18 Sep 2014

In the eye of the freeholder: Indigenous communities now have the choice

by Prue Warner, Mark Geritz

From 1 January 2015 Indigenous communities can transform land from community control to freehold ownership – if embraced, this could lead to greater native title certainty for the proponents of projects in the specified areas of remote and regional Queensland.

The Aboriginal and Torres Strait Islander Land (Providing Freehold) and Other Legislation Amendment Act 2014 (Qld) was assented to on 5 September 2014. If the new mechanism is implemented by Indigenous communities, it will have significant consequences on how Indigenous people are able to hold land and this will have flow-on effects for native title in the areas of Queensland where the Act applies.

When does the act come into force?

The majority of the amendments, including amendments to the Aboriginal Land Act 1991 (Qld) and the Torres Strait Islander Land Act 1991 (Qld) commence on 1 January 2015, with other amendments commencing on a day fixed by proclamation.

The freehold transformation

The Act creates a mechanism to allow for Indigenous councils to transfer land that is currently held on trust within designated Aboriginal and Torres Strait Islander communities to individual freehold ownership.

The Act maintains the position in the Bill, that the creation of freehold title would be entirely optional. As previously indicated, the current trustees of "freehold option land" within each of the 34 Indigenous council areas would be required to consult with their communities to decide whether to take up the option to transform the land into freehold title. Where the response is positive, the trustees would then request the Minister to approve the granting of freehold title in respect of such freehold option land to specified individuals. Available land would be allocated by auction, ballot or tender.

The impact on native title

Before freehold title could be granted over any freehold option land, any native title rights and interests in relation to the land would need to be voluntarily surrendered (or otherwise extinguished). In practical terms, this means that relevant native title parties will first need to enter into an Indigenous Land Use Agreement (ILUA) that implements the surrender to the State of all native title rights and interests over the relevant land.

Possible issues

Given that the Bill has been largely untouched in its passage through Parliament, the possible issues still remain the same as previously discussed. As the State will not be funding the costs associated with the surrender of native title rights and interests (which is necessary before the freehold option can be taken up), Indigenous communities are likely to have to bear their own costs in preparing and registering the ILUA through which the native title rights and interests would be surrendered. There will be no separate compensation payable for the surrender of native title rights and interests.

Possible benefits

The reforms are intended to allow Indigenous people to gain the same benefits from such land as other citizens can from ordinary freehold land.

For project proponents, the changes could result in greater native title certainty in the areas of Queensland covered by the Act, because native title rights and interests need to be surrendered before freehold title can be granted. This means that in these areas, project proponents will not need to negotiate and pay compensation to Indigenous groups through a future act validation process (such as the "right to negotiate") that they would otherwise need to for the grant of interests such as mining and petroleum leases. However, mining and petroleum companies will need to deal with the new Indigenous freeholders as they would with any other persons who hold such an interest.

To freehold or not to freehold

Despite the reforms, practical changes will only occur if Indigenous communities decide that the freehold option is beneficial to them. We will wait with interest to see the outcome.

You might also be interested in...

Related Knowledge

Get in Touch

Get in touch information is loading


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.