1 Optimising Benefits from Native Title Agreements

The Australian Government is developing its Indigenous Economic Development Strategy and in so doing is examining ways to improve economic development outcomes for Indigenous people and closing the gap between Indigenous and non-Indigenous Australians in key areas of Indigenous disadvantage.

Sustainable economic development is a critical factor in addressing Indigenous Australians' disadvantage, enabling wealth creation and home ownership. Addressing underinvestment on Indigenous owned or controlled land, better health, education and employment opportunities and delivering physical and social infrastructure are all elements critical to increasing economic development prospects. The Australian Government is determined to address these elements as part of its Indigenous Economic Development Strategy. In so doing it acknowledges that Indigenous Australians are central partners in efforts to closing the gap and that these efforts need to achieve results.

One area of focus for government is the engagement between Indigenous Australians and the resources industry; particularly in the area of agreements about access to Indigenous land to facilitate mining and other resource development activities. It is generally acknowledged that many Indigenous Australians live on land rich in resources that create wealth for the nation and for many businesses but delivers little in respect of equitable wealth distribution and wealth generation for Indigenous Australians.¹

While the opportunity presented by the minerals industry to Indigenous communities is increasing, so too are the demands placed upon Indigenous communities to engage effectively in highly complex commercial negotiations about access to land and related economic development initiatives. Over the past 20 years it is estimated that the minerals industry has contributed some $500 billion into the Australian economy² and it employs approximately 340,000 people, directly and in related industries, mostly in regional Australia. It is also estimated that there are over 340 new resource development projects proposed for Australia in the coming years.³

The amount of wealth generated so far and likely to be generated present industry, Indigenous Australians and governments with a challenge. How to ensure that the benefits arising from agreements are used to improve traditional owners and Indigenous communities' economic status and social well being? There are a number of assumptions behind this question. They are that:

direct financial contributions resulting from agreements do not necessarily translate into substantive benefits for Indigenous communities;
substantive benefits, such as employment options and community development initiatives often deliver benefits to all members of the community, not just the traditional owners; and
an equitable approach to distribution is more likely to generate socio economic benefits for the whole community.

Indigenous Australians' ability to engage effectively with the resources industry is influenced not only by the differing capacities of the players but also by the variety of laws and policies that may apply to the land in question.⁴ Across Australia, while State or Territory governments bear primary responsibility for issuing mining tenements and receive the majority of royalties paid to the Crown for mining on Indigenous owned or controlled land, both Commonwealth and State legislation apply to the management of these lands, access to them and dealings with Indigenous Australians.

The policy, legal and administrative regimes that apply to agreements between Indigenous Australians and members of the resources sector all, to varying degrees, provide for Indigenous communities agreeing to mining or other developments on Indigenous controlled or owned lands in return for economic and other benefits.

The Native Title Act 1993 (the Act) provides a process for the negotiation of such agreements, as it establishes a 'right to negotiate' for native title holders or registered native title claimants (referred to in this paper as the traditional owner) in relation to certain proposed actions contemplated by government (such as the issue of mining leases to resource developers), referred to in the Act as future acts. Since the passage of the Act in 1993 the National Native Title Tribunal (the Tribunal) has made over 2450 future act determinations.

The regime established under the Act for negotiating agreements between traditional owners and the resources industry can contribute to closing the gap on key areas of Indigenous disadvantage. Since the introduction of the Act, traditional owners in resource rich areas of Australia have achieved a range of direct and indirect benefits through negotiation and agreements relating to access to Indigenous lands and associated compensation for impairment of native title rights.⁵

Agreements negotiated under the auspices of the Act now constitute a major form of engagement between Indigenous people, industry and governments and provide Indigenous people, to varying degrees, a genuine planning and decision-making role in a range of issues affecting their lives and their environments. This role also brings with it responsibilities and duties in governance and community development as agreements provide an opportunity for the parties to build relationships and set parameters for future interactions on matters involving, for example, economic development, social wellbeing and environmental and cultural matters.⁶

These agreements often take the form of Indigenous Land Use Agreements (ILUAs), as provided for under the Act. Since 1998 over 340 ILUAs have been registered with the Tribunal.⁷ Agreements can potentially deliver considerable social and economic benefits capable of being harnessed by the current Indigenous community and used for future generations. An example of a recent agreement that is clearly designed to achieve just that is one between Rio Tinto and Indigenous communities in the Pilbara region of Western Australia. This agreement includes a commitment of $1 billion through binding initial agreements between Rio Tinto Iron Ore and the traditional owners of the Pilbara. Among other things, the monies distributed through such agreements are allocated to benefits-receiving trusts and programs related to education, training and employment, business development, cultural heritage protection, environmental, co-management and cross cultural education. Many of these distributions will contribute to regional economic development in remote Indigenous communities over the course of next 20 to 30 years. ⁸

However, while agreement-making provides a context for engagement, the mere existence of an agreement does not necessarily deliver meaningful or equitable outcomes for Indigenous communities. ⁹

Reflecting a joint desire to address this challenge and find ways to move forward, the Minister for Families, Housing, Community Services and Indigenous Affairs and the Attorney-General drew together a group of experts in a Native Title Payments Working Group (the Working Group) to share their perspectives.

The Working Group was invited to develop suggestions to ensure that the benefits accruing to Indigenous interests under native title agreements contribute to addressing economic and social disadvantage experienced by Indigenous communities and are delivered to not just current but future generations. ¹⁰

Attached to this discussion paper are the:

terms of reference of the Working Group
membership of the Working Group; and
the final report of the Working Group.

The scope of the Working Group's focus was targeted as not all Indigenous Australians have the opportunity to benefit from economic developments occurring on Indigenous land. However, with more than 60 per cent of mineral operations neighbouring Indigenous communities,¹¹ there are significant opportunities for many traditional owners and Indigenous communities and it is these opportunities that can potentially result in benefits for both the present and future generations of Indigenous Australians.

The obligation to ensure that these benefits are harnessed so as to optimise these opportunities falls directly on industry, traditional owners and their representatives, and government.

This discussion paper builds on the report of the Working Group and discusses a number of options to guide positive developments. Its purpose is to generate ideas, stimulate discussion and seek input from interested people and organisations on the way forward. It also raises a number of questions on which specific comment is sought.

1 For a broader discussion on this see Marcia Langton and Odette Mazell (2008), Poverty in the Midst of Plenty: Aboriginal people, the 'resource curse' and Australia's mining boom, Journal of Energy & Natural Resources Law Vol 26 No 1 2008 at p 31

2 The Hon Jenny Macklin MP, Minister for Families, Housing, Community Services and indigenous Affairs, speech to the Minerals Council of Australia Sustainable Indigenous Communities Forum, 27 May 2008, http://www.jennymacklin.fahcsia.gov.au/speeches/2008/Pages/sustainable_indig_comm_27may08.aspx (accessed 25 November2008)

3 The Minerals Council of Australia (MCA) submission to the Review of Australia's Future Tax System (the Henry Review) November 2008, http://www.minerals.org.au/ (accessed 25 November 2008)

4 The division of responsibilities between the various tiers of government influence the implementation of a number of the options discussed in this paper. For further discussion on this point see Langton and Mazel ( 2008) at pp 39 - 42 and Godden, Langton, Mazel and Tehan (2008), Accommodating Interests in resources Extraction: Indigenous Peoples, Local Communities and the Role of Law in economic and Social Sustainability, Journal of Energy & Natural Resources Law Vol 26 No 1 2008 at pp 6 - 11.

5 For further discussion on this see Ciaran O'Faircheallaigh & Tony Corbett, (2005) Indigenous Participation in Environmental Management of Mining Projects: The Role of Negotiated Agreements, Department of Politics and Public Policy, Griffith University, Brisbane, Australia Environmental Politics, Vol. 14, No. 5, 629 - 647, November 2005

6 See O'Faircheallaigh & Corbett (2005) pp 630 - 631

7 A explanation of an ILUA can be found at the NNTT website http://www.nntt.gov.au/Indigenous-Land-Use-Agreements/Pages/About_iluas.aspx
It It provides that
An indigenous land use agreement is an agreement between a native title group and others about the use and management of land and waters. These agreements allow people to negotiate flexible, pragmatic agreements to suit their particular circumstances. An indigenous land use agreement can be negotiated over areas where native title has, or has not yet, been determined to exist. They can be part of a native title determination, or settled separately from a native title claim. Indigenous land use agreements can be formed on the following topics:
• native title holders agreeing to a future development
• how native title rights coexist with the rights of other people
• access to an area
• extinguishment of native title
• compensation. When registered with the Tribunal, indigenous land use agreements bind all parties and all native title holders to the terms of the agreement. Indigenous land use agreements were introduced as a result of amendments to the Native Title Act in 1998.

8 See Rio Tinto's submission to the House of Representatives Standing Committee's Inquiry into Developing Indigenous Enterprises, 24 July 2008. The submission also states that, since 1996, Rio Tinto has signed nine major mine development agreements and negotiated more than 100 exploration agreements across Australia. Through these times Rio Tinto has committed to affected Aboriginal communities over the next 20 years a total sum of economic and social investments in the order of $1.4 billion, http://www.aph.gov.au/house/committee/atsia/indigenousenterprises/subs.htm (accessed 25 November 2008)

9 Ciaran O'Faircheallaigh, Native Title and Mining Negotiations A Seat at the table, But No Guarantee of Success, Indigenous Law Bulletin, March- April 2007, Vol 6, Issue 26 p 18.

10 The Hon Jenny Macklin MP, Media Release, Native Title Payments Working Group meets in Canberra, 30 July 2008, http://www.jennymacklin.fahcsia.gov.au/mediareleases/2008/Pages/native_title_payments_31jul08.aspx (accessed 25 November)

11 Australian Government (Department of Industry, Tourism and Resources), Working with Indigenous communities: Leading practice sustainable development program for the mining industry (2007). http://www.ret.gov.au/resources/pages/publications.aspx (accessed 19 November 2008)

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