Defer no time, delays have
dangerous ends.
1 Henry IV, Act 3, scene 2
On 15 August 2023, the ANAO published its audit Governance of the Northern Land Council,
the last of its four performance audits of governance arrangements in the four
NT Land Councils (link
here). The NT land councils are statutory entities established by the Aboriginal Land Rights (Northern Territory)
Act 1976 (ALRA), which is federal legislation.
The audit results were largely positive, as was the
response from NLC management which agreed to implement the eleven largely
technical recommendations. I previously commented on the audits of the Tiwi
Land Council and the Anindilyakwa Land Council (link
here) and on the audit of the Central Land Council (link
here).
In relation to the NLC, the ANAO headline conclusions
stated (inter alia):
8.
The Northern Land Council’s governance arrangements under the Aboriginal Land
Rights (Northern Territory) Act 1976, Native Title Act 1993 and Public
Governance, Performance and Accountability Act 2013 are largely effective...
10.
The NLC’s governance arrangements under the ALRA and NTA are largely effective.
The establishment and governance of the Council and its committees complies
with legislative requirements. Poor record-keeping reduces transparency over
the Council member nomination process and the validity of the constitution of
the Council. The transparency of other decision-making arrangements could be
improved. The NLC has not met a commitment to the Minister for Indigenous
Australians and the community to review its method of choice for Council member
selection. Governance arrangements for the exercise of the NLC’s key statutory
functions (negotiating and assisting with land use, assisting with commercial
activities, consulting and obtaining informed consent, and distributing
royalties and rents) are largely appropriate.
11.
The NLC’s arrangements to promote the proper use and management of resources
are largely appropriate …. the 2021–22 Annual Report was fully compliant with
PGPA Act and Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA)
requirements. There could be improvements to performance reporting…
Given the inherent challenges of the NLC’s operating
environment, this result must be rated as outstanding. There were nevertheless a
number of issues identified that should be of concern to the Minister and her
agency, particularly if they are left unaddressed. These include adverse ANAO
commentary regarding the failure of the NLC to follow through on a number of
repeated commitments to Ministers regarding the method of selection of Council
members (para 3.12-13), and some mildly critical commentary on the
effectiveness of the Audit Committee (paras 4.57 – 71) including the failure of
the land council to advise its own Audit Committee of a fraud by a staff member
(Appendix 8, para 1.f). I recommend interested readers take a look at the
report for the ANAO’s detailed analysis.
What emerges from these four performance audit reports is a
policy and administrative landscape permeated with competing pressures,
including conflicting cross cultural expectations, complex legislative
frameworks, continuous flows of funding from a range of sources including
mining royalty equivalents (which are used to fund the land councils and to
compensate Indigenous landowners for the impacts of mining, negotiated royalty
payments derived from mining and other resource use on Aboriginal land, and so
called section 19 payments for the use of Aboriginal land by third parties. All
of these funding flows are subject to both upward and downward accountability
expectations, that is, to the Parliament and to land councils’ constituents.
Given these inherent challenges, it is worth looking at the
sorts of issues that the ANAO reports do not assess and consider.
In 1985, I published an article (link
here) arguing for the extension of public sector audits beyond compliance
audits and beyond efficiency (or performance) audits to effectiveness audits.
To date, the effectiveness realm has not been embraced by the ANAO (nor most
other state audit offices).
The four land council performance audits provide a useful
case study of the limitations of performance or efficiency auditing within a
complex and challenging policy domain. The audits are narrowly focussed on the
compliance of the land councils with their statutory obligations. Financial
compliance with normal accounting obligations, and compliance with the expectations
of ministers and the wider public regarding the standards of governance within
statutory entities are extremely important. However, by ignoring the issue of
effectiveness, that is, whether the land councils are achieving what they are designed
to achieve by the parliament and the community, the ANAO has missed a major
opportunity.
More worryingly, there is a risk that the failure to analyse
the need for reforms designed to improve effectiveness will contribute to
creating the preconditions for more radical and retrogressive reform in the
future. Indeed, it would not be an exaggeration to observe that in relation to
an assessment of the operations of the land councils, the ANAO might itself be
regarded as ineffective by failing to focus on effectiveness as well as
financial compliance and performance and efficiency.
One of the implications of this blind spot by the
Parliament which should expect effectiveness assessments, and the ANAO which
should be pushing to undertake these assessments, is that other mechanisms are
utilised to assess effectiveness. Invariably, these are ad hoc, opportunistic
and random. They include royal commissions, parliamentary inquiries,
evaluations, commissioned and internal reviews, and perhaps media revelations.
In this context, it is worth noting that it is almost twenty years since there
has been a comprehensive review of the NT Land Rights legislation, and I am not
aware of any comprehensive evaluation or high level review of the operation of
land councils since their establishment in 1976, almost fifty years ago. There
have been a number of reviews and evaluations focussed on specific issues, but
these lack the panoptic perspective required to lay the groundwork for sensible
policy reform.
In the remainder of this post, I seek to identify a number
of issues related to the operation of the land rights system in the NT that
would benefit from regular overarching effectiveness assessments. To be clear,
I am not seeking to provide policy answers or solutions, but merely point out
that issues exist that warrant focussed analytic attention. Nor are all
effectiveness issues focussed on the land councils. The Minister, the NIAA, and
the NT Government all have interests and responsibility that intersect with the
land rights legislative framework. In no particular order, here seven important
issues that impact the effectiveness of the land rights framework in the NT and
consequently deserve regular analysis and assessment:
Royalties
and other payments: The NTG is currently consulting on potential
changes to its royalty regime (link
here). In particular, it seems likely that it is under pressure from mining
interests to reduce royalty rates. One consequence of such a change would be to
reduce the quantum of royalty equivalent payments that are automatically paid
by the Commonwealth to the ABA (and indirectly the land councils, the newly
established NTAIC (link here), and
landowner groups more generally. Yet it is unclear whether the land councils
are engaging with either the NT Government or the Commonwealth on this issue.
More broadly, the functions of land councils include to ascertain
and express the wishes of Aboriginal peoples living in the area of the Land
Council regarding the management of Aboriginal land; and to protect the
interests of relevant Aboriginal people. Aboriginal land is held communally, yet
payments arising from third party use of the land are often paid to entities
that do not necessarily reflect all members of the land owning group. Further,
in the case of large resource developments, the payments are also substantial,
but time limited. There is a persuasive argument that both the Commonwealth and
the land councils in administering financial transfers have something approaching
a fiduciary duty to ensure benefits are distributed appropriately and beneficiaries
are aware of the potential alternative approaches to use of such benefits. Or
to put this another way, there is a risk of future litigation that benefits
have not been administered and distributed in accordance with those entities fiduciary
responsibilities. Yet neither the Commonwealth
nor the land councils appear to have mechanisms that provide any evidence that beneficial
payments are in accord with either fiduciary responsibilities or the land
council obligations to protect the interests of their constituents.
Land
Council membership: A longstanding weakness in land council
membership, emanating from the customary or traditional basis of member selection,
has been a reluctance to select women in some quarters. There has to my
knowledge never been a female chair of a land council, and women are invariably
a minority on land councils. So a quick scan of the various land council web
sites indicates the following data on female membership: TLC 4 /32; ALC 8/26;
CLC 22/90; and NLC 17/78 with five additional women yet to be appointed. Overall,
51/226. This in turn raises the question: are land council priorities gendered
in ways which exclude or diminish women. I don’t know the answer, but nor does
anyone ever seem to formally ask the question. A further issue relates to the
longevity of land council membership, and whether there is an optimal level of
turnover of council members and in particular executive committee members.
Executive
Committees: The role of Executive committees and the land council CEOs
are crucial offices within land council structures. The ANAO identified a
number of instances where executive committees were operating beyond the
authority delegated to them and without adequate advice and information flowing
to members. A further issue concerns the longstanding under-representation of women
on these influential decision-making committees. According to the current
websites of the four land councils, the representation of women on these
committees at present is as follows: NLC 5/14; CLC 3/11. The TLC has a nine
member executive management committee, but its web site does not disclose its
membership. The ALC has a Finance Committee, but does not appear to have an
executive committee. The potential exists for membership of executive
committees and the office of CEO to confer extraordinary influence over the
operations of land councils and in particular their financial distributions. In
the event that audit committees are not operating independently, the risks of
influential individuals appropriating decision making power that the Parliament
has provided to the land councils increases. The absence of independent effectiveness
audits able to scrutinise the substantive activities and decisions of land council
executive committees and CEOs (and not just the processes they adopt) removes a
potential ‘check and balance’ that would provide additional protection for land
councils’ constituents.
Section
19 land agreements: the NLC audit lists (para 3.74) data on the
numbers of community consultations on all issues undertaken by the NLC. Over
six years there were almost 1750 meetings, consulting around 38,000 participants.
It is not clear how many of these resulted in section 19 agreements, nor is it
clear how many such agreements are on foot. Similar issues arise with the other
land councils, although the workload levels will be much lower. Nor is it clear
how long section 19 negotiations take to be finalised (see para 3.57 for the NLC
estimate). Similarly, there is little data available on the extent of formal
agreements as opposed to informal arrangements with traditional owners.
Delays and reluctance of the land councils two decades ago
to prioritise speedy section 19 negotiations were one of the drivers of the
township leasing arrangements that have long been resisted by the land
councils. It is not clear to me if the township leasing framework is working
effectively, but the deeper issue (particularly if we wish to see commercial investment
encouraged within townships) is to ensure that individuals and corporations
prepared to engage in commercial activities within townships have speedy
options for securing leases and tenure that facilitate raising commercial
finance.
The fundamental issue here is the answer to the question:
how well do these agreements for access to Aboriginal land operate. Are the
needs of landowner groups being met? Are the third party users satisfied? However,
as far as I can tell, there is no data or public information available to answer
these questions across all four land councils.
Royalty
and payment distributions: The ANAO found that the land councils
are largely complying with their legislative requirements in relation to royalty
distributions under Part IV and section 19 of ALRA. However over time, it is
clear that land councils and eligible communities have resorted to utilising
corporations to receive payments which then distribute the funds to their
members. One result of the use of such corporate mechanisms, in effect as a
middleman in the process, is that there is no transparency in relation to the
characteristics or identity of the ultimate beneficiaries, arguably avoiding
the legislative intent that the land council as a whole should decide on the
class of beneficiaries. In addition, there are obvious potential risks with
non-transparent payments allocated by the land council (or worse still, by the
executive committees) to corporations whose controlling members are not always
apparent.
Issues
of organisational scale: Given the complex policy environment
described earlier, and perhaps counter-intuitively, it is clear from the ANAO
audits that the two larger land councils (ie the NLC and the CLC) have
developed and maintained much stronger governance frameworks that the two
smaller land councils. Both the TLC and particularly the ALC appear to be beset
with serious and deep-seated governance issues. One of the wider policy
implications arising from this result relates to the scale of land council
operations. The experience of the two smaller land councils, where small
numbers of key individuals exercise substantial authority and control without
the checks and balances provided by members from different regions and
backgrounds, suggests that devolution can be taken too far. Both the larger
land councils have developed regional administrative frameworks to address the
longstanding pressure for greater devolution of land council powers and
functions. Are those arrangements working well, or not? And given the scale of
the dollars flowing through the system, should NIAA be undertaking greater
oversight of the smaller land councils?
Land
tenure responsibilities: The relationship between the land
councils and land trusts (who are if effect the entities who own Aboriginal
land under ALRA) are complex. A person or corporation seeking to utilise or
access a land trust’s country must approach the land council. In turn the land
council consults the traditional owners (from whom land trust members are
appointed) and then conveys the views of the traditional owners to the land
trust as a directive. This innovative and prescient arrangement has in my view
worked well over the past almost fifty years, but was not adopted by the Parliament
when it enacted the Native Title Act (NTA). Under the NTA, the native title
holders who are all members of the Prescribed Body Corporate make their own
decisions. In the NT, both legislative regimes operate. Which is most
effective? No one seriously discusses this within policy contexts.
Further, houses (and other assets) affixed and located on
land trust land which are not leased to a government entity are the responsibility
of the land trust as landlord. The land councils have a responsibility to meet
the financial commitments of land trusts, and in turn the Commonwealth has an
implicit responsibility to ensure that the financial liabilities of land
councils are funded. There is NT legislation (the Residential Tenancy Act)
which requires landlords to, inter alia, ensure the property is maintained and
habitable, and ensure the property is safe and secure (link
here). These obligations are rarely if ever addressed by land trusts or the
land councils, and Aboriginal tenants have, to my knowledge, never taken legal
action against a land trust to do so. This may be a function of the dearth of
independent advice available to individuals in remote contexts. Yet Aboriginal
people continue to live in overcrowded and under-maintained conditions
throughout the NT. Where leases exist, the landlord is usually a government or
community housing provider. But where they do not (for example, on outstations
on Aboriginal land), the landlord is the relevant land trust. It is not clear
how many NT Indigenous citizens live in houses without a lease, and the extent
of support they receive from land trusts and land councils. My own intuition is
that the answer is some thousands of people are housed in such locations, and
the support they receive from land trusts (who must act on the direction of a
land council) is zero or ‘not much’. A regular effectiveness audit would offer
one mechanism for beginning to measure the scale of this issue, and encourage
policymakers to set in train policy responses to address it.
Conclusion
The ANAO audits of the four NT Aboriginal land councils have
been an extraordinarily valuable exercise in setting down a detailed picture of
the workings of these important organisations. The overall picture has been
positive, although the ANAO findings in relation to the ALC in particular are in
my view extraordinary and of serious concern. In relation to the ALC audit, we
are yet to see any formal or public response by Minister Burney nor NIAA,
though one hopes that action is underway behind the scenes.
Yet the ANAO remit is limited, and this means that it under-invests
in focussing on effectiveness issues. This post has identified seven broader
issues that have the potential to impact the effectiveness of the NT land
rights framework for better or for worse, and consequently, deserve explicit
policy attention from land councils and from the relevant governments. It is my
contention that an explicit program of effectiveness audits by the ANAO across
the mainstream, but particularly across the Indigenous policy domain would make
a much greater contribution to assisting policymakers to find timely and proactive
solutions to many of the issues that require attention in those policy domains.
Avoiding asking the hard questions is always convenient at
the time, but Indigenous Territorians will not thank policymakers, whether in
NIAA, in the ANAO, or in the land councils who deliberately avoid the hard
issues. The risk is that at some point, effectiveness deficits will lead to regressive
policy changes that undermine the substantial rights presently available to
Aboriginal Territorians.
17 August 2023
