Regulatory outcomes and the mining sector: implications for Indigenous interests

 

Whiles I am a beggar, I will rail and say there is no sin but to be rich;

and being rich, my virtue then shall be to say there is no vice but beggary.

Henry IV, Part 2, Act one, Scene two.

 

New research published in the Journal Resources Policy (link here) examines the impact of the various elements of the overarching institutional prerequisites for mine approval via a comprehensive analysis of 409 mining applications subject to regulatory approval in Australia between 2000 and 2020.

The authors, Lisa Nicole Mills, Jennifer Stewart and Graeme Auld are resource policy experts based in Carleton University in Ottawa. The Abstract of their paper states (inter alia):

In this paper, we examine the pressures which affect business risk through the multiple dimensions of the “licence to operate,” in the case of federally regulated mines in Australia. Studying 409 mining applications that were under regulatory review, approved, or withdrawn between 2000 and 2020, we use competing risk hazard models and linear regressions to examine how measures of business risk (longer times in review and more conditions) and choices to withdraw are affected by: the attributes of the mine, competing rights claims and land-uses, levels of oppositional mobilization, changes in political parties in power, and market prices. We found that new projects, and those that triggered an independent assessment of their impact on water, were likely to experience longer reviews. Mines where agriculture was the competing land use also faced longer reviews, and mine proponents were more likely to withdraw their proposal. Contrary to our expectations, the mobilization of opposition to a mine was associated with faster time to approval, but also a higher number of conditions.

In section 2.1 of their article, the authors identify three broad elements of the regulatory process governing mine approvals in Australia: the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) which applies to nine potential matters of national environmental significance; the processes required to obtain secure mining title which are state based; and the provisions of the Native Title Act which apply to lands with either determined native title, or subject to claim. The empirical analysis undertaken was limited to processes under the EPBC Act.

The analysis considers interactions among licences to operate through the lenses of civil society mobilization, electoral and party politics, and competing land-uses as these combine to affect the business risk experienced by mine project proponents through the EPBC Act regulatory approval process and outcomes. I don’t propose to attempt to summarise the details of the statistical analysis and refer interested readers to the article itself. Not will I focus on the outcomes apart from the one of most interest to readers of this blog, namely in relation to Indigenous claims (emphasis added).

A third insight from the analysis concerns the role of competing rights claims and land-uses. The data indicated that Indigenous land rights claims did not have any bearing on the length of time to approval, withdrawals, or conditions; indeed, proposals to mine on land without any claims tended to take longer to be approved than those on land with claims: but this association was not statistically significant.

Further, the authors found that:

Higher levels of civil society mobilization pushed regulators in apparently different directions. When mobilization was high, more conditions were imposed upon the mine's operation, a finding that is consistent with literature that suggests social pressure may increase regulatory requirements… However, mines that faced mobilization were not subjected to longer approval times; and, in the case where mines faced opposition from actors who would be negatively economically affected by the mine's development, approval times were shorter.

The overarching conclusion of the analysis (references removed) is that

Unlike early work on social licence to operate that conceptualized social pressures as working in synergy with regulatory processes, often leading to higher requirements or even beyond compliance behavior, we provided evidence that regulatory licences can serve as a trump card to advance a project. In this respect, our analysis offers caution for those that view economic licensing [ie investor approval] and social licensing [ie community and social approval] as substitutes for, or at least complements to, regulatory licensing.

For my purposes, this research offers at least preliminary or provisional evidence that longstanding tropes embedded within Australian politics in relation to Indigenous land rights are mistaken and wrong. Those tropes, which underpinned the rationale for denying Indigenous interests a veto over mining on their lands, were that land rights would be anathema to mining development and indeed to the nation’s economic security. The experience of the past two decades is that those fears have not eventuated. That experience strongly suggests that the promulgation of those fears was designed to benefit the minerals industry and to maintain the structural exclusion of Indigenous interests within Australian society.

Having said that, hidden behind these issues, and embedded in the current institutional architecture of native title and land rights, are a set of public policy issues related to the equity of the current financial policy frameworks which

(i)            privilege native title holders of land which lies above mineral deposits over those Indigenous groups who do not have access to native title, or those native title holders whose land does not lie above commercially viable minerals; and

(ii)          with only some exceptions, fail to ensure that the funds which flow to native title holders and Indigenous landowners are disbursed within frameworks which privilege accumulation over consumption (or to put it another way, which fail to ensure that future generations will benefit from the compensatory negotiations undertaken by the current generation). If there is any merit in the arguments of many scholars (and Indigenous activists) that colonialism has ongoing impacts, and that intergenerational trauma is a reality, then any argument against intergenerational benefit provision for beneficial payments arising from mining on Indigenous land disappears.

These are public policy issues because it has been governments that have devised the institutional arrangements that underpin the implementation of native title rights and land rights, and while the issues identified above may not have been intended or even recognised, they are now of very real significance. I use the term ‘hidden’ because these issues have been largely submerged in the public debates over Indigenous land rights over the past five decades. With the turn to economic empowerment as an overarching priority in the Indigenous policy domain (link here and link here) it is time that these issues were given greater profile and attention by policymakers and Indigenous advocates.

 

5 May 2025

Huckitta: tragedy and opportunity

 

                                        Why do you start, and seem to fear

Things that do sound so fair?

Macbeth, Act one, Scene three.

 

Inside Story have just published (link here) a short article I wrote built around developments related to Huckitta station on Arrernte and in the NT. The article explores the fascinating historical intersections between Huckitta, its traditional owners, the criminal justice system, the Native Title Act, and the role of individual agency in driving developments across these disparate policy spheres.

While the article stands on its own, it is also an attempt to acknowledge that policy reform is never easy, nor straightforward. Developing, reforming, and at times resisting policy is inherently a collective exercise in the widest sense of that term. Policy is necessarily communal in nature, although it is rarely inalienable. It is inevitably shaped by the past and can only aspire to shape the future.

While social, cultural, economic and legal structures and systems are ubiquitous and determine in large measure both what is feasible and the order in which policy change might occur, the roles of individuals for better or worse, whether deliberate or random, are also crucial in shaping and determining policy outcomes.

 

4 July 2024

Correction

In the Inside Story article linked to above, I wrote that Bill Gray had overseen the preparation of the 1976 Aboriginal Land Rights Bill in the Northern Territory. Bill has contacted me to advise that the preparation of the legislation within the Department was overseen by former patrol officer Jeremy Long. Bill was the senior public servant repsonsible for the administration of the legislation over its first decade or so. I apologise to readers and of course to Bill for this error for which I am solely responsible.

18 July 2024

 

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

Indigenous involvement in the renewables transition: the case of critical minerals

 

Make use of time, let not advantage slip.

Venus and Adonis, 129.

 

On 4 October 2023, Professor Ciaran O’Faircheallaigh (link here) gave an insightful and well-argued seminar at the Centre for Aboriginal Economic Policy Research (CAEPR) at the ANU on the implications of the transition to renewables and net zero on demand for critical minerals, and the concomitant implications for Indigenous peoples globally and in Australia.

Information on the seminar is available on the CAEPR website (link here) and a recording of the seminar may be available shortly.

O’Faircheallaigh’s core argument can be boiled down to a series of propositions:

• the transition to renewable energy/ net zero will involve an extraordinary increase in production of critical and energy transition minerals (including lithium, cobalt, copper, nickel and rare earths) in order to produce the technology required to avert a climate catastrophe;

 

• The world’s resources of transition minerals are heavily concentrated on or near Indigenous territories.

 

• The history of mineral extraction on or near Indigenous lands has had significant adverse impacts on Indigenous peoples and thus been fundamentally unjust.

 

• Increasingly, in circumstances where Indigenous landowners have not been engaged and their social, cultural and economic rights have not been respected, Indigenous peoples have found ways to successfully delay or stop resource developments on their lands using a range of tactics from protests and direct action to litigation.

 

• These conflicts impose commercial costs on mineral developers, and will increasingly pose a threat to the global transition to renewable development.

 

• Governments are increasingly allocating substantial financial incentives to corporations aimed at encouraging the acceleration of investments necessary for the transition to a renewable future.

 

• However, invariably, there is no support in these strategies for Indigenous interests who are key stakeholders in the lands that are directly affected by mining and other elements of the transition. O’Faircheallaigh cited the Australian Critical Minerals Strategy (link here) which provides over $3bn in financial incentives to developers, but zero to Indigenous landowners affected by developments.

O’Faircheallaigh characterized the likely outcome of the current global transition pathway as lose/lose: Indigenous interests would seek to inject themselves into the development processes for new mines and other developments, and likely achieve sub-optimal outcomes (both financially and in terms of their other objectives); but so too will the global climate (that is, you, me, and the global population) lose as the critical investments in land based resources necessary for the transition will be slowed and perhaps diverted elsewhere as a result of the Indigenous objections and lawfare.

The solution according to O’Faircheallaigh is to ensure that Indigenous landowners have a legal right to exercise free, prior and informed consent (FPIC) over developments on their land. In Australia in the context of land rights legislation, this is often also known as a veto. Such a right would ensure Indigenous interests are engaged in the development process, and have the capacity to negotiate the terms of any mining or resource development.

Commentary

I found O’Faircheallaigh’s argument broadly persuasive, and agree that the introduction of FPIC rights for Indigenous interests would ensure faster and more certain outcomes in relation to proposed resource developments, including critical minerals.

O’Faircheallaigh largely justified his position on ethical grounds, without specifying the precise set of arguments he uses to justify that approach. I too agree that such ethical grounds exist and should be more widely recognised. I would base my arguments on the injustice involved in dispossession by settler states, the concomitant absence of comprehensive compensation, and the intergenerational costs imposed by the violence used to dispossess Indigenous landowners. Yet such arguments are far from widely accepted in Australia and elsewhere, and gain very little electoral traction.

There are however also a set of economic efficiency arguments that also point to the benefits of more explicit specification of property rights as an enabler of economic development and a facilitator of more efficient negotiations over particular developments. While a focus on working towards ‘just outcomes’ based on the existence of UNDRIP or other human rights instruments is intuitively appealing, it is rarely sufficient to persuade policymakers (and electorates) to shift direction. I have a sense that arguing the case on economic efficiency grounds would have a better chance of success as it engages with policymakers in the language they use themselves.

Even so, I am skeptical that policymakers in Australia (or elsewhere ) are about to shift direction and grant Indigenous landowners FPIC rights. In Australia, there has been no jurisdiction prepared to grant Indigenous interests FPIC in land related legislation since the enactment of the 1976 NT Land Rights Act. Under the Commonwealth’s 1993 Native Title Act, there are only procedural rights available to native title owners and claimants. Governments have not even been prepared to provide core funding to all Prescribed Bodies Corporate notwithstanding their statutory basis and their role in dealing with third party applications to access native title land.

The reason for this policy conservatism boils down to the fact that public policy outcomes in Australia are ultimately not a matter of what is most effective, or efficient, or what is in the public interest, but is determined by a complex interplay of implicit interest group negotiations seeking to influence government decisions. In those implicit negotiations, the onus is on those proposing change to overcome the significant inertial power of those interests benefiting from the status quo. Moreover, the very structures of government have been shaped and influenced over time by the most powerful interest groups which ensure that policy decision processes are weighted against those interests seeking to shift the status quo.  

I had one caveat regarding O’Faircheallaigh’s argument. I too have noted that Indigenous interests both globally and in Australia appear to have gained greater traction in slowing or preventing resource developments that they consider culturally threatening. In Australia, this is largely a result of the procedural rights embedded within the Native Title Act, environmental legislation,  and cultural heritage legislation. Yet while media reports of Indigenous successes are relatively common, I have yet to see any comprehensive data that either supports or refutes this proposition. Intuitively, one element in support of the O’Faircheallaigh proposition is the rise of ESG (link here) as a driver of corporate policies, a shift that is largely being driven from outside of the Indigenous policy domain. This suggests to me that there is an implicit potential for stronger alliances between Indigenous and environmental interests. Yet there is a long (and ongoing ) structural tension between these two sets of interests.

Given this context, the introduction of FPIC for Indigenous landowners in the near future might be characterised as a ‘first best’ solution, but one that is unlikely to eventuate anytime soon. The challenge then for Indigenous interests, academic commentators, and even policymakers (given the fact that lose/lose outcomes are a distinct possibility) is to find ‘second best’ solutions while keeping open the possibility of eventually moving to the ‘first best’ solution.

I don’t have a developed view on what the optimal second best solution matrix looks like, but it does strike me that an ongoing focus on achieving ‘just outcomes’, while important, needs to be supplemented by a stronger dose of pragmatically seeking merely better solutions. If Professor O’Faircheallaigh is correct, and we are looking down the barrel of lose/lose outcomes in the nation’s access to critical minerals and where Indigenous interests who seek to protect their cultural and socio-economic interests will be blamed for delaying the transition to renewables and net zero, there are even stronger grounds for Indigenous interests to proactively position themselves as pragmatic and constructive interlocutors.

My own approach to a ‘second best’ policy matrix would place a stronger focus on:  

• building the capability and intellectual capital (link here) of key Indigenous advocacy organisations so as to both protect existing rights and expand their institutional influence over future public policy decisons;

 

• building the independence of key Indigenous advocacy groups by exploring opportunities for reducing their reliance and use of funding and other mechanisms used by governments to leverage and shape Indigenous policy advocacy;

 

• building alliances and partnerships with like-minded interests (such as environmental interests, public interest advocacy interests, and philanthropies); and

 

• committing to supporting transparency reforms generally so as to place greater pressure on the existing interests who shape and protect the status quo.

Of course, the shape and detail of any second best strategy aimed at greater influence over the coming scale up in resource development is for Indigenous interests to determine and implement. As climate change worsens, the determination of governments to respond will ramp up, and this will inevitably shift the balance of power towards those interests arguing for removing ostensible impediments to rapid mining development. The time for Indigenous interests to devise their own strategic responses to the coming changes is now.

 08 October 2023

 

 Addendum: Here is the link to Professor O'Faircheallaigh's seminar (link here).

12 October 2023

 

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.

Yunupingu v Commonwealth: an important native title decision

 

A sceptre snatched with an unruly hand

Must be as boisterously maintained as gained

King John, Act 3, scene 3.

 

Yunupingu on behalf of the Gumatj Clan or Estate Group v Commonwealth of Australia [2023] FCAFC 75, Judgment of: Mortimer CJ, Moshinsky And Banks-Smith JJ. Date of judgment: 22 May 2023 (link here).

 

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 form 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 judgement, reflecting the arguments put by the parties, is highly technical and complex, particularly for non-lawyers such as myself. I don’t propose to attempt a detailed summary, nor a discussion of the legal implications of the judgment itself. I am sure that there will be a number of detailed summaries published over the coming weeks. I have included at the end of this post an appendix which sets out the Federal Court’s own high level summary of the case for those interested. 

It is as yet unclear whether this decision will be appealed to the High Court.

There was however one paragraph in the judgment that caught my attention, not for its legal import in relation to Gove, but because it plays into the particular policy responsibilities of the Commonwealth in relation to the Territories, and in particular the Northern Territory, both generally, but for present purposes for Indigenous policy.

 

Paragraph 471 states (emphasis added) :

471. Further, we do not accept the Commonwealth’s contention that when it exercised sovereign power in the Northern Territory it did so not as a national government in a federal system; rather it was “essentially performing the role of a State (as is illustrated by the fact that, in the case of the Northern Territory, the Commonwealth “stepped into the shoes” of the South Australian government)”. The NT Administration Act was an exercise of power under s 122 of the Constitution. It was subject to s 51(xxxi). There is a clear distinction between the kind of legislative power exercised over the Northern Territory as between the Commonwealth and South Australia.

 

It strikes me that the Commonwealth has over the last decade increasingly sought to position itself on Indigenous policy issues as of equivalent status as the states (and territories) in an effort to shift policy responsibility to the states and territories across the board. The issue that came before the Court is just one example of this. Another is the way in which the Commonwealth has been administering the National Agreement on Closing the Gap, and in particular, its passive approach to the quality of compliance by the states on issues such as the quality of implementation plans required under that National Agreement.

 

The fact that the Federal Court has called the Commonwealth out on the particular issues raised in this litigation is important, but should serve as an impetus for the Commonwealth to take stock and reconsider its wider positioning across the Indigenous policy domain. Afterall, the 1967 Referendum, passed with the support of over 90 percent of voters, gave the Commonwealth powers to legislate in relation to Aboriginal affairs for a reason.

 

Appendix

The Catchwords (or high level summary of the issues and decisions) to this judgment are set out by the Federal Court as follows (emphasis added):

NATIVE TITLE – claim for compensation under Native Title Act 1993 (Cth) (NTA) – where the applicant, on behalf of the Gumatj Clan or Estate Group, contends that, in the period from 1911 to 1978, a number of grants or legislative acts took place in the Northern Territory which, if valid, would have been inconsistent with the continued existence of the claimants’ non-exclusive native title rights, and would have extinguished those non-exclusive native title rights at common law – where the applicant contends that the grants or acts purported to effect an acquisition of property within the meaning of s 51(xxxi) of the Constitution, and that they did not provide just terms within the meaning of that provision – where the applicant contends that, the NTA apart, the grants or acts were invalid by reason of the failure to provide just terms as required by s 51(xxxi) – where the applicant contends that each of the grants or acts falls within the definition of a “past act” in the NTA – where the applicant contends that, by operation of the NTA, the grant or act was effective to grant or vest the rights that it purported to grant or vest, and the claimants are entitled to compensation under the NTA in respect of the acquisition of property – where the Commonwealth contended that the applicant’s claim should fail on a number of bases – where separate questions considered and determined by a Full Court in the exercise of the Court’s original jurisdiction.

 

NATIVE TITLE – extinguishment – pastoral leases granted between 1886 and 1903 – reservations of minerals – where the Commonwealth contended that the effect of those reservations was to vest title to minerals in the Crown and thereby to extinguish the claimants’ native title mineral rights (if established) – held: any native title mineral rights not extinguished

 

NATIVE TITLE – extinguishment – Mission Lease granted in 1938 – where the Commonwealth contended that the grant of the Mission Lease extinguished (or purported to extinguish) any native title rights in the claim area that then subsisted – where the Commonwealth contended that the legislative instrument provided for the grant of a common law lease and thus the lease conferred exclusive possession on the lessee – where the Commonwealth contended in the alternative that the Mission Lease was a statutory lease that granted rights that were inconsistent with the claimed non-exclusive native title rights – held: the Mission Lease did not extinguish or purport to extinguish the claimants’ claimed non-exclusive native title rights

 

CONSTITUTIONAL LAW – s 51(xxxi) of the Constitution – acquisition of property on just terms – where the Commonwealth contended that the just terms requirement contained in s 51(xxxi) does not apply to laws enacted pursuant to s 122 of the Constitution – where the Commonwealth submitted that Teori Tau v Commonwealth [1969] HCA 62; 119 CLR 564 is the binding authority on this question – where the Commonwealth submitted that Wurridjal v Commonwealth [2009] HCA 2; 237 CLR 309 did not overrule Teori Tau – held: Wurridjal did overrule Teori Tau and the just terms requirement contained in s 51(xxxi) does apply to laws enacted pursuant to s 122

 

CONSTITUTIONAL LAW – s 51(xxxi) of the Constitution – acquisition of property on just terms – where the Commonwealth contended that the relevant grants and acts were not capable of amounting to an acquisition of property within the meaning of s 51(xxxi) because native title was inherently susceptible to extinguishment by a valid exercise of the Crown’s sovereign power to grant interests in land and to appropriate to itself unalienated land – held: native title rights and interests are proprietary in nature and constitute “property” for the purposes of s 51(xxxi) – held: a grant or act that extinguishes native title rights and interests is capable of amounting to an acquisition of property within the meaning of s 51(xxxi)

 

 

 

 

 

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.