The Yunupingu High Court Decision: some downstream policy issues

 

When clouds are seen, wise men put on their cloaks;

When great leaves fall, then winter is at hand;

When the sun sets, who doth not look for night?

Untimely storms makes men expect a dearth.

Richard III, Act two, Scene three.

 

The Federal Court decision which led to the appeal to the High Court in this case was handed down in May 2023. I published two posts following that decision (link here and link here). In those posts I contemplated the potential policy implications in the event that the High Court ultimately were to endorse the Federal Court’s decision.

In early March this year, the High Court handed down its decision and upheld the Federal Court decision. I will leave the technical textual analysis to the lawyers, but it seems to me that the analysis I offered in May 2023 continues to hold true in broad terms. I recommend readers re-read those posts as they have continuing relevance. For a good summary of the implications of the High Court decision, I recommend the brief by international law firm Ashurst (link here).

The High Court decision has implications primarily for the NT, but also in theory for the ACT and perhaps other territories (link here).

In terms of the core future policy implications, I would nominate three related (and arguably intertwined) issues which will shape the ultimate outcomes:

1.    The nature of the compensable native title interests that were extinguished;

2.    The quantum of potential compensation likely to flow both to particular native title holding groups and overall; and

3.    How best to manage whatever compensation benefits ultimately flow.

As I pointed out in my previous posts, and as was reiterated by Ashurst, the flow-on effects of this decision will take time to emerge, and there may be an attempt by the Commonwealth to short-circuit future litigation and potential expansion of liability by negotiation of wider agreements along the lines of what occurred in Western Australia following the Mabo decision. Whether these flow-on implications arise from litigation or agreements, one insight which is indisputable is that the compensation funds that flow will essentially be one-offs (even if they flow over some negotiated period). Indigenous interests therefore have an incentive to prepare by building their capability to manage significant compensation flows. The obvious starting point therefore is to consider the feasibility of the development and use of mechanisms and policies which deliver perpetual benefit-flows. There are also strong arguments in favour of Indigenous interests considering the best policy architecture for managing such flows. However, the successful implementation of these types of arrangements are not straightforward.

Perpetual Funds

At present in Australia, we have a spectrum of governance arrangements for managing native title benefits rangeing from the ad hoc arrangements applying to native title payments operating in Western Australia (where there is limited visibility of their effectiveness) through to the more structured arrangements in Victoria where the Victorian Traditional Owners Funds Limited (link here) provides a financial investment service to the various Traditional Owner Trusts which have negotiated agreements with the Victorian Government. The NT of course has its own existing high level governance arrangements for managing royalty flows and native title financial agreements plus a range of subsidiary mechanisms essentially controlled or at least influenced by individual land councils or their constituents. Obviously, the NT’s existing overarching policy architecture will be the starting point for any consideration of necessary future arrangements. However it is clear (at least to me) that these extant structures are sub-optimal and require reconsideration and substantial improvement to meet future circumstances. In the rest of this post, I seek to outline at least in broad terms why I believe the current institutional architecture for managing financial benefits for Traditional owners in the NT are not fit for purpose.

The Aboriginals Benefit Account

The starting point for any consideration of the policy architecture for land rights and native title payments in the NT is the Aboriginals Benefit Account (ABA) established by the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA). This account is an institutional policy mechanism whose roots can be traced back to Paul Hasluck’s time as Minister for the Interior. It involves the Commonwealth appropriating an equivalent amount to the mineral royalty revenues accruing to the NTG (and the Commonwealth in relation to uranium).

The ABA is effectively controlled by the commonwealth minister for Indigenous Australians and its funds are allocated for various legislatively specified purposes: land council administration, land council distributions to corporations representing those impacted by mining, and various sundry costs such as township leasing. In addition, the ALRA legislation provides for various payments to the recently established NTAIC, now known as Aboriginal Investment NT (AINT), comprising a one-off capital injection of $500m and three annual payments of $60m, as well as annual administration costs. Importantly, there has always been an element set aside for beneficial grants to the wider NT Aboriginal community.

The ABA does not represent the totality mining related payments to Aboriginal Territorians as payments negotiated by land councils are outside the ABA, and so are some older trusts such as the Groote Eylandt Aboriginal Trust established by missionaries before the advent of land rights.

Aboriginal Investment NT

According to the most recent financial statements for the ABA (which can be found in an appendix to the NIAA Annual Report: link here), the ABA currently holds assets valued at $1.47bn offset by liabilities of $566m comprised primarily of the (tautologically described) ‘initial one-off endowment of $500m’ to NTAIC plus a further payment of $60m being the last of three legislated $60m payments designed to provide funding certainty to AINT its establishment phase. Any additional funding for the Future Fund and/or the Community Ready Fund is at the entire discretion of the Minister of the day. The ABA’s residual current net asset base is thus $907m. The annual appropriation to the ABA is based on the quantum of mining royalties levied by the NT Government which in turn is influenced by production levels in the various mines on Aboriginal land in the NT. By far the largest contributor to the NT Government mining royalties is the GEMCO manganese mine on Groote, scheduled for closure in the early 2030s.

According to the AINT financial statements in its annual report (link here), and its Strategic Investment Plan (SIP)(link here), AINT has allocated $500m to its Future Fund which is intended to finance its Community Ready Fund which is used to make community grants, and to invest in sector development and what the Plan terms nation-building investments. The Future Fund is designed to accumulate for at least ten years with the aim of providing a funding source into the medium/longer term. Its target rate of return is CPI +3%. The SIP notes that the AINT Board had allocated $155m to the community ready fund. The 2023-24 financial statements list AINT’s net equity holdings (assets less liabilities) as just under $680m.

There are two implications arising from the legislated framework for AINT. First, while its annual operational costs will be funded from the ABA, the funds available for distribution from its Community Ready Fund over the next decade will essentially be in the hands of the Government. This is the Fund which makes beneficial grants to community organisations across the NT.

Second, and importantly, the idea of a perpetual Future Fund is essentially a chimera. Assuming AINT achieves its target rate of return of CPI + 3%, then by 2035 it will have grown to $672m in 2025-dollar terms. From there on the use of an assumed 3% returns for distribution to the Community Ready Fund would finance a grant of $20m per annum in 2025 dollars in perpetuity. When one considers that previous annual grant levels from the ABA were around $40m per annum, and have recently dropped to around $25m, it becomes apparent that unless investment returns greatly exceed the target, the AINT Future Fund will require further endowments merely to ensure AINT can keep doing what the ‘old’ ABA was doing.

The more general and most important point deriving from this analysis is that the notion of establishing a perpetual fund to finance the economic transformation that is required in the NT (and the rest of remote Australia) is much more difficult than governments and the Indigenous leadership in the NT (which negotiated and agreed to the legislated architecture of the AINT) have been prepared to admit.

Implementation Challenges

The AINT was a signature reform, yet it will not deliver transformational change as presently funded and I would argue as presently designed. I will expand on what I consider will be necessary to drive such transformational change in a later post. While it is possible that a future Government will allocate more capital to the AINT from the ABA and/or that the AINT’s investment performance will be substantially better than its target, there is also a significant downside risk that governments will prefer to retain direct control over the balance of the ABA (and its significant automatic annual accretions) and/or the possibility of either poor or unlucky financial management by AINT. Moreover, the provision of automatic operational funding for the administration of AINT is in my view a potential structural flaw as it removes the crucial incentive that ensures management is financially rigorous and replaces it with an incentive to be politically attuned. Ultimately, this may be to the disadvantage of Indigenous interests in the NT.

Apart from highlighting the challenges of establishing financial Trusts or Future Funds that will maximise the longevity of any compensatory benefits that flow from expanded compensation arrangements due to Yunupingu, I wanted to focus on the ABA and AINT, because they each appear to provide a mechanism that could be used (or arguably misused) to fund compensation payments arising from future litigation in the NT.

When AINT [then referred to as the NT Aboriginal Investment Corporation or NAIC] was first foreshadowed during Minister Ken Wyatt’s term, there was widespread opposition from some quarters to its design. I was amongst those with concerns and published two posts on this blog (link here and link here). One of the concerns I raised then was that the establishment of the AINT was only partial leaving considerable funding in the hands of the minister. Moreover, this funding discretion was unfettered as the establishment of the AINT was the rationale for abolishing the ABA Advisory Committee. It is now crystal clear that the Minister retains considerable leverage over the AINT by virtue of her power to approve or not approve operational funding and the additional endowment top ups which will be necessary merely to maintain current levels of beneficial grants.

In my second post, I pointed to the major increase in funding for the land councils announced by Minister Wyatt and suggested that it was not coincidental in ensuring that the land councils supported the amendments. I thought then, and think now, that this was a short-sighted decision by the land councils. Whether the land council leadership realised it or not, an objective assessment suggests that they and their advisers were outmanoeuvred and collectively co-opted by the Commonwealth.

The most recent ABA financial statements indicate that last financial year the Minister approved over $80m in grants to private sector entities from the ABA (it was $60m in the previous year) [see page 186 of the ABA financial statements (link here)] with minimal transparency while the AINT committed in principle grant funding of $20.6m and $8.7m (see pages 27 and 29 of the annual report) and actually spent only $9m (see page 75 of the Annual Report). The ABA’s revenue growth has slowed over the past year following damage to the wharf at Alyangula, however it can be expected to continue at around $300 to $400 million per annum over the next decade. In other words, the ABA’s financial assets are growing at a faster rate than AINT’s financial assets generally and particularly the AINT Future Fund.

The bottom line was that the Minister retained access to the largest slice of the ABA pie with unconstrainted flexibility to make beneficial grants from the ABA while Aboriginal interests have through AINT gained access to a smaller slice of the pie, with constrained flexibility and high expectations from the communities seeking to overcome economic and social disadvantage.  

Risks

The design architecture of the ABA following the establishment of the AINT creates a significant risk that is considerably heightened by the Yunupingu decision. Given that the ABA is funded by appropriations to be spent for the benefit of Aboriginal people in the NT, it is theoretically possible that the Commonwealth might decide to utilise the ABA funds under the control of the Minister to finance any compensation liabilities it accrues into the future because of the High Court Yunupingu decision. More likely (given that the Commonwealth has form in this respect) the Commonwealth might seek to use its control and the financial heft of the ABA to negotiate a financial settlement of all potential litigation with the land councils and their constituents (either separately or together).

We are already seeing the Commonwealth seeking to constrain the likelihood that the land councils will ‘rock the boat’. It is clear that the political salience of the land councils has increased in recent years as both sides of politics have searched for ways to engage with disenchanted voters across the NT (link here).

The risk for Indigenous interests generally is that the land councils have a limited policy remit and perspective yet effectively operate as proxies for Aboriginal interests generally. The risk for land based Aboriginal interests is that the land council leadership and bureaucracies become increasingly vulnerable to co-option by governments.  The level of payments to the land councils from the ABA has increased considerably over the past five years. In just one year, from 2023 to 2024, ministerially approved administration payments to the four NT land councils rose from $109m to $138m, an increase of $28.9m or 21%. This generosity does not come free; it has an ulterior purpose and also has an opportunity cost in foregone investment by the ABA in pressing Indigenous priorities.

Of course, a new conservative government might revert to the earlier tactics and seek to dismantle what they see as the hegemony of the land councils (link here). Either way, Indigenous interests stand to lose out.

Way forward

In my view it is time for the Indigenous leadership in the NT to reconsider their strategic vulnerabilities and begin to strengthen the ramparts defending their key institutions. A key element in such a reconceptualised strategic approach would be to focus on building stronger governance capabilities, committing to stronger transparency (no matter how uncomfortable it seems) as an insurance against poor governance, and working harder to build a unified advocacy capability. Self determination is never handed to anyone on a plate; it must be argued for and grasped. And once gained it must be defended and used carefully. It is not possible for any group entirely dependent on government funding to exercise real self-determination.

The Yunupingu decision is the latest in a long line of High Court decisions seeking to remediate the incapacity and unwillingness of executive governments through time and across the nation to address deep-seated disadvantage, inequality and discrimination. The decision is important, but transforming newly acquired rights for Indigenous interests into tangible and transformational gains requires building the advocacy capabilities to reform institutions and the political unity to protect the incremental gains made in previous times. In both these arenas, a commitment to high quality governance and maximum transparency will be the friend and not the foe Indigenous interests, not least in undermining the proclivity of governments to co-opt those whose interests they decide to ignore or set aside. There are reasons that governments avoid transparency and seek to operate in the shadows.

Conclusion

The downstream policy implications of the High Court decision in Yunupingu are potentially significant. The expand the footprint of Indigenous rights in the Territories and particularly the Northern Territory. Yet taking advantage of those rights will not be easy and will require not just the preparation of new compensation litigation, but the development of strategically sophisticated political and advocacy capabilities, and a preparedness to resist the propensity of governments to co-opt emerging leaders who might otherwise constrain their attempts to maintain the status quo ante.

 

17 April 2025

 

The cult of forgetfulness: the Commonwealth submission in Yunupingu

  

That I could forget what I have been!

Or not remember what I must be now!

Richard II, Act three, Scene three.

In May 2023, the Federal Court handed down a decision (Commonwealth of Australia v Yunupingu on behalf of the Gumatj Clan or Estate Group) that mapped out a trailblazing path forward in relation to potential native title compensation issues in the NT and the Territories more generally. I published two posts on the case (link here and link here) which I recommend readers revisit for the background to the subject of this post.

 

As I wrote in the first of those posts:

Today’s Federal Court Decision is momentous insofar as it decides that the native title holders of the Gove Peninsula will be entitled to compensation for any native title mineral rights they held prior to the grant of mineral leases, pastoral leases and a mission lease. This arises from the Court’s finding (against the arguments of the Commonwealth) that any native title mineral rights which existed (and which are yet to be determined) were not extinguished by the grants of pastoral leases and mineral leases over the relevant land on the Gove Peninsula, and that the requirement for the Commonwealth to pay just terms compensation for such extinguished native title rights continues in the Northern Territory.

 

The Commonwealth appealed to the High Court and has now lodged a submission (link here) outlining its arguments as to why the Federal Court’s decision should be overturned in this matter. These arguments are highly technical and complex, and I don’t propose to offer a legal critique. Instead, I will merely summarise them (as best I can bearing in mind I am not a lawyer, let alone a constitutional expert), and then draw out some of the non-legal policy implications.

 

The core of the Commonwealth’s concern is that the Federal Court ruling, if it stands, extends back (in the case of the NT) the period for which compensation for extinguishment of native title by the grant of inconsistent interests would be payable from 1975 (when the RDA was passed) to 1911 when the NT was transferred to the Commonwealth from South Australia (see para 2 of the submission). As the Commonwealth notes (in para 3):

 If the Full Court is correct, then for almost seven decades a vast but indeterminate number of grants of interests in land in the Territory would have been invalid.  Further, upon the validation of those grants by the Native Title Act 1993 (Cth) (NTA), the Commonwealth would have become liable to pay compensation of a vast but presently unquantifiable amount (including interest, potentially going back to 1911).

 

In essence, the Commonwealth has three lines of argument aimed at avoiding this outcome.

 

First, they argue that the scope of s 51(xxxi) (which requires the Commonwealth to pay just terms for the acquisition of property) does not extend to laws solely supported by s 122 (which allows the Commonwealth to make laws for the government of a territory) because the text and context of s 51(xxxi) shows it applies only to laws made by the Commonwealth when acting as the Commonwealth, not the Commonwealth acting as a territory. See paras 12 to 19 for a summary of this argument.

 

Second, the Commonwealth argues, relying on Justice Gummow’s judgement in the Newcrest Case (supported by Justices Toohey, Gaudron and Kirby):

that native title was inherently defeasible to the Crown granting new rights that were inconsistent with native title.  When that occurred, there was no acquisition of property within the meaning of s 51(xxxi) because the extinguishment of native title upon that occurrence was something inherent in, and integral to, the property itself.

 

The import of this argument is that compensation does not attach to native title property rights per se but is only required due to the application of the Racial Discrimination Act enacted in 1975. See paras. 57 to 59 for a summary.

 

The third line of argument relates to the reservation to the Crown of all mineral rights in the Northern Territory Crown Land Act 1890 (SA) which was incorporated into a pastoral lease over the claimed land issued in 1903. The Commonwealth argues (para.132), citing Justice Gageler (who is now the Chief Justice) in a 2016 case, that the reservation of minerals in the Crown Land Act:

“had the consequence of creating rights of ownership in respect of the land in question, in the Crown” so that the Attorney General “would still have had the possession necessary to found an action for intrusion”.

 

See paras. 130 to 132 for a summary.

 

Commentary

I am not in a position to make an assessment of the legal merits of the Commonwealth arguments. It strikes me however that the Commonwealth is seeking to hold back the tide of much recent jurisprudence, and a broader concern in the community that the rationale for the appropriation of Indigenous lands without compensation does not entirely stack up. Having said that, the High Court will likely adopt a cautious and careful approach to these issues.

 

What I find intriguing however is how the arguments developed by the Commonwealth in litigation such as this is so strongly at odds with the public perception that our nation strives for inclusivity, for fairness, and for openness, and so strongly at odds with the policy narratives endorsed by both the current and previous Governments (think co-design, voice process, Makarrata, truth telling and treaty). Instead, these arguments addressing an important and potentially far-reaching judicial decision by the Federal Court are driven almost entirely by the narrowly legalistic lens through which the Attorney Generals portfolio operates, and the financial lens applied by the Department of Finance.

 

For example, at various places in the submission, the Commonwealth argues (by implication if not directly) that the Commonwealth requires flexibility to govern a territory such that it is not required to pay just terms; and that the Federal Court decision would leave to differential treatment between Indigenous native title holders in a territory and in a state, while ignoring the differential treatment being supported between native title holders and other property holders. Moreover, the submission argues explicitly for the narrowest reading of the nature of native title (ie that it does not amount to property for the purposes of the Constitution).

 

Perhaps the most obvious issue raised in the submission, but not directly addressed by Commonwealth Ministers is the issue of compensation for native title rights extinguished in the Territories between 1901 and 1975. We now have a Federal Court decision raising the issue directly, and all the Commonwealth can do is raise the financial consequences, contextualise it as a financial threat (liability to ‘pay compensation of a vast but presently unquantifiable amount (including interest, potentially going back to 1911’) without any public acknowledgement or recognition, let alone public discussion, that the obverse of this ‘coin’ was the loss without compensation of Aboriginal land and other property rights.

 

Of course, these are legitimate public policy positions for the Commonwealth to argue, and indeed one might argue that they are central to the implicit ‘grand bargain’ that underlies the High Court decision in Mabo No.2. But the fact is that instead of ensuring a public discussion, the Commonwealth has framed them entirely as technical legal issues, without any justification by relevant Ministers for why the Government is adopting the position it has. Neither the Attorney General nor the Minister for Aboriginal Australians has issued a media release announcing the Commonwealth submission. The Prime Minister recently stated that treaties were a matter for the states and territories (link here) seemingly oblivious to the fact that his Government is arguing against the recognition and compensation for Indigenous rights extinguished by Commonwealth executive action.

 

While the merits of the Federal Court decision are as yet undecided and will turn on complex and technical legal reasoning abstracted from everyday experience, the issues raised are real and are as yet unaddressed. The determination of our nation’s political leaders and elites to avoid policy substance and importantly, to neglect their democratic responsibilities to lead public discussion of these issues is to my mind both disrespectful to the wider community they purport to represent, and dangerous insofar as it creates an environment that encourages extremist views to flourish without context. This negligence reminds me of Bill Stanner’s comments in his Boyer lectures in 1968, over fifty years ago:

"What may well have begun as a simple forgetting of other possible views turned into a habit and over time into something like a cult of forgetfulness practised on a national scale. It's a structural matter, a view from a window which has been carefully placed to exclude a whole quadrant of the landscape."

 

The Commonwealth submission in Yunupingu, and its presentation, reflects more than it intends: it is simultaneously a sophisticated legal argument, a study in bureaucratic caution and conservatism, a reflection of political timorousness and timidity, not to mention short-sightedness, and irrefutable proof that the nation’s cult of forgetfulness continues to permeate our public policymaking and our political institutions.

 

16 April 2024

Yunupingu v Commonwealth: potential policy implications

Prove true, imagination, O prove true.

Twelfth Night, Act 3, scene 4.

 

In my previous post, I described the recent Federal Court decision in Yunupingu (link here) as momentous. In this post, I attempt to draw out some of the potential policy implications that might flow. I don’t purport to engage in detailed legal analysis, and nor am I claiming to be comprehensive in surveying the potential policy implications of the decision.

 

One obvious caveat of course is that the Federal Court decision is subject to potential appeal, the outcome of which is unknown.

 

I propose to deal with two broad issues.

 

First, perhaps the major policy shift arising from the decision is to expand the period of potential invalidity and liability for compensation for Territory Government granted titles (such as mining leases, pastoral leases and freehold) over native title. In Mabo, the High Court found that native title was vulnerable to extinguishment by inconsistent grant by the Crown. However, the existence of the Racial Discrimination Act from 1975 meant that inconsistent grants without compensation could lead to invalidity. The Native Title Act 1993 includes provisions to validate all such grants made over native title between 1975 and the date of the validation provisions on the condition that just terms compensation would be paid (as is required for all other Australian property owners whose titles are compulsorily acquired). Of course, when the validation provisions were enacted, no-one knew where native title existed.

 

In Yunupingu, the Federal Court confirmed that the constitutional requirement for the Commonwealth to pay just terms continues to apply in the Territories (confirming the High Court decision in Wurridjal). However it also extended this principle to confirm that actions by a Territory Government (established under s.122 of the Constitution) that extinguish native title (or acquire property generally) must in turn provide for just terms compensation. Grants of title without provision for just terms by a Territory Government that are inconsistent with native title are thus invalid.

 

There appear to be three territories potentially affected by this decision: the Northern Territory, the Australian Capital Territory, and the Jervis Bay Territory. The Northern Territory was established in 1911, the ACT in 1911 and Jervis Bay in 1915. Consequently, if Yunupingu is confirmed by the High Court, any inconsistent grants without just terms compensation over native title from these dates to 1975 are potentially invalid. Each of the three jurisdictions appear to require something akin to just terms compensation for compulsory acquisitions (although I haven’t done an historical analysis of the relevant acquisition laws), but may well have made inconsistent grants over native title within the relevant dates without just terms compensation.

 

The likely policy implications of this decision if upheld by the High Court are that the Commonwealth will come under intense pressure to validate all potentially inconsistent grants in the three territories from the relevant dates to 1975 on the condition that where actual inconsistency is found to have occurred, just terms compensation will be paid. A second implication will be that the Commonwealth will come under pressure to fund or underwrite the costs of any actual compensation payments awarded against the Territories. When the Native title Act was first enacted, the Keating Government offered to pay 75 percent of any native title compensation imposts on the states and territories, an offer that was never taken up by the states and territories and which ultimately lapsed.

 

A third policy implication (linked to the outcome of the second implication) will be to encourage intensified impetus by the relevant territory governments to reach native title settlements within their jurisdictions so as to pre-empt litigation and the uncertainty that would necessarily follow. While there has never been any formal confirmation, my strong intuition has long been that the preparedness of the Western Australian Government to negotiate substantial native title settlements is driven by internal advice that the state is potentially liable for compensation arising from the grant of titles inconsistent with native title after 1975. Examples include the Yawuru in Broome (link here), with the Noongar people in the south west (link here), and more recently the Tjiwarl native title agreement in the Goldfields region (link here).

 

Clearly the requirement to negotiate any such land use agreements may well fall within the ambit of possible ‘treaty negotiations’ in each jurisdiction.

 

The second issue I wish to address briefly relates to the nature of native title itself. The Federal Court spent some time discussing the nature of native title; see paragraphs 444 to 459 in their judgment. This appears consistent with the standard understanding, and the discussion cites extensively from earlier cases, including Mansfield J in Griffiths, (but not the High Court in Griffiths). The discussion, which is ostensibly directed at a discussion of the concept of inherent defeasibility versus plain defeasibility (I don’t propose to discuss the difference) concludes with the following paragraph:

 

459. What is extinguished by a grant of rights intended to be inconsistent with native title in certain land is not the traditional laws and customs which give rise to the claimants’ native title. The normative systems of First Nations Peoples remain. Traditional laws and customs are not dependent for their existence on any recognition by the Crown. They have existed for generations prior to colonisation, they continue to exist, and they can be enforced as between First Nations Peoples. They can continue to have normative force amongst those who are bound by them. What (if anything) is extinguished is the title to certain land; the “title” is the nomenclature for what is recognised by Australian common law, and what may cease to be recognised by Australian law, with the corresponding effect or benefit that the burden on the Crown’s radical title is removed.

 

What the Federal Court is not saying here is that native title rights are equivalent to freehold. A Straussian reading suggests that the Federal Court is laying down a pathway to a future expansion of the underlying basis for the calculation of compensation (one that I agree is both warranted and just). Such an expansion would require a future High Court to adjust the High Court decision in Griffiths (link here) so as to move beyond the value of equivalent freehold titles as the metric for establishing economic loss and as an implicit cap on the value of cultural loss (which was based on as assessment of the standards of the Australian community). The view that because an owner of a freehold title has expansive freedom of action over the land does not mean that such ownership captures the full extent of Indigenous relationships to an equivalent area or title. Clearly, such an expansion of the basis for native title compensation will not occur in the near term, and perhaps not even the medium term. However, the unanimous Full Federal Court decision here appears to lay down a potential future path for the development of native title compensation law.

 

In this context, I can’t help referencing Diane Smith’s 2001 prescient and insightful research paper, Valuing native title: Aboriginal, statutory and policy discourses about compensation (link here), where she argues, inter alia:

native title compensation is, like native title itself, sui generis, or unique. Native title compensation will require an innovative jurisprudential approach that acknowledges it as a fundamentally new creature, recognisable at the intersection of Aboriginal and Western laws. A precondition for that innovation will be the creation of a recognition space that ameliorates the legal ethnocentrism of the common law, and addresses the intrinsic value to Aboriginal people of their lands and waters.

 

Perhaps one of the most significant policy implications of the Yunupingu case will be the future development of a more innovative jurisprudential approach to the concept of native title compensation.

Note: some minor typographical errors have been corrected.

Handy - Dandy: Native title and compensation for extinguishment

A man may see how this world goes with no eyes. Look with thine ears: see how yond justice rails upon yon simple thief. Hark, in thine ear: change places; and, handy-dandy, which is the justice, which is the thief?       King Lear Act 4, Scene 6

I recently wrote a short piece for The Guardian on native title compensation, and in particular the recent Federal Court decision in Griffiths v Northern Territory of Australia, and in particular exploring the policy implications. Link is here. Space was an issue so the argument was quite truncated.

Issues I would have liked to explore further included the nature of the intangible costs which Justice Mansfield recognised and the more fundamental narrative of the recognition and acknowledgment of native title since the High Court’s Mabo decision.

Mabo was a compromise. The Court held that native title was sui generis, part of the common law, but that it was vulnerable to extinguishment through inconsistent decisions of government. However, it also found that decisions of government which extinguished native title since the passage of the Racial Discrimination Act in 1975 and which did not do so in a non-discriminatory manner (that is by providing compensation) were invalid. This led to calls for existing titles in non-Indigenous hands to be retrospectively validated if they were at risk. Subsequently, one of the components of the Native Title Act was to provide for the validation of such titles.

One of the issues I dealt with in the Guardian piece, albeit briefly, is the capacity of the legal system and the courts to drive political and policy change in circumstances where parliaments and elected representatives find it too difficult. Political scientist Colin Tatz argued in the late 1970s that the law and the courts presented more opportunities for reform and recognition of Indigenous rights than the political system. He was certainly proved right in relation to native title.

While the courts work hard to appear to remain behind the veil of ‘judicial’ neutrality, their social function as interpreters of law in a rapidly changing society means that they inevitably make new law to deal with new circumstances. Arguably the High Court decision in Mabo can be seen as a judicial response to the failure of the nation’s political elites to recognise the existence and legitimacy of pre-existing Indigenous land ownership.

This failure was starkly visible in the failure of the Hawke Government’s proposals for National Land Rights largely at the instigation of the Western Australian Labor Government led by Brian Burke, and even more so in the failure of the most states to establish comprehensive land rights regimes with the broad applicability evident in the NT Aboriginal Land Rights Act enacted by the Fraser Government in 1976.

My argument in The Guardian was that in effect, the Federal Court has been continuing in this vein, step by small step, filling in the interstices within the Native Title Act’s complex structure and framework. However, while these incremental steps have been largely positive, there is no guaranteed that particular steps will be, nor that the trend will continue to be expansive as opposed to restrictive. The legal system generally, and particular judges, develop decisions and lines of argument which are themselves shaped by community sentiment and support, and the wider political debate. Even where the legal system makes the running, the shape and form of the debate in the wider political and public domain continues to be hugely significant.

Perhaps the most innovative and far reaching aspect of the Griffith decision by Justice Mansfield relates to the nature of the intangible costs which were imposed on the native title holders whose ownership was extinguished by the actions of the NT Government in 1994. Compensation for the intangible costs of a compulsory acquisition is a recognised element in Australian (and British) common law. It is often referred to as ‘solatium’. In many statutes which recognise it, it is capped. Mansfield in assessing it referred to it as the non-economic impacts of the acquisition, in other words, the impacts on Aboriginal culture, on connection to country, on sacred sites and so forth. This is an appealing distinction to draw, and is intuitively justifiable.

However, many anthropologists would emphasise the hybrid nature of culture and economy, and indeed, Mansfield in his recent decision in  Rrumburriya Borroloola Claim Group v Northern Territory of Australia, a native title case based on land near Borroloola, found that native title rights could include a range of economic and commercial components or elements. It follows that the intangible impacts of extinguishment will not be quarantined to non-economic, religious or cultural matters, but will inevitably impact on economic rights. It may be argued that any such economic rights are incorporated into the value of the title linked to comparative freehold values, and there is some merit in this. However the economic activities that non-Indigenous land owners undertake on land are limited in comparison to the range of potential economic activities which are incorporated into native title.

Nevertheless, policy is made and implemented in most areas of public policy on the basis of limited information, and with a focus on simplification aimed at establishing general rules or approaches which can then be adopted without having to re-prosecute de novo every new circumstance. I suggest that Mansfield’s approach, while perhaps conceptually conservative, will form the basis of the approach to intangible costs into the intermediate term future.

Turning to the narrative which underpins the discussion of native title in the public domain, it has to date been dominated by the process of native title holders lodging ‘claims’, or more accurately, seeking formal determination of their native title. Once formally determined, native title is acknowledged by the legal system to have always existed.

The Griffiths case opens a new chapter in this narrative. It will shift the focus of public discussion and debate more squarely toward the ongoing and continuing extinguishment of native title (dispossession) since 1975.

The fact that the Native Title Act validated potentially invalid acts of extinguishment between 1975 and 1993, and these provisions were later extended even further by the Wik amendments to the Native Title Act, was a cause of deep-seated angst amongst Aboriginal and Torres Strait Islander peoples. The legislated validation provisions included complementary provisions requiring the payment of just terms compensation in accordance with the constitution. However, the mechanisms were primarily designed to provide immediate certainty and security for non-Indigenous land owner’s property rights. They were successful in this aim.

However, the validation provisions also created a situation where many native title holders whose property rights had been extinguished since 1975 would miss out on compensation. The reason is that seeking and achieving a formal determination of native title is a long, slow and expensive process; there is a backlog of applications, and understandably, there has been a focus on seeking and obtaining determinations over native title which has not been extinguished. Seeking determinations over titles which have been extinguished, and for which the only recompense is just terms compensation, understandably is a lesser priority.

But from the perspective of those native title holders alive when the extinguishment occurred, and who presumably felt most keenly the adverse consequences of that legally authorised and retrospectively validated change of ownership status, most individuals in those situations will not outlive the wait time for ‘just terms ‘ compensation.

This raises a fundamental issue of justice and fairness. What seems clear is that for many individuals whose native title has been extinguished since 1975, the mere inclusion of a provision alongside the validations requiring the provision of ‘just terms’ compensation in the future in the event a successful application for determination is made is not in reality the provision of ‘just terms’.

In 1993, the Parliament at least acknowledged the injustice of past dispossession, and made this tangible through the establishment of the Aboriginal Land Fund. While more than tokenism, it is far from an adequate recompense.

One test of this is to imagine yourself behind a hypothetical Rawlsian ‘veil of ignorance’; unsure whether the title to your home would be secured and validated, or extinguished and possibly and belatedly compensated. Would you agree to the arrangements put in place in the Native Title Act? I know that I wouldn’t.

The unfairness and injustice of the validation provisions in the Native title Act are an ongoing reminder to Indigenous Australians that dispossession is ongoing, and that the playing field is not level. It is a key part of what drives the aspiration and demand for substantive constitutional recognition and a treaty.

Public policy makers would be wise to find ways to advance these discussions and negotiations. An obvious way would be to put real bureaucratic and political focus and commitment into settling native title claims outside the litigation mindset which shapes so much native title policy at the moment.

History tells us that where the political system is gridlocked, the courts will eventually step in. To my mind however, leaving these issues unaddressed would be a monumental national failure, and runs the risk that generations of young and yet to be born Indigenous Australians will question the moral basis of the Australian nation state. Such an outcome would not bode well for our nation's future.