Allens

Native Title

Focus: Significant changes proposed to native title legislation

16 October 2012

In brief: Significant native title reforms largely focus on further encouraging the agreement-making processes to obtain native title holders' consent for projects/developments, through changes to the 'right to negotiate' regime (including requiring parties to meet detailed 'good faith' criteria) and changes to Indigenous Land Use Agreement processes. Allens native title specialists Partners Ben Zillmann (view CV) and Marshall McKenna (view CV) and Senior Associates Emily Gerrard and Penny Creswell examine the proposed changes.

How does it affect you?

Key changes proposed in the exposure draft legislation are:

  • the alteration of the right to negotiate' process to:
    • require parties to native title negotiations to meet detailed 'good faith' criteria in negotiations;
    • extend the minimum period during which parties must negotiate by two months (from six to eight); and
    • place the onus on the party applying for arbitration of a future act matter to first satisfy the tribunal that the good faith requirements have been met;
  • changes to the Indigenous Land Use Agreement (ILUA) process to 'promote flexibility', remove technicalities in relation to amendments to ILUAs, and reduce the time needed for the registration of agreements; and
  • to enable historic extinguishment in relation to public parks and reserves, as well as the extinguishing effects of public works within these areas, to be disregarded (by agreement).

Introduction

The Federal Government has released exposure draft legislation designed to implement changes to the Native Title Act 1993 (Cth) (the NTA), which the Attorney-General announced on 6 June 2012. The reforms principally focus on the further encouragement of agreement-making processes to obtain native title holders' consent for projects/developments through changes to the 'right to negotiate' regime and changes to increase the efficiency of ILUA processes.

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Changes to the 'right to negotiate' process

The 'right to negotiate' (RTN) is a process that applies under the NTA to the granting of certain approvals or the acquisition of land in circumstances where native title rights may be adversely affected. It is commonly applied to the grant of resources tenements, or the compulsory acquisition of land for projects. In simple terms, the RTN process provides the native title holder or claimant with a right to negotiate about the project/development, and if agreement cannot be reached, the matter can be referred to arbitration. A key requirement of the RTN process is that all parties must negotiate in good faith for a minimum timeframe before arbitration is sought.

Arguably, the most significant changes proposed in the draft legislation relate to the requirement to negotiate in good faith. On 6 June 2012, the Attorney General suggested the changes to the RTN were flagged as a mechanism to ensure that parties pay more than 'lip service' to the requirement to negotiate in good faith. The explanatory notes that accompany the proposed amendments state that changes are necessary because there is a lack of clarity as to what constitutes good faith negotiations and an inequity in bargaining power under the current NTA. The amendments are also stated to promote 'relationship building through agreement making'.

The proposed amendments to the good faith provisions can be loosely broken down as follows.

Definition or codification of what 'good faith' means

A new section that requires negotiation parties to use 'all reasonable efforts' to reach agreement and to 'establish productive, responsive and communicative relationships' between themselves is proposed. In deciding whether or not a negotiation party has negotiated according to these 'good faith' negotiation requirements, it is proposed that regard will be had to whether that party has satisfied the following 'criteria':

  • attended and participated in meetings at reasonable times;
  • disclosed relevant information in a timely manner;
  • made reasonable offers and counter offers;
  • responded to proposals in a timely manner;
  • given genuine consideration to other parties' proposals;
  • refrained from capricious or unfair conduct that undermines negotiation;
  • recognised and negotiated with other negotiation parties or their representatives; and
  • refrained from acting for an improper purpose in relation to the negotiations.

These amendments are clearly directed at the goal of clarifying what is meant by 'good faith negotiations'. However, there is a serious question whether this is genuinely needed. While the term 'good faith' is not currently defined in the NTA, the concept has been the subject of extensive judicial consideration over many years, and many would argue that the National Native Title Tribunal and Federal Court have, through such decisions, made quite clear what is expected to meet the good faith criteria and provided many examples of what this means. Indeed, in seeking to define 'good faith' through the proposed amendments, the Government suggests it is drawing the definition from such case law – ie it is seeking to clarify what good faith means, but not change that meaning.

However, as with any legislative amendment, if the proposed changes are made, the courts will necessarily have to re-examine afresh what is meant by 'good faith' when such matters next come before them, and there is a real concern the changes will cast doubt over the ongoing applicability of the existing bank of case law. For example, in seeking to define what is good faith, the amendments list certain criteria of good faith but, necessarily, this is a summary of only some, not all, factors the courts have considered, and it does not put them in the context in which they were examined in the cases.

Additionally, under the amendments there would be an entirely new requirement beyond good faith negotiations to reach an agreement – those negotiations must also show all reasonable efforts have been made to seek to establish 'productive, responsive and communicative' relationships between the parties (ie the native title party, the government and the project proponent). Exactly what this would require a party to demonstrate beyond seeking to negotiate an agreement regarding the doing of the future act is unclear and, in this context, this requirement may become a new emphasis of litigation.

Therefore, while the amendments aim to afford greater clarity about what is meant by good faith, there is a concern the exposure draft legislation may have the opposite effect, of reducing certainty about the meaning of 'good faith' in the native title context. It does beg the question whether seeking to define 'good faith' in statute is necessary or desirable. If the Government's aim is simply to make the broader, non-legal community aware of what 'good faith' means, rather than change the provisions of the NTA, another option would be to make such information available through non-legislative publications.

Increased minimum negotiation timeframe

The minimum timeframe during which the parties must negotiate in good faith (before any party can seek arbitration) is proposed to be extended from six months to eight months. There is no specific explanation why this is proposed, but it seems to suggest a philosophy that longer negotiations equal better, or more productive, negotiations. Alternatively, perhaps this is directed towards the aim of 'balancing bargaining power', the suggestion being that if project proponents and governments are faced with longer negotiation periods (and therefore, potentially, project delays), they will be more inclined to reach an agreement. In either case, the logic seems questionable.

Reversal of onus to show 'good faith'

Currently, if a matter is referred to arbitration under the RTN process, any party can raise as an initial issue that one of the other parties has not negotiated in good faith (to date, such claims are almost always brought by the native title party, alleging the government or project proponent has not negotiated in good faith). The party making the allegation must satisfy the arbitral body that the other party has not negotiated in good faith.

The proposed amendments provide that the arbitral body must not make a determination unless the negotiation party that applied for the determination satisfies this body that it negotiated according to the good faith negotiation requirements. This does two things:

  • it means good faith will always be a preliminary issue that must be demonstrated and considered by the arbitral body before proceeding to make a determination, whether any party contests it or not; and
  • the onus will be reversed – as in most (but not necessarily all) cases, it will be the government or project proponent who seeks arbitration due to a failure to reach an agreement, they will need to satisfy the arbitral body they have negotiated in good faith.

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Reforms to Indigenous Land Use Agreements

ILUAs are a popular form of agreement that can authorise a broad range of acts that might affect native title. The exposure draft legislation introduces reforms intended to improve the negotiation, agreement and administration of native title ILUAs. The proposed reforms follow a long consultation process, which commenced with a Discussion Paper the Government released in July 2010.1 Some of the more significant changes are discussed below.

Amendments to ILUAs

There has been a question as to the ability to amend an ILUA (by agreement of the parties) once it is registered. Among the proposed changes is confirmation of the ability for minor amendments to be made to an existing ILUA without the need to reapply to the National Native Title Tribunal (the NNTT) Registrar for re-registration. This proposal is welcomed; however, the examples offered in materials released with the exposure draft legislation suggest amendments permitted by this proposal will be minimal. Examples given are:

  • the updating of legal property descriptors;
  • updating of legal descriptions of parties; and
  • updating contact details or communication protocols.

As drafted, the degree to which amendments will be allowed without re-registration is unclear, as the proposed section requires the Registrar to be satisfied that 'conditions for registration of an ILUA are not affected by the amendments'. In our view, greater clarity is needed in the proposed drafting of this provision, to set clearly the boundaries of what amendments are permitted without requiring re-registration. Consideration of specific provisions dealing with the assignment of ILUAs, rather than bundling this issue in with the general concept of 'amendments', is probably also warranted.

Body Corporate ILUAs

The proposed amendments enable the negotiation of a Body Corporate ILUA for areas where there is a determination of native title, which includes areas where native title has been extinguished. Removing the restriction that Body Corporate ILUAs can only be made where there is a determination that native title exists over the 'whole of the proposed ILUA area' is a commonsense amendment that is likely to increase the popularity of Body Corporate ILUAs, and removes an existing uncertainty about such agreements. The reforms remove the need for parties to describe carefully only those areas where native title has been found to exist within an external claim boundary (which is noted as being a reason for parties reverting to Area Agreement ILUAs under the current NTA).

Shortening of objection notice periods

It is proposed that the registration of Area Agreement ILUAs (ie where there is not a determination of native title over the whole area in question, but there may be existing native title claims) be streamlined to reduce the mandatory three-month notice period to a one-month notice period. This will be accompanied by slightly modifying the process for parties opposing registration of agreements, to make objections on broader grounds where an ILUA has not been 'certified' by the relevant representative body (eg the relevant land council). These changes are intended to improve the efficiency of the registration process, which should reduce unnecessary delay, remove some process irregularities and increase incentive for entering ILUAs.

The removal of the restriction on registration of an Area Agreement ILUA where a new native title application (whose members are not party to the ILUA) has been made during the notice period and is subsequently registered after the end of the notice period, may attract attention from some stakeholders. In effect, the amendments will mean the Registrar is no longer required to withhold registration of an ILUA where a new native title claim is lodged over part of the ILUA area but fails to be registered within the shortened, one-month, notice period. This does, though, need to be balanced against the new objection rights available to unregistered native title parties in this scenario.

Disclosure of documents to ILUA objectors

The amendments propose to introduce scope for the NNTT to provide copies of certain documents, including potentially the ILUA itself, to a person objecting to the ILUA registration. While the NNTT must be satisfied that the objection is likely to be withdrawn if the document(s) are provided and that certain information can be redacted or withheld for commercial/confidentiality reasons, the amendments place such decisions in the NNTT's hands. The vast majority of ILUAs are confidential and parties to ILUAs may be concerned by the potential for disclosure of those agreements to third-party objectors.

Authorisation of ILUAs with no registered native title claimant or holder

As a result of some recent case law that held only registered native title claimants were required to authorise an ILUA, there was some uncertainty as to who could authorise an ILUA over an area where there were only unregistered native title claims or, indeed, no formal native title claims at all. The amendments seek to clarify that where there is no registered native title claimant or holder, the ILUA is to be authorised by any native title party 'who can establish a prima facie case that they may hold native title'. The amendment does, though, raise the question as to when an unregistered native title claim or, indeed, a group of persons that may have not yet even made a claim, will be considered to meet the requirements of 'establishing a prima facie case' (particularly when such a benchmark appears, at least in part, to replicate the registration test process for claims).

The amendment may also assist in closing potential statutory 'gaps' or loopholes in jurisdictions that facilitate an 'alternative framework' to native title proceedings (such as the Traditional Owner Settlement Act 2010 (Vic)), which in part rely on ILUAs with unregistered claimants or groups that are yet to even make a claim. The introduction of 'content' changes for ILUAs (to enable agreements to address content related to section 211 traditional rights) and the making of (or undertaking not to make) future native title claims or native title compensation claims are also amendments that assist to 'tidy up' statutory inconsistencies with state-based 'alternative framework' agreement processes.

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Mechanism to disregard historical extinguishment by consent

Finally, the proposed legislation introduces new provisions that are intended to provide flexibility to disregard historical extinguishment of native title over parks and reserves for the preservation of the natural environment, if there is agreement between the relevant government party (ie the Federal or relevant State/Territory Government) and the native title party that this should occur. The agreement of third parties that may have separate interests in the area would not be required, but they would be given a chance to comment.

This amendment would build on existing provisions in the NTA that already provide historic extinguishment can be disregarded in certain circumstances, such as where claims have been made over unallocated Crown land. The amendments will not only apply to claims that are yet to be determined, but also envisage that already-decided claims can be revisited.

The amendments provide that the validity of any third-party prior interest over the park area is not to be affected by such an agreement.

While this amendment's basic principle and intent are clear, there is some concern that the section does not provide any guidance on other issues that may arise from it – eg:

  • will this enliven native title compensation rights in relation to the impact of third-party grants over the park area, even where these have occurred before the agreement that native title extinguishment will be disregarded?
  • what consideration will be given to proposed future acts over the park area that may have been planned on the assumption that native title was extinguished, only for the government to agree mid-approval/grant that it will disregard extinguishment?

Such matters could potentially be addressed in any agreement the government strikes with the native title party, containing terms upon which the historical extinguishment will be disregarded, but it does leave such matters to the discretion and policy of the government in question.

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Next steps

The Federal Government has invited submissions on the exposure draft legislation by Friday, 19 October 2012.

Footnotes
  1. Discussion Paper, Leading practice agreements: maximising outcomes from native title benefits.

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