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by Sean Sexton*
This paper examines the Native Title Act 1993 (Cth) ('the NTA'), and the body that administers it, the National Native Title Tribunal ('the NNTT'). Despite the volume of native title material that is being generated, crucial questions remain unanswered. Is the NTA capable of delivering the Indigenous people of Australia meaningful rights to land and waters?
When recent trends in labour law are examined, the influence of neoclassical economics (or economic rationalism) is clear. A comparison between labour law and land rights legislation shows that, just as economic rationalism attacks the protective and empowering function of labour law as an impediment to growth, the same can be said for land rights legislation.
Under economic rationalist analysis, law is examined for the extent to which it impedes market forces, not for the protection or empowerment that a law may offer. The thrust of this paper is that if the influence of rationalism is as pervasive in native title as it has been in labour law reforms both in Australia and overseas, then Indigenous expectations for. land rights may not be delivered by the NTA. I will use the issue of mining development as a case study in the operation of the NTA.
Economic rationalism subscribes to a belief in the freedom of the marketplace. In the realm of industrial relations, the most economically efficient system is seen to involve direct bargaining between employers and employees. Labour laws emphasising employee protection are harshly criticised by economic analysis, because they place obstacles in the path of market forces[1]. Trade unions are also seen as impediments to the freedom of the market, and therefore as a 'transaction cost'[2].
Market driven labour practices contrast sharply with much of the law and policy that has developed in Australia. Employees have managed to extract significant gains in working conditions through collective action and protective legislation. The protective function that labour law fulfils is a recognition of the power imbalance between employer and employees. Mechanisms such as centralised wage control, recognition of unions, unfair dismissal legislation, and regulation of the work environment offer empowerment to employee[3]. However, economic critique has been both unwavering and persuasive[4]. Under this influence and under the guise of competitiveness and efficiency, there have been significant changes in labour laws: changes that include the movement away from centralised wage control[5], introduction of voluntary unionism[6], and reductions in workers compensation benefits[7]. The most radical reforms have occurred in Victoria and Western Australia, with similar moves afoot in the Federal area with the return of a conservative Government[8]. In New Zealand, legislation removing many of the protective mechanisms associated with labour law was passed in 1991. This scheme is much closer to the kind of market regulated systems that economic rationalists advocate as being the most efficient[9]. However, it is no coincidence that such schemes offer the least protection to employees. The need to reduce the cost of bargaining and of employment (which these changes seek to do) is driven by rationalist thinking. The same can be said for elements of the NTA.
Siobhan McKenna undertook an economic comparison between the Aboriginal Land Rights (NT) Act 1976 (Cth) ('the Land Rights Act') and the NTA[10]. 'Transaction costs' associated with land rights are identified by McKenna as the costs of consultation, compliance with the legislation, and of identifying those people to be consulted[11].
One crucial device in the Land Rights Act are the consent provisions[12] ('the veto'), relating to exploration and mining, which are discussed in some detail by McKenna[13]. The veto represents a powerful motivating tool for mining companies to present a reasonable proposal to Aboriginal groups. The ability to withhold consent to exploration and mining provides a strong measure of self-determination for Aboriginal people.
The consent provisions provide an incentive for mining companies to negotiate agreements with traditional owners which comply with and enforce their cultural and environmental wishes. This allows mining companies and Aboriginal people to share the benefits of mining on Aboriginal land, whilst minimising the disadvantages for traditional owners. It boils down to Aboriginal people wanting to be included in negotiations, and having control over how development is shaped.
As powerful as the consent provisions are seen to be, they have been the subject of legislative change. Prior to the 1987 amendments (which were a response to criticisms from the mining sector)[14], the consent process had two stages, one for exploration and one for the extraction phase. The consent now given by Aboriginal people under the Land Rights Act is for both exploration and mining. Thus, Aboriginal people have to make decisions on mining at a very early stage, and companies have to produce detailed future plans so that Aboriginal people are fully informed of the proposals[15]. In effect, it produces the need for exploration companies. to have envisaged a fully fledged mining operation at the exploration phase. Such an approach may be counter productive. One exploration project in a thousand reaches the extraction phase[16]. By removing the disjunctive consent procedure, the stakes for both Aboriginal people and mining companies are raised. In this situation, where both parties are operating from positions of uncertainty, the costs of bargaining are increased. An attempt to outflank the conjunctive consent provisions by way of contract was unsuccessful[17].
McKenna says that Aboriginal Land Councils have reduced the expected cost benefit of mining by insisting on detailed proposals. Yet such requirements seem justified[18]. Having only one opportunity to say yes or no necessitates having as much information as possible upon which to make decisions. Quite rightly, Land Councils and Aboriginal communities demand this information from prospective explorers. This demonstrates that what are 'transaction costs' to economists are the protective or empowering devices of Indigenous people.
It follows that legislation shaped by economic rationalist principles will not contain such protective provisions. The absence of veto in the NTA is dearly not an accident of legal drafting. What the NTA provides is 'the right to negotiate'[19]. These procedures provide that mining interests seeking to undertake activity on land subject to a native title claim negotiate with the claimants. There is no provision for a veto. If there is no agreement, the parties go to an arbitral body (the National Native Title Tribunal) to have the matter resolved[20]. The right to negotiate process is seen by McKenna as making the granting of exploration and mining licences simpler and cheaper than the Land Rights Act[21]. Simpler and cheaper it may well be, but without the veto, a crucial and powerful device is missing from the bargaining process. It also imposes time frames that may be unrealistic for Indigenous groups[22].
If the right to negotiate procedures are seen as a significant departure from the consent provisions in the Land Rights Act, then the sections of the NTA that establish future acts that attract the expedited procedure[23] take this contrast even further. Expedited procedures are excluded from the right to negotiate process. There is no equivalent to the expedited procedure in the Land Rights Act.
In Western Australia in particular, this procedure has become an increasingly contentious part of the NTA, because the WA Government is channelling the vast majority of its tenement applications through the expedited mechanisms. Aboriginal people and their representative bodies are forced to cope with a massive influx of applications to consider. Objections must be lodged within two months[24], and to be successful must satisfy the test set down by the NTA. The test focuses on disruption to community life, sites of significance, and disturbance to land and waters[25]. Given the time frame that the NTA imposes and the resources available, such a task is formidable[26]. The time limits seem more about satisfying development interests and keeping project realisation time to a minimum than they are about recognising logistical, cultural, and resourcing issues for Indigenous peoples. The shorter and stricter time limits in the NTA (both for this procedure and negotiations in general) are influential in McKenna's positive appraisal of the NTA over the Land Rights Act[27].
Few Indigenous groups (and few academics) envisaged that the expedited procedure would operate to allow mineral exploration to occur outside the 'right to negotiate' framework[28]. However, it seems that the interpretation of the test (and placement of the onus of proof in sustaining objections) is such that the balance appears to be favouring the activities of miners[29]. NNTT Deputy President Paul Seaman QC heard an objection to the expedited procedure applying to an exploration licence in Irruntyju-Papulankuntja community[30]. He dismissed the objection, on the grounds that there was not sufficient evidence of potential disruption to community life[31], and no likelihood of interference with sites of significance[32]. The basis of his decision seems to be that if a company wants to look at an area, away from communities or outstations, then unless there are sites of significance and a likelihood of interference with those sites, the expedited procedure applies.
The issue of expedited procedures been re-examined by Deputy President Seaman in Re Nyungah People[33]. He continued to search for a balance between Indigenous aspirations and developers. Despite finding that in this application the expedited procedure did not apply on the grounds of disturbance to the land, in his view, developments of a certain kind are intended by Parliament to be dealt with expeditiously[34]. The difficulty with the Seaman line of reasoning is that it sets a very high threshold test. It now seems that many exploration licences will be fast tracked. Such approaches are at odds with the very purpose of protective legislation.
The Federal Court has also endeavoured to achieve a balance between the competing interests. Justice Lee considered an application for a stay of NNTT findings that the expedited procedure applied to two exploration licences[35]. He made orders to the effect that if no agreement was made on the issue of protection of sites of significance, then the WA Government must endorse any licence granted with conditions that protect these sites.
The operation of the NTA in the area of gaining consent to explore and mine should be of significant comfort to those who endorse the economic critiques of the Land Rights Act. The much-vaunted transaction costs of the veto appear to have been significantly neutralised under the native title regime. In the light of how the consent provisions have been changed for the NTA, it is worth considering what justice Woodward, in his second land rights report, said on this issue:
'I believe that to deny to Aborigines the right to prevent mining on their land is to deny the reality of their land rights'.[36]
For Justice Woodward, the protective and empowering function of land rights legislation was paramount. He understood that the special nature of Indigenous relationships to land, and the degree to which they were unable to control mining on their land, warranted such protection. The empowerment and protection that a veto offers is not available under the NTA; and the operations of its replacement in the right to negotiate and the expedited procedures sections cast doubt on the ability of the NTA to fulfil the aspirations of Indigenous people.
McKenna observes that another cost which could be reduced in the NTA is the end of the monopoly on Land Council representation that the Land Rights Act imposes[37]. This echoes the economic rationalist stance on the union movement, whose critique of labour law cites unions as a mechanism by which employees establish a monopoly on their labour[38].
The removal of this monopoly, and the call for the introduction of face to face negotiations between traditional owners and mining companies[39], is remarkably similar to the calls to abandon collective agreements and replace them with individual employment contracts. The 'inefficiencies' that the monopoly mechanisms introduce are crucial empowerment devices in both fields of law. The absence of the Land Council monopoly in the NTA is testimony to the persuasiveness of the resource sector, and the influence of economic rationalism[40].
However, there are indications that the absence of the monopoly of Land Councils is causing some difficulties. Mining companies are now finding the cost of dealing with Indigenous peoples very high, without the regulatory monopoly of Northern Territory Land Councils[41]. This vindicates the view of those who advocate Land Councils having monopoly representation, because they serve as a 'one stop shop' between mining companies and Indigenous people[42]. This is similar to the argument for involving unions in the bargaining process. You have well resourced, experienced players acting on the employees' behalf, which negates the need for potentially slow individual negotiations across a firm, which may be widely geographically spread out.
Removing Land Council monopolies and attempting to talk with Indigenous people face to face is directly analogous with current trends in labour law. Economic rationalism fails employees because it does not take into account the power imbalance that exists between employer and employee. It operates on the assumption that market forces are benign to the interests of employees[43]. Economic rationalism may fail Indigenous peoples for similar reasons. Statistically it is shown that Indigenous people are amongst the poorest of the poor in this country. Indicators of education, health, and financial status show us that frequently Indigenous people are the most disempowered in our society.[44] Yet the rationalist approach to native title would allow the representatives of mining companies to negotiate directly with Aboriginal people. It would rarely be the case that such negotiations would occur with people other than the highly educated and articulate team selected for the task, in a language other than English. Land Councils, like unions, serve to even up the balance of power. To use economic arguments to remove Land Councils and unions from the picture, is merely a mask used to deny access to the crucial functions that these organisations perform. The history of Indigenous peoples' exposure to mining companies in Australia and the worldwide experiences of employees show us that the 'market' is not benign to their interests.
The link that economic rationalism provides between labour law and land rights is important for two reasons. First, it shows how the analysis of a law pursuing a protective or empowering function is significantly different from one that looks from the perspective of how that law impedes market forces. Second, it shows that when economic critique influences the law, protective mechanisms are removed.
Employees working under legislative schemes shaped by economic rationalism do not have their conditions enhanced. Recent surveys show that in New Zealand, under the Employment Contracts Act, levels of job satisfaction, security and trust are very low, and that there have been significant effects on wealth distribution and wages outcomes[45]. In Australia, a similar picture is painted, even though the labour law reforms (at a Federal level at least) have been not as radical as those in New Zealand[46]. One Australian survey suggests that working conditions relating to occupational health and safety are being traded off in the enterprise bargaining process, and that positive outcomes (for employees) in occupational health and safety are compromised by inadequate bargaining capacities of employees, and reduced reliance on awards[47]. The UK experience is that the Thatcher reforms have led to sectors with low union membership, yet higher levels of turnover, dismissal, and workplace injury[48]. It is the shift in bargaining power which produces these results.
Economic rationalism compels markets towards a path of least cost. However, these 'costs' are often found to be the devices from which those without power, derive it. To attempt to make land rights 'cost neutral' inevitably means that protective mechanisms will be removed. We see it in the contrast between the Land Rights Act and the NTA, and we see it in the recent developments in labour law. Empowerment is a cost that we must absorb. Land rights legislation must have some impact on development if it is to empower and protect Indigenous people.
During the formation of the Native Title Act, much was made of the need for balance; the need to offset the rights of Indigenous people against the need to satisfy the requirements of development and economic growth. What this paper shows is that, just as developments in labour law demonstrate, a land rights model informed by large doses of economic rationalism skews this balance away from those with least power. Quantification of the market place 'efficiency' of such laws rarely takes this into account. McKenna's work on land rights may be methodologically sound, but in the end produces a predictable result. The Native Title Act is more economically efficient, because some of the protective and empowering mechanisms of the Land Rights Act have been either removed or diluted.
To see empowerment as a cost and therefore as a negative, demonstrates the vacuum in which economic rationalism is said to reside. In the context of this discussion it means that the social position of many Indigenous people, the resources available, and the values they place on land and water, are significantly underestimated. Indigenous peoples can take little heart from an economist's endorsement of the Native Title Act[49], for the same reasons that economically-approved labour laws offer little to employees. The endorsements are based on criteria that do not reflect the need for protective and empowering legislation.
[1] See 'Labour Markets and Labour Law Compared with Capital Markets and Corporate Law', D Fischel, (1994) 51 University of Chicago Law Review 1061.
[2] 'Labour Markets and Labour Law Compared with Capital Markets and Corporate Law', D Fischel, page 1071.
[3] Labour and the Law, 0 Kahn Freund, Stevens for the Hamlyn Trust, London, UK 1972. Page 8.
[4] See 'Labour Markets and Labour Law Compared with Capital Markets and Corporate Law', D Fischel.
[5] 'Setting the Scene: Micro Reform, Impacts on Firms', Report 96/1, Bureau of Industry Economics, Australian Government Publishing Service, Canberra, 1996.
[6] See the reforms in Victoria under the Employee Relations Act 1992 (Vic).
[7] The right of an employee to sue an employer for common law damages has been restricted or abolished in NSW, Victoria, WA, SA and the NT. See 'Workers Compensation: An Overview', D Burton, Charter, November 1994, page 52. For a commentary of reforms in Victoria, see 'Workers Compensation in Victoria: From WorkCare to WorkCover', M Robinson, Journal of Industrial Relations, June 1994, page 229.
[8] For a commentary on the Victorian reforms, see 'Australian Employment Law in 1992', R Naughton, Asia Pacific Journal of Human Resources, Winter 1993, page 39, and 'Radical Labour law Reform and the Demise of the Victorian Industrial Relations System', R Mitchell & R Naughton, New Zealand Journal of Industrial Relations, 1993, page 275.
[9] 'Tracing the arc of the pendulum: The regulation of collective bargaining in New Zealand', P Churchman, New Zealand Law Journal, October 1991, page 357.
[10] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', S McKenna, Discussion Paper No. 79/1995, Centre for Aboriginal Economic Policy Research.
[11] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 2.
[12] Aboriginal Land Rights (NT) Act 1976 (Cth) s42.
[13] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', pp 5-7.
[14] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 5.
[15] Aboriginal Land Rights (NT) Act 1976 (Cth) s41(6).
[16] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 5.
[17] See Northern Territory of Australia - v Northern Land Council & On [1992] NTSC 12; (1992) 81 NTR 1.
[18] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 5.
[19] The right to negotiate process is covered by ss26-44.
[20] Native Title Act 1993 (Cth) s35.
[21] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 7.
[22] 'Negotiating Exploration and Mining Agreements under the Native Title Act', R Bradshaw, and The Skills of Native Title Practice: Proceedings of a workshop, P Burke (ed), Native Title Research Unit, Australian Institute of Aboriginal and Torres Strait Islander Studies, 1995, page 122.
[23] Native Title Act 1993 (Cth) ss29 and 237.
[24] Native Title Act 1993 (Cth) s32(3)
[25] Native Title Act 1993 (Cth) s237.
[26] 'Working with the future act regime', M Allbrook, in The Skills of Native Title Practice: Proceedings of a workshop, P Burke led), page 98.
[27] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 19.
[28] 'Working with the future act regime', M Allbrook, in The Skills of Native Title Practice. Proceedings of a workshop, P Burke (ed), page 98.
[29] The Native Title Report July 1994-June 1995 of the Aboriginal and Torres Strait Islander Social Justice Commissioner, pp 148-51.
[30] Re Irruntyju-Papulankuntja Community, NNTT W095/7, 6 October 1995, pa Deputy President Paul Seaman QC.
[31] Re Irruntyju-Papulankuntja Community at 11.
[32] Re Irruntyju-Papulankuntja Community at 11.
[33] Re Nyungah People, NNTT WO95/29, W095/32, WO95/36, W095/37,30 April 1996, per Deputy President Paul Seaman QC.
[34] Re Nyungah People at 11.
[35] Ben Ward and Ors v State of Western Australia & Australian United Cold; Clarrie Smith v State of Western Australia & Ore, unreported, Federal Court of Australia, No. 1165/95, 14 December 1995, per Lee J.
[36] Aboriginal Land Rights Commission: Final Report, Justice A E Woodward, May 1974, Government Printer of Australia, Canberra, page 108.
[37] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 11.
[38] 'Labour Markets and Labour Law Compared with Capital Markets and Corporate Law, D Rachel, page 1071.
[39] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', page 1.
[40] The Native Title Report July 1994-June 1995 of the Aboriginal and Torres Strait Islander Social Justice Commissioner, page 65.
[41] 'Title Fights and Ground Rules', J Macleay, The Australian, Thursday 18 April 1996, page 27.
[42] 'Native Title Act 1993: Implementation Issues for Resource Developers', J C Altman, Discussion Paper No. 88/1995, Centre for Aboriginal Economic Policy Research, page 8.
[43] 'Labour Markets and Labour Law Compared with Capital Markets and Corporate Law, D Fischel, page 1068.
[44] See National Aboriginal and Torres Strait Islander Survey 1994: Detailed Findings, Australian Bureau of Statistics, Australian Government Publishing Service, Canberra, 1995.
[45] 'The Employment Contracts Act; An Interim Assessment', K Hinoe & R Harbridge, (1993-94) New Zealand Journal of Industrial Relations, page 252.
[46] 'Enterprise Bargaining in Australia: Developments under the Industrial Relations Reform Act 1993', Department of Industrial Relations, Australian Government Publishing Service, 1994, pp 376.381.
[47] See 'Is Enterprise Bargaining Good For Your Health?', K Heiler, for Industrial Relations Research Centre, University of NSW, 1995.
[48] 'The Employment Contracts Act; An Interim Assessment', K Hince & R Harbridge, page 252.
[49] 'Assessing the relative allocative efficacy of the Native Title Act 1993 and the Aboriginal Land Rights Act (Northern Territory) Act 1976', S McKenna, pp 18-21.
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