COMMENTS NATIVE TITLE AND THE MINING INDUSTRY AFTER WARD, INCLUDING RECOMMENDATIONS FOR PARTICIPANTS. Michael Hunt *

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1 COMMENTS NATIVE TITLE AND THE MINING INDUSTRY AFTER WARD, INCLUDING RECOMMENDATIONS FOR PARTICIPANTS Michael Hunt * 1. INTRODUCTION The newspaper headlines and comments on the High Court's decision in WA v Ward 1 were varied: Native title continues to exist on West Australian and Northern Territory mining leases but Aborigines cannot use it to stop mining or to claim ownership of mineral and petroleum resources, the High Court ruled yesterday: headline in The Australian. 2 The ruling has clarified several sticking points: Premier Gallop. 3 Ben Ward emerged from the High Court yesterday frustration etched on his face: article in The Australian. 4 The WA Government and the mining industry applauded the judgment which alleviated fears of a massive royalties payout if rights to minerals and petroleum had been established: article in The West Australian. 5 The court's decision that native title was not automatically extinguished by a mining lease left open questions about what remaining native title rights would include: President of Chamber of Minerals and Energy: article in The West Australian. 6 'Bundle of rights' but miners still hold sway: headline in The Australian. 7 We share the frustration of the indigenous community that the native title process continues to be costly, complex and unwieldy: Chief Executive of Minerals Council of Australia: article in The West Australian. 8 * BA LLB(Hons), Hunt & Humphry, Project Lawyers, Perth. Western Australia v Ward; Attorney-General (NT) v Ward; Ningarmara v Northern Territory, Ward v Crosswalk Pty Ltd [2002] HCA 28 ( WA v Ward ). The Australian, 9 August 2002, p2. The West Australian, 9 August 2002, p8. The Australian, 9 August 2002, p2. The West Australian, 9 August 2002, p9. The West Australian, 9 August 2002, p8. The Australian, 9 August 2002, p2.

2 (2002) 21 AMPLJ Native Title and the Mining Industry After Ward 295 Rights lost but no one a winner: headline in The West Australian. 9 They can't all be right. But who is? In my opinion, the High Court's decision in WA v Ward has made very little difference to the main native title problem confronted by the mining industry - which is the task of getting access to land for exploration and mining. Let's analyse what the High Court decided. 2. EXTINGUISHMENT OF NATIVE TITLE BY THE GRANT OF TENURE The High Court confirmed the Wik 10 approach to extinguishment. In order to decide whether a land tenure or dealing (such as a pastoral or mining lease or Crown reserve) extinguished native title, it is necessary to compare the native title rights as proved in a particular case with the rights created by the tenure or land dealing. If that dealing created a right of exclusive possession (such as under a freehold title) native title rights would be wholly extinguished. If the dealing did not create a right of exclusive possession, the native title rights would be extinguished only to the extent of any inconsistency. Other native title rights will survive although the rights of the tenure holder will prevail during the term of the tenure. 3. PASTORAL LEASES The Court found that Western Australian pastoral leases, even if fenced and/or improved, did not create exclusive possession rights. Accordingly, a pastoral lease did not necessarily extinguish all native title rights, although it did extinguish any right to control access to the land or to require permission for any act to be done. In making this finding, the Court over-ruled the decision of the Full Federal Court which was under appeal. It has been said, The decision concerning pastoral leases was predictable with the court following the majority decision in Wik. 11 However, although predictable, the decision was disappointing for the mining industry. Its implications are both general and specific. Generally, as pastoral leases occupy one-third of Western Australia's land mass, if the grant of a pastoral lease had extinguished native title, an enormous area of land would have become immediately accessible to the mining industry. Specifically, there are potentially serious consequences for those mining companies who took advantage of the (former) Western Australian government's policy (formulated after the Full The West Australian, 9 August 2002, p8. The West Australian, 9 August 2002, p8. Wik Peoples v Queensland, (1996) 187 CLR 1. Chris Humphry, Swings and Roundabouts, the High Court decision in Ward v Western Australia (Miriuwung Gajerrong), Association of Mining and Exploration Companies Yearbook 2002, p68.

3 296 Comments (2002) 21 AMPLJ Federal Court's decision in WA v Ward 12 ) that because a fenced and/or improved pastoral lease had extinguished native title, an exploration or mining title could be granted within that pastoral lease without following the procedures of the Native Title Act 1993 ( NTA ). 13 Such a title is now exposed to a claim of invalidity if native title is ultimately proved to exist in the subject area. As has been said, this emphasises the importance of due diligence when acquiring tenements or entering into a joint venture in relation to tenements which were granted under these policies. 14 Summary: although widely predicted, the decision that the grant of a pastoral lease has not extinguished native title has substantially reduced the quantity of accessible land for the mining industry. 4. MINING LEASES What was not so widely predicted was the Court's ruling that while a mining lease granted under the Mining Act 1978 (WA) created an exclusive right to mine, it does not confer a right of exclusive possession of the land and therefore would not necessarily extinguish native title rights. Surprising (at least to me) was the Court's finding that the grant of the Argyle Diamond mining lease under the Mining Act did not necessarily extinguish native title, notwithstanding that it was granted pursuant to a parliamentary ratified State Agreement in the context of a major project. This decision was also disappointing for the mining industry. Its implications are wider than might first be thought because a material portion of current exploration is taking place on ground which has been held under previous mining tenure, such as historical gold mines. An even more significant factor is that a very much larger area of land is held under mining leases than is the subject of mining operations because of the peculiarly Western Australian system 15 under which most mining leases were actually acquired for exploration not mining. One has to agree with the comment - The court's reasoning concerning mining leases appears strained. Even if a legal distinction can be drawn between exclusive possession of land and an exclusive right to mine land, legally (and certainly in practice) a miner may take exclusive possession of a mining lease for mining purposes. As such, on the High Court's analysis of the extinguishment principles, the grant of a mining lease should wholly extinguish native title rights. 16 How does a mine manager know which native title rights an Aboriginal person is entitled to exercise on a mining lease? Is he obliged to allow that person to enter onto the lease and if so, to Western Australia v Ward (2000) 99 FCR 316 Policy announced by Press Release by the (former) Premier Richard Court on 21 June 2000; Guidelines for the Granting of Mining Tenements where Native Title has been extinguished by previous tenure, The policy was abandoned after the defeat of the Liberal government in February Katrina White, The Ward Case, a paper presented to the IID Conference Negotiating Native Title, Perth, October The compulsory relinquishment provisions of s 65 of the Mining Act 1978 (WA) gave rise to a large number of mining leases being held as conversions of former portions of exploration licences. Chris Humphry, op cit, p69.

4 (2002) 21 AMPLJ Native Title and the Mining Industry After Ward 297 camp on it, to hunt on it, to make fires on it and what else? The decision results in a very impractical situation requiring the Federal Court to undertake a detailed investigation of the facts on a case by case basis to decide the extent of native title rights on each mining lease. This is hardly suitable to encourage a 21 st century mining industry. 17 Summary: generally the mining industry expected that the High Court would confirm the Full Federal Court's decision that the grant of a mining lease had extinguished native title. So the High Court's decision to the contrary has disappointed the mining industry. First, it will cause confusion as to what native title claimants/holders can do on a mining lease. Secondly, it has substantially reduced the quantity of accessible land for the mining industry. 5. MINERAL OWNERSHIP Widely predicted was the High Court's statement that any native title right to minerals was extinguished by s 117 of the (now repealed) Mining Act 1904 (WA). In the event, it was not necessary for the Court to rule on it because on the evidence, the claimants had not proved any native title right to minerals. Justice Kirby stated that the finding was confined to Western Australia and that the answer could be different under different legislation. 18 The only other State in respect of which the issue has been considered is Queensland where a similar decision was reached in the Federal Court. 19 Summary: the High Court confirmed that any native title right to minerals was extinguished by the State's mining legislation. The mining industry expected this ruling but still welcomed it. The situation in other States still requires examination. 6. RESERVES Rather surprising (at least to me) was the Court's decisions as to reserves. In essence, it held that the creation of a reserve under the (now repealed) Land Act 1933 (WA) extinguished any native title right to control access to the land but did not otherwise of itself extinguish native title rights. However, a subsequent dealing with that reserve, such as its vesting or the granting of a lease over it 20 did extinguish native title. It was further surprising that the Court did not appear to regard as relevant the purpose for which the vesting or lease was undertaken. Although the legislation under which a particular reserve was created and vested will need to be examined, this ruling has certainly made more land readily accessible to the mining industry. It will also have some unusual outcomes In my opinion, the mine manager may properly exclude native title holders from any areas which are required for exclusive use in a mining operation. WA v Ward at [575]. Wik Peoples v Queensland, (1996) 134 ALR 637. Under s 32 of the Land Act 1933 (WA).

5 298 Comments (2002) 21 AMPLJ For example, although the Court ruled that native title had not been extinguished by the grant of the Argyle Diamond mining lease under the Mining Act, the establishment of major infrastructure on it or the enactment of an Act authorising the grant of the lease, nevertheless the Court ruled that native title had been extinguished by the benign acts of the creation of a reserve and its vesting for government requirements. Another example is the recent Martu consent determination 21 which confirmed native title over a vast area (136,000 square kilometres) of Western Australia except for the Rudall River National Park. This means that (in theory at least) a mining tenement can be acquired in the Park without having to negotiate with any native title party. This must be a surprising result for RioTinto, the holder of the significant Kintyre uranium deposit located within the Park. 7. ACCESS TO LAND FOR EXPLORATION AND MINING The headlines and comments I quoted at the start of this paper really miss the point of most concern to the mining industry. That point is that in Western Australia alone there are more than 10,000 applications for exploration and mining titles which have not been granted because they are delayed by the procedures of the NTA. The most critical native title issue for mining companies is how to progress their applications for mining tenements under the NTA regime. The NTA regulates all future actions (such as the grant of mining tenements) which affect native title rights. These actions are known as future acts. A future act will be valid if it falls within one of a number of categories of land dealings specified in the NTA provided that there is compliance with the applicable procedural requirements. 22 So, if the grant of a mining tenement affects native title, the grant will be a future act and will be valid only if there has been compliance with the requirements of the NTA. In order to decide conclusively whether the grant of a mining tenement will affect native title, a determination must be made as to whether native title exists in the area. This will require a hearing by the Federal Court of any native title claims over the area, a process which could take several years (it is now 8 years since the claim in Ward was first made and the claimants still don t have a determination of native title). However, in the interim, the validity of grant of a mining tenement application can be ensured in areas where native title claims have been made (or could be made) if the State and the tenement applicant comply with the requirements of the NTA on the assumption that native title does in fact exist in the area. A mining tenement which affects native title may be granted if: (1) there is compliance with the right to negotiate procedure; 23 or (2) the mining tenement has been authorised under an indigenous land use agreement; 24 or James on behalf of the Martu People v WA [2002] FCA 1208, per French J. NTA Pt 2, Div 3, Subdivs B-P. NTA Pt 2, Div 3, Subdiv P. NTA Pt 2, Div 3, Subdivs B, C and D.

6 (2002) 21 AMPLJ Native Title and the Mining Industry After Ward 299 (3) in the case of a mining tenement to be used solely for infrastructure purposes, there is compliance with the infrastructure procedure. 25 It is beyond the scope of this paper to consider each of these procedures. 26 Summary: the High Court's decision in WA v Ward has not assisted the mining industry in coping with the procedures for obtaining access to land. This remains the critical issue for the industry. 8. MY RECOMMENDATION NEGOTIATE A NATIVE TITLE AGREEMENT My view on the NTA is that the right to negotiate procedure is unworkable if it is relied upon to obtain the grant of a title. However, if used in conjunction with commercial negotiations, the right to negotiate procedure has benefit in a negative sense because, in my experience, neither the native title claimants nor the mining company really want to follow the whole tortuous process right through to the final conclusion of a determination in the Tribunal. The presence of the right to negotiate procedure provides considerable impetus for encouraging both sides to negotiate. An explorer wishing to obtain initial access to ground or the proponent of a mining project wishing to develop the project in any commercially acceptable time frame will have to negotiate a commercial agreement with native title claimants. A mining company should identify and then prioritise any tenements required in the area of its project. It could negotiate some in isolation or it could attempt to negotiate a package of all tenements including any tenements to be applied for in the future. Attempting to secure agreement to future applications may complicate the negotiations, particularly as sometimes more than one claimant group is involved. The sequential negotiation of tenements is likely to increase the overall cost. On the other hand, if there is any urgency concerning a particular tenement, it could be dealt with individually or separately from other tenure. In considering the impact of native title on mining tenement applications, it is essential to obtain correct and up to date information concerning the tenure of the subject land (eg freehold, reserve, pastoral leasehold or unallocated Crown land) and also the location of native title claims. This information can be obtained from the Land Claims Mapping Unit of the Department of Land Administration, the National Native Title Tribunal and/or the Department of Mineral and Petroleum Resources. It is useful to tabulate the information as follows: Title applied for (type and no) Purpose of Title Underlying land tenure Native Title Claim No and Name: Passed registration test? NTA s 24MD. They are examined in detail in Michael W Hunt, Mining Law in Western Australia, ch 18 (Sydney: Federation Press, 2001).

7 300 Comments (2002) 21 AMPLJ The principles mentioned in this paper can then be applied to determine the procedures which must be followed to secure the grant of mining tenement applications. For example, if the tenure is a vested reserve, the tenement can be granted without any native title process. When the relevant tenements and claim groups are identified, steps should be taken to initiate the NTA procedures (through the Department of Mineral and Petroleum Resources). This will establish a timeframe for negotiations and consultation. Under the NTA, the State must participate in the negotiation process (to the extent of conducting negotiations in good faith). It must be established early on with the native title claimants whether they require the State to be involved in the actual commercial negotiations. In my experience, neither the mining company nor the claimants want the State present during negotiations. However, unless the claimants waive the presence of the State, I believe that the State must attend negotiations. Delays may occur as the Department has limited resources. The claimants will usually request that the NTA procedures should not be commenced while negotiations are being conducted. My view is that such requests should be declined. It is conducive to efficacious negotiations to have the clock ticking under the formal right to negotiate process while commercial negotiations are being conducted. The mining company should give early consideration to a compensation package. The claimants are likely to approach the matter on the basis of the value of the project and the amount of compensation that they consider the project can carry, rather than an amount related to land value or disturbance. The claimants may request either a lump sum or a royalty or some other form of staged payment linked to production. It has been suggested that the practical impact of the High Court's decision in WA v Ward that native title does not include ownership of minerals is that negotiations with native title holders will not have to include discussion of royalties or compensation for mineral and petroleum rights. The good news is that compensation is likely to be reduced, given that it would be for a limited number of rights. 27 Logically that would seem to follow but I am seeing no signs of any reduced demands for compensation. Indeed in none of the many native title negotiations in which I have been involved has the native title party claimed mineral ownership. The negotiation process with the claimant groups is likely to move slowly. The rate of progress will be influenced by the level of the claimants administrative support and whether they are represented by a land council or by lawyers. I suggest that the mining company make contact with the relevant claimant groups in order to develop a relationship before commencing the formal negotiations. I recommend consideration be given to negotiating and signing a short agreement (a negotiating protocol) which sets out the procedures and timetable to be followed during the course of the negotiations. Summary: my advice to participants in the mining industry before the decision in WA v Ward was that the NTA's right to negotiate procedure is unworkable if it is relied upon to obtain the grant of a title. However, if used in conjunction with commercial negotiations, the right to negotiate 27 Graham Castledine Native Title still a way to go, Gold Gazette, August 2002, p3.

8 (2002) 21 AMPLJ Native Title and the Mining Industry After Ward 301 procedure has benefit because it encourages both the native title claimants and the mining company to negotiate an agreement rather than pursue a determination in the Tribunal. Nothing in WA v Ward causes me to change that advice. I am comforted that the President of the National Native Title Tribunal expressed a similar view in his comments upon the High Court's decision. The headline to his article was: Agreementmaking more important than ever, says President. 28 The article begins: The handing down of two landmark native title judgments by the High Court has reinforced the importance of negotiation and agreement-making, according to the President of the National Native Title Tribunal, Mr Graeme Neate. 9. CONCLUSION The WA v Ward decision has been described thus the result is something of a swing and a roundabout. Some issues have been clarified while others seem more blurred. 29 I concur with that assessment. As I said at the start of this paper, in my opinion the High Court's decision has made very little difference to the task of the mining industry in getting access to land for exploration and mining - which is the main issue confronting the industry. The Court itself gave the correct answer to the rhetorical question I posed at the start of this paper when it said: None of the principal parties has been completely successful ; 30 or as more colloquially expressed by the National Native Title Tribunal - As the High Court itself said, no clear winners have emerged through its judgment. 31 In my view, the mining industry could not regard WA v Ward as a win Talking Native Title, September 2002, p1, published by the National Native Title Tribunal. Chris Humphry, op cit, p69. Chief Justice's statement on announcing the decision in Ward v WA, 8 August Talking Native Title, September 2002, p4, published by the National Native Title Tribunal.