Native title and Australia’s resource boom: a lost opportunity?

They’re digging it up, but they’re not sharing it around. ginger_ninja/Flickr

AFTER THE INTERVENTION: Ciaran O'Faircheallaigh of Griffith University explains why mineral wealth rarely ends up in Indigenous hands.

Native title creates the potential for indigenous communities to share in the wealth when their lands are developed, particularly by mining companies. But a flawed system for negotiating mining leases has meant that indigenous parties are often severely disadvantaged. Communities that could find a way out of poverty are left behind. But with all the power on the miners’ side, what is the likelihood of addressing this power disparity?

What rights do native title provide?

In its 1992 Mabo decision, the High Court found that inherent Indigenous rights in land and water (“native title”) existed before European settlement of Australia.

The Court also determined that native title could continue to exist unless extinguished by valid grants of interests in land by the Crown, and if Indigenous peoples had maintained their connection with their traditional territories since colonial settlement.

“Valid grants of interests” by the Crown extinguished native title across much of Australia. But for Indigenous Australians able to secure native title, the High Court’s decision offered the prospect of recognition as owners of their ancestral lands.

It also offered the possibility of sharing in the wealth generated by development. This latter possibility arose in particular from the “Right to Negotiate” provisions of the Commonwealth Native Title Act 1993 (NTA), which provided legislative expression to the Mabo decision.

Indigenous peoples who have had native title claim applications accepted, or had their native title determined, enjoy a “Right to Negotiate”. Where state governments propose to do “future acts”, such as granting exploration or mining leases to resource companies, Indigenous people can exercise this right.

This gives them an opportunity, initially for six months, to negotiate with mining companies and seek agreement on the terms on which development can occur.

The Right to Negotiate: lots of promise, but not much delivery

The NTA does not place any limits on the matters that can be agreed in negotiations. Negotiated agreements could allow native title holders to share in project revenues and benefit from employment and business opportunities. They could also ensure protection of their cultural heritage and the environment.

You might think the “Right to Negotiate” would let native title claimants and holders share in the massive wealth being generated by Australia’s resources boom. This could help overcome their economic and social disadvantage and end the marginalisation experienced by Indigenous landowners during earlier booms.

But an Australian Research Council research project which examined more than 40 native title agreements negotiated with mining companies since 1992 found that the outcomes they delivered were in fact highly uneven.

Only 25% of agreements provide for substantial revenues. These are generally in regions of north and central Australia where politically-effective regional land councils support native title negotiations.

These same agreements tended to secure Indigenous access to education, employment and business development opportunities. They also offer high levels of cultural heritage and environmental protection.

But a large majority of agreements offered limited or negligible economic benefits. They added little to existing legislative protection of cultural heritage and the environment.

Legislation and funding conspire against fair agreements

Why would many native title groups enter into poor agreements? The answer lies in the fact that the NTA, combined with the way in which native title negotiations are funded in Australia, create a fundamental inequality in bargaining power that works against Indigenous people.

If an agreement is not reached at the end of the six month “Right to Negotiate” period, either party can refer the matter for arbitration to the National Native Title Tribunal (NNTT). This is a government instrumentality established by the NTA.

The NNTT decides whether the interests may be granted and whether there are conditions. The NNTT cannot allow payments related to the value of minerals extracted from native title land (the so-called “no royalty” provision).

In other words, if the matter goes to arbitration, there won’t be any royalties paid. This generates pressure on native title parties to reach agreement with developers before the matter goes to arbitration.

So why wouldn’t mining companies send every matter to arbitration? In theory, mining companies want to reach agreement because otherwise NNTT may not grant the lease, or will grant it subject to stringent conditions.

However in only one case since 1993 has the NNTT determined that a lease should not be granted. It has ruled that leases may be granted in over 25 cases.

Companies know that if they do not reach agreement within six months, they can go to the NNTT and get leases granted. The pressure is all on the Indigenous parties; they are at a huge disadvantage.

Nearly all negotiations between mining companies and Indigenous people in Australia are funded by the companies. They can threaten to withdraw funding if agreement is not reached. This further undermines the bargaining position of native title parties.

Fulfilling an economic promise

The end result of this situation is that, for many native title claimants and holders, the current resources boom, like previous ones, will pass them by.

The NTA should be amended to remove the “no royalty” provision. Where no agreement is reached, arbitration should be conducted by an independent judicial body and not by a government-appointed Tribunal. Public funding should be provided to support native title negotiations, as occurs for instance in Canada.

While these changes might not eliminate disparities in power between developers and native title holders, they would go a substantial way to ensuring that the economic promise offered by native title can be realised.