14 June 2012

 

Legal News & Analysis – Asia Pacific – Australia – Native Title

 

Today the Attorney-General announced plans for further reform to the Native Title Act 1993 in her address commemorating the 20th anniversary of the Mabo High Court decision.

 

Key proposals are: 

 

  • Legislating "good faith" criteria in the "right to negotiate" process.
    • Clarifying the tax treatment of payments from native title agreements.
    • Introducing legislative change to enable prior extinguishment to be overlooked in parks and reserves.
    • Expanding the scope of the indigenous land use agreement (ILUA) provisions.
  • What the proposed reforms may mean for the system is unknown because no detail has been released.
  • There are some parallels with earlier amendment proposals and reviews that give some indication of the potential issues that will need to be addressed in the extensive consultation phase that the Attorney-General emphasised would take place.
  • The Attorney-General and the Minister for Community Services and Indigenous Affairs also announced a review of native title organisations such as representative bodies and service providers.

 

Good faith

 

The announcement suggests an expansion of the obligations of proponents and the States under the right to negotiate (RTN) following the decision of the Full Federal Court in FMG Pilbara v Cox (2009) 175 FCR 141. It remains to be seen how the Government intends to do this. However setting out explicit criteria will inevitably provide more prescription and raise the hurdle for proponents and the States.

 

The announcement does not suggest the Government is proposing some of the more radical amendments that the earlier Greens Bill (the Native Title Amendment (Reform) Bill (No. 1) 2012) advocated. The Green's proposal included reversing the onus of proof in relation to the existence of native title and providing that a party may not apply to the National Native Title Tribunal for a determination that a mining lease should be granted until that party has first demonstrated that good faith negotiations have taken place.

 

Tax

 

The announcement about clarifying the tax treatment of payments from native title agreements is potentially very significant. The complexities around the taxation treatment of these payments has posed significant difficulties to date. The issue is becoming increasingly important as the quantum of benefits grows and the potential taxation consequences now affect hundreds of millions of dollars.

The connection to not-for-profit reforms flagged by the Attorney-General may be fundamental to the application of the proposed tax breaks. This is not clear. Both reforms are happening at the same time and ideally there will be more clarity when details of the reforms are released.

 

There will be significant issues that need to be resolved in the consultation process. This will include practical issues like how the reforms will impact existing corporate and trust structures and whether the tax breaks will apply to the (sometimes very substantial) payments made to individuals for personal benefit.

 

Prior extinguishment

 

Sections 47A and B of the Native Title Act currently provide for circumstances in which prior extinguishment of native title can be overlooked (based on occupation of Crown land and Aboriginal ownership of pastoral leases). The announcement flags extending these exceptions to parks and reserves and potentially further.

 

A difficulty with the previous Green's proposals arose because the arrangements operated through a bilateral agreement between the relevant State and native title group without reference to any third party rights. It remains to be seen how the Government proposal will work.

 

ILUAs

 

It is difficult to know what the Government intends in relation to ILUAs based on the announcement. There are technical improvements that could be made. However the announcement suggests there are problems with flexibility and topics. Although the Native Title Act identifies some matters that an ILUA may cover, there are no limits on their content. Mining and other proponents, State Governments and native title claimants have negotiated some extremely broad and wide ranging ILUAs in the past.

 

In our experience, the real impediment to negotiating ILUAs, is not any limit on flexibility or subject matter imposed by the Native Title Act but rather, where the State is requiring an ILUA before a future act can be done, the Native Title Act does not provide a conclusion to the negotiation process. However there is nothing inherently wrong with this from a legal perspective as ILUAs are contracts that are entirely voluntary.

 

What is the Government's vision?

 

The Attorney-General identified two key planks in the Government's vision for the native title system in another 20 years:

 

Our aim in twenty years time is that the vast majority of native title claims will be settled, helped substantially by the reforms Labor has instituted to deliver faster native title claims.

 

In twenty years time, I also want to see a native title system that creates economic and social opportunities for Indigenous and non-Indigenous Australians alike.

 

Do the reforms deliver the vision?

 

Whether or not the reforms proposed today will assist to achieve this vision will depend on the detail of the changes proposed. Properly implemented, some of them may represent improvements to the system.

 

However, regardless of what the detail entails, it seems doubtful that the proposed reforms will of themselves substantially contribute to the delivery of the Government's vision.

 

Faster native title claims

 

The recent budgetary changes that shifted the responsibility for mediation of claims from the NNTT to the Federal Court are the latest in a series of reforms made by successive Governments to the claim determination process. Many consent determinations have already been made. Most parties, particularly proponents would prefer a landscape that delivers certainty and security for their interests. This is what a determination of native title, properly formulated and based on appropriate evidentiary hurdles, achieves.

 

Perhaps what is missing in the Government's vision is a preparedness by the Federal and State Governments to address the circumstances which are contributing to delays in many determinations at the moment:

 

  • Areas where native title does not exist. It is often these areas that take the longest to resolve and until finally resolved, the system does not address the likelihood of the continued lodgment of further claims.
  • How to clearly identify the holders of native title. A lack of clarity and transparency around membership can risk determinations entrenching intra-indigenous disputes on a permanent basis. 

 

Economic and social opportunities for Indigenous and non-Indigenous Australians alike

 

This vision is a much broader vision of a more equitable and equal society. Of course this is an important vision and it is an aim that has often been articulated in the context of native title.

 

Just as often, commentators have observed that native title is not a panacea for traditional owners and that the system produces "haves" and "have nots". To think that any reforms under the umbrella of the Native Title Act by itself can deliver the sort of change referred to by the Attorney-General misconceives the nature of native title as a property right.

 

Native title offers some Aboriginal people quite significant rights, particularly those that are able to negotiate agreements with large mining and industrial proponents. However the reality is that these groups represent a small portion of native title holders and an even smaller portion of Aboriginal and Torres Strait Islander peoples in Australia. Some native title agreements negotiated by proponents already recognise this dichotomy. Government must also not lose sight of the need to support the delivery of opportunities to all indigenous people.

 

 

For further information, please contact:

 

Jean Bursle, Partner, Ashurst

jean.bursle@ashurst.com

 

 

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