6 October, 2012

 

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

  

In brief

 

  • The Commonwealth Government has released an exposure draft of the amendments proposed to the Native Title Act 1993 (Cth).
  • Public comment is due by 19 October, 2012.
  • Key changes are:  
  • Legislating “good faith” criteria in the right to negotiate process applicable to the grant of mining leases and certain other interests.
  • Changing the onus of demonstrating who has negotiated in good faith. Combined, the right to negotiate changes will make the process less certain for mining proponents and State Governments. 
  • Enabling prior extinguishment to be overlooked in parks and reserves. At one level this proposal is consistent with existing provisions about pastoral leases and vacant Crown land. However the exception fundamentally changes the way determinations are made. It is difficult to understand why the Government thought this was necessary or to understand the justification for the process changes.
  • Technical changes to the indigenous land use agreement (ILUA) provisions aimed at improving their operation.

 

Good faith

 

The amendments will expand the obligations of proponents and States under the right to negotiate (RTN) after the outcome of the Full Federal Court’s decision in FMG Pilbara v Cox (2009) 175 FCR 141.

 

Changing the standard

 

There are two fundamental changes. The first requires the parties (the State, the proponent and the native title party) to use “all reasonable efforts” to:

 

  • reach agreement; and
  • establish productive, responsive and communicative relationships between the negotiations parties. 

 

This is different to, and more onerous than, the existing requirements in a few ways.

The primary issue is the creation of a statutory expectation that an agreement will be reached, including an expectation that the relationship is of a particular standard. The meaning and effect of the obligation in the context of the legislation is unclear. The obligation could also be unrealistic even where a proponent (because the changes are directed at proponents) has the best of intentions (because it is directed at proponents after FMG Pilbara). For example, where Governments play a limited role or a native title party would like to exercise its right to oppose a proposal rather than negotiate about it.

 

The uncertain meaning of this new obligation will most likely generate litigation to clarify its meaning. This was the experience with the original drafting of the provisions, which resulted in major “test cases” over a period of years.

 

More litigation risks creating significant uncertainty for all parties in circumstances where Australia is beginning to struggle to sell itself as an attractive place to do business.

 

Changing the onus

 

The amendments propose to change the onus if parties negotiate in good faith and fail to reach agreement. Currently the question of whether a party negotiated in good faith is only litigated if a party alleges that someone has not negotiated in good faith. That is, the person making the allegation has the onus. This position was an amendment introduced by the Howard Government in response to the issues created by the original Act.

 

The original Act was silent on who had the onus. The amendments go much further and place the onus on a person seeking a determination, requiring that party to positively show that it has negotiated in good faith. In practice, this means that the mining (grantee) party will in practice always bear the onus. Practically, the obligation on unwilling native title parties would not be capable of enforcement, other than to seek the mediation assistance of the Tribunal.

 

This change could significantly increase the time and costs associated with a determination and encourage the raising of “good faith” as a matter of course; which was anecdotally experienced under the original Act and the primary motivation for the current provisions. It is unclear why the Commonwealth Government considers such a fundamental change is necessary, and the explanatory materials do not deal with this issue in any detail.

 

Moreover, it is unclear that this particular change would drive, for example, different and substantively improved engagement. Rather, it may only drive a more paper and process focused approach to engagement in order to limit the risk and/or duration of litigation.

 

Increasing the timeframes

 

The amendments would extend the length of time before which a party to negotiations can apply to the Tribunal for a determination. The period is currently 6 months and the amendments propose to increase it to 8 months. Given that most parties appear to attempt to negotiate for much longer than this anyway, this amendment should not be controversial. However it may suggest that the Government may not be fully aware of the extent to which most proponents will go to ensure they negotiate in good faith and that therefore the rest of the proposed amendments may have much further reaching impacts on the current system than the Government has predicted.

 

Identifying indicia

 

Finally, the amendments impose specific indicia of the actions that good faith involves (eg making real offers and counter offers). Setting out these indicia is less of a concern than the first two amendments. However, it does raise the question of how the new indicia ought to be read against existing case law. The cases that were litigated when the Act commenced to establish clarity around the meaning of the requirements, took a considerable period of time. The imposition of new requirements, even if they appear consistent with that case law could mean the community needs to go through this process again.

 

Prior extinguishment

 

Sections 47A and 47B of the 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 amendments would extend these exceptions to parks and reserves and some public works.

 

The difficulty with these amendments is not the intention of these exceptions but the way in which the Government is proposing to allow these areas to be covered. The proposal has been around for a long time and is generally supported. 

 

The difficulty with the proposed amendments are:

 

  • Recognition of these areas only requires a bilateral agreement between the State and native title group. Third party rights can exist in these areas and are not adequately addressed. Moreover, in a consent determination environment, all parties should have the right to negotiate about their interests and the effect any determination would have on those interests. The rights conferred on third parties by the amendments are very limited.
  • The amendment states that the non-extinguishment principle applies to other interests that preceded the nature reserve or continue to exist. Section 15 of the Amendment Bill deals with compensation. However there are potentially complicated validity and compensation issues that arise in relation to third party interests.
  • The Government is proposing to allow existing determinations to be varied based on these bilateral negotiations. This amendment involves a fundamental change to the underlying premise of the Act and the Government has not provided justification for its proposal. Native title determinations are determinations in rem (effectively they run with the land). They determine critical rights and interests of many parties and are binding against the world. Determinations are made by the Federal Court after a lengthy hearing to determine the interests of all parties or by a consent determination in which all parties consent (on the basis their interests are recognised and protected). Allowing such determinations to be opened up and changed in the future by two parties diminishes the finality of the decision and undermines the parties’ and the public’s confidence in the certainty of the legal process. 
  • An additional issue is the delay to determinations the proposal may cause. The exceptions provided under the existing section 47A and section 47B are not controversial in terms of the recognition of native title they enable to be achieved, despite prior extinguishment by other interests. However in practical terms those requirements create the need for a significant amount of research work to be done before a consent determination can be reached. This proposed amendment will not only add to that load on the system but will arguably create a disproportionate focus on specific areas within existing determinations. It is difficult to understand why the Government would do this when the system is already to slow at the process of recognising native title. A sunset clause may go some way to addressing some of these issues.

 

ILUA provisions

 

The ILUA provisions are largely technical and are not as wide sweeping as the other changes. The proposed amendments include: 

 

  • Enabling body corporate ILUAs to extend to all determined areas (previously, they could not be registered where native title has been extinguished). 
  • Amending the authorisation and registration process for Area ILUAs.
  • Clarifying that some additional topics can be covered by an ILUA.

 

 

For further information, please contact:

 

Jean Bursle, Partner, Ashurst

[email protected]

 

Geoff Gishubl, Partner, Ashurst

[email protected]

 

 

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