Australia: Changes proposed for native title agreement-making - but is more needed?

Last Updated: 16 February 2013
Article by Tosin Aro and Tim Nielsen

Key Points:

The Federal Government's proposed changes to native title agreement-making are helpful, but there are still some areas of uncertainty.

Late last year, the former Commonwealth Attorney-General introduced amendments into Parliament that, if enacted, will amend the Native Title Act in ways that could be of concern to proponents negotiating native title agreements for their projects.

The House of Representatives Standing Committee on Aboriginal and Torres Strait Islander Affairs is currently holding an inquiry into the Native Title Amendment Bill 2012 (NT Bill). As recently as 8 February 2013, the Committee held a roundtable hearing on the proposed reforms with representatives of various national bodies representing industry, agriculture and Indigenous interests, as well as a range of other native title experts and stakeholders.

The Committee's inquiry has uncovered widespread opposition to the proposed amendments. In this election year, given the depth of this opposition and the fact that both the Coalition and the Greens have withheld support for the NT Bill, it is unlikely that the proposed amendments will ultimately be enacted in their current form (if, that is, they are enacted at all).

We address below the principal ways in which the amendments would change how native title agreements are currently negotiated.

Good faith negotiations

The Native Title Act 1993 (Cth) (NT Act) requires proponents seeking the grant of mining and petroleum tenements that would cover areas where native title has not been extinguished to negotiate, in good faith, to obtain the agreement of any registered native title claimants for such areas to the grant of the tenements.

This "right to negotiate" (RTN) is a key procedural right granted by the NT Act, allowing Indigenous Australians to negotiate benefits for their communities (including improved business development, employment, educational and healthcare outcomes, as well as monetary compensation) in return for giving their consent to mining in their traditional lands.

RTN negotiations are not open-ended. If agreement has not been reached after six months of negotiations, any of the negotiation parties can apply to the National Native Title Tribunal (NNTT) for a determination about whether the tenement can be granted. However, the NNTT will only have power to hear an application if satisfied that all parties have negotiated in good faith. Currently, the onus is on a party alleging the absence of good faith (typically the native title party) to prove that another party (usually the proponent) has not negotiated in good faith.

The NT Bill would introduce far-reaching changes to the RTN. (The changes would apply to negotiations commencing after 1 January 2013 that are still on foot when the NT Bill commences.) Apart from increasing the minimum negotiation period to eight months, the NT Bill would:

  • replace the obligation to negotiate "in good faith" with an obligation to negotiate "in accordance with the good faith negotiation requirements"; and
  • require, whenever a native title party alleges a lack of good faith on a proponent's part, that the proponent be the party to establish that it negotiated in good faith – in effect, a reversal of the onus of proof.

Compliance with the new "good faith negotiation requirements" would require negotiation parties to "use all reasonable efforts to reach agreement". In assessing such compliance, the NNTT would be required to have regard to the extent to which the parties have adhered to prescribed behavioural standards that are said to be indicative of a good faith negotiation.

While these standards are broadly consistent with criteria established by the Federal Court in 1996 in Western Australia v Taylor (known as the "Njamal Indicia"), significant litigation may be needed to determine what is meant by using "all reasonable efforts to reach agreement".

The proposed reversal of the onus of proving good faith could result in a marked rise in the proportion of cases in which the good faith point is taken by native title parties. Proponents should seek to protect their position by carefully reviewing their procedures to ensure that they are routinely making (and keeping) comprehensive records of their negotiations with native title parties.

It is not clear that these changes would measurably improve the RTN. Proponents will also need to watch developments closely to gauge the impact of the amendments on the costs of (and timeframes for) conducting RTN processes.

Indigenous Land Use Agreements (ILUAs)

ILUAs (provided they have been registered by the NNTT) also provide a mechanism by which project proponents can obtain the consents of native title parties to the grant of mining and petroleum tenements that would cover areas where native title has not been extinguished. The key benefit of ILUAs for proponents, however, is that they can convey native title consents, not just to the grant of mining or petroleum tenements, but to all statutory approvals that might be required for a project. ILUAs are therefore useful for large projects involving multiple approvals.

The NNTT will only register an "area agreement" (the most common type of ILUA) where all people who hold or may hold native title in the ILUA area have been identified – and all such people have "authorised" the making of the agreement. A recent decision by Justice Reeves, Bygrave #3:

  • established that an ILUA covering a registered native title claim area only has to be authorised by the native title claim group for that claim; but
  • left uncertain the questions of who needs to authorise ILUAs over unclaimed (and overlapping claim) areas.

The NT Bill proposes amendments to the NT Act that are intended to resolve this uncertainty and, in this regard, clarifies that ILUAs in unclaimed areas must be authorised by all people who claim to hold native title in the ILUA area and can make out a "prima facie case" in support of that claim.

Unfortunately, the NT Bill misses the opportunity to:

  • confirm the first instance decision in Bygrave #3 that only native title claim groups need authorise ILUAs in their registered claim areas; and
  • resolve the question of whether, where more than one group is required to authorise an ILUA (such as where multiple groups have prima facie claims to unclaimed areas), those groups must authorise the ILUA separately.

The NT Bill would also amend the NT Act to allow agreed amendments to ILUAs to take effect, without a further authorisation, where the changes are relatively minor in nature (for example, to show party changes following assignments).

These changes are welcome. However, given the frequency with which changes to the compositions of registered native title claimants are being ordered under section 66B of the NT Act, we would have liked to have seen in the NT Bill confirmation that, where a registered native title claimant is made a party to an ILUA (or, indeed, to a RTN agreement), the "party" should be understood as comprising the individuals making up the relevant registered native title claimant from time to time.

We will keep you updated on the progress of the Committee's inquiry into the NT Bill, and on any changes made to the NT Bill as a result of responses received to that inquiry.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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