Australia: Freehold title within Indigenous communities: the evolution of native title?

Key Points:

There could be greater native title certainty for the proponents of projects in regional Queensland if designated Aboriginal (or Torres Strait Islander) land goes from community control to freehold ownership.

The Aboriginal and Torres Strait Islander Land (Providing Freehold) and Other Legislation Amendment Bill 2014 (Qld) was introduced into the Queensland Parliament on 8 May 2014. If passed, it would have significant consequences for how Indigenous people are able to hold land and could, if widely embraced, change the face of native title in Queensland.

Key reforms allowing freehold title proposed

The Bill, which has been touted as landmark legislation, proposes a mechanism to allow land within designated Indigenous communities to be transferred from community control to freehold ownership. The 34 Indigenous councils that currently hold land on trust for Aboriginal and Torres Strait Islander communities would be given the ability to transform that land into true freehold, to be held by Indigenous individuals.

The Government has labelled this measure the final stage in the continuum of Aboriginal and Torres Strait Islander land rights, which began with state ownership of land held for the benefit of Indigenous communities, progressed to community control of such land and (most recently) has incorporated the recognition of native title rights and interests – but which has never before contemplated individual ownership of such land.

How is land currently held on trust for Indigenous people?

The most common type of land tenure for remote and regional Indigenous communities is an Aboriginal (or Torres Strait Islander) deed of grant in trust (DOGIT) –- as granted under the Land Act 1994 (Qld), the Aboriginal Land Act 1991 (Qld) or the Torres Strait Islander Land Act 1991 (Qld). DOGIT land is held on trust by Indigenous councils for the benefit of local Aboriginal or Torres Strait Islander inhabitants. A significant amount of Aboriginal or Torres Strait Islander "reserve land" was also historically set apart under the Land Act 1962 (Qld) for the benefit of Indigenous inhabitants.

There is currently a process by which DOGIT and reserve land can be granted in fee simple to particular bodies corporate, land trusts or councils. However, such land must be held by the trustees for the native title holders of the land (if known) or other local Indigenous people (if not). Such land, although granted in fee simple, also cannot be sold and must remain held on trust by the trustees for the communal benefit of the local Indigenous community or native title holders (again, if known).

This means that Indigenous people cannot gain the same benefits from such land as other citizens can from ordinary freehold land (for example, they cannot individually own their homes or commercially own land for a business). That said, Aboriginals and Torres Strait Islanders are of course able to purchase freehold land outside these communities in the normal way.

How would the transformation to actual freehold occur, and how would it impact native title?

The Bill makes it clear that the creation of freehold title would be entirely optional. The current trustees of "freehold option land" within each of the 34 Indigenous council areas would be required to consult with their communities to decide whether to take up the option to transform the land into freehold title. Where the response is positive, the trustees would then request the Minister to approve the granting of freehold title in respect of such freehold option land to specified individuals. Available land would be allocated by auction, ballot or tender.

However, before freehold title could be granted over any freehold option land, any native title rights and interests in relation to the land would need to be voluntarily surrendered (or otherwise extinguished). In practical terms, this means that it will generally not be possible for communities to take up the freeholding option without first having entered into an Indigenous Land Use Agreement (ILUA) that records their surrender to the State of all native title rights and interests over the relevant land.

Possible issues with the proposal

The State has made it clear that it will not fund any surrender of native title. The following practical issues would therefore seem to arise:

  • Indigenous communities would have to bear their own costs of preparing and registering the ILUA through which their native title would be surrendered;
  • in addition, no monetary compensation would be given for the surrender of the native title (although it could be said that the receipt of the freehold title will be a form of "in-kind" compensation); and
  • the land would need to be sold for the process to become "self-funding", as intended, which has the consequence that the process will not be funded until Indigenous people cease to have possession of the land.

What does this mean for project proponents?

One implication of this proposal could be greater native title certainty for the proponents of projects in regional areas of Queensland, because native title needs to be surrendered before freehold title can be granted.

Where native title does not exist, project proponents will be able to avoid the additional processes (such as the "right to negotiate") that they would otherwise be required to undertake in conjunction with the grant of interests such as mining and petroleum leases. In other words, they would not be required to negotiate agreements with, and pay compensation to, Indigenous groups as a whole. In place of these obligations, usual land access obligations would be owed to the new individual freeholders.

Next steps

The Bill has been referred to the Agriculture, Resources and Environment Committee, which is to report back to Parliament by 11 August 2014. We will provide another update after their report is released.

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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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