Can native title reforms deliver on Australian government’s vision?

By Michael Sheng and Jean Bursle, Ashurst
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On 6 June this year, the Australian attorney-general announced plans for further reform to the Native Title Act. Key proposals in the announcement are: (i) legislating good faith criteria in the right to negotiate process; (ii) clarifying the tax treatment of payments from native title agreements; (iii) introducing legislative change to enable prior extinguishment to be overlooked in parks and reserves; and (iv) expanding the scope of the indigenous land use agreement (ILUA) provisions.

Good faith and tax

The announcement suggests an expansion of the obligations of proponents and the Australian states under the right to negotiate. It remains to be seen how the government intends to do this. However, setting out explicit criteria will inevitably provide more prescription and raise the hurdle for proponents and the states.

Michael Sheng Partner Blake Dawson Shanghai
Michael Sheng
Blake Dawson

The announcement does not suggest the government is proposing some of the more radical amendments that the earlier Greens Bill – (the Native Title Amendment (Reform) Bill (No. 1) 2012 – advocated. The proposal of the Australian Greens (a political party) included reversing the onus of proof in relation to the existence of native title and providing that a party may not apply to the National Native Title Tribunal for a determination that a mining lease should be granted until that party has first demonstrated that good faith negotiations have taken place.

In addition, the announcement about clarifying the tax treatment of payments from native title agreements is potentially very significant. The complexities around the taxation treatment of these payments has posed significant difficulties to date. The issue is becoming increasingly important as the quantum of benefits grows and the potential taxation consequences now affect hundreds of millions of dollars.

There will be significant issues that need to be resolved in the consultation process. This will include practical issues like how the reforms will impact existing corporate and trust structures, and whether the tax breaks will apply to the sometimes very substantial payments made to individuals for personal benefit.

Prior extinguishment and ILUAs

Sections 47A and B of the Native Title Act currently provide for circumstances in which prior extinguishment of native title can be overlooked, based on occupation of Crown land and Aboriginal ownership of pastoral leases. The announcement flags extending these exceptions to parks and reserves, and potentially further.

A difficulty with the previous Greens proposals arose because the arrangements operated through a bilateral agreement between the relevant state and native title group, without reference to any third party rights. It remains to be seen how the government proposal will work.

In addition, the announcement does not clearly explain what is proposed in relation to ILUAs. It suggests there are currently problems with flexibility and topics.

In our experience, the real impediment to negotiating ILUAs is not any limit on flexibility or subject matter imposed by the Native Title Act, but rather where the state is requiring an ILUA before a future act can be done, the Native Title Act does not provide a conclusion to the negotiation process. However, there is nothing inherently wrong with this from a legal perspective, as ILUAs are contracts that are entirely voluntary.

Faster native title claims

The recent budgetary changes that shifted the responsibility for mediation of claims from the National Native Title Tribunal to the federal court are the latest in a series of reforms made by successive governments to the claim determination process. Many consent determinations have already been made. Most parties, particularly proponents, would prefer a landscape that delivers certainty and security for their interests. This is what a determination of native title, properly formulated and based on appropriate evidentiary hurdles, achieves.

Perhaps what is missing in the government’s vision is a preparedness by the federal and state governments to address the circumstances that are contributing to delays in many determinations at the moment including: i) Areas where native title does not exist. It is often these areas that take the longest to resolve and until finally resolved, the system does not address the likelihood of the continued lodgment of further claims; and ii) How to clearly identify the holders of native title. A lack of clarity and transparency around membership can risk determinations entrenching intra-indigenous disputes on a permanent basis.

Government’s vision

The attorney-general identified two key planks in the government’s vision for the native title system in another 20 years:

“Our aim in 20 years time is that the vast majority of native title claims will be settled, helped substantially by the reforms [the Labor Party] has instituted to deliver faster native title claims.

“In 20 years time, I also want to see a native title system that creates economic and social opportunities for Indigenous and non-Indigenous Australians alike.”

Jean Bursle Partner Ashurst Perth
Jean Bursle

Whether the reforms proposed will assist to achieve this vision will depend on the detail of the changes proposed. Properly implemented, some of them may represent improvements to the system. However, regardless of what the detail entails, it seems doubtful that the proposed reforms will of themselves substantially contribute to the delivery of the government’s vision.

To think that any reforms under the umbrella of the Native Title Act by themselves can deliver the sort of change referred to by the attorney-general misconceives the nature of native title as a property right. Native title offers some Aboriginal people quite significant rights, particularly those that are able to negotiate agreements with large mining and industrial proponents.

However, the reality is that these groups represent a small portion of native title holders, and an even smaller portion of Aboriginal and Torres Strait Island people in Australia. Some native title agreements negotiated by proponents already recognise this dichotomy. Government must also not lose sight of the need to support the delivery of opportunities to all indigenous people.

The firm has changed its name from Blake Dawson to Ashurst Australia with effect on and from 1 March 2012. The Shanghai Representative Office is applying for a change of name from Blake Dawson Shanghai Representative Office to Ashurst Australia Shanghai Representative Office.

Michael Sheng is a partner at Blake Dawson in Shanghai, and Jean Bursle is a partner at Ashurst in Perth




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