Appendix 3: Key developments in native title 2012–13

Overview

This appendix reviews the following key developments in native title over the reporting period from 1 July 2012 to 30 June 2013 (Reporting Period):

• native title determinations and agreements
• the proposed Native Title Amendment Bill 2012 (Cth)
• other legislative amendments including the Tax Laws Amendment (2012 Measures No 6) Act 2012 (Cth) and the Courts and Tribunals Amendment (Administration) Act 2013 (Cth)
• reviews by the Australian Government on the native title system; the Working Group on Taxation of Native Title and Traditional Owner Benefits and Governance, the Review of the Role and Functions of Native Title Organisations, and the Australian Law Reform Commission Inquiry into Native Title.

Native title determinations and agreements

Native title determinations

Determinations of native title during the Reporting Period are shown in Figure 1.

These figures show the continuing long-term trend of achieving native title determinations by consent between the parties.

The Federal Court of Australia (Federal Court) observes that there has been a marked increase in the number of applications resolved by consent since 2010–11; from 10 native title consent determinations in 2010–11 to 37 consent determinations in 2011–12 and 28 consent determinations in 2012–13.^[2] While I welcome these higher numbers of native title determinations, I remain concerned about the lengthy period of time to resolve native title. The Federal Court reports that:

The average resolution time for applications has increased since 1994 with a slight levelling in recent years. As at 30 June 2013, the median time for resolution of applications was 12 years and 11 months.^[3]

I note that there is a trend towards decreasing the number of claims in mediation and increasing the number of claims in active case management before the Federal Court.^[4] I will continue to monitor the effect of these practices for resolving native title on the exercise and enjoyment of the human rights of Aboriginal and Torres Strait Islander peoples.

Indigenous Land Use Agreements

The National Native Title Tribunal (Tribunal) registered 122 Indigenous Land Use Agreements (ILUAs) during the Reporting Period. Figure 2 shows the number of ILUAs registered in each state and territory.

The high number of ILUAs registered in Queensland reflects the approach in that State to negotiate ILUAs as part of native title consent determinations.

The Tribunal observes that there has been a significant increase in the number of ILUAs registered since 2009: in 2009–10, there were 47 registered ILUAs; and this number increased to 150 ILUAs registered in 2011–12 and 122 ILUAs registered in 2012–13.^[6]

Future act agreements

There were 23 future act agreements facilitated by the Tribunal during the Reporting Period. The Tribunal notes that this is a lower number than previous years; this is because a significant number of notified proposed tenements were withdrawn and there was a reduction in the number of future act determination applications referred to mediation.^[7]

Native Title Amendment Bill 2012 (Cth)

On 28 November 2012, then Attorney-General Nicola Roxon introduced the Native Title Amendment Bill 2012 (Cth) (Amendment Bill) into the Federal Parliament. The Amendment Bill lapsed at the dissolution of the House of Representatives on 5 August 2013.^[8]

The Senate referred the Amendment Bill on 29 November 2012 to the Senate Legal and Constitutional Affairs Legislation Committee (Senate Committee) for inquiry and report.^[9] Concurrently, the House of Representatives referred the Amendment Bill to the House of Representatives Standing Committee on Aboriginal and Torres Strait Islander Affairs (HSCATSIA) for report and inquiry.^[10] In a media alert on 17 December 2012, HSCATSIA noted that it intended to consider ‘whether a sensible balance has been struck in the Bill between the views of various stakeholders’ and/or ‘proposals for future reform of the Native Title process.’^[11]

The Commission provided submissions to both the Senate Committee and HSCATSIA inquiries. I also participated in a ‘roundtable’ held by the HSCATSIA on 8 February 2013 and a public hearing conducted by the Senate Committee on 6 March 2013.

The provisions of the Amendment Bill and the Commission’s views on these amendments are:^[12]

Amendments to disregard the historical extinguishment of native title in areas set aside to preserve the natural environment

The Native Title Act 1993 (the Native Title Act) does not currently allow parties to reach agreement about disregarding extinguishment of native title except in particular circumstances set out in section 47 (pastoral leases held by native title claimants), section 47A (reserves covered by claimant applications) and section 47B (vacant Crown land covered by claimant applications).

The Amendment Bill proposed section 47C, which would allow historical extinguishment of native title over national, State and Territory parks and reserves to be disregarded where there is agreement between the relevant government party and the native title party.^[13] The intent of this amendment was to increase flexibility for parties to agree to disregard historical extinguishment of native title.

This amendment also proposed to:

• enable the government party to include a statement in the agreement that it agrees to disregard extinguishment of native title over public works within the agreement area, if the public works were established or constructed by or on behalf of the relevant government party
• provide notification requirements to give interested persons an opportunity to comment over a two month period on the proposed agreement
• ensure the validity of other prior interests (such as licenses and leases) and maintain public access to the area
• provide that the non-extinguishment principle applies, so that any current interests over the land would have continued to exist but would suppress rather than extinguish any native title rights to the extent of any inconsistency
• exclude Crown ownership of natural resources from the operation of section 47C.

In submissions to the Senate Committee and HSCATSIA, the Commission welcomed this amendment to expand the areas where historical extinguishment of native title can be disregarded. However, the Commission recommended expanding the proposed provision in the following two ways:

• alter the wording of the amendment so that the proposed section 47C operates in a manner similar to sections 47, 47A and 47B of the Native Title Act; namely, so that it is understood that agreement will be provided to disregard historical extinguishment as the starting point rather than requiring such agreement to be reached for every potential matter
• expand section 47C to allow historical extinguishment of native title to be disregarded over any areas of Crown land where there is agreement between the government and native title claimants.

Amendments to clarify good faith requirements in the right to negotiate provisions

The Amendment Bill proposed section 31A, which set out good faith requirements for parties in relation to negotiating a proposed agreement.^[14] These requirements were outlined in proposed section 31A(2) and included the negotiating parties:

• attending and participating in meetings at reasonable times
• disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner
• making reasonable proposals and counter proposals
• responding to proposals made by other negotiation parties for the agreement in a timely manner
• giving genuine consideration to the proposals of other negotiation parties
• refraining from capricious or unfair conduct that undermined negotiation
• recognising and negotiating with the other negotiation parties or their representatives
• refraining from acting for an improper purpose in relation to the negotiations
• any other matter the arbitral body considers relevant.

The objective of this amendment was to ‘encourage parties across the [resource] sector to focus on negotiated, rather than arbitrated, outcomes.’^[15]

In submissions to the Senate Committee and HSCATSIA, the Commission welcomed this amendment that sought to clarify the requirements for parties who need to demonstrate they have negotiated in good faith. This amendment proposed to address the uncertainty held by native title parties following the FMG Pilbara Pty Ltd v Cox Federal Court decision in 2009 that found the Native Title Act does not require parties to reach a certain stage in negotiations before a party can apply to the arbitral body for a determination that the future act can proceed.^[16]

Amendments to Indigenous Land Use Agreement processes

Proposed amendments to the ILUA processes aimed to ‘ensure parties are able to negotiate flexible, pragmatic agreements to suit their particular circumstances’.^[17] These amendments included provisions to:

(a) Broaden the scope of body corporate (Subdivision B) ILUAs

The Amendment Bill proposed subsection 24BC(2) in the Native Title Act, which would allow parties to make a body corporate ILUA over areas that are wholly determined but include areas where native title has been extinguished; and/or where an area has been excluded from a determination, and native title would have been held by the relevant native title group had native title not been extinguished over that particular area.^[18]

The Commission supported this amendment as it provided greater flexibility for the use of body corporate ILUAs.

(b) Authorisation and registration processes for ILUAs

The Amendment Bill proposed a number of complementary amendments that aimed to streamline authorisation, notification and registration processes for area agreement (Subdivision C) ILUAs.^[19]

These amendments generally would provide a balanced and pragmatic response to resolving uncertainty about authorisation and registration processes of area agreement (Subdivision C) ILUAs.

However, due to the complexities of native title matters that may need to be considered during the registration of ILUAs, in its submissions to the Senate Committee and HSCATSIA, the Commission noted that some of these amendments may create unforeseen and/or unintentional outcomes.

In particular, the Commission was concerned that replacing section 24CK with a provision that removes the objection process for ILUAs certified by a native title representative body would mean that persons who wish to object to a certified ILUA will only be able to seek judicial review.^[20] While the Commission supported amendments that simplify the registration process, it is of the view that this should not occur at the expense of people being able to seek an inexpensive and independent review of the registration process.

(c) Simplify the process for amending ILUAs

The Amendment Bill also proposed certain amendments to be made to ILUAs (whether body corporate, area agreement or alternative procedure) where:

• the amendment is specified in subsection 24ED(1) – amendments that can mostly be categorised as administrative amendments
• the parties to the agreement have agreed to the amendment
• the Registrar of the National Native Title Tribunal has been notified of the amendments in writing.^[21]

The Commission supported this amendment as it would provide flexibility to enable parties to make administrative amendments to ILUAs without requiring a new registration process.

Outcomes from the Senate Committee and HSCATSIA inquiries

The Senate Committee and the HSCATSIA finalised their reports in March 2013.

Both the Senate Committee report and the HSCATSIA report referenced the Commission’s submissions extensively: the Senate Committee recommended that the Amendment Bill be passed by Parliament with minor amendments to the good faith provisions and notice provisions for area ILUAs;^[22] and the HSCATSIA report recommended that the Amendment Bill be passed by Parliament.^[23]

Implications of the Amendment Bill on human rights

The Commission supported the passage of the Amendment Bill through Parliament because it is compatible with the human rights to enjoy and benefit from culture and to self-determination contained in the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and the United Nations Declaration on the Rights of Indigenous Peoples.^[24]

In its review of the Amendment Bill, the Parliamentary Joint Committee on Human Rights made the following comments in May 2013:

• Amendments to disregard the historical extinguishment of native title in areas set aside to preserve the natural environment:

The committee is of the view that enabling more areas to be made available for native title broadly promotes the right to enjoy and benefit from culture and the right to self-determination. The requirement to seek the consent of the government to disregard historical extinguishment may, on the face of it, be seen to limit the right to self-determination. However, on the basis of the extensive consultation and the need to consider the interests of third parties, the committee is of the view that this is a reasonable and proportionate limitation that seeks to address a legitimate objective.^[25]

• Amendments to clarify good faith requirements in the right to negotiate provisions:

The committee accepts that the right to negotiate – including the requirement that the negotiations be undertaken in ‘good faith’ – are an important part of respecting the rights of Indigenous peoples over their land and culture. From an international human rights perspective, whether the indicia for good faith negotiations are contained in agreed court and tribunal judgments or in legislation (which are in substance largely the same) does not determine whether human rights are respected. As the good faith criteria do not appear to be incompatible with human rights, the committee considers that Schedule 2 of the bill does not appear to give rise to any human rights concerns.^[26]

• Amendments to ILUA processes:

The committee intends to write to the Attorney-General to seek clarification as to why it is necessary to restrict the objection processes to an ILUA and how this is consistent with the right of all members of a community, including individual members, to enjoy their culture.^[27]

The Committee also made comments regarding the burden of proof in relation to native title claims:

The committee intends to write to the Attorney-General to seek clarification regarding the omission from the bill of provisions addressing the burden of proof in relation to native title applications and claims and whether the current burden of proof provisions in the Native Title Act 1993 are compatible with the right to self-determination.^[28]

Further amendments to the Bill

On 17 May 2013, Greens Senator Rachel Siewert introduced further amendments to the Amendment Bill into the Senate. These amendments proposed inserting a process into the Native Title Act that would shift the onus of proof onto the respondent (usually the State).^[29]

Current status of the Amendment Bill

The Amendment Bill lapsed at the dissolution of the House of Representatives on 5 August 2013.

It is extremely disappointing that the Amendment Bill did not pass through Parliament, particularly given the majority recommendations in both the Senate Committee and HSCATSIA reports.

Although the proposed amendments were minor, they were beneficial in terms of clarifying native title processes and expanding opportunities for Aboriginal and Torres Strait Islander peoples from native title settlements. Many stakeholders made significant efforts in their contributions to consultations held by the Parliament by providing written submissions to and participating in the roundtable held by the HSCATSIA and the inquiry by the Senate Committee.

Yet, despite extensive costs and efforts expended as part of these inquiries, the Amendment Bill has lapsed following the dissolution of Parliament and this process has not led to outcomes that could improve the exercise of human rights of Aboriginal and Torres Strait Islander peoples.

As set out in chapter 3, I recommend that the Australian Government reintroduce the Amendment Bill and support its passage through the Parliament.

Courts and Tribunals Legislation Amendment (Administration) Act 2013 (Cth)

The Courts and Tribunals Legislation Amendment (Administration) Act 2013 (Cth) (Amendment Act) came into operation on 12 March 2013.^[30]

The Amendment Act is part of the native title institutional reforms announced by the Government in May 2012 which I reported on in the Native Title Report 2012.^[31] The Amendment Act facilitated the transfer of the Tribunal’s appropriation, its staff and some of its administrative functions to the Federal Court.^[32] The intention of these institutional reforms is for the Tribunal and the Federal Court to achieve savings and operate more efficiently and effectively into the future.^[33]

Prior to the Amendment Act being passed by Parliament, the House of Representatives Standing Committee on Social Policy and Legal Affairs recommended in its Advisory Report on the Amendment Act that:

... the Attorney-General, in accordance with section 209(2) of the Native Title Act 1993, direct the Aboriginal and Torres Strait Islander Social Justice Commissioner to include in the yearly reports on the operation of the Native Title Act 1993 consideration of the functioning of the National Native Title Tribunal, and in particular:

• the adequacy of Tribunal resourcing to effectively fulfil its functions, and
• its effect on the exercise of the human rights of the Aboriginal and Torres Strait Islander peoples.^[34]

The Attorney-General wrote to me in May 2013, noting this recommendation and welcoming ‘my consideration of the matter to the extent...[I] think appropriate’.^[35]

I have considered both the recommendation by the House of Representatives Standing Committee and the request by the Attorney-General. Given the relatively recent implementation of these reforms and the new appointment of Raelene Webb QC as the President of the Tribunal in April 2013, it is my view that it is prudent to wait until the impact of the reforms on both the capacity of the Tribunal to effectively discharge its functions and the native title system more broadly is known before assessing the adequacy of Tribunal resourcing.

I also note that there are opportunities to monitor the level and appropriateness of Tribunal resourcing through agency annual reporting to Parliament and the Senate estimates process.

Tax Laws Amendment (2012 Measures No 6) Act 2012 (Cth)

The Tax Laws Amendment (2012 Measures No 6) Act 2012 (Cth) (Tax Amendment Act) commenced on 28 June 2013. The Tax Amendment Act amends the Income Tax Assessment Act 1936 (Cth) and Income Tax Assessment Act 1997 (Cth) to clarify that native title benefits received for the extinguishment or impairment of native title rights and interests are not subject to income tax.^[36]

The amendments also confirm that there are no capital gains tax consequences arising from certain events involving native title rights, including:

• creating a trust, that is an Indigenous holding entity, over native title rights
• transferring native title rights to an Indigenous holding entity or Indigenous person, or
• the surrendering or cancelling of native title rights.^[37]

I welcome the Tax Amendment Act clarifying the tax status of native title payments.

However, income generated from investing a native title benefit will be subject to income tax.^[38] I support stakeholder recommendations to expand the circumstances in which native title benefits will not be subject to income tax to include income gained from investment activity.^[39] This would provide additional financial benefits for native title holders to maximise the investment potential from their native title lands and waters.

Taxation of Native Title and Traditional Owner Benefits and Governance Working Group

On 3 August 2013, the Government released the Taxation of Native Title and Traditional Owner Benefits and Governance Working Group Report to Government (Native Title Working Group Report).^[40]

The Native Title Working Group was established by the Australian Government in March 2013 to:

• examine existing arrangements for holding, managing and distributing land related payments
• identify options to strengthen governance and promote sustainability.^[41]

The Group’s particular focus was on the tax treatment of current arrangements and on proposed options for holding, managing and distributing land-related payments.

The key consideration in the Native Title Working Group Report is the concept of the Indigenous Community Development Corporation (ICDC) that has been developed jointly by the National Native Title Council (NNTC) and the Minerals Council of Australia (MCA).

The ICDC is an income tax exempt, not-for-profit entity with Deductible Gift Recipient (DGR) status, which is intended to invest in community development and provide long-term economic development benefits for Indigenous peoples. The primary function of an ICDC is to receive, generate, manage and apply land-related funds.^[42]

As outlined in the Native Title Working Group Report, the ICDC would comprise:

• an ICDC entity established to receive an Indigenous community’s land-related payments and other income, and accumulate funds for a future fund
• a not-for-profit community or charitable entity for the benefit of the community – for example, community store, health service, school, cultural tourism, natural resource management, meeting rooms and community housing
• businesses for individual profit – an ICDC could provide loans, start-up and other support services to businesses conducted by community members for individual profit.^[43]

I reported on an earlier proposal of the ICDC model in the Native Title Report 2012.^[44]

The Native Title Working Group supports the ICDC model because:

• An ICDC could be used by Indigenous communities to provide financial support for a wider range of community or economic development activities than is possible using other entities such as a charitable trust. It could contribute to developing the local Indigenous community by building local and regional businesses and social ventures that create flow-on economic and social development opportunities.
• An ICDC (as a tax exempt entity with DGR status) could facilitate the accumulation of payments towards a ‘future fund’ of private monies derived by an Indigenous community from native title agreements or other sources. The tax exempt status would maximise the funds available for both economic development and inter-generational investment purposes.^[45]

While I welcome the development of the ICDC model by the Native Title Working Group, it is my view that the governance of the ICDC will be critical to its long-term workability. Consistent with the principles of self-determination and participation in decision-making as outlined in the Declaration, the ICDC governance structure must ensure that native title holders retain control of their native title monies for the benefit of the whole native title group.^[46] Further development of the ICDC must also include proper consultation with native title holders.^[47]

The Goldfields Land and Sea Council observes that the ICDC needs:

...to be around Indigenous owned/led regional mechanisms that include amongst other things:

• a strong focus on achieving sustainability, durability and resilience in structures, processes and programs;
• a willingness to take into account Aboriginal law and culture in the way structures, processes and programs are devised and executed;
• a commitment to nurturing the necessary governance structures; and
• a process of capacity building, both in Aboriginal communities and in the government agencies that partner with them.^[48]

I will continue to monitor the development of the ICDC model and urge the Government to ensure that native title holders are properly consulted in future decisions about the ICDC.

Review of the Role and Functions of Native Title Organisations

In December 2012, the Australian Government contracted Deloitte Access Economics (Deloitte) to undertake a review of the role and functions of native title organisations.

The focus of this review is to examine the role and functions of native title representative bodies (NTRBs) and native title service providers (NTSPs) to ensure that they meet the evolving needs of native title holders once native title claims have been determined.

The review is responding to the changing native title environment in which there are an increasing number of native title determinations and a greater focus on the governance of post-native title determination outcomes. As a result, the governance of native title is moving from NTRBs / NTSPs to Prescribed Bodies Corporate (PBCs) / Registered Native Title Bodies Corporate (RNTBCs) set up to hold and manage determined native title rights and interests.

Deloitte released a discussion paper in June 2013, Review of the Roles and Functions of Native Title Organisations, as part of its consultation process. The discussion paper considers the following:

• The roles and statutory functions of NTRBs and NTSPs to:
  • assist the process of determining native title claims as set out in the Native Title Act and Program Funding Agreements (PFAs)
  • negotiate ILUAs and future act agreements
  • facilitate the sustainable use of benefits from agreements and settlements
  • consider differences between NTRBs and NTSPs and whether there is any benefit in NTRBs being recognised under Part 11 of the Native Title Act
  • examine whether there is any scope for the rationalisation of the number of NTRBs / NTSPs operating in the native title system, and the implications of any reduction in the numbers of NTRBs / NTSPs.^[49]
• The roles and functions of PBCs / RNTBCs, particularly:
  • capacity constraints facing PBCs / RNTBCs
  • whether legislative and administrative changes could improve the capacity of PBCs / RNTBCs to fulfil their functions
  • the potential services that NTRBs / NTSPs can provide to PBCs / RNTBCs – and constraints to this approach in terms of NTRBs / NTSPs not being funded to support PBCs / RNTBCs, and/or PBCs / RNTBCs not wanting support from NTRBs / NTSPs
  • other possible sources of support for PBCs / RNTBCs such as Indigenous Business Australia (IBA), Indigenous Land Corporation (ILC) and the Office of the Registrar of Indigenous Corporations (ORIC).^[50]
• The role of private agents^[51] in providing anthropological, legal and commercial development services within the native title system. It notes that in some circumstances (such as where a NTRB/NTSP has a conflict of interest with representing overlapping native title claims) private agents can have a beneficial role in providing services to native title groups. However, there are also concerns about private agents contributing to disputes within and between native title groups, and eroding native title benefits by charging unreasonably high fee for services.^[52]

As Deloitte is expected to report to Government in December 2013, I will consider the outcomes of this review in next year’s Social Justice and Native Title Report.

Australian Law Reform Commission inquiry into native title

On 7 June 2013, then Attorney-General Mark Dreyfus announced draft terms of reference for the Australian Law Reform Commission (ALRC) to undertake an inquiry into specific areas of the native title system. I appreciated the opportunity to comment on these draft terms of reference.

The final terms of reference for the inquiry were announced on 3 August 2013 and request the ALRC inquire into and report on two specific areas of the native title system:

• connection requirements relating to the recognition and scope of native title rights and interests, including but not limited to whether there should be:
  • a presumption of continuity of acknowledgement and observance of traditional laws and customs and connection
  • clarification of the meaning of ‘traditional’ to allow for the evolution and adaptation of culture and recognition of ‘native title rights and interests’
  • clarification that ‘native title rights and interests’ can include rights and interests of a commercial nature
  • confirmation that ‘connection with the land and waters’ does not require physical occupation or continued or recent use, and
  • empowerment of courts to disregard substantial interruption or change in continuity of acknowledgement and observance of traditional laws and customs where it is in the interests of justice to do so.
• any barriers imposed by the Act’s authorisation and joinder provisions to claimants’, potential claimants’ and respondents’ access to justice.^[53]

The ALRC is expected to report to Government in March 2015.

In light of repeated recommendations from Social Justice Commissioners for a comprehensive review of native title, I welcome the ALRC inquiry and am optimistic that it will provide an opportunity to undertake an in-depth and holistic review of the native title system.

Conclusion

The Reporting Period reflects the native title system in a process of potential change. There are a number of working groups, inquiries and reviews that have either only recently been completed and are waiting for consideration by the Government, or are on-going. Consequently, it is difficult to analyse outcomes from these reviews and inquiries beyond continuing to observe and monitor these processes.

However, there are several observations that I would like to make. Firstly, as I note in chapter 3, it is essential that these various working groups, reviews and inquiries work together to provide a consistent approach to addressing Aboriginal and Torres Strait Islander peoples’ concerns about the native title system.

Secondly, government-instigated reviews of the native title system must have beneficial outcomes for Aboriginal and Torres Strait Islander peoples. We cannot continue to invest significant resources – both time and money – into processes that create no outcomes for native title holders on the ground. This is demonstrated by the extensive process of two government committee inquiries into the Native Title Amendment Bill 2012 (Cth), which then lapsed at the dissolution of Parliament.

And finally, we need to view these processes as an opportunity to ensure the native title system provides Aboriginal and Torres Strait Islander peoples with opportunities to achieve our economic, social and cultural aspirations in accordance with our human rights in the Declaration.