Native Title legal briefing
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The Federal Court’s decision in McGlade v Native Title Registrar  FCAFC and the Government’s Native Title Amendment Bill 2017:
What’s it all about?
On 2 February 2017, three judges of the Federal Court made a decision that affects the way that Aboriginal native title holders and claimants can be bound to agreements about the way that mining companies, government and others use native title lands.
The court’s decision and the government’s proposed response may at first appear complex and technical, but there are clear and important issues of justice at stake. In a few weeks the Commonwealth parliament will vote on proposed amendments to the Native Title Act 1993. The purpose of this note is to unpack the detail and to focus on the issues of justice and fairness.
Every native title claim is made by a Registered Native Title Claimant (Claimant) on behalf of the native title claim group (claim group). The Claimant may comprise one or more persons, often for example a senior member of each family in the wider native title claim group. The native title claim group comprises all people who may claim native title to the relevant area. Typically, between two and twelve people may make up the Claimant while the whole native title claim group may have hundreds of members.
The Claimant is authorised by the claim group to make the native title claim and to do other things which might include making agreements about their traditional lands with governments, mining companies and others.
What is an ILUA, and how is it different from an ordinary agreement?
Since 1998 the Native Title Act has included provision for “Indigenous Land Use Agreements (ILUAs)”.
An ILUA is an agreement between a native title group and others about the use of traditional lands and waters. There are different types of ILUA. The kind that we are discussing is an “Area ILUA”. Area ILUAs can cover topics like mining, compensation, environmental protection, extinguishment of native title and so on.
The concept of a registered ILUA came in response to the reluctance expressed by mining companies and others to negotiate agreements with native title groups after the commencement of the Native Title Act in 1994. Miners argued that entering into an ordinary contractual agreement with a native title Claimant would still leave open the possibility that other members of the same native title claim group might not view the agreement as binding on them, because they hadn’t all signed the agreement. The miners said that ordinary contract law didn’t offer them the level of certainty or security they needed to make major project investments on native title lands.
What distinguishes an Area ILUA from an ordinary agreement or contract is that, once registered by the National Native Title Tribunal (NNTT), the ILUA has the force of contract on every member of the native title group for the relevant area, so that every member of the native title group is bound by the terms of the ILUA as though they had signed it themselves.
ILUAs are convenient for mining companies, governments and others who want a high level of certainty in doing business with a native title claim group. Yet the ILUA represents a radical departure from the ordinary, common law concept of contract because once registered, an ILUA binds all members of the native title group regardless of whether or not they want to be bound.
An ordinary contract is an agreement between two or more parties in which an offer is made and accepted; all of the parties intend to enter into a contract; and there is consideration (benefit) flowing to each party. The law provides serious penalties for breach of contract, because a contract is presumed to have been freely entered into.
In contrast, an ILUA once registered contractually binds all native title claimants for the area, including those who object to the terms of the ILUA; those who do not wish to be a party to the ILUA; and even those who are not aware of the ILUA’s very existence.
For this reason, before registering an ILUA the greatest of care must be taken to ensure that it is truly the intention of the claim group to enter into the ILUA and to be bound by its terms.
Registration of an ILUA
The NNTT’s functions include accepting and determining applications for registration of ILUAs.
Before registering an ILUA, the NNTT Registrar must be satisfied that all reasonable efforts have been made to ensure that all persons who hold or may hold native title in the agreement area have been identified; and that all of the persons identified have authorised the making of the agreement.
Since 2010 it has been the practice of the NNTT to accept for registration ILUAs that have been signed by at least one member of the Claimant, on the basis that the “Registered Native Title Claimant” is defined as a singular entity under the NTA, as interpreted by a Federal Court judge in QGC Pty Ltd v Bygrave (No 2)  189 FCR 412.
There are various reasons why all members of the Claimant may not sign an ILUA. Those reasons can be relatively mundane, for example the death or incapacity of a member of the Claimant. On the other hand, a member of the Claimant may not sign an ILUA out of concern that he or she is not authorised by all or part of the native title claim group to do so.
McGlade v Native Title Registrar & Ors  FCAFC 10
On 2 February 2017 Justices North, Barker and Mortimer of Federal Court decided that an Area ILUA could not be registered by the NNTT unless all members of the Claimant were parties to the agreement and had signed it.
The Court based its decision on the language of the NTA, but also stressed that it is the policy intention of the NTA that all members of the Claimant must sign an ILUA, even if this may be inconvenient for one reason or another. The Court said that it is in the interest of the certainty and finality that all members of the Claimant sign an ILUA before it is registered.
The Court’s decision confirms that the extraordinary effect of an ILUA (i.e. binding all members of the native title group in contract) needs to be balanced by minimum safeguards against potential injustice. The minimum safeguard is that all of the representatives chosen by a native title group must sign an ILUA before its registration can bind all of them in contract.
The Court recognised that there may be various reasons why an ILUA is not signed by all members of the claimant, ranging from the relatively mundane (e.g. a member’s death or permanent incapacity) to conscientious refusal, or other motivation. In those cases, the NTA provides a mechanism for the claim group to apply to the Court to remove and replace members of the Claimant.
Government’s Native Title Amendment Bill
The Commonwealth Government has proposed a Native Title Amendment Bill 2017 to “resolve the uncertainty created by the Full Federal Court decision in McGlade…” (Explanatory Memo, para 1).
The Government intends to negate the recent McGlade decision and revert to the practice of allowing ILUAs to be registered without the signature of all members of the Claimant.
The Government proposes to amend the NTA to:
“a. secure existing agreements which have been registered on or before 2 February 2017 but which do not comply with McGlade
b. enable the registration of agreements which have been made and have been lodged for registration on or before 2 February 2017 but do not comply with McGlade, and
c. clarify who must be a party to an area ILUA in the future unless the claim group determines otherwise”.
(Explanatory Memo, para 13)
Critique of the Government’s Approach
It is estimated that around 120 ILUAs registered since 2010 on the basis of the Bygrave decision may be impacted by the Full Federal Court’s decision in McGlade (Clayton Utz, Lexology newsletter, February 2017). Industry is concerned that mining leases and other interests granted on the basis of those ILUAs may be open to challenge. The actual number of such interests, if any, is unknown at this stage.
Without providing any detail of the need for an urgent legislative response, the Commonwealth claims that ‘urgent amendments are imperative to preserve the operation of currently registered ILUAs and provide the sector with a prospective process for registering ILUAs which minimises the risks presented by the McGlade decision’ (Explanatory Memo, para 24).
The Government should articulate these risks more clearly. Even without registration an ILUA can operate as an ordinary contract at common law. It is noteworthy that to date there has been no published example of an actual case where serious detriment to property or investment arises from the McGlade decision. The need for urgent and less than fully considered action by the Government appears to be an illusion.
The Commonwealth has effectively conceded that it has not consulted fully in relation to the Amendment Bill: Refer to the Explanatory Memo, para 25.
The NTA is primarily a measure for the benefit of Aboriginal people, not just a vehicle of convenience for governments and industry:
The [Native Title] Act should therefore be read as having a legislative purpose of wiping away or at all events ameliorating the ‘national legacy of unutterable shame’ [footnote omitted] that in the eyes of many has haunted the nation for decades. Where the Act is capable of a construction that would ameliorate any of those injustices or redeem that legacy, it should be given that construction.
The NTA carefully balances the interests of all parties in its current ILUA provisions: In return for the certainty provided to miners, governments and others by the registration of an ILUA, the registration process needs to be thorough and ensure that all identified members of the native title group authorise the making of the agreement.
There may be an argument for allowing the NNTT to register an ILUA in cases where a member or members of the Claimant are unable to sign due to death or incapacity. This seems to be a common sense proposal, although even the death of a member of the Claimant could deprive an entire family or clan of representation on the Claimant.
For reasons mentioned above it is a dangerous and unreasonable precedent to formalise a system where Area ILUAs may be registered (and therefore bind all claim group members) on the basis of the signatures of only some but not all members of the Claimant. Without the signature of all members of the Claimant it cannot be assumed that all identified members of the claim group have authorised the Claimant to enter into the agreement.
The practice of allowing registration of partially-signed ILUAs creates serious risks of its own. There are already documented cases of mining companies interfering in the deliberations of native title claim groups in order to “divide and conquer” the claim group as a whole. Refer, for example, to the following:
The Government’s proposed amendments do not distinguish between the mundane (e.g. death or incapacity of a member of the Claimant) and the controversial (e.g. genuine objection to the registration of the ILUA and its consequences).
There is a real risk that the unprincipled and possibly unlawful “divide and conquer” tactics deployed by some unscrupulous mining companies and others in native title agreement negotiations since 2010 may become industry Standard Operating Procedure if the practice of registering an ILUA on the basis of partial execution by the Claimant is allowed to stand.
- An amendment to the NTA to permit the NNTT to register an area ILUA where a member of the Claimant is deceased or incapacitated should be supported, on condition that there is also adequate provision for replacement of the deceased/incapacitated member.
- For the reasons mentioned above, an amendment to permit the NNTT to register an area ILUA where one or more members of the RNTC refuses to sign the ILUA should not be supported.