11 Apr 2013

Have faith: Guidance on common issues in native title negotiations

by Mark Geritz, Tosin Aro, Prue Harvey

One party's efforts to get around roadblocks in native title negotiations did not mean the negotiations were not conducted in good faith.

There is useful guidance to mining and petroleum project proponents on an array of commonly-faced issues when negotiating with native title parties generally and more specifically, in relation to their obligation to negotiate in good faith as part of the right to negotiate process under the Native Title Act 1993 (Cth) in the recent decision of Adani Mining Pty Ltd / Jessie Diver & Ors on behalf of the Wangan and Jagalingou People / State of Queensland [2013] NNTTA 30, the last to be handed down by the outgoing President of the National Native Title Tribunal. Clayton Utz acted for Adani Mining Pty Ltd.

Right to negotiate process

Adani applied for a mining lease in connection with its Carmichael Coal Mine Project in the Galilee Basin in central Queensland.

As no Indigenous land use agreement (ILUA) had yet been registered for the relevant project, Adani needed to engage in the right to negotiate process in respect of land or waters where native title had not been extinguished to seek the grant of its mining lease.

The State published a section 29 notice about the proposal to grant the mining lease with a notification day of 23 November 2011. The registered Wangan and Jagalingou People claim covered part of the area of the proposed mining lease at the critical point in time (four months after the "notification day"), making the applicant to that claim (the WJ Party) the "native title party" for the negotiations (and to any section 31 agreement under the Native Title Act, were it agreed).

Obligation to negotiate in good faith

Adani (as well as the State and the WJ Party) was obliged to negotiate in good faith (for a period of at least six months from the notification day) with a view to obtaining the agreement of the WJ Party to the grant of mining lease.

Negotiations between Adani and the WJ Party ensued over the following year, until 7 November 2012 when (being unable to reach an agreement) Adani applied to the Tribunal for a determination that the mining lease could be granted.

The WJ Party alleged that although Adani had complied with most or all of the indicia of good faith that had been established from previous cases (in particular see Western Australia v Taylor (1996) 134 FLR 211 (Njamal)) the following matters meant that Adani had not met its obligation to negotiate in good faith, with its behaviour being sustained and serious enough to constitute more than a lapse in good faith. The findings of the Tribunal are also referred to below.

Substantial delay in negotiations: Although there was a lag of seven months in the negotiations which was considered by the Tribunal to amount to a "substantial delay", Adani's ability to explain the delay and the fact that it did not insist on the agreement being reached within a shorter time frame from that originally proposed meant that this did not show that Adani had failed to negotiate in good faith.

Change in scope of project: Although the scope of the Project did change throughout the negotiations this was explained by Adani in written updates to the WJ Party and was not misleading. Further the obligation to negotiate only related to the grant of the mining lease and this did not change during the negotiations.

Undue influence in legal representation choice: In September 2012, the WJ Party decided to change its legal representative by a resolution signed by six out of seven individuals. Adani was uncertain about whether this decision, not being unanimous, was sufficient to make the change and also expressed considerable concern to the WJ Party and its new legal adviser about the change's impact on the negotiations. The Tribunal found that Adani's conduct could not be characterised as an attempt to influence the WJ Party's choice of adviser and that Adani "expressed understandable disappointment and concern at the change of the legal representatives when negotiations were well advanced".

Seeking ILUA authorisation: as part of the broader negotiations, Adani had proposed that an ILUA be entered into with the WJ Party in relation to the grant of the mining lease and other "future acts" associated with the project. When it became clear that the WJ Party did not agree to the terms of the ILUA, as well as commencing proceedings in the Tribunal relating to the grant of the mining lease, Adani sought to have the ILUA authorised at a meeting of the WJ native title claim group immediately following another meeting of that group (organised by a third party Aboriginal corporation) that proposed the replacement of the WJ Party.

The WJ Party argued that only the WJ Party could represent and speak for the WJ native title claim group and that Adani should not have bypassed the WJ Party and engaged with a third party when it had an obligation to negotiate in good faith with the WJ Party; nor should it have engaged the legal advisers of the third party Aboriginal corporation to provide legal advice in relation to the ILUA.

Adani argued that in accordance with recent case law (QGC Pty Ltd v Bygrave (No 2) (2010) 189 FCR 412) it was clear that the contracting counter-party for the ILUA (as opposed to the section 31 agreement) was the WJ native title claim group and that Adani wanted to determine if the view of the WJ Party (effectively an agent) to oppose the ILUA was shared by the WJ native title claim group, being the actual contracting party (effectively the principal).

Adani further argued that it wanted to ensure that the WJ native title claim group had the benefit of legal advice. In the absence of such advice from the WJ Party's lawyers Adani sought for such legal advice to be provided by the legal advisers for the third party corporation, as it believed the membership of the third party corporation covered a sufficiently representative selection of the WJ native title claim group.

The Tribunal found that as this occurred at the end of the negotiations Adani could have done no more than simply commence proceedings in the Tribunal and that the above conduct was not unlawful and did not amount to a failure to negotiate in good faith.

Next steps

Having found that Adani did negotiate in good faith, the Tribunal can now proceed to consider the substantive issue: the making of a determination about the grant of the mining lease. We will provide a further update when this decision is delivered.

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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.