US Supreme Court Justice Gorsuch and Native American policy

 

We must not make a scarecrow of the law, 
Setting it up to fear [frighten] the birds of prey,
And let it keep one shape, till custom make it
Their perch and not their terror.

Measure for Measure, Act 2 scene 1.

 

On the New Yorker web site (link here), Amy Davidson Sorkin has an insightful and thought provoking analysis of conservative US Supreme Court Justice Neil Gorsuch’s surprising perspective on Native American rights. Her article is worth reading not just for the profile of Justice Gorsuch and his jurisprudential record, but for the analysis of the US Supreme Court’s recent decision in Arizona v. Navajo Nation, and the alternative interpretations of the treaty commitments that were at the core of the arguments. As Davidson Sorkin writes:

The case involved the future division of the waters of the Colorado River—an issue of existential concern to millions of people across seven Western states, including a hundred and seventy thousand who live on the Navajo reservation.

 

Davidson Sorkin ends her profile by referencing Elie Mystal in an article from The Nation. Mystal who ‘after puzzling over Gorsuch’s lack of empathy for other groups’ wrote that ‘Gorsuch is the staunchest defender of tribal sovereignty and Native American rights perhaps in the history of the Supreme Court, and I choose to be thankful for that’. Mystal goes on to elaborate on the rationale for Gorsuch’s support of Indigenous rights, and the limits of that support, based on his view that native rights were recognised in the US Constitution. Mystal quotes Gorsuch’s dissent in a recent case to elucidate his thinking:

“Instead, the Constitution’s text—and two centuries of history and precedent—establish that Tribes enjoy a unique status in our law.” For Gorsuch, in other words, Tribal nations are uniquely protected by a constitutional promise (often ignored) that they will be left alone. 

 

I strongly recommend readers have a look at both these articles. Reading these two articles led me to think more about a few issues of significance in Australia, and how the experience in the US may provide lessons or comparative perspectives of use to both policymakers and First Nations.

 

The first issue is the importance of water rights to Indigenous peoples, its centrality to their cultural perspectives and being, and its increasing commercialisation by governments struggling to regulate usage of a scarce resource by mainstream commercial interests. The dilemma for Indigenous interests is that the most obvious pathway to greater access to water, and to the protections of water resources is to participate in its commercialisation. This may suit some Indigenous groups, but is unlikely to suit all Indigenous groups. There is a growing literature on Indigenous water rights in Australia which confirms the existence of a complex and diverse policy agenda. My sense however is that governments are yet to comprehensively and substantively address the policy opportunities and challenges embedded in this policy agenda (link here).

 

The second issue relates to the increasing focus emerging in Australian public discourse on Indigenous issues related to the importance and potential of negotiated treaties. I won’t attempt to summarise the myriad issues involved, but will instead make one simple point: the US experience (confirmed in Arizona v Navajo Nation) demonstrates beyond doubt that whatever their advantages and merits (and they are potentially considerable), the propensity for governments, and even the courts, to avoid, undermine and ignore even formal treaty commitments is an existential risk both to the rights that are sought to be protected by the treaties and to the treaties themselves. The best long term protection for Indigenous citizenship and other rights is to progressively build and sustain deep support in the wider community.

 

The third issue I was led to contemplate is the ongoing role of the judiciary in Australia in driving substantive policy reform, and in particular, the role of individual jurists who have an understanding of the complexity of the policy challenges facing both the nation and Indigenous citizens. To put it bluntly, it is arguable that the capabilities of governments to drive policy reform has been progressively diminished and depleted over recent decades, and perhaps as a result, the influence of the judiciary has expanded to fill the vacuum.

 

However, it is difficult to nominate a single Justice of the High Court who might be described in terms akin to those used about Justice Gorsuch as the staunchest defender of Indigenous rights in the history of the Court. In part, this is a result of a different legal culture, less overtly political, and more grounded in a culture of reasoned judicial impartiality (a feature which I am grateful for). Still, clearly a number of Justices have made enormous contributions: Chief Justice Gerard Brennan in his lead judgement on Mabo, Chief Justice Robert French in expanding the extent of native title rights to pastoral leases in Wik. Justice John Toohey was in the majority in Mabo and Wik, and perhaps more importantly, made a major contribution in his time as the first Aboriginal Land commissioner under the Aboriginal Land rights (Northern Territory) act 1976. Interestingly, each of these justices had serious involvement in Indigenous legal issues earlier in their careers.

 

Yet it is the dissenting contributions that have foreshadowed potential directions for the development of the law that stand out for me. Justice Toohey’s judgment in Mabo (supported by Justices Deane and Gaudron, but not by Justices Brennan, Mason and McHugh) argued for the existence of a fiduciary duty by the Crown. In 1997 in Newcrest Mining v The Commonwealth, Michael Kirby was one of the minority arguing that the 1969 case of Teori Tau (which held that the Commonwealth was not obligated to pay just terms for the acquisition of property in a Territory) should be over-ruled. In 2009, Wurridjal V Commonwealth finally overturned Teori Tau. In the 1996 case Hindmarsh Island Bridge Case, Kirby’s lone dissent argued that while the race power in section 51(26) of the Constitution  permitted special laws for people on the grounds of their race, it should not be read so as to discriminate adversely against such people on that ground. Unfortunately, Australia continues to this day to have a Constitution that allows the Parliament to make laws that adversely discriminate against the members of a race.

 

The fourth issue worth reflecting on in the comparison of the US and Australian legal systems is the shared preparedness of both systems to contextualise contemporary issues with detailed historical analysis and research. Clearly in the US context, Gorsuch is highly adept at weaving historical narratives into his reasoning. So too has the High Court in Australia been prepared to build its legal decision making on detailed historical analysis of the treatment of Indigenous citizens. This is also a feature of the land claim process under the Aboriginal Land Rights (Northern Territory) Act 1976, and under the Native Title Act 1993. As an aside, one might make a similar argument for the under-appreciated role of anthropology in these far reaching legal processes that are changing the institutional shape of the Australian nation.

 

One of the less well understood positive implications of land rights legislation and the Native Title Act has been their ongoing contribution to educating the judiciary and the supporting cohorts of legal functionaries of the complexity of intercultural engagement and the innate intelligence and functional integrity of Indigenous cultural practices. Australia is a better place for those ongoing processes.

 

28 June 2023

 

 

 

Political and media narratives on alcohol policy in Central Australia

 

Before him he carries noise,

and behind him he leaves tears…

Coriolanus Act 2, scene 1

 

Late last week the media reported the release of NT Police crime statistics which indicate a significant drop in alcohol related crime. According the Guardian (‘Incredibly noticeable’: alcohol bans have cut family violence and crime in Alice Springs, advocates say):

NT police statistics collated by the Central Australian Aboriginal Congress revealed a 37% decrease in domestic violence assaults from January to April. All other assaults dropped 35% while property offences were down 25% over the same time period.

 

It is clear that the reinstatement of the alcohol bans on town camps in Alice Springs and surrounding communities (subject to the potential for Alcohol Management Plans to be negotiated and approved by the NT Government) has had a significant and positive impact on crime in Alice Springs and surrounds.

 

According to a 23 June 2023 front page story in The Australian (Grog bans put brake on Alice Springs violence, (link here $): “…total recorded assaults dived from more than 260 in January to 170 in April…”. The Australian also published an editorial on the issue (A sober Alice Springs starts to get its life back on track’) (link here) which is worth reading both for what it gets right and for what it gets wrong or omits.

 

The editorial’s headline is clearly misleading: Alice Springs is not yet sober and alcohol abuse remains a significant and deadly problem. The Australian’s own article notes that police continue to be concerned about illegal sales of alcohol, and quotes the Police Association President as saying that police on the ground ‘have definitely seen an increase in secondary supply…’. The article goes on to quote NT Police Acting Deputy Commissioner as stating that ‘volumetric restrictions’ on how much alcohol individuals could buy would ‘go further in helping to reduce the alcohol-related harm across the community’.

 

It is not clear what the Deputy Commissioner of Police had in mind when he referred to volumetric restrictions, but it has long been recognised by social scientists that volumetric taxation of alcohol is both more efficient and has considerable health benefits (link here). It is also widely recognised by health professionals that the harms due to alcohol consumption (and particularly over-consumption) are extremely serious. See the Australian Institute of Health and Welfare web report on Alcohol, tobacco & other drugs in Australia (link here) for a discussion of alcohol related harm. To take just two mainstream data points from that report:

(i)            AIHW analysis of the National Hospital Morbidity Database showed that alcohol accounted for nearly 3 in 5 drug-related hospitalisations in 2020–21 (57% or 86,400 hospitalisations); and

(ii)          In 2019–20 alcohol-related injuries resulted in 30,000 hospitalisations (118 per 100,000 population). The most common causes of alcohol-related injury hospitalisations were falls (39%), intentional self-harm (24%), assault (15%) and transport (7.2%)

 

The editorial goes on to allocate blame to the NT and federal governments, as well as to the NIAA and other paid advisers (it names KPMG) for being ‘too distant from the realities of life in the areas they claim to represent’. While the editorial doesn’t name former Minister for Indigenous Australians Ken Wyatt, it does correctly acknowledge that the decision to allow the Stronger Futures alcohol controls to lapse was made under his watch. The editorial correctly notes that Senator Jacinta Price predicted that the removal of the alcohol bans in the NT would result in an upsurge of violence against women and children. Offsetting that, it might be observed that she was not prescient enough while the preselected candidate for the NT Senate seat to persuade Minister Wyatt to maintain the Commonwealth controls across her electorate.

 

The most egregious omission from this Editorial, and indeed from the whole political narrative related to alcohol consumption and harm (both to individual and to their families including children) is the effective capture of governments of all political persuasions in both Canberra and the NT by the alcohol production and retail industry, and those involved in the associated supply chains. There is a deep-seated and widespread pro-drinking culture across the whole NT population, and governments are terrified of antagonising industry interests because of the nascent potential for those interests to heighten and leverage political opposition in the electorate. Political donations also play a part in both Canberra and Darwin.

 

Meanwhile taxpayers nationally and in the NT are meeting the costs of the health services, the policing, the incarcerations, and the infrastructure damage associated with alcohol induced dysfunction. Aboriginal people and communities bear the direct social and psychological costs of endemic domestic and lateral violence which are exacerbated and in large measure caused by the easy availability of alcohol.

 

Australia provides almost $3bn per annum to businesses to incentivise Research and Development that would otherwise not occur because R&D is a positive externality (link here). The explicit rationale for R& D subsidies to business arhe the existence of positive externalities. That is, businesses do not accrue all the benefits of their R&D and are thus not adequately encouraged to invest in it. There is a public interest in maximising R & D. Yet alcohol harm has extensive negative externalities without government taxation linked to the harm to society generally. That is, the alcohol producers do not bear all the costs arising from the sale of their product, and are thus incentivised to over invest in producing it (and to also lobby against any regulation in the public interest).

 

While governments do tax alcohol, the taxation of alcohol is not driven by the need to internalise the costs, but rather by governments’ revenue raising strategies mediated by the counter-lobbying of particular segments of the alcohol industry. Higher rates of tax on alcohol — ideally related both to the volume of alcohol involved and the the levels of harm arising (link here) — would both reduce the demand and thus the levels of societal harm caused by alcohol consumption, and coincidentally strengthen the abilities of governments to invest in harm minimisation. The AIHW web report cited above notes that the levels of alcohol related harm are higher in remote regions than elsewhere.

 

The ABC too has a report on the new statistics (link here), based on evidence given to an ongoing coronial inquiry into the deaths of four women in NT communities arising from domestic violence by their intimate partners (link here). Two of the cases occurred in Central Australia. The Coroner will undoubtedly make finding in relation to the role, if any, alcohol abuse played in the extended cycles of domestic violence these women suffered, and which ultimately ended with their violent deaths.

 

One problem with the media coverage of many of the challenges facing remote communities is that the coverage inevitably focusses on events and not on underlying processes or causes. However, they also often go further, and actively frame the issues in ways which have the effect, or are designed, to avoid and mislead the consumers of media by focussing on trite but plausible narratives rather than acknowledging the existence of systemic and institutional forces that hold sway over virtually the entire span of public policy in Australia. Yet the government decisions in both Canberra and Darwin can be framed in different ways.

 

The decisions to allow the lapse of alcohol controls, to then resist reinstating those controls, and ultimately — in the face of irresistible political pressure from mainstream interests arising from social chaos engendered by the uncontrolled flood of alcohol into town camps and communities — to lead the Commonwealth Government to intervene and effectively coerce the NT Government to reinstate controls were both geographically and temporally complex.  The Australian editorial frames these decisions as the result of governments not listening to local (Aboriginal) voices.

 

In doing so, The Australian editorial effectively ignores an alternative framing, namely that governments do not listen to Aboriginal voices because they are beholden to the alcohol industry. The sorry history of the NT Labor Government’s approach to the proposal for a Dan Murphy superstore near Darwin airport is redolent with obsequious pandering to alcohol interests (link here). Both the NT and the Commonwealth Parliaments have strong Indigenous representation, including amongst the Ministers who were ostensibly responsible for taking these decisions. It strains credulity to conceive that these decisionmakers were somehow ‘removed from those whose interests they were supposed to protect’, or were not prepared to listen to local voices. These decisionmakers do not spend their entire lives in Canberra nor in Darwin. At their core, these decisions were political decisions, not policy decisions, and were taken because of the systemic power of the alcohol industry.

 

Subsidiary framings (also not explored by the recent media reports) include the possibility that the NT Government was committed to abolishing alcohol controls in order to reduce the flow of itinerants into Darwin and other major centres, and the federal Labor Government was unwilling to itself re-legislate in order to minimise friction with the NT Labor Government, and the concomitant perception of incompetence were it to do so directly. Hence the elaborate charade of a joint media conference to announce Commonwealth funding and the NT Government backflip (link here).

 

I do not absolve the decisionmakers in Canberra and Darwin, on both sides of politics, for their poor and socially destructive decision-making both on this issue and in relation to other shortcomings across the Indigenous policy domain. Decisions that have led to the continuation of extraordinary levels of social harm both for drinkers, but more importantly for their partners and children and local communities.  But nor should media outlets be absolved when they effectively run interference for commercial interests that are the direct cause of so much societal harm.

 

Alcohol abuse is clearly an important contributor to the challenges facing remote Indigenous communities across at least four jurisdictions. It does not however represent the totality of the challenge, and there are no panaceas. A first step however is to understand that the promulgation of misleading or tendentious policy narratives and framings will not lead to effective policy reform. A second step would be to actively consider policy options designed to limit the unrestricted supply of full strength alcoholic beverages across the whole community.

 

Addendum

For those interested, a selection of some previous posts related to alcohol issues in remote Australia are set out below:

 

Alice Springs crisis: observations on remote policy (link here)

Alcohol policy reform in remote Australia: a potential roadmap (link here)

Neil Westbury article on regressive changes to remote alcohol laws in the NT (link here)

Regulating Alcohol in the Northern Territory: in whose interest? (link here)

Alcohol policy reform: addressing the underlying economic incentives (link here)

Alcohol Regulation in Remote NT Communities (link here)

 

Good news: the ANAO audit of the CLC

   

Wisely and slow, they stumble that run fast

Romeo and Juliet, Act two, scene three.

 

The ANAO yesterday released their audit of the Central Land Council (link here), the third in a series of four audits of the NT Land Councils established under the Aboriginal Land Rights (Northern Territory) Act 1976.

 

The headline findings include:

•           The CLC’s governance arrangements under the ALRA and NTA are largely effective. 

•           The CLC’s arrangements to promote the proper use and management of resources under the PGPA Act are largely appropriate, except for arrangements to manage risk of fraud and conflicts of interest.

 

The ANAO have provided a succinct, thorough and comprehensive outline and assessment of the internal workings of the CLC. The audit describes an organisation that appears to be well run and with systems that are fit for purpose in a demanding cross cultural governance environment. My own take on the audit findings is that the CLC’s governance systems provide a highly useful template that the other land councils would do well to consider and emulate.

 

There are only two issues that struck me as worth highlighting.

The first relates to the CLC’s internal auditors, PwC, which has also been providing auditing services to corporations that are in receipt of royalty and other payments by the CLC’s internal Aboriginal Associations Management Centre. The ANAO point out that a decision apparently made by the Audit and Risk Committee to move to different auditors for the CLC and the separate corporations had not been reflected in the formal documentary record. See para 4.40, and footnote 69. While perhaps an insignificant technical matter, it points to the risks that outsourcing key functions like ‘internal’ audit can create incentives for conflicts of interest to emerge.

 

The second issue relates to the comparative costs of the various audit and risk committees (ARCs) across the four land councils, and in particular, the costs allocated to the various chairs of the ARCs. The CLC has established a truly independent ARC, in contrast to the ALC which includes three TLC Council members on the Committee whose accounting skills are not made apparent as well as a consultant with extensive other business with the TLC (see paras 4.69-70 of the ANAO Tiwi Land Council Report (link here).

 

In the CLC report, the ANAO include a comparison of the fees paid to the chairs of the four Land Council ARCs (see para 4.71 and footnote 79). The ANAO note that total remuneration for the CLC Chair was $6700. In comparison, in 2021–22 the other NT Land Councils provided the following annual remuneration to the Audit Committee Chairs (excluding travel and other expenses): Anindilyakwa Land Council — $58,352 (three meetings); Northern Land Council — $3048 (four meetings); and Tiwi Land Council — $2780 (five meetings). This data speaks for itself.

 

The ANAO are to be congratulated on the thorough way they have gone about analysing what are complicated governance structures within unique statutory authorities.

 

The CLC is clearly well managed and appears to be providing valuable benefits to its diverse and geographically dispersed constituency.

 

We now await the final audit of the NLC.

 

Typographical errors: ANAO audits of the Tiwi and Anindilyakwa Land Councils

 

Here are a few of the unpleasant’st words

That ever blotted paper.

Merchant of Venice Act 3, scene 2.

 

There are four land councils established in the NT under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA): the Tiwi Land Council (TLC), the Northern Land Council (NLC), the Central Land Council (CLC), and the Anindilyakwa Land Council (ALC).

 

In the last fortnight, the ANAO has published two important audit reports on the smaller two land councils, the TLC (link here) and the ALC (link here). Land Councils are Commonwealth statutory corporations albeit with a range of unique elements relating to the appointment of members, their funding, and their linkages with other Indigenous institutions in the Northern Territory. They are also native title representative bodies under the NTA. Over and above their narrow legislative roles, they have developed into important Indigenous institutions in both the NT and nationally.

 

The ANAO notes that the rationale for these audits is provide independent assurance to Parliament that the Land Councils’ governance arrangements are effective in meeting legislative obligations under the ALRA, the Native Title Act 1993 (NTA) and the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The ANAO has indicated that an audit of the CLC will shortly be published and an audit of the NLC is expected to be published in a couple of months.

 

I don’t have the space here to provide a comprehensive summary of each of these reports, and will instead cherry pick a small number of issues that appear to me to have significant governance implications both for the individual land councils and the broader institutional framework they operate under.

 

The ANAO is to be congratulated on the quality and accessibility of its analysis given the innate complexity of these institutions, including their cross cultural responsibilities. Nevertheless, as I have previously noted on this blog, the ANAO has a propensity to cloak its findings in heavily qualified bureaucratic prose and extreme understatement. The result is that an ANAO report reads like a novel written in a foreign language. Those proficient in bureaucratese know exactly what is being said while those unfamiliar with the language (eg in the media and the general public) are left largely untroubled and unaware of the significance of what has been said.

Tiwi Land Council Audit

 

The ANAO headline findings for the TLC were:

The Tiwi Land Council's (TLC) governance arrangements under the ALRA and the PGPA Act are partly effective….The TLC’s arrangements to promote the proper use and management of resources under the PGPA Act are largely inappropriate. (page 5).

 

The ANAO notes that in 2021-22the TLC budget was $4.3m, and it distributed $5.9m in land use payments to Traditional owners (TOs). These are not particularly large amounts, but will add to around $100m over the span of a decade.

 

In para 2.9, the ANAO noted that its analysis of Management Committee and Council meeting minutes identified multiple instances where the Management Committee made decisions without delegation between 2008 and 2020.  

 

A core statutory function of the land councils is to consult Traditional owners and ascertain their consent to proposed activities on their land. The ANAO identified significant shortfalls in the TLC’s approach to exercising this function:

3.64 The ALRA determines that, in carrying out its functions, a Land Council shall have regard to the interests of, and shall consult with, the Traditional Aboriginal Owners of the land in its area and any other Aboriginal people interested in the land. The ALRA further specifies that a Land Council shall not take any action unless it is satisfied that: •the Traditional Owners of that land understand the nature and purpose of the proposed action and, as a group, consent to it; and •any Aboriginal community or group that may be affected by the proposed action has been consulted and has had adequate opportunity to express its view to the Land Council…

…3.66 The TLC subcontracts the organisation and conduct of the clan meetings to Tiwi Resources, an Aboriginal corporation owned by the eight clans. The TLC presents at these meetings, however does not take minutes, and does not request the minutes from Tiwi Resources. The TLC was unable to provide information to the ANAO about the discussions or decisions made at clan meetings and cannot demonstrate it has conducted effective clan consultations. 

 

In the summary at the start of Chapter Four, the ANAO note (page 51):

The TLC’s arrangements to promote the proper use and management of resources are largely inappropriate. The TLC’s policy framework and arrangements for risk management, fraud control and managing conflicts of interest are incomplete, not appropriately established, and inconsistently implemented. The TLC’s corporate plan and annual report, including performance statements, are not fully consistent with legislative requirements.

 

Finally, in what I took to be a damning indictment of the level of engagement of the National Indigenous Australians Agency, the ANAO laid out the functions of the NIAA set out in the formal order which established it (see para.2.26), which includes roles ‘to lead and coordinate policy Commonwealth policy development’ and to ‘build and maintain effective partnerships…’, and then noted (in para 2.27) the NIAA’s advice of its perception of its role in relation to the NT Land Councils which adopted a much more passive approach. Then to ram home the point, in para 2.28, the ANAO stated without further comment:

2.28 As part of this audit, the ANAO approached the NIAA regarding a potential recommendation to the NIAA to support the Tiwi Land Council to develop appropriate delegation instruments. The NIAA responded that ‘This is a matter for the Tiwi Land Council’.

 

Anindilyakwa Land Council Audit

The ANAO headline findings for the ALC were:

The ALC’s governance arrangements under the ALRA and PGPA Act are partly effective …. The ALC’s arrangements to promote the proper use and management of resources under the PGPA Act are partly appropriate (page 6).

 

The ANAO notes that in 2021-22 the ALC budget was $7.4m, and it distributed $70.2m in land use payments to traditional owners (TOs). These are substantial amounts appropriated for Aboriginal benefit, and will add to around $770m over the span of a decade.

 

Notwithstanding this rather anodyne description, I was quite astonished to read the detailed analysis contained in the ANAO audit. While the audit focusses on a single organisation, the ALC, it necessarily describes a network of parallel organisations with interlocked directors, and senior staff, and a complex web of financial flows between them. Yet the financial books of the parallel organisations (and their commercial subsidiaries) are beyond the ANAO remit, leaving the readers to ponder the implications of a series of questionable arrangements and decisions taken within the ALC.

 

The high level conclusions of the ANAO are outlined at pages 8 to 10, followed by a series of technical recommendations. The following extracts pick out some of the more salient high level conclusions:

17. …. Key interests held by the CEO and Council members (including the Chair) in corporations that receive funding based on decisions of the Council, are not consistently declared and are ineffectively managed. (See paragraphs 4.19 to 4.51)…

18….The 2021-22 Annual Report was not published as at March 2023. Although the draft 2021–22 Annual Report mostly complies with PGPA Act and Rule and ALRA requirements, it lacks transparency in relation to operations.

19. The Audit Committee does not provide adequate oversight and scrutiny of the ALC’s operations. The Audit Committee is not independent from management and is not effective in the delivery of some of its key mandatory functions under the PGPA Act. It does not appropriately review the ALC’s performance reporting; system of risk oversight and management; and system of internal control. The Audit Committee secretariat is not effective. (See paragraphs 4.64 to 4.85)

 

The issue of conflicts of interest is at the core of this audit. In plain English, a conflict of interest opens the way for those conflicted to accrue inappropriate financial benefits. The ANAO has identified no instances where that has occurred, however its remit is limited to the ALC and it has not examined the financial affairs of the various parallel and subsidiary organisations. Figure 4.1 on page 68 provides a useful summary of the complex relationships involved. The key must read paragraphs are 4.45 to 4.50.

 

Some extracts:

4.32 The CEO’s declaration identified an interest arising from the ALC’s employment of his spouse (who was first employed by the ALC in 2014). The ‘notes’ section of the declaration was left blank, and no management plan was included in the register or elsewhere. The CEO had not made a written declaration of the interest prior to 2022...  

4.47 The involvement of the ALC Chair, CEO and CEO’s spouse in organisations that, in 2021–22, received the majority of royalty equivalents and that, in 2020–21 and 2021–22, received the majority of NT Indigenous Economic Stimulus Package funds, creates a risk of conflicted interests….

4.48 In Council funding decisions, the ANAO observed disproportionate benefit to the entities with which the CEO is associated. During the two 2022 Finance Committee meetings (at which the ALC CEO was present), 112 requests for funding valued at $109.1 million were reviewed… In summary, requests submitted by the ALC CEO represented 24 per cent of funding applied for, and 36 per cent of approved funding; and the success rate for requests submitted by the ALC CEO was 99 per cent by value, compared to a success rate for the other applicants of 53 per cent by value. 

4.50 Given the influence of the Chair and CEO over the ALC’s funding and management decisions; the financial benefit that AAAC, GHAC and consequently Winchelsea Mining obtain from the ALC; and the ALC Chair’s, CEO’s and CEO’s spouse’s positions in GHAC and Winchelsea Mining; the risk of conflicts of interest is high. The current management strategies applied to this risk are either insufficient or not implemented. 

 

The ANAO analysis of the ALC Audit Committee is also eye watering. The ANAO identifies that the ‘independent chair’ costs nine times more than other land councils expend on their audit committee chairs (para. 4.73), and is engaged by the parallel organisations that are also effectively controlled by the CEO and ALC Directors.

 

The ANAO identified several significant issues in relation to the independence of the Audit Committee Chair (para. 4.70):

• The Chair of the Audit Committee is the founding director of Enmark Pty Ltd (Enmark). Between 2014–15 and 2021–22 the ALC paid $896,056 in fees to Enmark for services. Between 2017–18 and 2021–22 Enmark was one of the top three consultants by value engaged by the ALC.

• Enmark provides consultancy and other services to several Aboriginal corporations receiving royalty equivalent funding from the ALC. This includes GHAC and AAAC.  The ANAO identified numerous deficiencies in the approach of the Audit Committee to its responsibilities.

 

One further issue that I won’t explore in detail relates to the ALC’s use of royalty payments to third party organisations which were then effectively reallocated to the land council for the payment of salaries (see paras 3.51 and 3.52). The ANAO correctly identifies this mechanism as a potential source of fraud, but fails to note that it effectively undermines one of the Minister’s tools available to ensure the land council is appropriately focussed on its legislated remit. Under the ALRA, the Minister approves the budgets of the land councils, but the ALC has effectively been redirecting royalty equivalent funding away from community benefit and towards its own operations, thus undermining the fiscal constraints that incentivises good priority setting.

 

Finally, the ALC Board and CEO provided a ten page response to the Audit report, which needs to be read in full. The response focusses on the undoubted achievements of the ALC and its associated organisations in a range of areas. It documents a massive increase in staff of the ALC, many from the local communities. It also notes that the former Minister for Indigenous Australians Ken Wyatt was kept fully informed of development on Groote Eylandt, and that the CEO of NIAA has been briefed. It points to the ALC’s involvement with the ANU in documenting the social indicators on Groote; a matter I commented on in an earlier post (link here).

 

Clearly whatever its other deficiencies, the capability of the ALC Board to write entertaining prose far exceeds that of the ANAO. The ALC response provided my favourite line from the whole report in a comment on the ANAO’s conclusions on conflict of interest:

The ALC has effectively managed conflicts of interest in the context of this operating environment and accepts that we have not always properly documented these practices. Therefore, instances of typographical errors have given the auditors a negative overall impression.

 

Conclusion

These two audits raise important issues regarding the quality of governance in two of the four NT land councils. The TLC appears to have taken a series of remedial actions and should hopefully make good progress. The ALC faces more deep-seated issues and notwithstanding its response, I for one am unconvinced that it is yet on the right path.

 

The existence of these issues however is not just an issue for the Land Council directors and management. It seems to me that the relevant Ministers over the past decade have allowed the quality of regulatory oversight of the NT land councils to significantly weaken and in some cases to perhaps disappear. Not only has this laissez faire approach opened up the opportunities for conflicts of interest to emerge (and thus to opportunities for fraud against local communities and the Commonwealth), but it has also undermined the overall effectiveness of the land councils in fulfilling their statutory obligations and remit.

 

To address the issues raised in these audits, it strikes me that there are two essential actions required.

 

First, to provide an assurance to the ordinary members of the Groote community, there appears to be an overwhelming case for an independent forensic investigation into the financial affairs of the ALC, its associated organisations, and its key staff and Directors. It seems to me imperative that Minister Burney should both initiate such an investigation immediately, and initiate a short sharp review of the way in which NIAA oversights portfolio bodies.

 

Second, given that it is now almost fifty years since land councils were established, and that there has been no overarching review for two decades or so, there is a strong case for a high level independent review of the appropriate regulatory framework for the operations of the NT land councils. Such a review should reconsider their statutory remit, their funding arrangements, and importantly, how land councils relate to associated Indigenous entities that have responsibilities for utilising the royalties, royalty equivalents, and other land use payments that accrue to landowners and affected communities. Such a review should not have any overt political agenda apart from considering the best way to meet the future needs and aspirations of Aboriginal landowners and native title holders in the NT into the future.

 

 

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)