Introduction
- Native title is one of a number of risk factors to be identified, assessed
and managed in connection with gas pipeline development
in Australia. Any
one or combination of a range of risk factors, including movements in exchange
rates and commodity prices, changes
in government and government policy,
environmental conditions, labour relations and so forth, as well as native
title, can threaten
the feasibility of a project. Perhaps due to the volume
of recent, highly significant developments in this area of the law, native
title is the subject of widespread uncertainty and misunderstanding, and
is given a degree of attention which may be disproportionate
to its real
importance. A related but distinct area of risk arises in the context of
aboriginal heritage.
- The aims of this paper are to identify the risk for gas pipeline developers,
and explain how it can be assessed and managed. There
is practical advice
on negotiating agreements, calculating compensation, and participating
in arbitration in the National Native Title Tribunal.
Proposed amendments to the Native Title Act,
which could impact on gas pipeline development, are explained.
- The law in this area is evolving rapidly. The observations made in this
paper, although current in January 1998, may have a very short
shelf life.
Native title and aboriginal heritage - what is the risk
Nature of the risk
- Native title and aboriginal heritage present the risk of a gas pipeline
development project being:
- stopped, or materially delayed, in its construction, commissioning or operational
stages, or
- subjected to additional costs, such as compensation obligations, site clearance
expenses, legal costs and so forth, for reasons connected
with aboriginal
legal (native title) or cultural (aboriginal heritage) interests in land
affected by the project.
- Aboriginal objectors who wish to stop or delay a project on aboriginal
legal grounds have recourse to a number of legal remedies not
available
to non-aboriginal objectors. They also have recourse to generally available
legal remedies, under environmental, planning
and other laws, which are
beyond the scope of this paper. The various remedies may be pursued together,
or separately, one at a time.
Pursuing one remedy does not prevent a different
remedy from being pursued at the same time or subsequently.
Legal remedies
- The legal rights and remedies specifically available to aboriginal objectors
are:
- Negotiation rights and other procedural rights under the Native Title Act 1993 (Commonwealth).
- The grant of easements and other titles required before the construction of a pipeline can begin will require the giving of notice
to actual and potential native title claimants, and will often attract the right to negotiate procedures. There is no time limit
on the process, particularly if there are appeals. A period of 2 years to complete the right to negotiate procedures is not unrealistic.
- Compensation under the Native Title Act.
- The liability to pay compensation can be assumed under an agreement with native title holders or claimants, imposed by the National Native Title Tribunal as a condition of a determination, or determined by the Federal Court.
- Federal Court injunctions (interim and permanent) on native title grounds to protect the subject matter of a native title claim.
- Once a native title claim has been lodged, the Federal Court has power
to grant injunctions to prevent any activity which might unlawfully
or invalidly extinguish, impair or infringe the claimed native title rights.
- Emergency and permanent declarations under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Commonwealth.
- The Commonwealth Minister for Aboriginal Affairs may make emergency declarations for up to 30 days, which can be extended to 60 days,
if approached by an aboriginal group seeking protection of a culturally significant area. Following investigation of the circumstances,
the Minister can make declarations preventing operations permanently, or for finite periods of time. Although the decisions of the
Minister are amenable to judicial review, there is no appeal on the merits.
- State Supreme Court injunctions (interim and permanent) to prevent
actual or anticipated breaches of State legislation protecting
aboriginal
cultural heritage.
- For example, aboriginal custodians of culturally significant sites in Western Australia can seek injunctions to prevent operations
which might damage a site in contravention of the Aboriginal Heritage Act 1972.
- The first three sets of remedies will involve a claim that proposed operations
are to be conducted, or an essential easement or other
title is to be granted,
on land the subject of native title rights. It might be argued that existing
titles are invalid, that renewals
and new grants will be invalid unless
certain procedures are followed, or that operations should cease until
compensation has been
agreed or determined.
- The fourth and fifth sets of remedies will involve a claim that proposed
operations are to be conducted on a site or area of aboriginal
cultural
significance, and will involve damage to or desecration of that site or
area. The operations might be trench excavation,
or essential related operations
such as the construction and use of borrow pits, access roads, construction
camps, and so forth.
Other remedies
- In addition to pursuing legal remedies through the executive and judicial
arms of government, aboriginal opponents of a gas pipeline
project and
their supporters can be expected to conduct a media campaign with a view
to influencing public opinion away from the
project. This can have the
effect of:
- putting pressure on ministers and government officials to impose requirements
which tend to delay or frustrate the project;
- making it harder for them to grant approvals necessary for the implementation
of the project; and
- making it difficult for the proponents of the project to proceed in
the face of media opposition.
- In addition to developing an effective legal strategy, it is therefore
important for developers to have a government and community
relations strategy
to deal with these issues.
How to assess and manage risk
Assessing the risk
- Where operations on the ground have not commenced and are not imminent,
the risk of injunction applications is low. The more relevant
risk during
the early stages of a project is in relation to the grant of easements
and other titles. The risk is one of added delay
and expense, of onerous
conditions being imposed and, in extreme cases, of easements not being
granted at all. Assessing these risks
involves:
- obtaining information on the possible extinguishment of native title;
- ascertaining the identity of actual and potential native title claimants.
- Where operations on the ground have commenced or are imminent, an application
to the Commonwealth Minister under the Aboriginal
and Torres Strait Islander Heritage Protection Act is the least
expensive and most expedient legal procedure available to aboriginal opponents
of the project. If that approach is not
successful, an application to a
Court for an injunction would most probably be the next step. The application
could be based on both
heritage and native title claims. The assessment
of heritage risks involves searching registers of sites, and conducting
heritage
surveys. Typically, this involves archaeological and ethnographic
surveys by suitably qualified consultants. Ethnographic surveys
require
the cooperation of aboriginal custodians, and are often the subject of
comprehensive agreements.
Managing the risk
- One approach is to attempt to avoid the risks, by siting the route of the
proposed pipeline in low risk areas.
- Native title risk can be avoided if the route is entirely within
freehold land granted before, and current on, 1 January 1994. This
will rarely be possible, because of the need to cross road reserves, rivers,
and other areas where native title rights might
not have been extinguished.
- Heritage risk can be avoided if the route is entirely within
areas which have been disturbed in the past - for example, under
existing roads and railways. This is obviously not a practical strategy.
However, areas of known significance
should be avoided if possible.
- Strategies directed at recognising and minimising the risk are likely to
be more successful than those which seek to deny or ignore
the existence
of significant sites.
- Successful risk management strategies have been those which involve the
negotiation of comprehensive agreements with native title
claimants and
other aboriginal groups likely to be affected by the project. Agreements
often cover a wide range of issues, including
the grant of easements and
other titles, access agreements, compensation and other benefits, heritage
surveys and clearance. Negotiation
of agreements can take a considerable
period of time, and should be initiated at the earliest possible stage
of the project.
Negotiating outcomes - what does and doesn't work
- Most agreements between developers and aboriginal groups are confidential.
The negotiations which result in agreements, or don't (as
the case may
be), are seldom subject to scrutiny or analysis by outsiders. Consequently,
any list of what does and doesn't work is
necessarily confined to the experiences
of its author, and the attitudes of the parties involved in the particular
negotiations which
gave rise to those experiences. Approaches which fail
in one application may be successful in another, and vice versa. The following
list is offered subject to those qualifications.
- Negotiation strategy.
- Before commencing negotiations, it
is important to establish a negotiation strategy, with clear objectives
and means of achieving
them. The strategy should be sufficiently flexible
to meet changed or unforseen circumstances. It should include a fall back
strategy
to cover the possibility that an acceptable agreement is not reached.
While negotiations will largely be between the developer and
the aboriginal
group(s) concerned, the fall back strategy should take into account the
Government's obligation to negotiate in good
faith before a matter can
be referred to the National Native Title Tribunal
for determination, and ensure that this obligation is discharged.
- Negotiating team.
- The developer's negotiator(s) should be selected with care to ensure awareness of the issues, sufficient seniority and authority to
make binding decisions, and sufficient knowledge of the
physical and technical aspects of the proposal to explain it and respond
to questions. There should also be continuity - a person should not be put on the negotiating team unless there is good reason to
believe that he or she will be there for all of the negotiations.
- Mode of negotiations.
- Parties will sometimes negotiate an agreement covering the format of negotiations before commencing the negotiations relating to the
project itself. Negotiations may involve frequent meetings, often in the location of the area to be affected, both between the developer
and the aboriginal group, and between members of the group.
- Time for negotiations.
- It is essential to recognise that negotiations may take a considerable amount of time and resources, and should be commenced as soon
as possible. Imposing time constraints on negotiations rarely works. Aboriginal groups often have little or no interest in the project
proceeding by a particular date, or at all, unless they will benefit from the project. While it is important to keep things moving,
unreasonable
deadlines should be avoided. Aboriginal decision making processes are often highly consultative, and can it can take
a considerable amount of time to obtain a response to an offer or counter-offer.
- Merits of the claim.
- Debating the merits of a native title claim, or the authenticity or significance of a site, is generally not conducive to reaching
an agreement. An assessment of the merits is important to understand relative bargaining strengths, but generally should not be referred
to in negotiations.
- Intransigence.
- Refusing to move from a stated position can bring negotiations to a swift, but unsatisfactory, conclusion. It is necessary to strike
a balance between a 'take it or leave it' attitude, and conceding
so many points that the original offer lacks credibility.
- Preferential treatment.
- Where there is more than one aboriginal group concerned, it is generally better to offer similar terms and conditions to each. Giving
a preference to one group over another on the basis of the perceived merits of their respective claims is usually not a good idea.
- Benefits.
- The benefits to aboriginal people under the agreement should be worthwhile and enduring. Typically there will be both monetary benefits
and other benefits, such as the provision of training and employment;
provision of housing, electricity and water; and so forth,
depending on the needs of the group. Assistance in establishing enduring businesses is frequently rated more highly than offers of
employment in the construction phase of the project. There is usually an expectation that developers will pay, or contribute to,
negotiation costs incurred by aboriginal groups, including legal fees, travel and accommodation, and consultants' fees.
- Receipt of benefits.
- Proposals which seek to postpone the receipt of benefits by aboriginal groups until the determination of their native title claim
will require significant advantages to aboriginal groups to be an attractive alternative to completing the right to negotiate procedures.
It is better to make payments in instalments, linked to milestones in the project, than to make a single payment.
- Follow up
- After an agreement has been reached, there should be ongoing consultation and liaison between the developer and the aboriginal groups
concerned. This is particularly important in the context of heritage
surveys and clearance, which may continue for some time after
the agreement has been executed.
Compensation - what is and isn't reasonable
Compensation procedures
- The Native Title Act provides for compensation
to be paid to native title holders whose native title is affected by certain
acts occurring after 1 January
1994.
- Native title holders and claimants can lodge claims for compensation which,
following a process involving registration, acceptance
and mediation, are
referred to the Federal Court for determination. The process can be time
consuming - years rather than months
- and expensive.
- Where proposals affecting native title are referred to the National
Native Title Tribunal for determination, the Tribunal can impose compensation
conditions. Compensation awarded to registered native title holders is
not
delayed, but compensation awarded to claimants (that is, before their
claim has been determined) must be paid into a trust account
until the
claim has been determined. If the claim ultimately fails, the money is
refunded. If the claim ultimately succeeds, the
native title holders can
elect either to accept the amount paid into trust, or to make a compensation
claim, involving further delay.
- The delay in receiving compensation is an incentive for native title claimants
to resolve development proposals by agreement, rather
than through the
National Native Title Tribunal. Another incentive
is the ability to negotiate profit share arrangements and production royalties,
which the Tribunal can not impose.
Compensation rights
- The statutory entitlement to compensation is:
... on just terms to compensate the native title holders for any loss, diminution, impairment or other
effect of the act on their
native title rights and interests.
- Compensation payable under an agreement can be negotiated with regard to
that statutory entitlement, but ultimately it is determined
by the expectations
of the claimants, and the capacity of the project to carry compensation
expenses (which may be ongoing) and still
offer an acceptable return to
investors.
- From a commercial viewpoint, what is or is not reasonable usually has
little to do with an expert's attempt to quantify the statutory
entitlement
to compensation in a particular case. A gas pipeline development may have
considerably less impact on native title holders
than a small scale mining
development, but be able to carry a disproportionately higher compensation
cost. It may be eminently reasonable
to agree to a compensation package
which considerably exceeds the estimated statutory entitlement, in return
for avoiding months
or years of delay. The expense saved through avoiding
legal proceedings, added to the revenue earned through timely commencement,
should at least offset the cost of the compensation package.
- The short point is that there is no simple formula to be applied in deciding
what is and isn't reasonable in negotiating compensation
packages. The
lower limit is governed by the expectations of the aboriginal group, which
need to be carefully managed. The upper
limit is governed by the amount
the project will bear and still be attractive.
Arbitration - what to expect in the National Native Title Tribunal
- Matters attracting the right to negotiate procedures which are not resolved
by negotiation can be referred to the National
Native Title Tribunal for determination. The usual procedures include
the following:
- Application for determination. This can be lodged by any
of the negotiation parties, but is usually lodged by the Government party.
- Notice of application. The Native Title Registrar notifies
the parties that the application has been accepted and gives the date for
the preliminary conference
- usually within 14 days.
- Preliminary conference. Parties may attend in person or
by telephone. Directions are made in relation to the conduct and timing
of the inquiry, including
preliminary issues such as whether the Government
party has discharged its obligation to negotiate in good faith.
- Hearing on good faith issue. If this issue is to be contested
by the native title parties, it should be raised at the preliminary conference.
There will be directions
for the exchange of documents and contentions,
followed by a hearing and a determination. If the Tribunal considers that
the Government
party has not negotiated in good faith, the application
for a determination must be dismissed.
- Pre hearing procedures. If the good faith issue is not
contested, or is resolved in favour of the Government party, the parties
must exchange lists of documents
and statements of contentions, and inspect
documents. They should then confer with a view to agreeing the issues to
be put before
the inquiry, the facts and documents to be relied on, and
the procedures for the conduct of the inquiry. There may be conferences
during this process, during which directions are amended or further directions
made.
- Listing hearing. At the listing hearing the Tribunal will
make directions for the conduct of the inquiry, including the venue of
the hearing, and
set a date for the hearing to commence.
- Hearing. Each party must be given an opportunity to present
his or her case. The Tribunal must carry out its functions in a fair, just,
economical,
informal and prompt way, and is not bound by rules of evidence.
The Tribunal will expect to base its determination so far as practicable
on written witness statements, documentary evidence, videos, a site visit,
and short oral evidence.
- Criteria. The matters to be taken into account by the
Tribunal are listed in the Native Title
Act. In addition to specific matters, the Tribunal may take into account
any matter it considers relevant.
- Determination. There will usually be a delay between the
conclusion of the hearing and the delivery of the determination, to enable
written reasons
for the determination to be prepared. The Tribunal will
endeavour to give its determination within 6 months after the lodgement
of
the application. Parties can continue to negotiate, and can reach agreement,
at any time until a determination is made.
Proposed amendments to the Native Title Act
The reform agenda
- Reform of the Native Title Act has been
on the agenda for some time. On 27 June 1996 the Howard Government introduced
the Native Title Amendment Bill 1996.
An earlier Bill to amend the Native Title
Act, introduced by the Keating Government in 1995, had lapsed. Both
Bills were primarily directed at overcoming the High Court's Brandy
decision,
which was understood to limit the role which could be performed by the
National Native Title Tribunal in the process
of determining native title and compensation claims.
- On 8 October 1996 the Howard Government released further amendments. The
proposed amendments attempted to address some of the problems
which had
emerged since the commencement of the Native
Title Act on 1 January 1994:
- the constitutional limitations on the National
Native Title Tribunal in the claims and compensation procedures;
- the fact that native title claims can be registered in circumstances
where they have little or no prospect of success;
- the uncertainty, delay and expense associated with the 'right to negotiate'
process;
- the difficulty of dealing with conflicting native title claims.
The 10 point plan of May 1997
- The proposed amendments did not anticipate the decision of the High Court
in Wik and do not address its many implications.
On 1 May
1997, the Prime Minister released his proposed response to the
Wik decision, known as the 10 point plan.
The key elements of the
plan were:
- Validation of acts/grants between 1/1/94 and 23/12/96
- Confirmation of extinguishment of native title on 'exclusive' tenures
- Provision of government services
- Native title and pastoral leases
- Statutory access rights
- Future mining activity
- Future government and commercial development
- Management of water resources and airspace
- Management of claims
- Agreements
The Native Title Amendment Bill 1997
- The Native Title Amendment Bill 1997 was
introduced into the House of Representatives after considerable consultation
between the Commonwealth Government and the various
groups particularly
interested in the outcome - aboriginal groups, State and Territory governments
and industry groups. The Bill
combines the proposals contained in the 1996
Bill, the amendments to that Bill, and the 10 point plan.
- The Bill has not yet been passed, and its passage is not assured.
- It is beyond the scope of this paper to attempt to explain the Bill. The
Bill contains nearly 300 pages of amendments, while the Act
itself occupies
127 pages. The Bill contains many proposals which will benefit resources
and infrastructure developers generally.
For example:
- Validation of intermediate period acts. States and Territories
will be able to validate acts done between 31 December 1993 and 23 December
1996 which may have been invalid
due to the existence of native title on
pastoral leaseholds and certain other categories of land. Easements for
gas pipelines granted
in the relevant period, over the relevant categories
of land, can be validated.
- Confirmation of extinguishment. States and Territories
will be able to confirm the extinguishment of native title by freehold
grants and Crown leases conferring
exclusive possession, and the partial
extinguishment of native title by other Crown leases. This could in some
cases remove native
title as a risk element in relation to gas pipeline
development.
- Indigenous land use agreements. The proposals will make
it possible to enter into binding agreements with aboriginal groups, permitting
gas pipeline developments
to proceed outside the right to negotiate procedures.
- Registration of native title claims. It will be more
difficult in future for multiple native title claims to be registered over
the same area. Transitional provisions
will progressively reduce the number
of existing claims which can remain on the Register. This should make the
negotiation of future
act proposals, including gas pipeline developments,
more workable.
- There are several proposals which have particular relevance to gas pipeline
developments. These are:
- Public infrastructure facilities. Gas transmission and
distribution facilities to be operated for the general public can be developed
outside the right to negotiate
procedures.
- Private infrastructure facilities. Compulsory acquisitions
for private infrastructure will be exempted from the right to negotiate
procedures. These include easements
for gas gathering, distribution and
transmission facilities.
- These proposals are not yet law. While they appear to overlap, it
is possible that some will be enacted and others not.
