Raymond Dann & Ors (Amangu People)/Western Australia/Empire Oil Company (WA) Limited - [2006] NNTTA 153

NATIONAL NATIVE TITLE TRIBUNAL

Raymond Dann & Ors (Amangu People)/Western Australia/Empire Oil Company (WA) Limited, [2006] NNTTA 153 (24 November 2006)

Application No: WF06/21

IN THE MATTER of the Native Title Act 1993 (Cth)

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IN THE MATTER of an Inquiry into a Future Act Determination Application

Raymond Dann, Barry Dodd, Wayne Warner, Ron Ronan, Rod Little, Clarrie Cameron, Rob Ronan, Betty Forsyth, Donna Ronan and Colin Whitby on behalf of the Amangu People (native title party)

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State of Western Australia (government party)

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Empire Oil Company (WA) Limited (grantee party)

FUTURE ACT DETERMINATION - TRIBUNAL JURISDICTION TO DETERMINE MATTER

Tribunal: John Sosso
Place: Brisbane

Date: 24 November 2006

Hearing dates: 29 September 2006

Representatives:-

Grantee Party: Mr Craig Marshall, Empire Oil Company (WA) Limited

Native Title Party: Ms Leigh Simpkin, Yamatji Land and Sea Council

Government Party: Ms Maryie Platt, Department of Industry and Resources

Mr Domhnall McCloskey, State Solicitor’s Office

Catchwords: Native title – future act determination application – proposed petroleum exploration permit – jurisdiction – whether parties have negotiated in good faith – evidentiary onus – no challenge to good faith negotiations of government party – no obligation to negotiate in good faith over land and waters over which there are no registered native title rights and interests - grantee party negotiated in good faith.

Legislation:
Native Title Act 1993 (Cth) ss 10, 29, 30A, 30, 31, 33, 35, 36, 36A, 37, 38, 39, 41A, 75, 82, 109, 150, 151, 203BB
Petroleum Act 1967 (WA) ss 31, 38, 50, 54

Case Brownley v Western Australia (No 1) (1999) 95 FCR 152

Dann/Western Australia/Empire Oil Company (WA) Limited [2006] NNTTA 126 (25 August 2006)
Little v Western Australia [2001] FCA 1706
Placer (Granny Smith) v Western Australia (1999) 163 FLR 87
South Blackwater Coal Ltd v Queensland (2001) 165 FLR 232
Strategic Minerals Corporation NL/Kynuna/Queensland [2003] NNTTA 83
Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303
Walley v Western Australia (1996) 67 FCR 366
Walley v Western Australia (1999) 87 FCR 565
Western Australia v Dimer (2000) 163 FLR 426
Western Australia v Hayes (2001) 163 FLR 384

REASONS FOR DECISION ON WHETHER THE TRIBUNAL HAS JURISDICTION TO CONDUCT AN INQUIRY

The issue to be determined in this matter is whether Empire Oil Company (WA) Limited (“the grantee party”) has fulfilled its obligations under section 31 of the Native Title Act 1993 (Cth) (“the Act”) and negotiated in good faith with the Amangu People (“the native title party”). Neither the grantee party nor the native title party has contended that the State of Western Australia (“the government party”) has not negotiated in good faith. The issue of good faith goes to the jurisdiction of the Tribunal to make a section 38 determination, and once raised must be dealt with prior to a consideration of the section 39 criteria – see Walley v Western Australia (1996) 67 FCR 366. In these proceedings the native title party raised two jurisdictional challenges. The first concerned the validity of the section 29 notice issued by the government party. The Tribunal has dealt with, and dismissed, that challenge – see Dann/Western Australia/Empire Oil Company (WA) Limited [2006] NNTTA 126 (25 August 2006). The second jurisdictional challenge, the issue of whether the grantee party has negotiated in good faith, is dealt with hereunder.
On 15 December 2004, the government party gave notice under section 29 of the Act of its intention to grant Exploration Permit 4/04-5 EP (“the proposed tenement”) pursuant to section 31 of the Petroleum Act 1967 (WA) to the grantee party.
The notice stated that the grant of the exploration permit would authorise the grantee to explore for petroleum and carry on such operations and execute such works as would be necessary for that purpose for a term of 6 years, with an option for renewal for a further five years.
It is important to understand that the proposed future act in question is the grant of an exploration permit. Such a permit entitles the grantee to “explore for petroleum, and to carry out such operations and execute such works as are necessary for that purpose, in the permit area.” - section 38 Petroleum Act 1967 (WA). However, such a permit does not entitle the holder to recover petroleum from a licence area. The holder can make application for a production licence pursuant to section 50 of the Petroleum Act, which licence may be granted pursuant to section 54. The relevant law governing petroleum tenements was usefully explained by Deputy President Sumner in Western Australia v Hayes (2001) 163 FLR 384 at 389-392. The Department of Industry and Resources has produced a document (which is referred to hereunder) entitled “Administration of Petroleum Titles in Western Australia and Adjacent Offshore Areas”, which was last updated on 14 February 2003. The following information is set out in that document (at [1.2]):
“At this early stage of the State’s petroleum development the industry relies upon large tracts of land in which to explore. Although the mode of exploration is transient and relatively non-intrusive it is nevertheless expensive and the widest possible access is essential to increase the chances of discovery.
The development of any discovery is made through petroleum production licences of approximately 320 sq km, but which usually only require a few hectares of the surface land for production facilities.
Vacant petroleum exploration areas are allocated initially by publicly advertising areas, in terms of a number of blocks (blocks are graticules of 5 minutes of latitude by 5 minutes of longitude), as being available for application for the grant of Exploration Permits. Grant of such permits is made on merit, consideration being given to the extent and appropriateness of the work proposals, together with the applicant’s technical and financial ability.
In all cases, the holders of exploration and development titles are required to meet work commitments and comply with the conditions of approval to retain the rights to explore.
The holder of a petroleum exploration title has the right to convert any commercial discovery made to a Production Licence.
Titles issued for the actual extraction of petroleum are much smaller in area than exploration titles and are issued subject to appropriate conditions relative to safety, resource management, protection of the environment etc.
An applicant for a Production Licence is required to submit a notice outlining the nature of the proposed development, the method of operation and its environmental impact.
Further approvals must be obtained before any production can commence.”

Consequently, the grant of the proposed tenement will only allow the grantee party to explore for petroleum and carry out related activities. Should the grantee party wish to make application for a production licence the government party will have to give further notice under section 29, and any native title claim group with registered native title rights and interests will obtain a further right to negotiate. The negotiations undertaken in this matter, therefore, related solely to the exploration phase.

The proposed tenement, comprising 965.9 square kilometres, is located approximately 20 kilometres east of Eneabba, the north-west corner being situated at Latitude 29º 44’ 55.6” S, Longitude 115º25’05.1” E (GDA94), with the application area extending southerly for approximately 37 kilometres and easterly for approximately 35 kilometres. The proposed permit lies within the Shires of Dandaragan, Coorow and Carnarmah and includes land and waters that comprise part of both the Yued native title determination application area (WC97/71) and the Amangu native title determination application area (WC04/2).
The Yued native title determination application was lodged on 22 August 1997 and its current registered native title rights and interests were entered on the Register of Native Title Claims on 21 July 1999. The uncontested material before the Tribunal is that the grantee party entered into a Heritage Protection Agreement with the Yued People on 26 April 2005, and settled all other agreements by 2 February 2006. The Yued People are not involved in this matter and have not challenged the jurisdiction of the Tribunal on the basis that either the grantee or the government party has not negotiated in good faith. Unless otherwise indicated all references to the “native title party” in this determination relate solely to the Amangu People.
The Amangu People have various native title rights and interests which were entered on the Register of Native Title Claims on 3 March 2005. The nature of the rights and interests is dependent on whether the land and waters fall within Areas A, B or C. For the purposes of this matter, the land and waters in question fall within Area A. There are 35 enumerated rights and interests in Area A, including (but not limited to) rights to occupy, use, enjoy, access, camp upon, move about, visit, conduct and participate in ceremonies and meetings, take flora, take sand, stone, clay, ochre and water, and erect shelters on and over the subject area.
On 12 May 2006, the grantee party lodged with the National Native Title Tribunal (“the Tribunal”), pursuant to sections 35 and 75 of the Act, an application for a determination under section 38. As at least six months had passed since the notification day, the grantee party was prima facie entitled to make this application – section 35(1)(a).
On 17 May 2006 I was appointed the presiding Member to constitute the Tribunal for the purposes of conducting the inquiry into the future act determination application.
On 15 June 2006 I convened a preliminary conference with the representatives of the parties to determine if agreement could be reached on any issues and to sensibly prepare this matter for hearing. At this conference the native title party contended that the Tribunal lacked jurisdiction to proceed with the inquiry on the basis that the section 29 notice was invalid. The history of this inquiry and the respective contentions and submissions of the parties are set out in my reasons for the determination of the jurisdictional issue published on 25 August 2006 in which I determined that the section 29 notice was valid and that the Tribunal had jurisdiction to determine the section 35 application.
On 1 September 2006 I convened a Directions Hearing at which the native title party informed the Tribunal that it intended to raise a further jurisdictional issue namely, that in its opinion the grantee party had not negotiated in good faith.
Section 31(1)(b) of the Act requires that each of the negotiation parties must negotiate in good faith with a view to obtaining the agreement of the native title party to the doing of the future act or the doing of the future act with or without conditions. Section 36(2) provides that if any negotiation party, other than the native title party, did not negotiate in good faith, the Tribunal must not make a determination pursuant to section 38.
Any negotiation party alleging bad faith negotiations has an evidential burden which it must discharge by the production of evidence to support its contentions – Placer (Granny Smith) Pty Ltd v Western Australia (1999) 163 FLR 87 at [28]. In this matter directions were set requiring the native title party to produce contentions and documents to substantiate its challenge. Each of the other negotiation parties was given the opportunity to respond.
The native title party initially submitted that credibility of the grantee party was an issue and accordingly, this was an appropriate case for the taking of oral evidence and the cross-examination of witnesses. Accordingly I provided the native title party with an opportunity to make formal submissions on the subject, however, after consideration it advised that no further submissions on the subject of an oral hearing would be forthcoming.
I formed the view that there was sufficient material before the Tribunal to enable a decision to be made on the jurisdictional good faith challenge without recourse to oral evidence – section 151. It is important to recognise that the Tribunal must operate within relatively tight legislative timeframes. The Tribunal is enjoined by section 109(1) to carry out its functions in a “fair, just, economical, informal and prompt way”. In particular the Tribunal is “not bound by technicalities, legal forms or rules of evidence” – section 109(3). Moreover, regard should also be given to the following observations of Carr J in Walley v Western Australia (1996) 67 FCR 366 (at 378):
“It is apparent from the scheme of Subdiv B of Div 3 of Pt 2 of the Act that Parliament intended that the question whether a future act may be done or may be done conditionally should be decided in a timely manner. References in ss 30, 35 and 36 to periods measured in months and the requirement expressed in s 36(2) confirm this. There is obviously a risk of that intention being thwarted if proceedings before the Tribunal get bogged down in the adducing of evidence and the hearing of argument on the question whether the government party has negotiated in good faith.”

It is also relevant to have regard to the fact that the Tribunal has already expended a considerable amount of time dealing with the jurisdictional challenge to the section 29 notice. By the time that the Tribunal determines the good faith jurisdictional challenge more than six months will have elapsed from the date the grantee party made application under section 35. In such circumstances there is a requirement to notify the Commonwealth Minister (s 36(3)), and the Commonwealth Minister is empowered to request that the Tribunal make a determination within a specified period (s 36(4)) and if a determination is not made within that time frame, the Minister is empowered to intervene and make the determination (s 36A). Indeed Carr J also said in Walley (at 578): “it can be seen from s 36 that Parliament intended, as a general rule, that an arbitral determination should be made within four or six months (depending upon the type of future act) of the application to it.” In these circumstances, there is a need for the Tribunal to make a decision on the good faith challenge promptly and with as much expedition as is sensible having regard to issues of procedural fairness.

Both the native title and grantee parties have provided extensive written submissions on the issues germane to the jurisdictional challenge, and the government party has also made some short, but helpful submissions. The submissions received are as follows:

Native title party submissions:

Contentions of the Native Title Party as to Lack of Good Faith (“NTPSC”) filed 18 September 2006;
This submission was supplemented by the unsworn affidavit of Matthew John O’Sullivan (a solicitor formerly employed with the Yamatji Land and Sea Council, the representative for the Amangu People). Subsequently on 20 September 2006, the native title party provided the Tribunal with an amended affirmed affidavit of Matthew O’Sullivan (“NTPAMS”);
Affidavit in Support of Contention of Lack of Good Faith by Nathan Cammerman affirmed 6 October 2006 (‘NTPANC”), filed 6 October 2006; and
Submissions of the Native Title Party Pursuant to Directions Dated 17 October 2006 (“NTPFS”), filed 20 October 2006.

Grantee party submissions:

Affidavit of John Lloyd Craig Marshall affirmed 19 September 2006 and filed on 25 September 2006 (“GPSD”). Mr Marshall is the Managing Director of the grantee party. Included in the Affidavit is an extensive Statement of Defence which has been drafted in a manner which is somewhat difficult to read, and which is not paginated. Mr Marshall’s affidavit is supplemented by supporting evidence set out in Appendix 1 which comprises two binders containing Folios 1-73. The attached 73 folios provide a comprehensive history of the negotiation of the parties, and in total amount to more than 1,000 pages of material;
Affidavit of John Lloyd Craig Marshall in Support of the Statement of Defence (“GPSD”), affirmed and filed on 10 October 2006;
Affidavit of John Lloyd Craig Marshall (“GPASD”), affirmed and filed on 11 October 2006; and
Submissions of the Grantee Party Pursuant to Directions Dated 17 October 2006 (“GPFS”), filed on 24 October 2006.

Government party submissions

Government Party Contentions as to the Grantee Party’s Alleged Lack of Good Faith (“GSC”), filed 27 September 2006; and
Further Submissions of the Government Party filed pursuant to Orders issued 17 October 2006 (“GFS”), filed 24 October 2006.

History of Negotiations

The full history of the negotiations between the negotiation parties is lengthy and subject to numerous differences of opinion about motives, alleged delays in convening meetings and the fairness or unfairness of certain conduct, offers and negotiating behaviour. Nonetheless there are some core matters that are not in contention and which are relevant to the issue of good faith. Those matters are set out below. For the record I note that much of the factual information about dates when matters were publicly notified or published are set out in the grantee party’s materials. Unless that material is contradicted by other material filed with the Tribunal or has been contested, I have assumed that the material set out by the grantee party is factually accurate.
The grantee party made application for the grant of an exploration permit for petroleum in September 2004 in response to a Notice of Invitation which was published in the Government Gazette of Western Australia in March 2004. The government party offered to grant the proposed tenement to the grantee party on 3 November 2004, and this offer was accepted on 8 November 2004. In the government party’s letter to the grantee party of 3 November 2004 W L Tinapple, Director of the Petroleum and Royalties Division of the Department of Industry and Resources, said:
“Your application for the above area has been successful and you are regarded as the preferred applicant.
As the area contains National Parks and or Nature Reserves (see attached plan) I would remind you of Government policy which is to the effect that no access to these lands will be allowed for the purpose of exploration or production.
The application area is also the subject of Native Title Claim(s) and in respect of which the Right-To-Negotiate (RTN) provisions of the Commonwealth Native Title Act 1993 apply.
Bearing in mind these constraints, you should now confirm whether you wish to proceed with this application or not. If you decide to proceed you should recognize that the RTN process will be commenced immediately and that you will need to actively take part in those negotiations on a good faith basis.
Please advise of your decision in writing within 14 days. Failure to do so may result in refusal of your application.”

It will be noted that from the outset the grantee party was put on notice of the requirement that it must negotiate in good faith with any native title party. In subsequent correspondence with the grantee party, the government party reiterated the need to negotiate in good faith (e.g. in a letter of 7 December 2004 from W L Tinapple to Mr Craig Marshall). On 8 November 2004 the grantee party accepted these conditions and requested that the government party proceed with the application so that the right to negotiate process could be activated.

Pursuant to section 29, the government party gave notice of the proposed granting of the tenement on 15 December 2004. In letters dated 6 January and 12 April 2005, the government party wrote, inter alia, to the grantee party notifying it of the need to commence negotiations with the Yued People initially (6 January) and subsequently the Amangu People (12 April). The government party’s correspondence included copies of the exploration permit application form, a plan and topographical plan showing the area applied for, an outline of the proposed work program, a copy of the search of the Register of Aboriginal Sites and an extract of section 39(1). Further, to assist negotiations, the government party also enclosed copies of its guide of what constitutes “negotiations in good faith” and a copy of its Negotiation Protocol. Finally, the government party also attached two documents, the first entitled “Administration of Petroleum Titles in Western Australia and Adjacent Offshore Areas” and the second a copy of four additional conditions for discussion. The government party also requested that the grantee party provide within fourteen days of receipt of each of the letters to the respective registered native title claimants (of 6 January and 12 April 2005) a copy of the following documents:
·the grantee party’s last annual report;
·advice as to whether Aboriginal heritage surveys within the proposed tenement area were proposed or completed; and
·any company policies or information which might be relevant to native title claimants.

It is relevant to highlight that the material forwarded by the government party in its two letters graphically highlighted two matters. The first was that a majority of the land and waters comprising the proposed tenement area fell within the outer boundaries of the Yued People’s native title determination application. The second issue was that the vast majority of the land and waters comprising the tenement area ostensibly comprise freehold land. Of the land which, prima facie, would support the assertion of native title rights and interests, most falls within the area of the Yued application. Of the land and waters within the outer boundaries of the Amangu People’s application almost all is exclusive tenure, with only a very small area comprising reserves and some leasehold interests. Suffice it to say, that the area of land and waters comprising the proposed tenement which falls within the outer boundaries of the native title party’s application, only a fraction would prima facie be capable of supporting native title (subject, of course, to the operation of sections 47 – 47B).
The government party’s search of the Register of Aboriginal Sites disclosed no listed sites. However, the government party provided the following information to, inter alia, the grantee party:
“Prior to any proposed development/activity, so that no site is damaged or altered (which would result in a breach of Section 17 of the Act) it is recommended that suitably qualified consultants be engaged to conduct ethnographic and archaeological surveys of the area. This should ensure that all Aboriginal interest groups are consulted so that all sites on the designated land are avoided or identified. Such a survey would involve archival research, consultations and on the ground inspections. The Department of Indigenous Affairs is not able to recommend individual consultants, however contact details of the professional associations Department of Indigenous Affairs is as follows….
A survey should also ensure that the provisions of the Act are met.”
On 21 April 2005 and in response to the Government party’s directive of 12 April 2005 that the grantee should provide certain documents to the native title parties within 14 days, the grantee party wrote to the Amangu native title party appending, inter alia, a proposed Heritage Protection Agreement (“HPA”) for consideration by the native title party. These documents were received by Yamatji Land and Sea Council (“YLSC”), who represents the native title party in accordance with s 203BB of the Act, and were forwarded to the Amangu Working Party for consideration. No immediate response to the HPA was provided to the grantee party by the native title party.
On 19 May 2005, having obtained agreement from the native title and grantee parties, the government party requested Tribunal mediation assistance pursuant to section 31(3) of the Act. The first Tribunal convened mediation meeting took place on 22 June 2005 and was attended by representatives of each of the negotiation parties. A number of outcomes were agreed, including inviting the attendance of the grantee and government parties at the next Amangu Working Group meeting on 15 July 2006 and for YLSC to forward to the grantee party prior to that meeting the issues in the draft HPA which may have been of concern to members of the Working Group. It should be noted that the Working Group meeting did not proceed on 15 July due to the death of a local Elder and it was rescheduled and held on 25 July 2005.
On 22 June 2005 YLSC, on behalf of the native title party, wrote to the government party (and providing a copy to the grantee party) outlining its submissions. Seven numbered points were set out, however the last point is of most significance and is set out below:
”7. The Native Title Party says that the rights to maintain and protect places of importance must be reflected in the agreement. The Native Title Party says that the exploration permit area is rich in significant sites and areas, and are most concerned to protect them.
Furthermore, as the materials provided by DOIR show, the Department of Indigenous Affairs Register extract correctly states that sites may exist that are not yet entered into the Register system and that on-going consultation with relevant Aboriginal groups is required to identify any additional sites that may exist.
In this context, the measures toward protecting such sites, as detailed in the DOIR’s schedule of endorsements for this tenement, are insufficient. If the exploration permit is to be granted, a more satisfactory method of heritage protection would be for a full and detailed clearance to be conducted of all areas of interest to the Grantee Party to ensure that the Grantee Party does not disrupt or cause damage to any areas of importance to the Native Title Party. This further enables the Native Title Party to exercise its right to maintain and protect places of importance in relation to the exploration permit area. This should form part of the negotiations.”
On 8 July 2005 the grantee party forwarded an amended draft of the proposed HPA which contained some typographical alterations and a proposed new clause:
“Access to Conduct the Ground Disturbance Works
Provided that the company complies with the recommendations of the Heritage Survey Report submitted and does not carry out Ground Disturbing Works on areas not cleared by the Heritage Survey, it is deemed that the Native Title Party and the Native Title Claim group have approved the right of Empire to carry out its cleared Ground Disturbance Works in full satisfaction of Sections 17 to 23 of the Petroleum Activity (sic).”
On 22 July 2005 Ms Tonya Jensen, Legal Officer with the YLSC, responded to the proposed HPA noting that “many of the clauses in your document are unlikely to be acceptable in an agreement of this nature” and suggesting that a fresh template provided by YLSC would be a more appropriate starting point if the negotiation process was not to be unnecessarily protracted. The issues in contention outlined by Ms Jensen were as follows:
·Aboriginal heritage protection, including the conduct of heritage surveys, an agreed heritage protocol and protection of cultural information;
·agreed processes for dealing with applications under section 18 of the Aboriginal Heritage Act;
·payment for access to land;
·access to the permit area;
·environmental protection and rehabilitation of the land affected;
·monitoring and review of the agreement; and
·employment, training and contracting opportunities.
Mr Marshall, representing the grantee party, subsequently attended the Amangu Working Group meeting on 25 July 2005 at which he provided part of an extensive Power Point presentation which is set out in Folio 22 of Appendix 1. The conduct and outcomes of the meeting are set out in a Tribunal letter dated 1 August 2005 which was circulated to the negotiation parties. The relevant part of this document is as follows:
“The Amangu working group expressed concerns about the heritage survey and report process outlined in the agreement with particular reference to; the sensitivity of information relating to site identification; the clauses relating to s18 applications; and those relating to the company disagreeing with the recommendation of the anthropologist to appoint a monitoring team to monitor activities.
Tonya Jensen also noted that the agreement did not address compensation. She indicated that she would forward to Mr Marshall a template agreement similar to that which he has negotiated with other native title claim groups represented by YLSC, which contains terms relating to heritage surveys/reports and compensation which are acceptable to the Amangu working group.
Mr Marshall also gave a short presentation on petroleum exploration activities, with photos and diagrams to assist in the explanation.
Mr Gartrell, from the Environment Division of DoIR gave a brief presentation on the processes used to ensure environmental compliance from petroleum exploration companies.
Following this the Amangu working group requested a private session with their representatives.
After the private session, the Amangu working group proposed the following:
1)Empire to fund a meeting to progress matter in between working group meetings
2)Amangu wishes to discuss compensation and heritage protection
3)Amangu will take away Empire’s Agreement and YLSC Template and advise at next meeting
4)Working Group members to be paid $150 sitting fee
Mr Marshall indicated that items 2 and 3 were agreed to, however items 1 and 4 were not acceptable. The Amangu working group expressed their disappointment at what appeared to be an impasse.
Parties agreed that the meeting should be concluded.”
After Tribunal intervention, two outcomes were agreed to. First that YLSC would forward a template agreement agreeable to the native title party to the grantee party, and second, that the native title party would take away the grantee party’s HPA and the YLSC template and provide comment at the next Working Group meeting.
Mr Marshall, on behalf of the grantee party, emailed YLSC on 3 August 2005 stating, inter alia, that it would not agree to pay compensation to the native title party. YLSC in correspondence dated 18 August 2005 replied that this conflicted with the grantee party’s agreement to point 2 at the Working Party meeting. It was also stated that the Amangu Working Group was funded to meet on a quarterly basis, and that as the grantee party would not agree to fund a whole or part-day meeting, it would “take significantly longer for the working group to be able to satisfactorily negotiate an agreement with you.” The next Working Group meeting was due to be held in either October or November 2005. Mr Marshall responded on 19 August 2005 in the following terms:
“I have made these changes as I clearly stated at the Meeting that Empire has not paid compensation with any of the other Perth Basin Claimants and will not be paying compensation at the Exploration stage. This is an Exploration Permit to explore for petroleum. The fact that compensation payment is not on the Agenda is quite clear as it is not in Empire’s Draft Heritage Agreement.
I stated that I was happy with the Heritage Protection Agreement in Point 2. That was what my presentation was about. I would appreciate it if you do not infer that I said anything to the contrary.
I look forward to receiving either amendment to the HPA provided or the YLSC HPA. To date I have not received any input from the Amangu or the YLSC on the Heritage Protection Agreement regarding Petroleum Permit Application 4/04-5 and WC04/2.
Regarding Empire’s Draft Heritage Protection Agreement, I consider that this Agreement has not been read fully by either the YLSC or the Amangu and that individual sub-clauses may have been taken out of context of the total clause.”
At this time there was some staff movement within YLSC with Ms Tonya Jensen no longer working as the claim lawyer. Ms Jensen’s role was taken over by Mr Matthew O’Sullivan who emailed Mr Marshall on 7 October 2005 inviting him to attend a Working Group Meeting on 3 November 2005. Mr Marshall’s response of 11 October 2005 concluded as follows:
“To date, since forwarding the Empire Draft HPA on 12 April 2005, Empire has had no response to this Agreement or received an Amangu/YLSC draft template HPA as agreed by the Amangu/YLSC.
The YLSC and the Amangu should provide this information to Empire to progress negotiation as the YLSC and Amangu agreed at the last Mediation Meeting with Empire at Geraldton on 25 July 2005. Empire will not be attending this meeting and looks forward to receiving a response from the Amangu and the YLSC.
Empire is disappointed with the total lack of progress, time and cost it is incurring while waiting for the YLSC acting as the legal representatives of the Amangu. It is further disappointed that it seeks to repeat the meeting already held in Geraldton on 25 July 2005 when Tonya Jensen of the YLSC was acting for the Amangu….
May I suggest that the time put aside for the Amangu Working Group Meeting on 3 November 2005 should address the Empire Draft HPA. It is also considered that, at the time of this Working Group Meeting, the Amangu address and evaluate the Empire HPA correctly, reading all the sub clauses in context with the entire clause and the agreement. The Working Group meeting could also address the Amangu/YLSC template that is to be forwarded for review by Empire prior to the next NNTT Mediation Meeting. I consider from the previous meeting on 25 July 2005 the Empire Agreement was only evaluated immediately before the meeting with discussion on individual sub-clauses not understood as they were not discussed in that clauses entirety or referenced to the entire agreement.”
A further mediation meeting was convened by the Tribunal on 14 October 2005. It was noted that one of the outcomes of the Working Group meeting of 25 July was that YLSC was to supply to the grantee party a copy of its template heritage protection agreement. An undertaking was given that this would be actioned subject to the understanding that it had not been endorsed by the native title party. This document was duly forwarded by YLSC on 18 October 2005.
The status of the HPA submitted by the grantee party was also discussed, with YLSC stating that it would be considered by the Working Group at its next meeting and a decision made as to whether it or the YLSC template agreement would be used as the basis of negotiations. Mr Marshall was invited to attend the next Amangu Working Group meeting but declined on the basis that he would prefer not to attend until the Working Group had considered both agreements. It was also agreed that future negotiations would be effected by written correspondence due to the length of time between Working Group meetings and limitations placed on YLSC obtaining instructions outside scheduled Working Group meetings.
On 20 October 2005, Mr Marshall provided a marked-up response to the YLSC template agreement and stated that the grantee party “will be happy to use this as the Agreement and the Heritage Protection Protocol for 4/04-5.” However, Mr Marshall specifically addressed the issue of compensation in this letter as follows: “Empire will not agree to pay Compensation in the exploration stage for a Native Title Claim area in the Perth Basin where the majority of the land is freehold and excludes Native Title. This is consistent with my draft HPA and all the other agreements Empire has settled in the Perth Basin. Empire has been consistent with terms of Heritage Protection Surveys to be settled by an agreed budget. The Company does not pay ‘sitting fees’, ‘cash payments’ or fund meetings when conducting exploration.” Finally, Mr Marshall agreed that he would attend the Amangu Working Group meeting of 3 November 2005.
The Working Group meeting proceeded on 3 November 2005, and Mr Marshall, representing the grantee party, attended. Folio 40 of Appendix 1 purports to contain the minutes of the meeting. The author of this document is not clear, however from the tone of the document it appears to have been prepared by the grantee party. I do not necessarily regard this document as an objective and unbiased account of the meeting, however it is of some use in at least conveying the tone, content and nature of proceedings. It appears that there was quite extensive discussion of the compensation issue. Mr Marshall had amended the YLSC template agreement by replacing Clause 4 which deals with payments. In the original version supplied by YLSC there was provision for the payment of a yet to be agreed figure of the final cost of on-ground exploration. This provision was replaced by the grantee party with the following:
“4. PAYMENTS
4.1 There are no payments made under this Agreement to the Native Title Party while the Grantee Party is conducting exploration for petroleum.
4.2 Should the grantee party be successful in discovering petroleum in commercial quantities, then the Grantee Party will be required to apply for a Production Licence to produce petroleum. A Production Licence is a new tenement and if located over an area of land that are not all freehold land, then further negotiating with the Native Title Party will be a legal requirement. This is where the Grantee Party and the Native Title Party can negotiate benefits if the petroleum resource to be developed, is on Crown Land.”
It would appear that after some discussion, Mr Marshall offered a payment amounting to 5% of On Ground Expenditure conducted over Crown Land or land not excluded from Native Title. The native title party, however, wanted the 5% payment to be made on all land the subject of the proposed permit. With an apparent impasse on this matter, the Working Group made a further proposal for an up front lump sum payment for $35,000 in full satisfaction of any claim for compensation (confirmed in correspondence dated 11 November 2005 from YLSC to the grantee party) and sitting fees of $150 per person. This further proposal was not acceptable to the grantee party. Other issues and a slightly different version of this meeting is outlined in correspondence dated 11 November 2005 from YLSC to the grantee party.
A further Tribunal mediation meeting was convened on 7 November 2005. The relevant extracts from the notes taken of that meeting are as follows:
“Matthew O’Sullivan reported that the Amangu People identified compensation as the principle issue to be addressed during their negotiations with the grantee party. Matthew advised that the Amangu People would prefer the grantee party give due consideration to the threshold issue before any consideration of the remainder of his amended Amangu heritage protection agreement (HPA).
Craig Marshall advised that the proposal made by the Amangu People with respect to compensation is not acceptable to the grantee party as it is not consistent with how the company dealt with matters in the Perth Basin. Empire’s position was not to compensate for access to land or reserves where a determination in the Federal and High Court had extinguished native title. Empire was comfortable in entering into negotiations at production stage on providing compensation to land where native title was not extinguished. Craig requested the offer be formally proposed to him and gave an undertaking to provide a formal response to that offer.
Craig Marshall expressed his disappointment that his proposed amendments to the heritage protection agreement were not discussed at the working group meeting nor had he received a response to the amended HPA.”
Mr Marshall outlined the areas in the amended YLSC HPA requiring a response, and Mr O’Sullivan agreed to respond within one week, and, in turn, Mr Marshall agreed to provide feedback to any native title proposal within a week of receipt. Mr O’Sullivan’s response of 11 November 2005 dealt largely with past events and essentially reiterated the position of the native title party on the question of compensation. The response of Mr Marshall of 22 November 2005 was also basically a reiteration of the grantee party’s position on not paying compensation for exploration on freehold land. However, Mr Marshall again wrote to YLSC on 24 November 2005 in which he further amended the YLSC HPA, in particular rewriting clause 4 to provide for the payment to the native title party of 5% of the final cost on-ground exploration based on a specified formula. However clause 4.13 provided: “For the avoidance of doubt, payments shall not be made to the Native Title Party under this clause in connection with On-Ground Exploration that is carried out on land within the Project Area where native title has been wholly extinguished, for example, freehold land.” The term “project area” was defined in clause 1 as meaning: “the area of land within the Permit that is within the Claim Area.” In addition to the clause relating to payments, the marked-up agreement provided by Mr Marshall included a number of amendments relating to the nature of the proposed permit, timeframes, the conduct of heritage surveys, the duration and effect of the agreement and dispute provisions.

The further amendments made by the grantee party in the marked-up draft of the YLSC HPA indicates that while a number of clauses were still in dispute, some agreement had been reached in relation to less complex amendments. However, it is apparent that the compensation clause remained the most intractable issue.
Mr O’Sullivan’s email response of 25 November focused not so much on merits or otherwise of the proposed changes made by the grantee party, but rather whether the “marked up” draft in fact disclosed all of the proposed changes, and whether the failure to “mark up” all of the changes was motivated by bad faith. Mr Marshall replied by email on the same day attaching a copy of the draft YLSC HPA, with the exception of Schedule A (Aboriginal Heritage Protocol) with all amendments shown, and without further comment. The full “marked up” amendments to Schedule A were forwarded by Mr Marshall on Monday 28 November 2005.
All of the parties attended a Tribunal convened mediation meeting on 29 November 2005, but no further progress was made in resolving the compensation issue. The only outcome was that Mr O’Sullivan was to review the draft “marked up” agreement and provide feedback at the next meeting which was scheduled for 5 December 2005. Mr O’Sullivan ultimately wrote to Mr Marshall on 2 December 2005 outlining in some detail the position of the native title party on each the proposed changes made by the grantee party to the draft agreement. Importantly on the question of compensation he wrote:
“We note that the compensation offer included in the draft document represents a substantial departure from the offer made by Empire Oil at the Working Group meeting of 3 November 2005. Accordingly we will need to seek our client’s instructions in relation to this new offer. However, we note this new offer constitutes a retreat from the earlier offer and is not consistent with Empire Oil’s duty to negotiate in good faith.”

On the question of whether the grantee party had fully “marked up” all of the proposed amendments, Mr O’Sullivan wrote:

“We refer further to the Heritage Agreement, Schedule A and Schedule B provided by email on 29 November 2005 marked up with all of Empire Oil’s proposed amendments. Notwithstanding the assurances provided by Empire Oil at the mediation of 29 November 2005, and your emails of 23 and 29 November 2005 that the documents provided contained all of Empire Oil’s proposed amendments in a marked up format, we note that there were still several amendments to the Aboriginal Heritage Protocol which were not marked up. In particular, several of those proposed amendments are of some significance. Given the difficulties that this issue has previously created it is of great concern that the most recent version of the documents still contain proposed amendments which are not clearly marked up. In the circumstances it is difficult to view these omissions in a benign way.”

The Tribunal convened a further mediation meeting on 5 December 2005 at which there appears to have been an extensive discussion of various points of disagreement between the parties. However, as the notes of the meeting indicate, the two major areas of concern for the native title party relate to clause 4 dealing with compensation and paragraph 2.3 of Schedule A (Aboriginal Heritage Protocol) which concern the relevant “trigger point” for conducting a heritage survey. Subsequent (9 December 2005) to this meeting the government party circulated a tenure map of the proposed tenement area. According to the information supplied by the government party 90.27% (314.4 square kilometres) of the land and waters with the Amangu native title party’s portion of the proposed tenement was freehold, 7.14% was reserve land, 1.14% was leasehold and 1.45% was roads.
The grantee party by letter dated 14 December 2005 responded at length to the native title party’s correspondence of 2 December 2005. A number of minor and other drafting issues were agreed to, but there was no progress on the issue of compensation. This letter was subsequently discussed at a Tribunal convened mediation meeting on 16 December 2005, where it was agreed, inter alia, that YLSC would seek instructions from the Working Group on the outstanding aspects of the agreement and on their position on compensation. The Working Group met on 8 February 2006 and accepted the compensation proposal put forward by the grantee party. At the Tribunal convened mediation meeting of 3 March 2006 this decision was conveyed by Mr O’Sullivan, who also stated that the native title party’s position on heritage surveys was that they should be held over all land and waters, irrespective of whether the land and waters was exclusive or non-exclusive tenure. Mr Marshall indicated that the grantee party’s position was that while it would comply with the provisions of the Aboriginal Heritage Act over land where native title was not claimable, it would only agree to conduct a heritage survey over lands where native title was claimable.
By letter dated 10 March 2006 YLSC formally wrote to the grantee party outlining the outcomes of the Working Group meeting. Having resolved the question of compensation, the remaining contentious issue was whether heritage surveys would be conducted over the non-claimable land pursuant to the Aboriginal Heritage Protocol set out in Schedule A. Clause 2.3 of the Protocol as drafted by the native title party provided:
“Ground Disturbing Petroleum Operations
2.3 The Grantee Party may only conduct Ground Disturbing petroleum operations if the operations are not all located on freehold land within the Project Area if it complies with the Aboriginal Heritage Survey Procedure set out in clause 3 below.”

The version finally proposed by the grantee party was as follows:

“Ground Disturbing Petroleum Operations

2.3 The Grantee Party shall not undertake any Ground Disturbing work on any part of the Project Area unless it complies with the provisions of the Heritage Act 1972 (sic) and if the Aboriginal Heritage Survey is to be conducted it shall be pursuant to Clause 3 below”

On the issue of the appropriate trigger for conducting an aboriginal heritage survey under the Protocol Mr O’Sullivan wrote:
“We note that the Protocol within the Agreement is in substantially similar terms as the Regional Standard Heritage Agreement (“RSHA”), and other agreements concluded between various claimant groups and oil and gas proponents, both in the Perth Basin and elsewhere.
The view has been advanced that as petroleum exploration is not covered by the RSHA there is no need to provide similar levels of heritage protection during petroleum exploration. We note that petroleum exploration was never eligible for the expedited procedure under the Native Title Act on account of the high level of expected ground disturbance. It is a non sequitur to suggest that the level of heritage protection should be less than that provided for exploration activities accommodated by the expedited procedure. Far from a weakening of the provisions of the RSHA, Protocol Clause 2.3 should represent a bolstering of its provisions. The Protocol Clause 2.3 contained in the Yamatji Land and Sea Council Template Agreement already represents a watering down of heritage protection in the name of pragmatism and compromise.
Our client’s are of the view that Empire Oil’s approach to Protocol Clause 2.3 cannot be seen as having arisen from a genuine attempt to negotiate with a view to obtaining the agreement of our clients, and as such does not amount to negotiating in good faith.”
Mr Marshall responded by email on 15 March 2006 in the following terms:
“It is clear that should Empire wish to conduct exploration over areas that are not freehold land and on areas that are not exempt from the Native Title Act then a Heritage Survey with the Amangu will proceed. Where exploration activities are to be conducted on freehold land then Empire will rely on its legal obligation to comply with the Aboriginal Heritage Act. The fact that there is not a requirement for Empire to include the Amangu Claimants to conduct Aboriginal Heritage Surveys over freehold land does not mean that the Company has not negotiated in Good Faith. Empire takes all of its legal obligations seriously and fully understands the Aboriginal Heritage Act and complying with it, in particular freehold land.
I take this opportunity to make a statement on aboriginal sites and registering 4/04-5 within the Amangu Native Title Claim and in particular within the Permit Application Area. If there are aboriginal sites on freehold land of which the Amangu are aware of through their traditional customs and oral culture, then the Amangu need to take steps to have those sites recognised and registered through the Aboriginal Cultural Materials Committee and then placed on the Register of Aboriginal sites.
Regarding the search of the Aboriginal sites conducted on 4 January 2005 by the Department of Industry and Resources within the Petroleum Exploration Permit Application 4/04-5, there are no recorded sites. So, in respect of freehold land within the Permit, if there are sites that need protection, they need to be recorded on the Register.”
There were two more Tribunal convened mediation conferences – 20 March and 24 March 2006 – but basically, an impasse had been reached between the grantee and native title parties. The key issue at the conclusion of the negotiations was the unwillingness of the grantee party to undertake heritage surveys over those land and waters of the tenement area which were freehold or exclusive tenure. Two other contentious issues were the position of the grantee party that compensation payments made under clause 5.4 were full and final and that the agreement would lapse if there was a finding by the Federal Court that there were no native title rights and interests over the subject land and waters.

Legal Principles

The native title party submitted (NTPSC at para 2) that the relevant legal principles underpinning the statutory requirement to negotiate in good faith are set out by Deputy President Sumner in Gulliver Productions Pty Ltd v Western Desert Lands Aboriginal Corporation (2005) 196 FLR 52. No other party made any submissions to the contrary. For the purposes of this matter I adopt Deputy President Sumner’s outline of the law at 54-60/[4] – [20].
In particular I note the following legal principle which Deputy President Sumner drew attention to (at 60/[20]): “Of particular relevance to this case is that negotiations in good faith need only occur about matters related to the effect of the act on the registered native title rights and interests of the native title parties (s 31(2)) of the NTA.”
It is important, when evaluating whether a negotiation party has negotiated in good faith, to pay due regard to the operation of section 31(2). This subsection, which was inserted by the 1998 amendments, provides that a refusal or failure by any of the negotiation parties to negotiate in accordance with section 31(1)(b) about matters unrelated to the effect of the proposed future act on the registered rights and interests of a native title party, does not mean that the party refusing or failing to do so has not negotiated in good faith. In other words, the refusal or failure of either the government or grantee party in right to negotiate proceedings to enter into discussions about the effect of the future act on issues unrelated to registered native title rights and interests, does not mean that there have been bad faith negotiations.
The Explanatory Memorandum to the Native Title Amendment Bill 1997 circulated by the Prime Minister contains two brief mentions of this amendment. At paragraph 18.16 it is stated: “The requirement to negotiate in good faith is clarified to make it clear that it applies to all parties, but only requires negotiation in good faith about matters related to the effect of the act on the native title interests of the native title parties. This amendment will assist in ensuring that negotiations are focused on the issues between the parties.” Later, at paragraph 20.31 it is also stated: “New subsection 31(2) provides that where any of the negotiation parties refuses or fails to negotiate about matters which are unrelated to the effect of the future act on determined or claimed native title rights and interests, this will not constitute a failure to negotiate in good faith. This ensures that the negotiations should focus on relevant matters.”
Two preliminary points can be made about the operation of section 31(2).
First, the subsection does not limit the scope of matters that can be the subject of negotiations between the parties. This was explicitly recognised by Carr J in Walley v Western Australia (1999) 87 FCR 565 who said (at 579) that there is “no limitation on what the parties may voluntarily include in their discussions and any agreement.” The right to negotiate provisions are designed to provide a starting point, or a platform, from which the parties are at liberty to discuss any issue which they believe will advance their commercial relationship. It is becoming increasingly obvious that exploration and mining operators, as part of sound and commercially prudent management practice, need to develop good community relations not just with native title claimants, but also the wider Australian community. Section 31 does not operate in any manner to limit, constrain or impede productive negotiations which can range over any sensible matter that any of the negotiation parties brings to the table. Indeed it is patently obvious that the Act creates the opportunity for dialogue and the building of durable relationships.
Second, while the Act does not limit the subject matter of negotiations it does not compel grantee and government parties to go beyond the four corners of the legislation. The Native Title Act 1993 is, as the Short Title says, “An Act about native title in relation to land or waters, and for related purposes.” It is not a code for good faith negotiations about all issues that may conceivably arise between the parties. It is an Act designed specifically to recognise and protect native title (s 10) and is not designed for the advancement of issues unrelated to the subject matter, scope and purpose of the Act.
The types of matters that can be taken into account in determining if the government or grantee parties have negotiated in good faith are illustrated by the criteria which the Tribunal must take into account pursuant to section 39 – see Brownley v Western Australia(No 1) (1999) 95 FCR 152 at 162 per Lee J. Further, other sections in Subdivision P also provide useful markers to the type of negotiations that can be factored in when evaluating whether the parties have negotiated in good faith. In particular reference can be made to sections 27B, 33(1) and 33(2). The last mentioned subsection is of potential importance. Section 33(2), which was inserted by the 1998 amendments and had no equivalent counterpart in the original Act, provides that without limiting the scope of negotiations, existing non-native title rights and interests in relation to “the land or waters concerned” can be taken into account. The term “land or waters concerned” must be interpreted to mean so much of the land and waters of the proposed tenement area which fall within the outer boundaries of a registered native title determination application which are capable of sustaining the registered native title rights and interests of the relevant native title party.
There are two different types of issues that can arise in a right to negotiate inquiry. The first is whether, in relation to land and waters which are subject to a registered native title determination application, one of the parties has refused to negotiate over matters that are said to be unrelated to or unconnected with the impact of the doing of the future act on the registered native title rights and interests. Examples of how the Federal Court has approached questions of this type can be found in the judgments of Carr J in Walley v Western Australia (1999) 87 FCR 565 and Lee J in Brownley v Western Australia(No 1) (1999) 95 FCR 152. The second issue, and one which has also arisen in this matter, is not whether the matters sought to be negotiated are not related or connected to the doing of the future act, but rather whether they relate to land and waters which are not subject to a registered native title determination application. Registered native title rights and interests can only exist in respect of land and waters claimed and claimable by a native title determination application. Freehold land and other exclusive tenure is not claimed in the Amangu People’s native title determination application, and, further, is not generally claimable. It is on this fundamental point that much of this determination hinges.

Application of Legal Principles to the Facts

The native title party contended (NTSPC) that the grantee party had not negotiated in good faith because:
(a)   during the negotiations over compensation it kept, in effect, reducing the amount on offer (NTSPC at para 4);
(b)   it provided to the native title party an incomplete version of the “marked up” version of the agreement which was patently misleading in that not all of the changes effected by the grantee party were disclosed (para 5);
(c)   it negotiated a heritage survey agreement but refused to apply its provisions to areas of the proposed tenement area within the outer boundaries of the Amangu native title determination application where native title had been extinguished (para 6); and
(d)   it rejected, without reason, the acceptance by the native title party of the grantee party’s compensation offer and then introduced late in the negotiations new issues relating to aboriginal heritage, which issues were unreasonable and manifested a specious attitude designed only to obtain a rejection from the native title party (para 7).
The native title party outlined in summary form its main contentions as follows (NTSPC at para 8):
“In summary, EO resiled from its first compensation offer, pitched the second at a level that offered very little if any benefits on its own, which could not be expected to be accepted by a reasonable NTP at face value and when the NTP sought to meet EO’s stated objections in the interests of having heritage surveys conducted, Mr Marshall then revealed that EO did not plan to take the usual prudent step of having such surveys on most of the tenement and rather sought to rely only on avoiding registered sites, a position which must be seen as untenable because it would not amount to compliance with State heritage laws. The making of such changes just when other key negotiated clauses had been accepted leads to the inference that EO did not want to reach an agreement that involved the payment of compensation and sought additional unreasonable requirements to prevent this from happening. Further, by failing to disclose changes to the agreement in his dealings with Mr O’Sullivan, it is further alleged that Mr Marshall, for EO, demonstrated bad faith.”
Some of the contentions of the native title party suggest that the grantee party has not negotiated in good faith because of what it says is the current state of the law in various matters, and that, accordingly, the grantee party has negotiated on either a legally incorrect basis or on a basis which could be regarded as unreasonable. This is particularly the case with respect to the negotiations concerning the Aboriginal Heritage Protocol.
Before dealing with questions of “fair dealing” and the proper scope of the good faith negotiations, I will deal briefly with certain contentions of the native title party about the legal underpinnings of the negotiations.
The native title party submitted (NTPANC at para 6) that the grantee party would not recognise the full extent of the protections afforded by the Aboriginal Heritage Act 1972. In particular it was contended (NTPANC at para 8): “The question of heritage surveys by traditional owners to determine the existence and extent of heritage sites is a matter which largely determines whether there will be full compliance with State heritage protection laws under the AHA.”

As the government party contended (GFS at para 2), there is nothing expressly stated in the Aboriginal Heritage Act 1972 or able to be implied from its terms, to support the proposition that there is an obligation on a grantee party to fund an aboriginal heritage survey to ensure compliance with its obligations.
The next proposition advanced by the native title party was that the Geraldton Regional Standard Heritage Agreement (“RSHA”) applies to freehold land. The suggested relevance of this to the question of good faith arises from the Affidavit of Matthew O’Sullivan. Mr O’Sullivan, on behalf of the native title party, suggests that the grantee party did not negotiate in good faith in relation to the Heritage Protocol. He refers (NTPAMS at para 12) to his letter of 10 March 2006 which has been referred to earlier. In that letter he contends that the Aboriginal Heritage Protocol put forward by the grantee party contains a lesser standard of heritage protection than that contained in the RSHA, which only applies to exploration activities where the State asserts the expedited procedure. On this point the native title party made the following submissions (NTPANC at para 16):
“16. The State’s position as to the RSHA is that the RSHA does not expressly apply to freehold land, which is acknowledged, but it does not logically follow from that fact that the RSHA does not apply to freehold land, just as it would not be correct to infer that because there is no express mention of the AHA of freehold land, as distinct from other tenure, no-one is bound to comply with protection provisions of the AHA on freehold land. Everyone is so bound (see section 5). The State has carefully avoided saying that the RSHA does not apply to freehold land: it is observed that such a position by the State would be odd given that one of the stated goals of the RSHA is to provide for compliance with the AHA (see item G.b.iii of the Preamble to the RSHA which is the first annexure to the Cammerman affidavit).
The point which appears to be made by the native title party is that as the RSHA applies to exploration activities on freehold land, and that as the RSHA contains a higher standard of heritage protection than that agreed to by the grantee party on freehold land, in the context of a right to negotiate, this would suggest unreasonableness on the part of the grantee party.
Leaving to one side the fundamental issue, namely that the right to negotiate can only apply to land and waters where there are registered native title rights and interests, it is also helpful to deal with the suggestion that the RSHA applies to exclusive tenures within the area of a proposed exploration tenement.
The Recitals to the RSHA used by the Yamatji Marlpa Barna Baba Maaja Aboriginal Corporation, as the representative body for the Geraldton and Pilbara representative areas, make it quite clear what is the subject matter and scope of the Agreement. Recital E states: “The subject matter of this Agreement is a matter arising under the NTA in relation to the Claim.” Recital F then states: “The Proponent has made Tenement Applications for Exploration Tenements within the Claim Area.” Clause 1 defines claim area as “the land and waters the subject of the Claim.” There are frequent references throughout the Agreement to “Exploration Activities in the Claim Area on the Exploration Tenements” and “Exploration in the Claim Area” – cl. 5.1.1, 5.1.3, 6.1, 6.2, 7.1. The government party contended (GFS at para 4.3): “By necessary implication from the matters set out in clauses 4.1 and 4.2 hereof a RSHA does not apply to freehold land.” It is not necessary for the purposes of this matter to make any binding finding on the applicability of an RSHA to freehold land in the Geraldton region. However, I see no reason to disagree with the contention of the government party. Certainly for current purposes, there is no basis to suggest that a grantee party is negotiating in bad faith by contending that the terms of an RHSA are not applicable to freehold land and that the grantee will not fund heritage surveys over such land.
The native title party contends that the grantee party has throughout the negotiations engaged in conduct which has neither been honest or reasonable. To put in common parlance, the native title party contends that the grantee party has “gone through the motions” and has appeared to negotiate, but in reality has never been genuine about reaching a mutually agreeable accord. The type of conduct allegedly engaged in by the grantee party was summed up by Lee J in Brownley v Western Australia (No 1) as follows (at 162-163): “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.” In this matter, the native title party is suggesting that the grantee party, by constantly shifting the negotiation goal posts, by failing to disclose allegedly critical contractual changes and by engaging in intransigent and unreasonable negotiation conduct, has manifestly failed to negotiate in good faith.
The grantee party, conversely, contends that it went to considerable lengths to negotiate a mutually agreeable accord. The grantee party initiated negotiations and responded to correspondence from the native title party without delay, and in most cases, in a very comprehensive manner. In fact the grantee party consistently complained that the native title party was slow to respond to its communications and was tardy in meeting commitments made under the auspices of Tribunal convened mediations.
In addition, the grantee party points out that it negotiated an agreement very quickly, and ostensibly without acrimony, with the Yued People, the outer boundary of its native title determination application comprising more than half of the total area of the proposed tenement.
It is clear that the grantee party supported Tribunal convened mediations and attended each of the sessions convened. Further, the grantee party did not precipitously lodge a section 35 application. Negotiations had continued for more than a year before this occurred, and the request for arbitration only eventuated when it became patently clear that negotiations had reached a stalemate. The making of a section 35 application by a negotiation party of itself is not an indication of bad faith, simply the exercise of a legal entitlement – Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303 at 322 per Nicholson J. However, if a section 35 application is made by a negotiation party in a precipitate manner such that productive negotiations are aborted, then the termination of negotiations in such circumstances can be taken into account in assessing whether the party against whom the good faith challenge is mounted has acted reasonably and responsibly. As stated, in this case there can be no suggestion that the grantee party did not fully engage with the native title party, and on the facts presented the request for arbitration was only made when negotiations had finally failed.
Not only did the grantee party attend Tribunal convened mediation meetings, Mr Marshall also attended and addressed two Amangu Working Group meetings. The grantee party made the following submission (GPSD):
“The Grantee met twice with the Amangu Working Group in Geraldton seeking to settle compensation terms and the terms of conducting Aboriginal Heritage Surveys. These two meetings failed to reach agreement with their insistence on a $35,000 front end cash payment which was resolved through the introduction by the Grantee Party, the mediation process with the National Native Title Tribunal and subsequent lengthy Mediation Meetings. The parties failed to reach final agreement which was very disappointing mainly due to the Native Title Party insisting on the inclusion in the Heritage Protection Agreement that Amangu Aboriginal Heritage Surveys be conducted over freehold land where such land is excluded from Native Title before the Grantee Party could access any land excluding Native Title, to conduct exploration programmes….
The period of negotiating with the Native Title Party in good faith first on the Upfront Cash Payment compensation issue is from 21 April 2005 until 10 March 2006 and then following settlement, a further period to 24 March 2006 when the Native Title Party demanded the right to include in the Heritage Protection Agreement that access to freehold land should be the subject of an Amangu Aboriginal Heritage Survey. Because the Grantee refuses to agree with this while it is not legally enforceable pursuant to the Native Title Act and furthermore when it is documented that Native Title is extinguished on freehold land, the Grantee considers that not agreeing to this does not amount to not negotiating in good faith.
On 17 November 2005 it became apparent that although the Grantee parties’ Agreement was acceptable in all other respects, the Native title party’s demand to conduct Aboriginal Heritage Surveys over freehold land prior to the Grantee having access and to land where more than 92% of the Permit Application in the Amangu Claim is freehold and also where the Amangu insist that if their Native Title Claim is not granted, the HPA terms will continue and not terminate. As a consequence the Grantee Party had no other recourse than to seek a Determination for the Future Act pursuant to a Section 35 Determination lodged on 9 May 2006 with the NNTT.”
In Western Australia v Dimer (2000) 163 FLR 426 Member Lane made the following pertinent observations (at 446):
“To determine whether the grantee party and the native title parties have negotiated to the required standard, the conduct of each party must be examined in the light of the actual circumstances in each case. It is unrealistic to apply a standard based on artificial or hypothetical negotiation model, because to do so would suggest that a party need only follow mechanically a series of steps in order to be in a position to invoke the Tribunal’s jurisdiction. This is why decisions of the Tribunal such as Evans v Western Australia (unreported, National Native Title Tribunal, CJ Sumner, No WF98/267, 15 July 1999) at 44-45 emphasise that the fact that parties participate in mediation does not conclusively demonstrate negotiation in good faith.
The fact that at some stages of the negotiation, parties may not have demonstrated good faith negotiation behaviour does not prevent a finding that negotiation in good faith has taken place if, overall, the conduct of the parties shows that they have acted honestly and reasonably. So, for instance, the grantee party may be excused from behaving in an objectively reasonable fashion if faced with unreasonable conduct from the native title party.”
It is important to bear in mind that when the Tribunal assesses whether a government or grantee party has negotiated in good faith, it takes into account a number of factors. It does not, as Member Lane points out, apply some theoretical negotiation model and mechanically determine if there have been good faith negotiations based on whether the parties’ conduct fits in with certain criteria. Assessing whether there have been good faith negotiations requires the Tribunal to look at all circumstances and the totality of the negotiations. This is particularly the case when the parties appearing before the Tribunal do not have the monetary and human resources of the Crown or large mining companies. When the Tribunal is dealing with representative bodies and smaller exploration and mining companies, common sense dictates that there will be extra stresses placed on the parties. The ability of the parties to adopt “best practice” negotiations in these circumstances is often illusory. What may at first appear unreasonable or intransigent behaviour, often is simply hard but reasonable bargaining. So it is very important to assess negotiations recognising that the Tribunal is considering the behaviour of real people, often working in very difficult circumstances, without many resources, sometimes with major financial constraints and often with both a less than perfect understanding of their obligations under the Act and of their respective aspirations and concerns.
In this matter the grantee party did commence the negotiations opposed to the payment of compensation. However, while the grantee did reject the payment of an up-front $35,000 fee as well as sitting fees, it did agree to some limited form of compensation. So, the material discloses that the grantee party did not adopt a totally inflexible position, and was prepared to negotiate with the native title party on compensation. The fact that the native title party ultimately accepted the final form of compensation (at the Working Group meeting of 8 February 2006) would tend to indicate that the offer made by the grantee party was not unreasonable in the circumstances.
Much has been made by the native title party about the grantee party constantly shifting the negotiation goal posts. However, an objective perusal of the documents does not support this proposition. The grantee party, in fact, remained consistent throughout the negotiations in refusing to contemplate the payment of compensation or the funding of heritage surveys over land and waters that fell outside the native title determination application area, albeit within the outer boundaries of the claim and within the tenement boundaries. This negotiating position is also consistent with the grantee party refusing to accept ongoing obligations if there was a determination by the Federal Court under section 13 that native title was extinguished. The grantee party’s position was a consistent and hard one, but one that was, from its perspective, commercially and legally sound.
The grantee party was under no legal obligation to negotiate in good faith about compensation over land and waters not included within the native title determination application area. The grantee party was under no legal obligation to negotiate in good faith about heritage surveys over land and waters falling outside the area of the Amangu native title determination application.
The obligation to negotiate in good faith is prescribed by section 31. As previously pointed out, section 31(2) relieves a negotiation party from having to negotiate about matters unrelated to the effect of the act on the registered native title rights and interests of the native title parties. Such rights and interests can only exist over land and waters that fall within the boundaries of a native title determination application. The Amangu People’s application specifically excludes land and waters affected by not only Category A and B past and intermediate period acts, but also previous exclusive possession acts and “areas in relation to which native title rights and interests have otherwise been wholly extinguished.” In short, freehold land (and, prima facie, roads) falls outside the Amangu claim area and, in respect of that land, there are no registered native title rights and interests about which a grantee party has to negotiate with good faith. Even if section 31(2) had not been inserted in the legislation, there is no legislative nexus imposing any obligation on either the grantee or government parties to negotiate with respect to land and waters outside of the claim area.
The native title party does have a legitimate interest in the protection of areas or sites of particular significance within their traditional country. The meaning of “particular significance” has been explained in many Federal Court and Tribunal determinations in the context of section 237(b). Moreover, the protective operation of the Aboriginal Heritage Act 1972 (WA) was highlighted by Nicholson J in Little v Western Australia [2001] FCA 1706 at [75] – [77]. However, the key point is that when making a section 38 determination the Tribunal must take into account the effect of the proposed future act on “any area or site, on the land or waters concerned, of particular significance to the native title parties in accordance with their traditions” - s 39(1)(a)(v). The obligation is limited to areas or sites “on the land or waters concerned” and not areas falling outside the area of the native title determination application. It was open to, and entirely legitimate for, the native title party to negotiate an Aboriginal Heritage Protocol with the grantee party that would have potentially offered a higher level of protection to areas and sites of particular significance than that provided for by either the Native Title Act 1993 or the Aboriginal Heritage Act 1972. Not all areas or sites of significance are necessarily protected by the operation of the Aboriginal Heritage Act, and the Act recognises that sometimes the disclosing of culturally sensitive information would be contrary to Aboriginal customary law or tradition – s 7(1)(b). However, while recognising the legitimacy of a native title party attempting to use the right to negotiate process to obtain broader heritage protections, there is no compulsion on a grantee party to negotiate on heritage protocols for land and waters over which a native title party does not have registered native title rights and interests. An outright refusal, as in this case, to negotiate about heritage protocols over freehold land, is not a failure to negotiate in good faith, as there is no obligation to negotiate about such land and waters.
The next issue is whether, irrespective of this, the conduct of the grantee party was so unreasonable or dishonest that it could not be said that it negotiated in good faith in respect of the impact of the proposed future act on the registered native title rights and interests of the native title party. The only basis on the material presented, to make such a finding, would be if the grantee party deliberately engaged in dishonest behaviour. The most obvious example of the claimed dishonest behaviour was the failure to disclose all of the changes to the contractual documentation. Certainly the native title party asserts that the grantee party’s behaviour was dishonest in not showing all of the “tracked” changes. The material before the Tribunal does not support a finding of dishonesty on the part of the grantee party. Throughout, the grantee party negotiated within the legitimate boundaries of the law. The grantee party could have been more generous, could have been more receptive to changes and could have been more subtle in its communications and sensitive in the way in which certain matters were expressed. However, Mr Marshall, the spokesperson for the grantee party, remained quite consistent in his approach to the negotiations, and did, at times, compromise. Moreover, throughout the negotiations Mr Marshall kept to timelines and despite a lack of diplomacy at times, never hid his company’s negotiating position. I therefore am unable to draw any adverse inference about the failure of Mr Marshall to show all of the “tracked” changes. I note that the grantee party asserted (GPSD under para 10 headed “Fair Dealing”): “Tracking and any amendments to this Agreement referred to was undertaken immediately there appeared to be tracking missed. This is an easy error considering the number of changes.” Apart from the assertion of the native title party, there is no material before the Tribunal which would substantiate the drawing of an adverse inference against Mr Marshall with respect to “tracked” changes. On the balance I find that Mr Marshall made an honest mistake and was not acting dishonestly.
In conclusion, then, the starting point of any good faith inquiry is to assess the nature of the negotiations between the parties on the possible effect of the grant of the future act on the registered rights and interests of the native title parties. The registered rights and interests are only relevant with respect to land and waters where native title may continue to exist and which fall within the claimed land and waters of the relevant native title determination application.

It was entirely appropriate and sensible for the native title party to seek to obtain agreement from the grantee party on both compensation and a comprehensive heritage protocol. However in evaluating whether the grantee party has negotiated in good faith, only the impact of compensation and heritage protocols on claimed land and waters is relevant. In this matter the Amangu application specifically, and necessarily, excludes land where native title has been extinguished. In other words compensation and heritage protocols, for freehold and other exclusive tenure land over which petroleum exploration may occur, are not relevant to section 31 negotiations as such exploration cannot affect registered native title rights and interests, as there are none and cannot be any, over such land and waters.
The reasonableness of the compensation offer can only be looked at with respect to claimable land and waters covered by the application. It is totally irrelevant in this matter that less than ten per cent of the land and waters within the outer boundary of the Amangu claim falling within the proposed tenement area is covered by the application, such that little compensation will be paid. The issue is not the quantum of the compensation but the fairness of the offer. If there is only a small quantity of land or waters within the claim area, then as a matter of logic, only a small amount of compensation is, prima facie, payable. As stated, the fact that the native title party ultimately accepted the compensation offer tends to suggest that it was not an unfair offer.
The requirement to negotiate in good faith imposed by section 31 is aimed at ensuring that there is a fair process in place to encourage sensible and real dialogue between the negotiation parties. The Act does not require the Tribunal to evaluate whether the parties have negotiated in good faith on the basis of the alleged reasonableness of each proposal and counter-proposal. It is not open to the Tribunal to determine if there have been good faith negotiations on its view of the reasonableness of the substantive offers – Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303 at 321 per Nicholson J. The Tribunal is required to determine if there has been a genuine attempt by the negotiation parties to reach an agreement, and this is to be determined by the actions of the parties and not their subjective intentions – Brownley v Western Australia(No 1) (1999) 95 FCR 152 at 163 per Lee J. In this matter I make the following findings:
(a)firstly, with respect to those land and waters over which the native title party has registered native title rights and interests within the meaning of subsection 30(3);
(i)the grantee party did not delay in commencing negotiations with the native title party;
(ii)the grantee party was assiduous in responding to communications and initiating communications;
(iii)the grantee party attended meetings that were organised both by the native title party and the Tribunal;
(iv)the grantee party put forward offers, and responded with counter-offers to proposals from the native title party;
(v)the grantee party invested considerable time, money and energy in a process aimed at achieving a negotiated outcome;
(vi)the grantee party did not refuse to negotiate on trivial or inconsequential issues;
(vii)the grantee party did not, despite suggestions to the contrary by the native title party, shift its negotiation position when agreement was in sight;
(viii)the grantee party did not engage in obstructive or unreasonable behaviour;
(ix)     the grantee party responded to reasonable requests for information;
(x)the grantee party engaged freely and appropriately in Tribunal convened mediation conferences;
(xi)     the grantee party did not precipitately seek arbitration;
(xii)the grantee party did not unilaterally and unreasonably cease negotiating with the native title party;
(xiii)    the grantee party did not act dishonestly;
(xiv)the grantee party did not seek to mislead or deceive the native title party; and
(xv)the offers and negotiating position of the grantee party were not so patently unreasonable, that it could be inferred that it had no real intention of achieving a negotiated outcome;
(b)secondly, with respect to those land and waters within the area of the proposed tenement where there are no registered native title rights and interests, I find;
(i)the grantee party was under no obligation to negotiate with respect to matters related or connected to land and waters over which there were no registered native title rights and interests; and
(ii)the grantee party was, consequently, under no legal obligation to negotiate with respect to compensation, heritage or any other issue with respect to freehold land and other land and waters where native title had been extinguished which fell within the tenement area and within the outer boundaries of the Amangu People native title determination application but were not which were not (and could not) be covered by that application.
Although it is not necessary for the purpose of this determination, I also find that the native title party negotiated in good faith. The native title party proposals were aimed at achieving, what it believed, was a fair outcome. The right to negotiate process provides a legal platform for the negotiation parties to “put on the table” those issues which they believe are appropriate and which will assist in not only allowing the future act to occur, but also to develop longer term durable relationships. Further, I find that the negotiations carried out by the relevant staff of YLSC were fair and reasonable.
I have therefore formed the view that the grantee party has negotiated in good faith.

Decision

The grantee party has fulfilled its obligation to negotiate in good faith as required by section 31(1)(b) of the Native Title Act1993 (Cth) and the Tribunal has jurisdiction to conduct an inquiry and make a determination pursuant to section 38.

John Sosso

Member