Muccan Minerals Pty Ltd and Another v Taylor and Others on behalf of Njamal
[2016] NNTTA 28
•26 July 2016
NATIONAL NATIVE TITLE TRIBUNAL
Muccan Minerals Pty Ltd and Another v Taylor and Others on behalf of Njamal [2016] NNTTA 28 (26 July 2016)
| Application Nos: | WF2016/0001, WF2016/0002 and WF2016/0003 |
IN THE MATTER of the Native Title Act 1993 (Cth)
- and -
IN THE MATTER of an inquiry into future act determination applications
Johnson Taylor and Others on behalf of Njamal (WC1999/008)
(native title party)
- and -
Muccan Minerals Pty Ltd
(grantee party)
- and -
State of Western Australia
(Government party)
DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT AN INQUIRY
Tribunal: | Mr JR McNamara, Member |
Place: | Brisbane |
Date: | 26 July 2016 |
| Catchwords: | Native title – future act – s 35 applications for a determination – mining lease applications M45/1160 M45/1162 M45/1163 – jurisdiction – power – whether grantee party has negotiated in good faith – grantee party has not negotiated in good faith – Tribunal does not have power to proceed with future act determination inquiry – applications dismissed – s 148(a) |
Legislation: | Native Title Act 1993 (Cth) s 29(2)(b)(i), s 30(2), s 30A, s 31, s 33, s 35, s 36(2), s 148(a), s 151(2) |
| Cases: | Bradford and Julie Young v Kariyarra and Another [2014] NNTTA 103 (‘Young v Kariyarra’) Brownley v Western Australia (1999) 95 FCR 152; [1999] FCA 1139 Cosmos (Yaburara Mardudhunera People)/Western Australia/Mineralogy Pty Ltd [2009] NNTTA 35 (‘Cosmos v Mineralogy’) Doxford v Barnes (2008) 218 FLR 414; [2008] NNTTA 54 Drake Coal Pty Ltd, Byerwen Coal Pty Ltd /Grace Smallwood & Ors (Birri People)/Queensland, [2012] NNTTA 9 (‘Drake Coal v Birri People’) Fejo v Northern Territory (1998) 195 CLR 96; [1998] HCA 58 FMG Pilbara Pty Ltd/Flinders Mines Limited/Wintawari Guruma Aboriginal Corporation/Western Australia [2009] NNTTA 62 (‘Flinders Mines v Wintawari Guruma’) June Ashwin on behalf of the Wutha People/Western Australia/Contact Uranium Limited [2008] NNTTA 129 (‘Wutha v Contact’) Muccan Minerals Pty Ltd and Another v Taylor and Others on behalf of Njamal [2014] NNTTA 74 (‘Muccan v Njamal’) Placer (Granny Smith) Pty Ltd v Western Australia (1999) 163 FLR 87 (‘Placer (Granny Smith)’) Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303 (‘Strickland v Minister for Lands’) Western Australia/Arthur Dimer, Ollan Dimer, John Walter Graham, Sonny Graham, Katie Ray, Maureen Young, Georgina Schultz, Mabel Wilson, Jack Schultz, Betty Bullen, Graeme Pellew (Ngadju People, WC95/17); Cyril Barnes, Merle Forrest, Mercy O’Loughlin, Stevie Sinclair, Judy Slater, Elvis Stokes & Victor Willis (Central East Goldfields People, WC99/30)/Equs Limited, [2000] NNTTA 290 (‘Western Australia v Dimer’) Western Australia/Western Australia Petroleum Pty Ltd & Anor/Hayes & Ors on behalf of the Thalanyji People [2001] NNTTA 18 (‘Western Australia v Thalanyji’) White Mining (NSW) Pty Ltd/Franks (Plains Clans of the Wonnarua People)/New South Wales [2011] NNTTA 72 (‘White Mining v Franks’) Xstrata Coal Queensland Pty Ltd/Albury (Karingbal #2/Queensland [2012] NNTTA 93 (‘Xstrata v Albury’) |
| Representative of the native title party: | Marcus Fort, Yamatji Marlpa Aboriginal Corporation |
| Representative of the grantee party: | Ken Green, Green Legal Pty Ltd |
| Representatives of the Government party: | Christine Weetman, Department of Mines and Petroleum Sarah Power, State Solicitors Office |
REASONS FOR DECISION
Introduction
This decision considers whether the Tribunal has power to conduct an inquiry into three future act determination applications lodged by Muccan Minerals Pty Ltd (‘Muccan’) for the grant of mining leases M45/1160, M45/1162 and M45/1163. The applications were lodged under s 35 of the Native Title Act 1993 (Cth) (the Act) and I have been appointed by the President of the Tribunal to conduct the inquiry.
The Njamal People (Njamal) are a negotiation party in this matter because: their registered native title claim overlapped the mining leases four months after the notification day; and their native title claim is still registered (see ss 29(2)(b)(i), 30(2) and 30A of the Act).
Njamal contend that Muccan did not negotiate in good faith with them as required by s 31(1)(b) of the Act. I must therefore consider whether or not Muccan did so before I can proceed to make a determination on the applications. If Njamal satisfy me that Muccan did not negotiate in good faith, then I must not make a determination (s 36(2)).[1] The Tribunal will not be entitled to deal with the applications and the applications will be dismissed (s 148(a)).
[1] s 36(2) of the Act prohibits the arbitral body from making a determination if any negotiation party satisfies it that any other negotiation party (other than a native title party) did not negotiate in good faith as required by s 31(1)(b). The arbitral body is not prevented from making its own enquiries (Ward v Western Australia (1996) 69 FCR 208, 215-217)
Previous history
This is not the first time Muccan have requested the Tribunal to make a determination about the grant of the mining leases – they previously lodged future act determination applications for each mining lease in December 2013. I was appointed Member to conduct that inquiry and in July 2014 I found the Tribunal was not entitled to deal with the applications because Njamal satisfied me that Muccan had not negotiated in good faith with them (see Muccan v Njamal).
Proceedings and submissions
In early March 2016 I convened a preliminary conference at which Njamal alleged Muccan had not negotiated in good faith. Njamal made no such allegation against the Government party. Accordingly I set directions requiring good faith submissions to be lodged.
The good faith submissions are substantial. Njamal’s submissions comprise contentions and the affidavit of Mr Marcus Fort (their legal adviser up until 24 May 2016) which annexes 30 documents (NTP Contentions, Mr Fort’s Affidavit and NTP1-30). Muccan’s submissions comprise contentions, a chronology of events and 42 supporting documents (GP Contentions, GP Events 1-23 and GP1-42). Njamal also lodged a reply to Muccan’s submissions (NTP Reply).
Following the lodgement of good faith submissions, I sought parties’ views on whether good faith should be decided on the papers or whether an oral hearing should take place. Muccan contended Njamal’s reply raised new issues and requested a hearing because they wished to respond. I considered Muccan’s request and, rather than hold a hearing, I suggested to parties that Muccan could reply in writing instead. The parties agreed, and Muccan subsequently lodged their reply (GP Reply).
I have considered the material before me and am satisfied the matter can be decided on the papers (per s 151(2) of the Act).
Issues for good faith
I will address the following issues in considering whether or not Muccan negotiated in good faith with Njamal:
1. Did Muccan provide Njamal with relevant information about the mining leases?
2. Did Muccan appropriately commit to negotiations with Njamal?
(a)Njamal working group meetings
(b)Conduct
(c)Lodgement of s 35 applications
3. Was Muccan reasonable?
(a)Compensation
(b)Economic advice
(c)Heritage
4. Does Muccan’s overall conduct meet the threshold for good faith?
1. Did Muccan provide Njamal with relevant information about the mining leases?
Njamal contend that the information they received from Muccan regarding their proposed activities was the same ‘exploration information ... submitted as evidence’ in Muccan v Njamal, ‘namely, a memorandum detailing ... intended exploration activities’ (NTP Contentions at 23-25). In response, Muccan contend they have ‘never possessed, Information as to Productive Mining’, that the memorandum ‘is the best statement as to the work proposed’ on the mining leases, and that ‘such position is made clear’ in their first correspondence with Njamal following Muccan v Njamal (GP Contentions at 8.17, GP32 and GP40).
Njamal contend that because Muccan ‘maintained’ their ‘lack of provision of information’, my findings in Muccan v Njamal at [49]-[50] should ‘apply equally in this case’:
[49] The possible impact of the doing of these proposed future acts is more significant than just prospecting or exploration as the grants allow for rights that include exploration right through to production with no further obligation for the grantee party to negotiate with the native title party. As such, there is a greater obligation on the grantee party to provide information that enables parties to negotiate in such a way as to address the concerns of the native title party.
[50] The information the grantee party has provided to the native title party in order for them to consider the effect of the grant on their registered native title rights and interests only contemplates exploration and not mining. The grantee party has provided no indication of what, where or how production activities might be undertaken, nor even what they might be looking to mine. As such, the native title party’s ability to assess the scale or impact of the act on their registered rights and interests has been hampered. The grantee party’s stated reason for not supplying this information to the native title party, being that it was not information they were required to produce under the Mining Act, is not a particularly compelling argument as it does not negate the fact that it is relevant information to the negotiation process under the NTA.
In Muccan v Njamal at [51], I compared Muccan’s provision of information with that of a grantee party in another good faith decision (Wutha v Contact). In Wutha v Contact the Tribunal found that the grantee party had not provided the native title party with sufficient information about their proposed activities. However, because the negotiations were centred on a draft agreement, the Tribunal concluded that the insufficient information did not harmfully impede the native title party’s capacity to negotiate (although it was not ideal). I distinguished Wutha v Contact in Muccan v Njamal, because at that time, ‘no draft agreements or proposals appear to have been exchanged’ between Njamal and Muccan (at [51]). Ultimately, I concluded Muccan had failed to negotiate in good faith because of a combination of: the provision of insufficient information; the absence of a draft agreement or an ‘offer which could be considered ... in any meaningful way’; and their insistence upon a costly on-site meeting with Njamal (at [94]-[98]). The relevant principle here is that disadvantage caused by insufficient information about a grantee’s proposed activities can be mitigated when there are attempts to address a native title party’s concerns via an agreement.
The first direct correspondence from Muccan since Muccan v Njamal (determined 29 July 2014) was prepared by Ms C Camarri in March 2015. Ms Camarri acknowledged the outcome of Muccan v Njamal and introduced herself as ‘in-house counsel at the Creasy Group of companies, of which Muccan is a member’. She stated: ‘I wish to undertake the negotiations mandated by the NTA’ (NTP11/GP32).
In the correspondence, Ms Camarri sought to address the requirement to provide Njamal with information about Muccan’s proposed activities on the mining lease. She attached ‘for ease of reference’ the memorandum submitted in Muccan v Njamal and described it as ‘a detailed explanation of its currently planned program of works’. She wrote it:
... confirms that:
(1)Muccan intends undertaking the following works on each of the Inquiry Tenements,
· Stream Sediment Sampling
· Soil Sampling
· Geological Mapping & Rock Chip Sampling
· Aircore Drilling
· Reverse Circulation (RC) Drilling
· Diamond Drilling
(2)the extent to which drilling might actually occur is dependent upon the results from the non-drilling activities...
I acknowledge that any grant of an Inquiry Tenement will entitle Muccan to undertake “actual mining operations”, and that should circumstances arise where it is economically viable to do so, such “actual mining operations” will likely occur.
Ms Camarri also provided a response to Njamal’s initial s 31(1)(a) statement (GP11). The statement listed Njamal’s concerns and some proposed conditions for an agreement with Muccan. Muccan’s response addressed each of the points raised in the statement. Ms Camarri wrote that ‘[in] light of the considerations referred to’ in Njamal’s statement, Muccan had ‘prepared the accompanying proposed agreement’ for Njamal to consider:
Muccan is hopeful that the Proposed Agreement addresses many (if not all) of the NTP’s concerns.
However, if that is not the case, then Muccan invites the NTP to:
(1)identify the manner in which the Proposed Agreement does not fully address the relevant NTP's; and
(2)propose (including in the alternate) how the NTP's concern might be addressed.
Ideally, any such proposal should be by way of an amendment or addition to the accompanying proposed agreement.
The draft agreement is detailed (NTP12/GP32). Should productive mining be approved, it addresses Njamal’s requests for the provision of information, and it includes arrangements for compensation and the commissioning of a socio-economic impact assessment report ‘on the effect of the proposed Mining Operations on the Njamal People and their culture for the purpose of informing the Njamal People about those likely impacts’. It provides for heritage work programme surveys, site avoidance and identification surveys, and notification. It stipulates no ground disturbing activities on uncleared areas. There are also provisions for cross cultural awareness programmes for Muccan employees and employment and training for Njamal.
In the months that followed, there were a number of exchanges between Njamal and Muccan about the terms of the proposed agreement and about a meeting between Muccan and the Njamal working group. Unfortunately, they did not reach an agreement regarding the length and cost for such a meeting. Nor did they reach agreement about the compensation terms in the proposed agreement (NTP13/GP33, NTP15-16/GP35, NTP17-20/GP36-37, NTP21-22/GP38, NTP23-24/GP39). This will be further discussed below.
Njamal maintain that Muccan v Njamal at [50] still applies, and that Muccan have ‘consistently failed to provide any indication of “what, where or how production activities might be undertaken, nor even what they might be looking to mine”’. They contend that if Muccan ‘cannot provide information as to any planned or proposed mining activities, it must address [Njamal’s] concerns’ (NTP contentions at 33).
Findings on information
I find that, in providing a draft agreement and engaging in correspondence in relation to the terms, Muccan attempted to address Njamal’s concerns as presented in their s 31(1)(a) statement and as raised in correspondence. The relevant principle in Muccan v Njamal at [50] applies to the facts in this matter. In negotiating an agreement over Njamal’s concerns, Muccan mitigated to some extent the disadvantage caused by insufficient information about their proposed activities.
2. Did Muccan appropriately commit to negotiations with Njamal?
(a) Njamal working group meetings
Njamal contend that Muccan ‘failed to respond to requests to meet with the working group’ and ‘ultimately refused to meet’ with the Njamal working group (NTP Contentions at 37). In reply, Muccan state that Njamal’s contention is ‘disingenuous’ given the circumstances of the negotiations (GP Contentions at 9.14).
During the negotiations, Njamal invited Muccan to two working group meetings. The first was held on 12 February 2015, and the second on 1 May 2015.
The first Njamal working group meeting – February 2015
Prior to Ms Camarri’s letter of 19 March 2015, the negotiations were overseen by Tenement Manager Mr Greg Abbott who attempted to seek instructions from Muccan (NTP6).
On 12 January 2015, Njamal emailed Mr Abbott to invite Muccan to attend a working group meeting scheduled for 12 February 2015. Njamal forwarded a budget estimate requesting a pro rata contribution to costs for a one hour meeting totalling $5,574 (NTP3). Three follow up emails were sent by Njamal to Mr Abbott throughout January asking ‘if this estimate is approved’ (NTP4), confirming ‘if your client is not able to attend we would still like to continue negotiations’ (NTP5), and asking:
If you hear from either Muccan or [GP name removed] about attendance at the next Njamal Working Group meeting then let them know that we will be proceeding with a meeting on the 12/2/2015 but we have cancelled the second day. We will have a rather full agenda but will endeavour to squeeze them in…[NTP8]
On 21 January 2015, the State expressed concern about Muccan’s participation in negotiations: the Department of Mines and Petroleum (DMP) wrote to Muccan ‘requesting an update on the progress of negotiations or withdrawal of the lease applications’ (NTP7).
On 23 February 2015, Njamal emailed Mr Abbott to advise that the working group had met in February without Muccan. The working group ‘raised concerns with Muccan … lack of engagement with Njamal to date’ and requested Muccan ‘come to the table to commence negotiations in good faith or alternatively withdraw their tenement applications’ (NTP10).
Given the above correspondence, there is a factual basis for Njamal’s contention that Muccan ‘failed to respond to requests to meet with the working group’. When Ms Camarri wrote her letter in March 2015, she gave no explanation for the delay in responding prior to that time. After March 2015, Muccan responded to Njamal’s requests and there were further delays, as set out below.
On 2 April 2015, Njamal advised ‘we are in the process of reviewing the documents’ attached to Ms Camarri’s March 2015 letter (NTP13/GP33). Njamal stated ‘[h]owever at this stage we are still awaiting an official response from Muccan Minerals in relation to their attendance at a working group meeting’. Njamal explained:
The Njamal People have elected a working group comprised of 13 persons to undertake negotiations on their behalf and they like to meet with proponents to develop an understanding and build a relationship before entering into an agreement.
In the context of the previous emails from Njamal to both the DMP and Mr Abbott, it is clear that Muccan’s attendance at a Njamal working group meeting was a live issue for Njamal, who saw it as a way for Muccan and Njamal to ‘come to the table’ and negotiate an agreement. It was also reasonable for Njamal to pursue the issue because it was something that the parties had failed to achieve in their previous negotiations.
Muccan contend Njamal’s statement, ‘we are still awaiting an official response from Muccan Minerals in relation to their attendance at a working group meeting’, ‘was mischievous given that the previous invitations were specific to the Working Group Meeting of 12 February 2015’ (GP Contentions at 9.11). I do not accept Njamal’s statement was mischievous. Muccan did not take the opportunity to argue the issue with Njamal when they replied to Njamal later in April. Instead, Muccan discussed time allocation and costs for a meeting at some point in time ‘with the Native Title Party, or its representative “working group”’. Such discussion indicates that Muccan assumed there should be negotiations about a meeting with Njamal.
The second Njamal working group meeting – May 2015
In the same email of 2 April 2015 (NTP13/GP33), Njamal confirmed that a second working group meeting was planned for 1 May 2015. They invited Muccan to attend and noted that their representative, the Yamatji Marlpa Aboriginal Corporation (YMAC), ‘receives limited government funding for future act negotiations’ and ‘rely on external parties to provide funding towards negotiations where it is reasonable to expect them to do so including contributing towards the costs of meetings’. Njamal attached a budget estimate requesting a pro rata contribution to costs for a one hour meeting. The cost totalled $5,500:
Can you please indicate:
1) whether Muccan is willing to attend a working group meeting with the Njamal Native Title Party; and
2) If so, can you please indicate whether Muccan is willing to contribute $5,500 towards the costs of the meeting
Njamal resent the email on 20 April 2015 because Muccan had not responded. Muccan replied the following day. They gave no explanation for the delay.
Muccan contend Njamal’s requests ‘were deliberate and intended to convey the appearance that, even if the Grantee Party declined to contribute… the Grantee would nevertheless be welcome to attend the meeting (or possibly welcome to attend the meeting at some lesser cost)’ (GP Contentions at 9.11). In the email of 2 April 2015 (NTP13/GP33), Njamal said that they: ‘rely on external parties to provide funding towards negotiations where it is reasonable to expect them to do so including contributing towards the costs of meetings’ (my underlining). I see nothing mischievous in this. I will say more of this below.
I accept that Njamal’s email conveyed an expectation that their $5,500 request was a starting point for negotiating the costs and allocated time for the second working group meeting. It appears Muccan interpreted the request in the same way, because at the time of their reply, they did not challenge Njamal’s motive and instead wrote:
‘Whilst Muccan … looks forward to meeting with the … “working group”, Muccan does not believe it to be in the interests of either party to meet in the circumstances outlined in your email… Muccan does not believe a meeting for 60 minutes is sufficient… It is difficult to see how all, or indeed many, of the matters which arise from Muccan’s [19/3/2015] letter and its enclosures could be sensibly dealt with during a 60 minute period…
In the circumstances, Muccan suggests a far more efficient and cost effective approach is for the Native Title Party to consider, and provide a written response to, Muccan’s letter and its enclosures… Following such a written response, it may well then be sensible for the parties to meet with a view to resolving and remaining issues….
Muccan is unable to agree to the proposed “charge” for the one-hour meeting. To Muccan’s mind, the proposed charge for a 60 minute meeting appears exorbitant… Muccan would be willing to pay its proportional share of the direct costs of any meeting (for example, room hire expense, appropriate food and drink expense), but could not anticipate its share of those costs exceeding $2,500.In the circumstances, please advise when it will be possible to meet ... in circumstances where the meeting can last for a minimum of 3 hours and Muccan’s share of the direct costs will not exceed $2,500 [NTP15-16/GP35]
On the face of it, the last paragraph above appears to be an offer of a $2,500 contribution by Muccan for a three hour meeting with the Njamal working group as Njamal had previously provided their budget breakdown. It also appears to be how Njamal interpreted the paragraph, because two days later, on 23 April 2015, Njamal countered:
Whilst it is true that ideally parties would meet for 3 hours or longer to properly address all issues the government funding that YMAC [Yamatji Marlpa Aboriginal Corporation] receives would not allow this to occur for every mining proponent unless the proponent were funding the meeting…
Notwithstanding the above, given the importance of the Grantee Party attending a meeting … we are agreeable to having Muccan Minerals Pty Ltd attend the meeting on 1/5/15 for one hour and are willing to accept the contribution of $2,500 towards the meeting. We will guarantee Muccan has one hour available...
If Muccan is not able to attend on the 1/5/2015 then we will seek instructions from the group as to organising a future meeting, however at this stage there are no other meetings scheduled so the ability to share costs will likely be hampered. [NTP17-18/GP36]
Njamal contend that Muccan delayed their response to the 1 May working group invitation until ‘11 days prior to the second proposed working group meeting [and] with the requirement that the meeting be “3 hours or not at all”’. Njamal state they responded with a proposal ‘two days later agreeing to the reduced cost but proposing it apply to a one hour meeting’ (NTP Contentions at 53). In their proposal, Njamal stressed ‘the importance’ of Muccan attending the working group meeting as ‘at this stage there are no other meetings scheduled’ (NTP17-18/GP36).
Njamal contend that Muccan’s delay in responding to the invitation and their failure ‘to respond to that proposal prior to the meeting at all, demonstrates the Grantee Party was continuing [the] unreasonable behaviour observed by the Tribunal’ in Muccan v Njamal at [87] (NTP Contentions at 53). Njamal state:
Here, instead of requiring an onsite meeting, the Grantee Party is in effect requiring that any meeting go for three times as long as what the Native Title Party Representative body has advised it considers appropriate and could agree to, and made this response 3.5 months after the first request for a meeting and 11 days prior to the date it [the second meeting] is due to take place [NTP Contentions at 56].
Although it was Muccan who delayed their response to Njamal’s invitation until 21 April 2015, Muccan infer that Njamal was unreasonable in replying to Muccan two days later on 23 April 2015. Ms Camarri complained that Muccan could not ‘give proper consideration’ to Njamal’s request ‘during the four business day period between receipt of your email and the holding of that meeting. You will of course be aware from the footer on my emails that “I am not in the office on Fridays”’. Muccan also seemed to infer that Njamal was unreasonable to propose a one hour meeting at the reduced contribution of $2,500. Firstly, because:
In any event, Muccan would not have accepted your offer because of its previously explained concern, namely that a meeting for 60 minutes is insufficient given the range of matters which likely need to be raised and be addressed and unjustifiable given the associated preparation and mobilisation costs... [NTP21/GP38]
Here Muccan highlights another concern they have regarding their participation in a meeting with Njamal, that is, the ‘unjustifiable’ cost (presumably to Muccan) of ‘preparation and mobilisation’ for a one hour meeting. Muccan do not explain this further.
Secondly, Muccan seem to infer Njamal were unreasonable because Njamal had an ‘expectation that Muccan should fund not only its costs of negotiation, but also the Native Title Party’s’ to the sum of $2,500:
I note, so as to avoid any misunderstanding of Muccan's letter dated 21 April 2015 that the offer by Muccan was to pay its proportional share of the direct costs of the proposed meeting (for example, room hire expense, appropriate food and drink expense etc). It was not to simply make a contribution in the amount of $2,500. On reviewing the "Estimate" attached to your email sent 23 April 2015, it is clear that the estimated direct costs of meeting were $1,780 (ie catering at $1,350.00 and venue hire at $430.00). One fifth of that amount is $356. The balance of the estimated costs appear to be the funding to representatives of the Native Title Party. If the Native Title Party has any expectation that Muccan should fund not only its costs of negotiation, but also the Native Title Party's costs, then that expectation will need to be fully articulated and justified...
Your email sent 6 May 2015 appears not to directly address when the Native Title Party or its representative "working group" are able to meeting with Muccan. The inference from your email sent 6 May 2015 is that neither the Native Title Party nor its representative "working group", are willing to meet with Muccan unless Muccan funds the Native Title Party's negotiations costs.
Please confirm whether that inference is incorrect. [NTP21/GP38]
Findings on working group meetings
In my view Njamal were quite transparent about the arrangements, costs, membership, processes, and purpose of working group meetings. I see nothing unreasonable in a request from a native title party for assistance (financial, ‘informational’, and logistical) to enable them to meaningfully engage with proponents of future acts on land over which they are the registered native title claimant. Njamal expressed this in their 2 April correspondence. They noted the limited government funding available for future act negotiations and said that they ‘rely on external parties to provide funding towards negotiations where it is reasonable to expect them to do so including contributing towards the costs of meetings’.
In Flinders Mines v Wintawari, Member O’Dea at [82] said:
It is clearly the case that there is no obligation on any party to a negotiation under section 31(1)(b) of the Act to provide financial or other assistance to facilitate the engagement of one party in the process (see Gulliver at 95). It may be, that in some circumstances, a refusal by one party to assist another to engage, may be taken into account when assessing whether or not the party has acted reasonably in the circumstances.
As discussed at [37] above, Muccan inferred ‘disingenuous’ motives contained in Njamal’s 2 April correspondence concerning the arrangements for working group meetings. In Muccan’s letter of 13 May (referring to the 6 May email from Njamal) they seek confirmation of their ‘inference’ that the Native Title Party is unwilling to meet unless Muccan funds Njamal’s ‘negotiation costs’.
At this point, it might have been better for Muccan and Njamal to focus on the purpose of the working group meeting, specifically the agenda, to rationalise how the business could be dealt with in a one hour meeting, or why a three hour meeting was necessary, before resolving the question of contribution.
On the evidence, Njamal made concessions in negotiating a budget for a meeting with Muccan - from $5,500 to $2,500 for a one hour meeting. Flexibility on funding appeared to be more achievable than flexibility on time. Njamal’s budget was transparent, their concessions were clear for Muccan to understand, and they attempted to explain how their funding constraints limited the time they could reasonably allocate to Muccan without further assistance (NTP13/GP33, NTP17-18/GP36). While Muccan appeared to make an offer of $2,500 towards costs, they later precisely articulated an amount they might be prepared to pay: it ‘was not simply to make a contribution in the amount of $2,500’, rather it was $356 being ‘one fifth’ of $1,780 for venue hire and catering, shared between five grantee parties. Their offer was contingent on a three hour meeting with the working group: Muccan argued that one hour was ‘insufficient given the range of matters which likely need to be raised and be addressed and unjustifiable given the associated preparation and mobilisation costs’. As mentioned at [37], Muccan did not describe or detail their preparation and mobilisation costs or explain why the costs were unjustifiable.
As part of their reply to Njamal’s working group invitation, Muccan ‘suggests a far more efficient and cost effective approach is for the Native Title Party to consider and provide a written response’ to Muccan’s letter and draft agreement sent in March 2015. Muccan then suggested that ‘[f]ollowing such a written response, it may well be sensible for the parties to meet’. On the face of it, the ‘suggestion’ seems to be in the interests of both the parties. However it is difficult to see how it could be ‘more efficient and cost effective’ for Njamal. Certainly, in context, the ‘suggestion’ seems more efficient and cost effective for Muccan rather than Njamal, because the meeting Muccan proposed capped Muccan’s contribution to $2500 contingent on a minimum of three hours. This does not seem cost effective for Njamal given the funding issues they had explained to Muccan in their invitation to attend the May working group meeting (NTP13/GP33). If (as suggested by Muccan) Njamal were to ‘identify any additional queries’ and ‘narrow any issues remaining’, then that would theoretically result in a more focussed and shorter working group meeting. However, Muccan maintained their request for a three hour meeting. With reference to Flinders Mines v Wintawari at [70] I will take this conduct into account when I consider whether Muccan’s overall conduct was reasonable and whether it meets the threshold for good faith.
In any event, the position taken by the Njamal working group at the May working group meeting seems to fit with Muccan’s ‘suggestion’. At the meeting, Njamal instructed their representative YMAC to:
continue negotiations on the draft agreement on their behalf. In the event we are able to reach an agreement in principle with Muccan we will seek to bring the draft agreement back to a Working Group meeting for the Working Group’s endorsement subject to final community authorisation [NTP19/GP37]
(b) Conduct
Njamal contend Muccan’s correspondence in May 2015 (NTP21-22/GP38) and October 2015 (NTP26-27/GP40) was ‘obstructive and argumentative’. They argue Muccan’s conduct was ‘antithetical to the overriding obligation to negotiate in good faith’ (NTP Contentions at 68-69).
May 2015 correspondence from Muccan (NTP21-22/GP38)
Njamal contend that because Muccan did not attend the May working group meeting, the ‘group requested YMAC engage in negotiations on its behalf’ (NTP Contentions at 70, NTP23/GP39). Njamal assert that ‘[t]o a reasonable proponent that should have been the end of the matter and the grantee should have proceeded to engage with the substance of the native title party’s requests’ (NTP Contentions at 70). Njamal state that instead, Muccan wrote ‘raising issues with the fact that YMAC has been requested to negotiate on the group’s behalf and only take matters back to the working group in the event an agreement in principle has been reached’ (NTP Contentions at 71). Njamal contend Muccan’s ‘objection to the group’s instruction ... was designed to frustrate, obstruct and protract the negotiation process’ (NTP Contentions at 82). Specifically, Njamal take issue with the following portion in Muccan’s correspondence:
From Muccan's perspective, two points arise;
(a)the fact that in principle agreement with YMAC is necessary before either the "working group", the "community" or the Njamal Registered Native Title Claimants will consider any proposal from Muccan is unlikely to be negotiation in accordance with s 31(1)(b) NTA. The fact that YMAC does not have authority to bind the Njamal Registered Native Title Claimants must of itself necessitate any proposal by Muccan being presented to the Njamal Registered Native Title Claimants for rejection.
I would be grateful if you could seek instructions from the Njamal Registered Native Title Claimants on this point; and
(b)the NTA does not require Muccan, and Muccan will not enter into a cascading series of negotiations with differing persons, each of whom say they have some, but not final, authority to negotiate on behalf of the Njamal Registered Native Title Claimants.
Njamal’s use of the term ‘agreement in principle’ was perhaps ill-advised. Authority to negotiate should not be confused with an authority to unilaterally strike ‘in principle’ agreements (White Mining v Franks at [70]). In context however, it is clear that what Njamal proposed was for YMAC to continue negotiations on a ‘subject to instructions’ basis, including key terms – and, if agreement on those key terms was reached it would be taken to the group for authorisation.
Njamal contend Muccan, as part of the Creasy Group of companies, have ‘extensive experience in dealing with Native Title Claim Groups’ (NTP Contentions at 75, supported by evidence at NTP30). They argue ‘the fact that decision-making processes by claimant groups are multi-staged or complicated is nothing new’ to Muccan. Njamal note that the Tribunal has also acknowledged the complexities involved (NTP Contentions at 76-77, citing Young v Kariyarra at [46]). Njamal state:
Not only is it common practice for YMAC lawyers to act and negotiate on behalf of claim groups in between government funded meetings which allow the obtaining of instructions, but this procedure was necessitated in this case by the Grantee Party’s inability to respond to the requests for meetings [NTP Contentions at 78].
Muccan contend the portion of correspondence that Njamal take issue with ‘must be read in the wider context of the GP’s letter’ and that it was ‘correct of the GP to raise its concern’ about Njamal’s proposal. They contend Njamal do not ‘explain how the negotiation process was frustrated, obstructed or protracted, let alone refer to any evidence as to such consequences’ (GP Contentions at 9.27-31).
Given Muccan’s own ‘suggestion’ for Njamal and Muccan to ‘narrow any issues remaining between the parties’ before a working group meeting (NTP15/GP35), and both parties’ experience in native title negotiations, Muccan’s response to Njamal’s proposal certainly did not help the negotiations. It is something to be taken into account in considering Muccan’s overall conduct.
October 2015 correspondence from Muccan (NTP26-27/GP40)
Njamal state that in July, YMAC ‘provided a detailed marked up version of the Mining agreement and provided succinct responses to the multiple issues raised by the Grantee Party’ (NTP Contentions at 83, NTP23-24/GP39).
Njamal contend Muccan’s 19 October 2015 letter contains evidence of ‘continuing ... argumentative conduct’ and that Muccan query ‘the validity of the native title party’s claim ... asserting a lack of evidence exists’ which ‘is not good faith and it is not appropriate’ (NTP Contentions at 88, 101, and 103). Specifically, Njamal take issue with the following:
Your emails states:
As per section 251B of the Native Title Act 1993 (Cth) the decision-making process of the Njamal consists of negotiations taking place with a working group, agreement being reached, the agreement being authorized at a wider claim group meeting and the Applicant signing the agreement and binding the claim group on their behalf. The Grantee Party's position in this case has resulted in the Working Group asking YMAC to negotiate on their behalf, this is not their preferred approach.
The reference to s 251B of the Native Title Act 1993 (Cth) ("NTA") is perplexing. That section refers to an authorisation by a "native title claim group or a "compensation claim group" to make a "native title determination application" or a "compensation application". It does not refer to any "decision-making process" for the purpose of Subdivision P of Division 3 of Part 2 of the NTA...
I would be grateful if you could provide me with a copy of any affidavit filed with the Federal Court addressing the authority of the persons who are currently authorised to "make" the Njamal "native title determination application". I make that request because I assume the decision making process you refer to above, being one based on an authorisation pursuant to s 251B NTA, is clearly set out in an affidavit which has been filed pursuant to s 62(1)(a)(v) NTA or possibly for the purposes of s 66B(b)NTA. Of course, if it were not so clearly set out, then it would be difficult to understand why you say the decision making process you refer to above arises from an authorisation pursuant to s 251B NTA.
PREVIOUS DRILLING WITHOUT A SURVEY / PREVIOUS (ASSUMED) BREACH OF HERITAGE AGREEMENT AND UNCLEARED DRILLING
I refer to your comments under the heading "Previous Drilling without a survey".
Who is YMAC heritage?
Why are they relevant to an agreement between Muccan and the "Njamal Claim Group"?In particular, what is the relevance of them saying they "would have required a survey" given:
(1)the obligation under the Heritage Agreement for the (contracting) parties to consult with a view to determining whether a heritage survey might be required: see clause 8.1 of the Heritage Agreement; and
(2)the right of a party to invoke the dispute resolution provisions of the Heritage Agreement that if consultation does not result in agreement as to heritage survey might be required.
Where is the evidence that any holes drilled by Muccan interfered with the exercise of any native title rights and interests? Where is the evidence that Njamal "native title claim group" hold native title rights and interests?
Njamal contend the letter shows Muccan ‘actively does not accept the existence of the Njamal People’s native title rights and interests’ (NTP Contentions at 104).They assert:
This is the reason why, in the Native Title Party’s submission, the Grantee Party has maintained their intransigent refusal to meet with the native title party over the past two years, this is the reason why the grantee party is insisting on any compensation being subject to a determination of native title, and this is the reason why the grantee party did not undertake a heritage survey with the native title party and the Grantee Party withdrew the native title party's preferred heritage protocol and proposed compensation provisions from the Draft Agreement [NTP Contentions at 105].
In response, Muccan contend it ‘cannot be correct’ ‘that the GP must agree with any assertion by the NTP, or at a minimum not question any assertion by the NTP’ (GP Contentions at 9.51).
The future act regime does not require a native title party to prove native title, nor a grantee or government party to accept that native title exists in the area of a proposed future act. In Fejo v Northern Territory the High Court held that:
one important aspect of the protection that the Act gives to native title is the right to negotiate... But neither the value of the right to negotiate nor the possibility of its exercise before determination of a native title claim are matters that affect in any way the strength of the claim to native title that lies behind the right to negotiate [at 121].
The obligation on the parties is to negotiate in good faith with a view to obtaining the agreement of the native title party to the doing of the act. Section 31(2) intends the parties negotiate about the effect of the proposed future act on the native title party’s registered native title rights and interests – and, according to the Explanatory Memorandum, s 31(2) was intended to ensure ‘that the negotiations should focus on relevant matters’ (Xstrata v Albury at [210]).
In that regard government parties seek submissions from native title parties pursuant to s 31(1)(a). In this matter, some information about the exercise of the Njamal People’s native title rights and interests was contained in Njamal’s 29 February 2014 submissions to the DMP, and in the 1 July 2015 email from Njamal to Muccan. However, it is not unreasonable for a grantee party to ask a native title party about the nature and exercise of native title rights and interests.
Findings on conduct
On the one hand, Muccan’s two letters address all of the issues raised by Njamal in their correspondence. Muccan attach draft agreements and appear to continue negotiations despite their ‘concerns’ which they contend they were ‘correct’ to raise. On the other hand, Muccan engaged in conduct which (although it did not protract negotiations) harmed the negotiation process. In particular, Muccan’s letters focus on issues which are more about process than parties’ interests.
In assessing whether a negotiation party has negotiated in good faith, the Tribunal must look at the totality of the material before it. In Brownley v Western Australia Lee J observed:
if a State purports to engage in negotiation, but, in truth, its conduct serves an ulterior and undisclosed purpose antithetical to the making of an agreement with a native title claimant, it will not be negotiating in good faith. Delay, obfuscation, intransigence and pettifoggery would be indicia of such conduct.’ (at 162-3/[25])
Furthermore, it is not necessary to show the party has ‘knowledge’ or intent to negotiate in bad faith - ‘honesty and good faith in the conduct of a government will be judged objectively, not by whether a government believes that it has so acted’ (at 163/[27]). The Tribunal has consistently followed and applied the law in Brownley v Western Australia (see Western Australia v Thalanyji at [7]-[8]).
In Doxford v Barnes the Tribunal noted:
When the Tribunal has to determine if a grantee party has negotiated in good faith it is incumbent on the Tribunal to assess the overall conduct of that party in the context of that party’s capacity to negotiate, the attitude and actions of the other parties and the general negotiating environment faced by each of the negotiation parties. In short a contextual evaluation is required. In this matter it is relevant to consider the financial circumstances of the grantee party and his overall capacity to engage in negotiations. A negotiation party with considerable resources, access to professional advice and the ability to organize and attend meetings will be required to act reasonably having regard to its ability to negotiate. Conversely the conduct of a negotiation party with limited resources, little or no access to professional services and difficulties in attending, let alone organising meetings, will be evaluated in that context [at 424-5].
In Doxford v Barnes, the grantee party Barnes was an unrepresented individual with few resources whereas the native title party was represented. However, the principle was later applied in Cosmos v Minerology, in which the Tribunal noted the unequal relationship between Minerology, a large company with multiple tenure and productive mining operations, and the Yaburara Mardudhunera People who were represented by YMAC.
In this matter, Njamal and YMAC have been transparent about their limited financial resources and capacity. Although there is little evidence about the financial circumstances of Muccan, they are part of the Creasy group who have interest in a considerable array of tenure in the Pilbara region (NTP30), and they have access to ‘in house counsel’ and external legal consultants (NTP11/GP32).
In this matter, and in the previous negotiations over these mining leases, there was much discussion about a meeting between Muccan and the Njamal working group although a meeting never occurred. Both Njamal and Muccan were outwardly in favour of meeting. Time and cost was the barrier and meeting content was never discussed. Had the interests (in the context of principled negotiation)[2] of the parties been central to discussion, the issues around time and cost might have been resolved.
[2] Roger Fisher and William Ury, Getting to Yes: Negotiating an Agreement Without Giving in, Cornerstone, New Ed, 2012.
(c) Lodgement of s 35 applications
As part of their July 2015 correspondence, Njamal forwarded Muccan a marked up copy of the draft agreement which contained, amongst other things, Njamal’s counter offer on compensation and inserted Njamal’s preferred heritage protocol in place of the one proposed by Muccan (NTP24/GP39).
It appears the DMP were monitoring progress. In August 2015 Njamal reported to the DMP: ‘As discussed ... we are awaiting a response to a marked up agreement sent through to Muccan and M&M Walter Consulting on the 1/7/2015’ (NTP25).
Muccan did not respond to Njamal’s marked up agreement until almost four months later, on 26 October 2015 [NTP26-27/GP40]. In their response, Muccan rejected the monetary component of Njamal’s proposal and rejected Njamal’s insertion of their preferred heritage protocol.
There is no evidence of any correspondence between the parties for another four months until 16 February 2016, when Muccan wrote the following short email to Njamal and the DMP:
The DMP has requested Muccan Minerals provide it with an update as to the negotiations in respect of the above tenements.
Can you let me know how you are going with reviewing the attached draft agreement and if possible, an estimated timeframe for a response so I can let the DMP know [NTP28/GP41]
On 22 February 2016, Njamal responded to Muccan and the DMP:
I have reviewed the letter and considered the proposed mark-up of the draft agreement. We appear to still be a long way from reaching an agreement especially with respect to compensation and the heritage protocol ... Given your comments and mark-up I believe it is appropriate for us to proceed to mediation and I look forward to discussing with you further at the Tribunal [NTP29/GP42].
The following day, Muccan lodged the s 35 applications which are the subject of this inquiry.
Njamal ‘acknowledge that the act of making a s 35(1) application under the NTA cannot alone be relied upon to demonstrate a lack of good faith’ (citing FMG Pilbara Pty Ltd v Cox (2009) 175 FCR 141, [19]). However, they submit that it can be considered a lack of good faith ‘if in doing so, the government or grantee party had improper motives, or adopted a negotiating position so unreasonable as to indicate a lack of sincerity in its desire to reach agreement with the native title party (citing Placer (Granny Smith) at [30]). Njamal contend Muccan’s ‘refusal to proceed to mediation must be considered in the overall context of the Grantee Party’s behaviour and the correspondence giving rise to the request for mediation in the first place’ (NTP Contentions at 65-66).
In response, Muccan state ‘almost a year had elapsed since Ms Camarri had assumed conduct of the negotiations’, ‘almost 4 months had elapsed since the NTP had received Ms Camarri’s [last] letter’, and the Njamal working group ‘had instructed YMAC on 1 May 2015 to continue negotiations on their behalf’ (GP Contentions at 9.25). In these circumstances, Muccan contend the ‘more relevant question may be why’, when Njamal responded in February, Njamal:
did not say more in relation to the GP’s proposed agreement than:
I have reviewed the letter and considered the proposed mark-up of the draft agreement
... did not explain why mediation was likely to be beneficial given ... the parties:
appear to still be a long way from reaching an agreement especially with respect to compensation and the heritage protocol [GP Contentions at 9.25]
Findings
Muccan appear to contend that Njamal’s email and delay was justification for lodging their s 35 applications. On the evidence, Muccan did not communicate any urgency during the negotiations. Muccan made their first offer in March 2015, some eight months following Muccan v Njamal. Njamal responded with a counter offer four months later in July, and Muccan responded with a further offer four months afterwards in October. Following, neither party communicated for another four months and only did so when prompted by the DMP. Muccan emailed Njamal to ‘let me know how you are going... so I can let the DMP know’ [NTP28/GP41]. The tone of the email is casual. No sense of urgency was conveyed and no detailed response was requested from Njamal. In the circumstances, Njamal’s response was proportionate and reasonable. For the purpose of advising the DMP, Njamal gave a brief description of the outstanding issues and proposed a constructive way forward by suggesting mediation. In the circumstances, Muccan’s lodgement of the s 35 applications was unreasonable and indicates a lack of sincerity in their desire to reach agreement (per Placer (Granny Smith) at [30]).
3. Was Muccan reasonable?
Njamal contend Muccan ‘acted unreasonably’ over compensation, economic advice and heritage. They contend Muccan’s position on these issues ‘demonstrate that ... the Grantee Party ... “adopted a rigid non-negotiable position when issues critical to the matter needed to be discussed”’ as found in Muccan v Njamal at [98] (NTP Contentions at 106 and 119).
(a) Compensation
Njamal make three contentions regarding Muccan’s offer of compensation.
First, Njamal contend Muccan ‘acted unreasonably in making a sham offer by requesting it be in full and final satisfaction of impact to native title rights and interest[s]’ (NTP Contentions at 106). In response, Muccan contend:
such conduct is entirely consistent with the obligation under s 31(1)(b) NTA to negotiate in good faith. To argue the contrary (as the NTP does) is to suggest that negotiation parties should not endeavour to finalise native title compensation when a future act is proposed, and that accordingly every future act should be the subject of a compensation claim (ie in the case of a mining lease, a claim under s 123 Mining Act 1978 (WA)). Such an approach promotes litigation, rather than resolution by negotiation, and cannot be correct [GP Contentions at 10.6]
I accept Muccan’s contention. It is not unreasonable for a grantee party to seek an agreement in final terms.
Second, Njamal contend the compensation offered by Muccan was ‘extremely low and unfair’. As a counter offer, Njamal proposed ‘broad-based compensation payments related to a % of on-ground expenditure and a % of production payments’ (NTP Contentions at 108-109). They stated their counter offer was in part derived from ‘previous agreements that the Native Title Party has reached with other proponents recently’ (NTP23-24/GP39). Njamal provide no other evidence to support their contention that Muccan’s offer was ‘extremely low and unfair’. Njamal’s counter offer also rejected the ‘full and final satisfaction’ clause in favour of one that allowed Njamal to seek future compensation from Muccan (NTP24/GP39 clause D6).
In Drake Coal v Birri People, Deputy President Sosso noted ‘it is not for a court or tribunal to assess the reasonableness of each offer’ (at [159], citing Strickland v Minister for Lands at 321). At [195]-[197]). DP Sosso provided a useful summary of Federal Court decisions which, as a general rule, make it impermissible to determine good faith by evaluating the reasonableness of compensation offers. According to DP Sosso:
[201] The Tribunal would only consider the fairness of a compensation package in two circumstances. First, if the offer of the grantee party is so manifestly and obviously unfair that any reasonable person would regard it as a “sham” or “unrealistic” offer. Second, if independent material is produced to the Tribunal which indicates that an offer is potentially unfair or unrealistic, such that the party put that proposal forward is not negotiating in good faith.
There is no evidence of those circumstances in this matter. Therefore, I cannot depart from the general rule that good faith cannot be determined on the reasonableness of compensation offers.
Third, Njamal contend Muccan ‘did not respond to the substantive NTP compensation offer’ that Njamal made, and ‘did not engage with the NTP’s correspondence relating to assessing compensation other than to ask further questions or argue’ (NTP Reply at 2). In response, Muccan contend they ‘did respond to the substantive NTP compensation offer’ and that the ‘questions asked were reasonable. The NTP declined to answer those questions’ (GP reply at 2.1-2.2).
In their 26 October 2015 correspondence, Muccan set out comments under a number of headings. Under the heading ‘Compensation’ they note that ‘Muccan draft 2’ sent 13 May 2015, proposed a compensation scheme which ‘finalised any potential claim’ that Njamal might have under the Act. The compensation was payable following a favourable determination of native title, and was essentially an offer of $10/ha CPI indexed for productive mining.
The ‘YMAC draft 3’ proposal sent 1 July 2015 contained a detailed compensation scheme based on exploration payments and production payments from the date of the agreement (first element); and an amendment to the ‘full satisfaction and release’ clauses in favour of ‘offset’ provisions (second element).
In their 26 October reply letter, Muccan accept the second element, but not the first – describing the second element as a ‘new scheme’. In their document ‘Muccan Draft 4’, Muccan did not delete the ‘YMAC Draft 3’ compensation clauses, did not reinstate the deleted Muccan compensation clauses, and did not provide a ‘clean’ copy. This led to some confusion. Muccan also say at paragraph 4.3 of their letter that in accepting the Njamal’s offset clause, it is done ‘with a view to identifying an acceptable contribution to any compensation that might ultimately be claimable by the Njamal people’. They do not explain what ‘identifying an acceptable contribution’ means, nor how the parties would go about the exercise of ‘identifying an acceptable contribution’.
Muccan, in their contentions in reply at 2.1, say that they ‘agreed to the NTP’s renumbered clause D6 Offset. That agreement exposed the GP to a future claim for compensation over and above that previously offered by the GP. That was a significant concession’ (GP reply at 2.1).
Muccan did not state their reason for rejecting the monetary component of Njamal’s proposal (first element) in their letter. Instead, they inserted the following comment at the compensation heading of the draft agreement appended to the letter:
The issue of compensation is complex, including by reasons of arguments that significant portions of the Mining Tenements have been extinguished of native title rights and interests. On that basis Muccan does not accept the amendments proposed…
Government party tenure information for the mining leases shows that M45/1163 (970.33 hectares) is comprised of 95.3% pastoral lease; M45/1162 (953.48 hectares) comprises 45.7% pastoral lease and 54.3% general lease; and M45/1160 (955.11 hectares) 73.8% pastoral lease and 26.3% general lease. In any case, what is relevant is the fact that Njamal are the native title party and hold important procedural rights. An unspecified conclusion of native title extinguishment as a ‘basis’ for dismissing a compensation proposal needs closer examination, that is, it does not go to the merit of the proposal.
Findings on compensation
In Brownley v Western Australia Lee J made the following comments about negotiations over compensation as outlined in s 33(1) of the Act:
The State is not obliged to reach agreement on such a matter but it is required to receive, and consider, a proposal from a registered native title claimant in a manner that has regard to the particular facts of the case and to the merit of the proposal in all the circumstances [at 169].
Section 33(1) lists potential topics for negotiation – they are ‘facultative not directory’ (Xstrata v Albury at [208]). That is, the conditions listed in s 33(1) relating to payments worked out by reference to profits, income, or things produced, may be included as a possibility in negotiations. Brownley v Western Australia is authority for the proposition that a party with a policy that it would not reach accord for the making of s 33 payments would not be negotiating in good faith (at 169). However, ‘although there is no obligation for a ... grantee party to negotiate profit or royalty type payments, the failure to agree to negotiate about such payments may in some circumstances be an indication of a failure to negotiate in good faith’ (Xstrata v Albury at [208]). There is no obligation for a grantee party to ‘capitulate in order to reach agreement’. However a grantee party has an obligation to receive and ‘give genuine consideration’ to a proposal from a native title party for a payment of the type outlined in s 33(1) (Western Australia v Thalanyji People at [33]-[37] and cases cited therein, notably Western Australia v Dimer at [40]).
At the heart of Njamal’s third contention (and Muccan’s response) lies the first question to be considered. Did Muccan give genuine consideration to Njamal’s proposal? Muccan’s ‘basis’ for rejecting Njamal’s proposal for s 33(1) type payments was that ‘compensation is complex’, together with an unexplained suggestion of widespread native title extinguishment. This does not allow me to conclude that Muccan gave ‘genuine consideration’ to Njamal’s proposal.
The second question is did Muccan provide a counter offer that Njamal could reasonably respond to?
In Young v Kariyarra the Kariyarra native title claimants asserted that the grantee party, Young, failed to make a reasonable offer and in doing so did not show a genuine attempt to negotiate an agreement over compensation. Young first offered a royalty of 20 cents per tonne (including CPI) of any mineral mined as ‘full and final satisfaction’ of their liabilities for native title compensation. Kariyarra then made a counter offer of $1 per tonne (including CPI) of sand mined; a $5000 per annum (CPI increased) education allowance per tenement; and $5000 per ancillary tenure grants as ‘full and final satisfaction’. Young countered with two alternative offers. The first was for 25 cents per tonne (including CPI) of sand; equivalent royalty paid to the State for any other minerals as ‘full and final satisfaction’. The second provided no financial offer but removed the ‘full and final satisfaction’ clauses, enabling Kariyarra to make future claims for native title compensation against Young. Kariyarra did not respond to either offer (Young v Kariyarra at [62]-[66]). Member Shurven determined that, on the facts, there was no basis for Kariyarra’s contention. It is clear on the facts that Young gave genuine consideration to Kariyarra’s counter offer and provided a counter offer that Kariyarra could reasonably be expected to respond to.
In this matter it is difficult to see how Njamal could have responded to Muccan. Muccan rejected the first element of Njamal’s counter offer (the monetary component) but seemingly provided no monetary offer in its place. Muccan did not state whether their original offer of $10/ha ‘compensation’ was still on the table. It was not reinstated in ‘Muccan draft 4’. In any case, Njamal had already indicated that the original offer was unacceptable. What Muccan proposed by ‘identifying an acceptable contribution to any compensation that might ultimately be claimable by the Njamal people’, was unexplained, confusing and uncertain.
(b) Economic advice
Njamal state that in April 2015, they requested that Muccan ‘fund economic advice in order ... to properly consider and assess the financial offer’ Muccan had presented. Njamal maintain the request was ‘due to the lack of provision of information and the high uncertainty flowing from this fact’ (NTP Contentions at 108, NTP17-18/GP36). They contend Muccan ‘acted unreasonably in failing to provide a substantive response to the request ... [o]ther than to ask what the purpose of the advice would be’ in May 2015 (NTP Contentions at 106 and 113).
Muccan contend their ‘request for assistance in understanding how “economic advice” might assist the parties was reasonable’. They state they ‘did not understand on what the “economic advice” would be based, what it would constitute or how it would assist the parties’. They state ‘there may be good answers to remedy the GP’s lack of understanding, but the NTP declined to address those matters’ in its subsequent correspondence in July 2015 ‘or at all’ (GP Contentions at 10.10-11, NTP23-24/GP39).
Findings
The evidence supports Njamal’s contention that Muccan failed to provide a ‘substantive response to the request’. Muccan’s response was simply to ask:
please explain ... how any “economic advice” might assist assessing any compensation to which any Njamal Person may be entitled under the NTA [NTP21/GP38]
(c) Heritage
In July 2015, Njamal forwarded a marked-up version of the draft agreement containing Njamal’s proposed changes. Among other changes, Njamal had deleted the majority of Muccan’s proposed heritage provisions and substituted a ‘Schedule B: Aboriginal Heritage Protocol’ (NTP23-24/GP39). Njamal contend Muccan ‘acted unreasonably in ... refusing to agree to the group’s preferred heritage protocol’ (NTP Contentions at 106).
In response, Muccan contend they are ‘not obliged to simply agree to whatever the NTP proposes’. They state they ‘did not simply reject the protocol, but rather gave detailed reasons why’ (GP Contentions at 10.12, NTP26-27/GP40). In contrast, Muccan observed that Njamal inserted their protocol into the draft agreement ‘without any accompanying explanation or reasoning’ (NTP26-27/GP40). Muccan contend ‘[t]here was nothing unreasonable about the manner in which the GP responded’ (GP Contentions at 10.13).
Given Njamal did not provide any explanation for the insertion of their preferred heritage protocol, Muccan’s response was reasonable in the circumstances.
3. Does Muccan’s overall conduct meet the threshold for good faith?
Njamal contend that Muccan ‘maintained’ their ‘lack of provision of information’ as in Muccan v Njamal. However, during the negotiations that followed Muccan v Njamal, the parties discussed a draft agreement. The agreement included arrangements for the provision of information should productive mining be approved, as well as compensation, heritage and socio-economic impact assessment. I concluded the draft agreement mitigated to some extent the disadvantage caused by the insufficient information about Muccan’s proposed activities.
As in Muccan v Njamal, a meeting between Muccan and the Njamal working group in this negotiation never eventuated. On this occasion, the obstacle to a face to face meeting appeared to be an impasse as to cost apportionment and time allocation.
The suggestion by Muccan for a ‘more efficient and cost effective’ approach, and advice from Njamal that they had instructed YMAC to continue negotiations on their behalf, appeared to be a step in the right direction towards ‘narrowing the issues’ ahead of a working group meeting. However, Muccan’s proposal remained contingent on a three hour meeting which brought into question the ‘efficient and cost effective’ element, and the overall approach became weighed down by exchanges regarding a number of issues other than the core elements of agreement.
In my view, Muccan’s expectation of being allocated a minimum of three hours at a working group meeting was unreasonable in the circumstances. Muccan was aware that: the working group meetings proposed received limited government funding and relied upon proponent funding; Njamal needed to conduct other business at working group meetings and an allocation of three hours would likely reduce time available to consider other business; and the contribution Muccan proposed was limited.
In their 13 May 2015 letter, Muccan suggested that a 60 minute (only) meeting breached a threshold regarding ‘associated preparation and mobilisation costs’ – which presumably a three hour meeting would not. This is not explained and no further insight into Muccan’s finances is available – apart from those noted at [63]. At [61] I refer to Doxford v Barnes, and at [61] Cosmos v Minerology. It is the overall conduct of the party in the context of its capacity to negotiate, the attitude and actions of the parties and the general negotiating environment faced by each that I am required to assess.
Those determinations (Doxford v Barnes and Cosmos v Minerology) support the proposition that a negotiation party with considerable resources, access to professional advice and the ability to organise and attend meetings will be required to act reasonably having regard to its ability to negotiate; and ‘conversely the conduct of a negotiation party with limited resources, little or no access to professional services and difficulties in attending, let alone organise meetings, will be evaluated in that context’ (Doxford v Barnes at (at 424-5).
In considering the reasonableness of Muccan in the circumstances, I am entitled to take into account the apparent unequal relationship between Muccan and Njamal. Muccan appeared to offer quite limited financial assistance for a working group meeting but had quite high expectations regarding the time to be allotted to discuss the mining leases. I conclude Muccan were unreasonable in this regard.
When considering whether Muccan was reasonable to lodge the s 35 applications, I considered the overall circumstances of the negotiations. In particular, at no time was there a sense of urgency or evidence that the negotiations were a priority for Muccan. In these circumstances, Muccan’s lodgement of the s 35 applications was unreasonable and indicates a lack of sincerity in their desire to reach an agreement.
There is an obligation on a negotiation party to ‘give genuine consideration’ to any proposal from a native title party for a payment of the type outlined in s33(1), but there is no obligation to ‘capitulate in order to reach agreement’ (Western Australia v Thalanyji People at [33]-[37]). When such a proposal was made by Njamal in ‘YMAC version 3’ draft agreement, the response from Muccan was a margin note which read:
The issue of compensation is complex, including by reasons of arguments that significant portions of the Mining Tenements have been extinguished of native title rights and interests. On that basis Muccan does not accept the amendments proposed...
At [81]-[94] I addressed matters relevant to compensation and noted that the basis Muccan gave for rejecting Njamal’s proposal for s 33(1) type payments was that ‘compensation is complex’ together with an unexplained suggestion of widespread native title extinguishment. This does not allow me to conclude that Muccan gave ‘genuine consideration’ to Njamal’s proposal.
Additionally, it is questionable whether Njamal could have reasonably been able to respond to the issue of compensation in Muccan’s October letter. In reframing the monetary component from ‘compensation’ to ‘contribution’, without explaining what was intended, created confusion and uncertainty.
Finally, Muccan failed to respond to Njamal’s proposal for funding for economic advice. Overall, the accumulation of each of these circumstances, leads to a finding that Muccan does not meet the threshold contemplated by s 31(1)(b) of the Act.
Determination
I am not satisfied that the grantee party negotiated in the manner required by s 31(1)(b) of the Act. According to s 36(2) of the Act, the Tribunal has no power to proceed to make a determination on the future act determination applications brought by the grantee party in respect of mining lease applications M45/1160, M45/1162 and M45/1163.
Mr JR McNamara
Member
26 July 2016
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