Mining companies liable for native title compensation? On the Court's radar!

By Mark Geritz, Tosin Aro and Georgia Davis
13 May 2021
It's official – "pass-through" provisions in the Mining Act 1978 (WA) are under the microscope. Will mining tenement holders be found liable to pay native title compensation?

The Federal Court, in Tjiwarl Aboriginal Corporation RNTBC and State of Western Australia [2021] FCA 438 (Tjiwarl Compensation Case), recently granted leave to 14 mining companies to join a native title compensation claim out of time, on the basis that those companies may be liable to pay compensation arising out of the grant of mining tenements over the Tjiwarl native title determination area. While the matter remains at an early stage, Justice Mortimer noted that there may be a separate question in relation to the construction and operation of section 125A of the Mining Act 1978 (WA), and we can expect a ruling on this issue in due course.

Regulatory framework

The Native Title Act 1993 (Cth) permits a State or Territory to legislate that a person other than the Crown is liable to pay compensation in relation to particular acts. Western Australia has done so in relation to particular mining acts, in section 125A of the Mining Act, which notes that:

  • compensation payable to native title holders for or in respect of the grant of a mining tenement is payable by:
    • the applicant for the grant of, or the holder of, the mining tenement at the time the compensation is required to be paid; or
    • the applicant for the grant of, or the holder of, the mining tenement at the time a determination of compensation is made; and
  • where the mining tenement in question has been surrendered, forfeited or expired, the holder immediately before the surrender, forfeiture or expiry is liable for native title compensation.

(We note that there is a corresponding provision for petroleum acts in section 24A of the Petroleum and Geothermal Energy Resources Act 1967 (WA).)

We are not aware of any previous Court decision looking at the operation of these "pass-through" provisions. Perhaps as a result, in the Tjiwarl Compensation Case, the State and Tjiwarl Aboriginal Corporation RNTBC expressed different views on who should be held liable for native title compensation in relation to the grant of mining tenements. In the circumstances, the Court felt it was appropriate to join the mining companies to the proceedings, given the clear interest they had in the outcome of this argument.  

We will be watching how these proceedings unfold to determine how State and Territory "pass-through" provisions will be treated at the Federal level. The proceedings will also provide invaluable guidance for how to value compensation for the impact on native title of mining and mining-related acts (it will be recalled that the High Court, in its 2019 Timber Creek decision, was not required to address this question).

Not just Western Australia!

We expect that the implications of this decision will not only be felt in Western Australia – New South Wales, for example, has a similar "pass-through" provision under section 281B of the Mining Act 1992 (NSW). There has also been a concern from industry that such pass through legislation may be enacted in jurisdictions that do not currently have such legislation.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.