and provide finance. I dealt briefly with this issue in a June 2021 post relating to the proposed changes to the NT Land Rights Act (link here). See also the Parliamentary Library’s Bills Digest on those amendments (link here)

 

The Committee discussion of these tenure issues extends from para 2.64 to para 2.106, essentially setting out the problem, and canvassing various solutions, but failing to alight on any specific solution. The core of the problem is that there are multiple factors mitigating against the ability of Indigenous land owners to raise capital using their land as collateral. The problem is best described as multi-faceted market failure. See the AIG submission for some case studies (link here). Leases (linked to ILUAs) are part of the solution, but while necessary, they are not sufficient. The way forward is for Government to establish an institution or mechanism to provide an underlying guarantee for loans which are utilising Indigenous land as collateral. Yet after two years of hearings, the Committee failed to explicitly identify the required policy action. Para 2.106 makes it clear that PMC (now NIAA) and AGD intuitively understand this, however they won’t take the final step as they understand too that there is no political will at the Government level to do so. As a result, the Committee is left lamely suggesting (para 5.13) that:

The financial challenges that prevent more effective leveraging of Aboriginal and Torres Strait Islander land assets should be seriously considered, including by financial institutions and banks.

 

Finally, it is worth considering what is missing from this report.

I will nominate three high level issues.

 

First, while there are multiple reference regarding the desirability of greater accountability within PBCs and NTRBs, there is virtually no recognition that Governments too need to be accountable for their policy actions and inaction, and that the best way for this to occur is via greater transparency.

 

Second, there is a desperate need for greater (not less) proactive policy engagement by government with a focus on the policy opportunities that exist within the native title /land rights space. The longstanding decision to place the administration of the bulk of the native title Act with AGD (and not with NIAA) is a recipe for adding ever more legal complexity at the cost of policy coherence and policy vision. In my view, it is major oversight that the Committee says nothing about the overarching portfolio responsibilities and what the means for the outcomes on the ground.

 

Third, given the focus on the intersection between Indigenous landowners in northern Australia, and economic development, it seems extraordinary that there is no mention in the Committee report of the operation of the North Australia Investment Facility, the Government’s $7 billion flagship for its northern development policy framework. The mention of the NIAF in the Office of Northern Australia submission (link here) is underwhelming. I don’t propose to go into detail here (I have previously discussed this issue here), but the fact that Indigenous interests have accessed only a miniscule proportion of the funds committed to date is clearly worth some attention.

 

While this appears somewhat negative, there are some positives. The Committee clearly put a lot of effort into building a consensus position, something that is probably necessary to gradually shift mindsets among the political elites who will determine the pace and nature of policy reform into the future. And the Committee inquiry created the opportunity for some substantive policy contributions from stakeholders and academics, including from the Indigenous Reference Group for Northern Australia (who promoted the idea of a northern Australia Indigenous economic development body supported in recommendation four. The submissions (amongst others) by Altman and Markham, by the ANU, by the Aboriginal Investment Group and of course by the Department of Prime Minister and Cabinet and the Attorney Generals Department are all worth reading (link here) and add to the quantum of accessible and policy relevant information in the public domain.

 

The bottom line arising from a closer reading of the Joint Standing Committee on Northern Australia’s report, both in what it recommends, and what if fails to deal with, is to reinforce how little the government has done since coming to office in 2013 to encourage the inclusion of Indigenous landowners and communities in economic activity. The Committee’s report deserves to be widely read with a critical eye. It identifies some positive directions, but falls short of providing a clear roadmap or policy agenda for taking Indigenous participation in the northern Australia economy to the next level. Unfortunately, there is also a risk that if there were to be a change of Government in May this year, then the new Government might be tempted to use this report as a partial policy roadmap. Such a result would be disastrous in my view for Indigenous interests, and a lost opportunity for a new Government, and would signal a lack of real engagement at systemic levels by the new Government.

 

The Committee is correct in highlighting the economic opportunities for Aboriginal and Torres Strait Islander interests in northern Australia, but fails in my view to lay out an effective pathway to ensure those opportunities will be grasped anytime soon. The responsibility to act however falls upon governments. It is time they roused themselves from their drowsiness, and woke up to the opportunities available from pursuing policy reform designed to reverse the ongoing exclusion of Indigenous interests in northern Australia, and beyond.