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Proposed regulations for trust monies under the Native Title Act (2004)

8 April 2004

Ms Sarah Low
Native Title Unit
Attorney-General's Department
Robert Garran Offices
National Circuit BARTON ACT 2601

Dear Ms Low

Proposed regulations for trust
monies under the Native Title Act

I refer to the 10 March letter
from Mr Anderson about proposed regulations under the Native Title
('NTA') regarding monies to be held in trust
from future act determinations. Thank you for forwarding the Draft
Outline for Regulations Under sections 36C(5), 41(3) and 42(5)
and inviting my comments on this document.

Before turning to the Outline,
I want to emphasise an important background issue. The regulations may
facilitate or encourage a position that traditional owners are only entitled
to redress for impacts on their interests to the extent that courts recognise
native title rights. The relevant sections of the NTA enable a tribunal
or minister to rule that a future act can proceed on the basis that money
be placed in trust to be received by the native title claimants only if
and when a court makes a native title determination in their favour. My
concern with this approach is that it may allow legitimate Indigenous
interests to be impacted upon without reparation.

There are decisions in which
the courts have acknowledged that the relevant Indigenous community has
interests and connection to land but receives no native title recognition
or protection (De Rose1 and Yorta Yorta2
are two recent examples). Some future act agreements exist where the developer
has accepted it is dealing with the legitimate traditional owners of an
area and reached agreement with that community regardless of current
or future outcomes of native title court proceedings
(examples of
these agreements include the Burrup Peninsula and the Western Cape Communities
Co-Existence Agreement). These court decisions and future act agreements
suggest that tribunals and ministers should be encouraged to make orders
respecting traditional owners' legitimate interests, regardless of the
vagaries of Australia's native title laws. Instead, these regulations
may facilitate the opposite occurring.

The basis for my concerns about
the trust fund arrangements is founded on international human rights standards,
particularly those on protection of culture and self-determination. Australia
has an obligation to ensure that Indigenous people are not denied the
right to enjoy their culture. This requires the Government to take positive
measures of protection against the acts of other parties (including legislative,
judicial and administrative acts, and also acts of non-government parties
within Australia) where those acts constitute a breach of the obligations
in the International Covenant on Civil and Political Rights.

I realise the Attorney has
not requested submissions in relation to the relevant provisions of the
NTA. In some respects, I must the take the legislation as a given, and
simply consider the proposal for regulations about the management of monies
from future act determinations. My submissions on the proposed regulations
are outlined below, but they should be understood in the context of these
over-arching concerns about the system in which the regulations seek to

The majority of my comments
on the proposed regulations concern the expenses in administering the
trust, and how these are to be met. This is a matter requiring careful
attention, particularly in light of consistent complaints from many different
sectors about the lack of resources making the native title system unworkable.
My basic concern with the proposed regulations is the lack of protection
of the trust fund, because the trust fund is the amount determined as
the appropriate redress for the development's impact on native title rights.
Under the proposed regulations, this amount is made available to cover
administrative expenses, and the trustee's actions in managing the fund
are insufficiently controlled. I explain the details of my concerns below.

The Outline (in para's 18 &
20) proposes that the trustee's expenses can be reimbursed from the trust
fund. This may be appropriate for a standard trust arrangement, but it
is not appropriate here. The usual legal arrangements for a trust commonly
arise where a benefactor has donated money and established an arrangement
for that money to be used to assist the trust's beneficiaries. In such
a case, there is no justification for the beneficiaries having any entitlement
to the trust fund, apart from the terms of the trust itself. In these
situations, it is appropriate that the trustee's administration expenses
are reimbursed from the trust fund. However, the situation of these trust
monies under the NTA is quite different. Where native title is found by
the courts, it is understood to have been a pre-existing right. Accordingly,
any amount considered to be appropriate redress for a future act's impact
should have been provided to the claimant group from the time the impact
occurred. It is not appropriate for the monetary amount to be treated
as normal trust funds, and be available for administrative expenses.

Even if the Attorney were minded
to proceed with the expenses arrangement as proposed, I suggest an alternative
wording for one clause. Paragraph 23 of the Outline specifies examples
of costs the trustee may recoup from the trust funds. For most examples,
the Outline states the reimbursed expenses must have been 'reasonably
incurred'. However, for expenses incurred in locating a person entitled
to be paid trust funds, the Outline does not suggest these expenses be
qualified by the word 'reasonable'. In the context, the lack of the word
'reasonable' suggests that all such expenses may be reimbursed.
I see no reason for this to be the case and suggest that the word 'reasonable'
be inserted where appropriate.

The Outline indicates (in para
30) that the regulations will include legal protection for the trustee.
The trustee will not be liable for investment and payment decisions made
under the regulations or legislation. This may expose the trust fund,
which is the amount previously determined to be appropriate reparation
for traditional owners, to diminution from incorrect decisions made by
the trustee. You may wish to consider whether the proposed regulation
is within the power to make regulations under the NTA. It does not appear
that the proposed legal protection is necessary or convenient for carrying
out or giving effect to the NTA. The NTA seems to contemplate regulations
which prescribe the manner in which trusts are to be operated and managed,
rather than extending to issues of liability for the administration of
the trusts or authorising regulations which may depart from established
principles of common law.

The Outline proposes that the
Registrar of the National Native Title Tribunal will act as the trustee
for any monies to be held in trust under this system. The Outline explains
that the costs of administering the trust 'may be lower if the...[trust
can be] an add-on to the National Native Title Tribunal's existing business,
rather may be the case were another person to be appointed trustee'.
As noted above, the proposed regulations have the trustee's expenses directly
impacting on the extent to which a native title community may receive
redress to which they are entitled. Accordingly, I consider it appropriate
that the trustee arrangements be determined on something more solid than
the costs 'may' be lesser if the Tribunal administers any trust. Has the
Attorney-General's Department investigated the options and come to a considered
position on what is the most economical model? Alternatively, if this
is too onerous, perhaps the regulations should allow a wider range of
trustees, allowing the parties to agree on the trustee. Given the range
of trustee corporations operating under controls of Commonwealth and States
legislation, perhaps there are other options that would provide the parties
sufficient security and still maintain competition in relation to operating

If you have any questions regarding
this matter, please contact John Southalan who works with me in the Human
Rights and Equal Opportunity Commission.

In the interests of transparency
and openness, I consider it useful for matters to be widely discussed.
Accordingly, I intend to make this letter available on the Commission's
website.3 If you have any concerns about this proposal
please contact John Southalan to discuss before 22 April.

Yours sincerely

Dr William
Jonas AM

Aboriginal and Torres Strait Islander Social Justice Commissioner

De Rose v State of South Australia, trial decision [2002] FCA
1342, per Lindgren J at [903].
2. Members of the Yorta Yorta Aboriginal Community
v Victoria & o'rs
, trial decision per Olney J at [122]-[128];
Full Federal Court decision per Black CJ at [81]-[83]; and High Court
per Gleeson CJ, Gummow & Hayne JJ at [69].

Last updated 7 July 2004.