Rusa Resources (Australia) Pty Ltd v Is (deceased) and Others on behalf of Wajarri Yamatji
[2015] NNTTA 15
•02 April 2015
NATIONAL NATIVE TITLE TRIBUNAL
Rusa Resources (Australia) Pty Ltd v IS (deceased) and Others on behalf of Wajarri Yamatji [2015] NNTTA 15 (02 April 2015)
Application No: WF2014/0017
IN THE MATTER of the Native Title Act1993 (Cth)
- and -
IN THE MATTER of an inquiry into a future act determination application
Rusa Resources (Australia) Pty Ltd (grantee party)
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Anthony James Bellotti and Others on behalf of the Malgana Shark Bay People (WC1998/017) (first native title party)
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IS (deceased) and Others on behalf of Wajarri Yamatji (WC2004/010) (second native title party)
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The 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: 2 April 2015
Catchwords: Native title – future act – application for a determination in relation to petroleum exploration permit application – jurisdiction – power – whether grantee party has negotiated in good faith – scope of the obligation to negotiate in good faith (s 31(2)) – grantee party has not negotiated in good faith – Tribunal does not have power to proceed with future act determination inquiry.
Legislation:Petroleum and Geothermal Energy Resources Act 1967 (WA), ss 30, 31
Native Title Act 1993 (Cth), ss 29, 30(1), 30A, 31, 35, 36(2), 38, 39, 109(3), 151(2)
Cases:Adani Mining Pty Ltd/ Jessie Diver & Ors on behalf of the Wangan and Jagalingou People/ State of Queensland [2013] NNTTA 30 (‘Adani Mining v Diver’)
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 (‘Brownley v Western Australia’)
Drake Coal Pty Ltd, Byerwen Coal Pty Ltd /Grace Smallwood & Ors (Birri People)/Queensland, [2012] NNTTA 9 (‘Drake Coal v Birri People’)
FMG Pilbara Pty Ltd v Cox and others (2009) 175 FCR 141; [2009] FCAFC 49 (‘FMG Pilbara v Cox’)
Gulliver Productions Pty Ltd v Western Desert Lands Aboriginal Corporation (2005) 196 FLR 52; [2005] NNTTA 88 (‘Gulliver v Western Desert Lands Aboriginal Corporation’)
June Ashwin on behalf of the Wutha People/Western Australia/Contact Uranium Limited [2008] NNTTA 129 (‘Wutha v Contact’)
Placer (Granny Smith) Pty Ltd v Western Australia (1999) 163 FLR 87; [1999] NNTTA 361 (‘Placer v Western Australia’)
Muccan Minerals Pty Ltd and Another v Taylor and Others on behalf of Njamal [2014] NNTTA 74 (‘Muccan Minerals v Njamal’)
Mr Kevin Cosmos & Ors (Yaburara Mardudhunera People)/Mr Jack Alexander & Ors (Kuruma Marthudunera People)/Western Australia/Mineralogy Pty Ltd, [2009] NNTTA 35 (‘Cosmos v Mineralogy’)
Strickland v Minister for Lands for Western Australia [1998] FCA 868; (1998) 85 FCR 303; (1998) 100 LGERA 50 (‘Strickland v Minister for Lands’)
Western Australia v Dimer (2000) 163 FLR 426; [2000] NNTTA 290 (‘Western Australia v Dimer’)
Western Australia v Taylor (1996) 134 FLR 211; [1996] NNTTA 34 (‘Western Australia v Taylor’)
White Mining (NSW) Pty Ltd v Franks (2011) 257 FLR 205; [2011] NNTTA 72 (‘White Mining v Franks’)
Xstrata Coal Queensland Pty Ltd & Ors/Mark Albury & Ors (Karingbal #2);Brendan Wyman & Ors (Bidjara People)/Queensland, [2012] NNTTA 93 (‘Xstrata Coal v Bidjara’)
Representative of the
grantee party: Mr Chas Lane, Consultant
Representative of the
first native title party: Mr Daniel Wells, Yamatji Marlpa Aboriginal Corporation
Representatives of the
second native title Ms Huia Woods, Yamatji Marlpa Aboriginal Corporation
party:Mr David Taft, Yamatji Marlpa Aboriginal Corporation
Representatives of the Ms Maryie Platt, Department of Mines and Petroleum
Government party: Ms Sarah Power, State Solicitor’s Office
REASONS FOR DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT THE INQUIRY
On the notification day of 4 December 2013, the Government party, through the Department of Mines and Petroleum (‘DMP’), gave notice (‘the notice’) under s 29 of the Native Title Act1993 (Cth) (‘the Act’/‘NTA’) of a future act, namely the grant of petroleum exploration permit application STP-EPA-0111 (‘the proposed permit’) to Rusa Resources (Australia) Pty Ltd (‘the grantee party’).
Any person who, four months after the notification day, is a native title party (that is, a registered native title claimant or body corporate according to the specified time frames in s 30(1) of the Act) in relation to any of the land or waters that will be affected by the future act, has a procedural right to negotiate in relation to the future act (see s 30(1)(a) and s 31 of the Act).
At the four month closing day, being 4 April 2014, the registered native title claims of the Malgana Shark Bay People (WC1998/017 – registered from 30 March 1998) and Wajarri Yamatji (WC2004/010 – registered from 5 December 2005) overlapped the proposed permit at 58.74 and 43.74 per cent respectively. The claims remain on the Register of Native Title Claims and each is a native title party in respect of these proceedings (see s 29(2)(b)(i) of the Act). The Malgana Shark Bay People shall be referred to as the first native title party, and the Wajarri Yamatji as the second native title party.
According to the notice, the proposed permit comprises 7,691.63 square kilometres, being a total of 100 5’x5’ blocks which are situated in the 1:1,000,000 mapsheet SG50 (Meekatharra), approximately 147 kilometres north-north east of Kalbarri, in the Shires of Murchison (50.6 per cent), Shark Bay (45.5 per cent) and Upper Gascoyne (3.9 per cent).
The proposed permit application results from the exercise of an acreage option allowed by a previous Special Prospecting Authority (SPA 6 AO) held by the grantee party. The rights which would be conferred by the proposed permit (if granted) are set out in s 38 of the Petroleum and Geothermal Energy Resources Act 1967 (WA) (‘PGERA’).
This decision is about whether the Tribunal is satisfied the grantee party negotiated in good faith with a view to obtaining the agreement of the second native title party, as required by s 31(1)(b) of the Act. If any negotiation party satisfies the Tribunal that any other negotiation party (other than a native title party) did not negotiate in good faith, the Tribunal must not make a determination pursuant to s 38 (see s 36(2) of the Act). The implications of s 36(2) were explained by the Full Federal Court in FMG Pilbara v Cox (at 143) as follows:
… the statutory prohibition at s 36(2) affects the ‘power’ of the Tribunal to make an arbitral determination rather than its ‘jurisdiction’. The prohibition on exercise of the power only arises when the good faith point is both taken and taken successfully by a negotiation party. If there were no good faith but the point were not taken, the Tribunal would still have jurisdiction and power. The power to make a determination is a function of the jurisdiction conferred on the Tribunal.
There is no submission that the Government party failed to negotiate in good faith.
The future act determination application
On 10 November 2014, the grantee party made an application, pursuant to s 35 of the Act, for the Tribunal to make a future act determination under s 38 of the Act in relation to the proposed permit. The application was made on the basis that the negotiation parties had not been able to reach an agreement of the kind mentioned in s 31(1)(b) of the Act and at least six months had passed since the notification day specified in the s 29 notice (see s 35 of the Act). On the same day, I was appointed as Member to conduct the inquiry into the application.
A preliminary conference was convened on 27 November 2014. At that conference, the native title parties’ representatives indicated their intent to raise allegations of lack of good faith against the grantee party. Accordingly I set directions at that conference, requiring the parties to submit contentions and evidence on the question of good faith (the preliminary issue) and in relation to the s 39 criteria (the substantive issue).
The directions specified that, should a native title party wish to challenge the good faith of any party during the negotiations, submissions on this point should be provided on or before Friday 19 December 2014. On that day, the first native title party confirmed it would not pursue a good faith challenge against the grantee party. On Saturday 20 December 2014, the second native title party provided its submissions to the Tribunal and the parties. On Monday 22 December 2014, the grantee party requested the second native title party’s submissions not be accepted by the Tribunal, given the submissions were lodged out of time. After considering the issue, parties were advised on 24 December 2014 that I would accept the second native title party’s submissions noting that: the Tribunal is required to carry out its functions in a fair, just, economical, informal and proper way and is not bound by technicalities, legal forms and rules of evidence (s109); and, in this instance, it would seem an overly technical approach to refuse the submissions noting that the delay was a matter of hours, rather than days or weeks, and had not unduly prejudiced any party. On 15 January 2015, the grantee party provided its submissions, and on 23 January 2015, the second native title party provided a reply.
Parties’ views were sought on whether the good faith inquiry should be decided on the papers or whether an oral hearing should take place. The Government party and the second native title party indicated they were agreeable to the matter proceeding on the papers. The grantee party also agreed, subject to being granted leave to make a further submission. The grantee party’s request was granted and the further submission was received on 4 February 2015. The second native title party was provided with the opportunity to reply by Friday 6 February 2015, and declined via email, stating it ‘maintains its contentions set out in paragraph 31 of its contentions in reply’.
I have considered the material before the Tribunal and am satisfied the matter can be decided on the papers pursuant to s 151(2) of the Act.
The obligation to negotiate in good faith
The obligation to negotiate in good faith is set out in s 31 of the Act:
s 31 Normal negotiation procedure
(1)Unless the notice includes a statement that the Government party considers the act attracts the expedited procedure:
(a)the Government party must give all native title parties an opportunity to make submissions to it, in writing or orally, regarding the act; and
(b)the negotiation parties must negotiate in good faith with a view to obtaining the agreement of each of the native title parties to:
(i) the doing of the act; or
(ii) the doing of the act subject to conditions to be complied with by any of the parties.
(2)If any of the negotiation parties refuses or fails to negotiate as mentioned in paragraph (1)(b) about matters unrelated to the effect of the act on the registered native title rights and interests of the native title parties, this does not mean that the negotiation party has not negotiated in good faith for the purposes of the paragraph.
The ‘negotiation parties’ are the Government party, the grantee party or parties and the native title party or parties (see s 30A of the Act). Where an allegation of a lack of good faith is made, it is only the conduct of a grantee party and/or the Government party which is relevant to the Tribunal’s power to make a determination under s 38 of the Act. As stated at [6] above, the Tribunal must not make a determination if any negotiation party satisfies the Tribunal that either the Government party or the grantee party did not negotiate in good faith (also see s 36(2) of the Act). If the Tribunal were so satisfied, the parties would need to recommence negotiations although it would be possible for a future act determination application to be made again in relevant circumstances.
Whether a native title party negotiated in good faith is not part of the consideration under s 36(2), though a native title party’s conduct can be taken into consideration when the Tribunal is assessing how reasonable the conduct of the grantee party or Government party has been in the circumstances (see Xstrata Coal v Bidjara at [65] and Placer v Western Australia at [30]).
Although the Tribunal is not bound by the rules of evidence (see s 109(3) of the Act), the effect of s 36(2) is to require the party alleging the lack of good faith to produce material to support the allegation. As explained in Gulliver v Western Desert Lands Aboriginal Corporation (at [10]):
The Tribunal has said that the practical effect of s 36(2) is to place an “evidential burden” on the party alleging lack of good faith negotiations which would normally require it to produce evidence to support its allegations. The Tribunal is not required to adopt strict rules on burden of proof but any party alleging a lack of good faith negotiations must provide contentions and documents which specify in detail the matters it relies on. (Dempster, Western Australia and Bayside Abalone [1999] NNTTA 235 Hon EM Franklyn QC (at 4, 21); Placer (Granny Smith) Pty Ltd v Western Australia (1999) 163 FLR 87 (21 December 1999) (at [21]-[28]).)
Good faith is not defined in the Act, though the description in Placer v Western Australia (at [30]) is informative. The references to a Government party are also applicable to a grantee party. It reads as follows:
Negotiation involves ‘communicating, having discussions or conferring with a view to reaching an agreement’: Western Australia v Taylor (1996) 134 FLR 211 at 219. Good faith requires the Government party to act with subjective honesty of intention and sincerity but this, on its own, is not sufficient. An objective standard also applies. The Government and grantee parties’ negotiating conduct may be so unreasonable that they could not be said to be sincere or genuine in their desire to reach agreement. The Tribunal must look at the conduct of the Government party as a whole but may have regard to certain indicia which were outlined in Western Australia v Taylor as a guide to whether the obligation has been fulfilled. One of these indicia is whether the negotiation party has done what a reasonable person would do in the circumstances. There is no requirement that the Tribunal be satisfied that the Government party has made reasonable offers or concessions to reach agreement but is permitted to have regard to the reasonableness or otherwise of them if it assists in the overall assessment of a party’s negotiating behaviour. Lack of good faith in the negotiations by the native title party will be relevant to whether the other parties have fulfilled their obligation and may impose a lesser standard on them.
The parties are not required to reach any particular stage of negotiations before applying for a future act determination application, however, it is insufficient to merely go through the motions and the quality of the conduct must be assessed (see FMGPilbara v Cox at [20] and [24]). In White Mining v Franks, Deputy President Sosso outlined key elements of the Full Federal Court’s decision in FMG Pilbara v Cox and went on to explain (at [33]):
… it is central to a good faith assessment to have regard to a negotiation party’s state of mind as manifested by its conduct. A party will fail to negotiate in good faith if it proposes a course of action which could be characterised as stalling, and then seeking arbitration after six months when the other party or parties reasonably would have expected that negotiations be on-going. In short, while good faith is not evaluated on the basis of the “status”, “stage” or “substance” of negotiations, it is evaluated on how negotiations are conducted. Consequently, if a party has deliberately taken advantage of another party’s understandable misapprehension that the negotiations would lead to an accord and delays in putting offers on the table or engaging in substantive negotiations to “buy time” so that the six months would elapse and arbitration could be sought, then the Tribunal will find that there have not been good faith negotiations.
In Western Australia v Taylor, Member Sumner (as he then was) provided a series of indicia of conduct to be taken into consideration when assessing good faith, which have been consistently referred to by the Tribunal (‘Njamal indicia’). The indicia are not to be interpreted as an exhaustive list and each item does not need to necessarily be present; they rather represent factors to consider, when the Tribunal is assessing the overall conduct in all of the circumstances (see Western Australia v Dimer at [85] and Adani Mining v Diver at [34]). With this in mind, the indicia in Western Australia v Taylor are as follows (at 224-225):
(i)Unreasonable delay in initiating communications in the first instance;
(ii)Failure to make proposals in the first place;
(iii)The unexplained failure to communicate with the other parties within a reasonable time;
(iv)Failure to contact one or more of the parties;
(v)Failure to follow up a lack of response from the other parties;
(vi)Failure to attempt to organise a meeting between the native title and grantee parties;
(vii)Failure to take reasonable steps to facilitate and engage in discussions between the parties;
(viii)Failure to respond to reasonable requests for relevant information within a reasonable time;
(ix)Stalling negotiations by unexplained delays in responding to correspondence or telephone calls;
(x)Unnecessary postponement of meetings;
(xi)Sending negotiators without authority to do more than argue or listen;
(xii)Refusing to agree on trivial matters, for example, refusal to incorporate statutory provisions into an agreement;
(xiii)Shifting position just as an agreement seems in sight;
(xiv)Adopting a rigid non-negotiable position;
(xv)Failure to make counter proposals;
(xvi)Unilateral conduct which harms the negotiating process, for example, issuing inappropriate press releases;
(xvii)Refusal to sign a written agreement in respect of the negotiation process or otherwise; and
(xviii) Failure to do what a reasonable person would do in the circumstances.
In Western Australia v Dimer, Member Lane endorsed the indicia and sought to categorise them into the following overarching obligations (‘Dimer obligations’):
(i)An obligation to communicate and respond with other parties within a reasonable time;
(ii)An obligation to make proposals to other parties and respond to those proposals (by making counter-proposals or by way of comment or suggestion about the original proposal) with a view to achieving agreement;
(iii)An obligation to make inquiry of other parties if there is insufficient information available to proceed in negotiations, and a reciprocal expectation that relevant information be provided by those other parties within a reasonable time;
(iv)An obligation to seek from other parties appropriate commitments to the process of negotiation or subject matter of negotiation, and a reciprocal obligation to make either appropriate commitments to process, or appropriate concessions as the case may be;
(v)An obligation to avoid unilateral conduct which harms the negotiation process and to act honestly and reasonably in the circumstances, with a view to reaching agreement (for example, make necessary inquiries of the other party).
I adopt the above principles for the purpose of this decision.
Good Faith Submissions
For ease of reference, a list of submissions and supporting documents can be found as Attachment A to this decision.
Second native title party submissions
The second native title party’s submissions comprise: a statement of contentions dated 20 December 2014 (‘SNTP Contentions’); the affidavit of Ms Huia Rosemary Woods affirmed 19 December 2014 (‘SNTP Affidavit’) with annexures (‘SNTP1-24’); and a reply to the grantee party dated 23 January 2015 (‘SNTP Reply’).
The second native title party’s contentions regarding the grantee party’s good faith negotiation fit into five categories:
1. The grantee party failed to provide ‘relevant and sufficient information’ in relation to its ‘exploration program, the financials of the Grantee Party, the impact of the exploration program on the environment, drilling techniques, the impact of the act on the Second Native Title Party’s native title rights and the potential for the impact of the act on the Byro aquifier’ (SNTP Contentions at 25-28, citing Njamal indicium (viii) and Dimer obligation (i));
2. The grantee party failed ‘to make a reasonable, realistic offer within a reasonable timeframe and then adopted a rigid approach once the offer was made’ (SNTP Contentions at 29-34, citing Njamal indicia (ii), (xiv) and (xviii), Dimer obligation (ii));
3. The grantee party failed to make an appropriate commitment to the process of negotiations, failed to make appropriate concessions and its conduct lacked a genuine attempt to reach an agreement (SNTP Contentions at 35-37, and 41-42, citing the Njamal indicia and the Dimer obligations generally);
4. The grantee party acted dishonestly and misleadingly in not disclosing its intentions for exploration which included the use of hydraulic fracturing. (SNTP Contentions at 38-40 and 43, citing Njamal indicium (xvi), the Dimer obligations generally); and
5. The grantee party approached ‘members of the Second Native Title Party directly for negotiations when he was fully aware that their authorised legal representative is YMAC [Yamatji Marlpa Aboriginal Corporation]’ (SNTP Contentions at 44-48, citing Njamal indicium (xvii), Dimer obligation (v)).
Grantee party submissions
The grantee party submissions comprise: a covering letter dated 14 January 2014, signed by Mr Chas Lane, representative and consultant for the grantee party (‘GP Letter’); three documents written by Mr Lane entitled ‘Comments on the Affidavit of Huia Woods’, ‘Response to the Contentions of the FNTP and SNTP’ and ‘Observations on the behaviour of the Native Title Parties’ (‘GP Submissions 1-3’); 20 attachments (GP1-20), including a letter signed by the grantee party director confirming Mr Lane’s authority to act for the grantee party (GP19); and a further submission on 4 February 2014 (GP Submission 4). In carrying out its functions, the Tribunal is not bound by the rules of evidence and must be fair, just and informal (s 109). However, it assists the Tribunal if a clear distinction is made between personal recollections or statements and contentions or responses to another party’s submissions.
Background to negotiations
Based on the evidence submitted by the grantee party and second native title party and Tribunal records, I accept the following occurred after s 29 notification and up to the day on which the s 35 application was made:
| DATE | EVENT |
| 4 December 2013 | s 29 notification day |
| 11 December 2013 (SNTP1) | Government party via the Department of Mines and Petroleum (‘DMP’) initial negotiation letter to the grantee party (‘GP’), the first native title party (‘FNTP’) and the second native title party (‘SNTP’). |
| 23 December 2013 (SNTP2/GP1) | GP initial negotiation letter and submissions to DMP, FNTP and SNTP in relation to the proposed permit. |
| 10 February 2014 (SNTP3/GP2) | SNTP initial negotiation letter to GP prepared by Ms Huia Woods, Yamatji Marlpa Aboriginal Corporation (‘YMAC’). |
| 12 February 2014 (SNTP4, referred to in SNTP5/GP3 and SNTP Reply at 5) | SNTP submissions to DMP and GP in relation to the proposed permit. |
| 11 March 2014 | GP lodged request for Tribunal mediation assistance. |
| 5 May 2014 (GP7) | First Tribunal mediation conference held. |
| 8 July 2014 (SNTP14) | GP forwards SNTP a draft ancillary agreement including a cultural heritage protocol and list of commitments relating to environmental protection, employment, training and contracting opportunities, cross cultural awareness, financial compensation and production payments should a conjunctive agreement be accepted. |
| 8 July 2014 (SNTP15) | Second Tribunal mediation conference held. |
| 22 July 2014 (SNTP16) | Third Tribunal mediation conference held. |
| 13 August 2014 (SNTP17) | SNTP representative forwards a terms sheet by way of counter offer to the GP’s draft ancillary agreement and list of commitments. |
| 26 August 2014 (SNTP18) | Fourth Tribunal mediation conference held. |
| 29 August 2014 (GP13) | GP responds to SNTP terms sheet/counter offer. |
| 15 October 2014 | Fifth Tribunal mediation conference held. |
| 4 November 2014 (SNTP24) | Sixth and final Tribunal mediation conference held. |
| 10 November 2014 | GP lodged s 35 application, mediation request taken to be withdrawn. |
Issues regarding good faith:
1. Failure to provide relevant and sufficient information
The second native title party contends that a number of requests were made to the grantee party for information relating to ‘the financials of the Grantee party’, its proposed exploration program (including drilling techniques); and, the impact its program would have on the environment, the second native title party’s native title rights, and the Byro aquifier (SNTP Contentions at 25-28). The second native title party contends the grantee party failed to negotiate in good faith because it failed to provide the relevant information to enable the second native title party to: assess how the project would affect its native title rights and interests (at 26); or make an informed choice about how to proceed in negotiations in a way that would recognise and protect these rights and interests (at 27).
Outline of evidence
DMP’s initial negotiation letter to the grantee party (SNTP1), and copied to the native title parties, requested the grantee party provide to DMP and the native title parties:
·the company’s last annual report;
·an outline of the proposed work program as applied for, for STP-EPA-0111 and the effect on the land and waters;
·advice as to whether Aboriginal heritage surveys within the title area are proposed or completed; and
·any company policies or information which might be relevant to native title claimants.
The letter is signed by DMP Acting General Manager Ms Allison Cohen and attaches, amongst other things: a copy of the proposed permit application; a plan showing the area applied for; a topographical plan showing the area applied for; searches of the Department of Aboriginal Affairs Aboriginal Sites Database (revealing six registered sites and eight other heritage places within the proposed permit). The copy of the proposed permit application includes a brief description of the proposed work program:
Year Work Program Details Expenditure A$
1 Geological, physical and environmental studies 100,000
2 Field mapping, geological and environmental studies 100,000
3 100km new 2D seismic acquisition, processing and 1,800,000
Interpretation4 Drill 1 exploration well 3,000,000
5 Geological, geophysical and environmental studies 100,000
6 Drill 1 exploration well 3,000,000
The grantee party’s 23 December 2013 submission in response to the DMP’s initial negotiation letter comprises a letter and a one-page environmental management policy dated May 2012 (SNTP2/GP1). The letter is addressed to Mr Michael Meegan, Principal Legal Officer for YMAC, Perth office. The letter states that as the grantee party is a private company, there is no annual report or similar prospectus, and that heritage surveys have not been undertaken given the location of the proposed seismic survey or exploration drilling has not been determined. It also states:
The proposed work program for the licence has been provided to you by Ms Cohen and is not repeated here. The field work associated with petroleum exploration generally consists of seismic surveying and exploration drilling, activities which are commonplace in Western Australia and have been for nearly fifty years. Modern seismic surveying involves minimal disturbance to the land and can be readily managed to avoid areas of environmental or cultural significance. Exploration drilling generally affects an area of one hectare, not including the access road required to truck equipment to the drill site. Again, this activity can be managed to avoid areas of environmental or cultural significance.
The second native title party’s 10 February 2014 initial negotiation letter to the grantee party states (SNTP3/GP2):
Taking instructions and advising our clients in relation to this negotiation is primarily conducted by the Wajarri Yamaiji Working Group comprising of 16 members who are elected annually by the Community to represent them in such matters. Any agreement which is reached has then to be authorised by the community at a community meeting of the Wajarri Yamaiji People. We have limited funding for future act activity of this kind and we therefore seek your agreement in principle (subject to the approval of Working Group and Community Meeting budgets) to fund the negotiation process
To this end, we suggest the following course of action:
1.On receipt of information outlined above, it will assist the negotiations greatly if Pangaea [sic - Rusa] agree to pay for an expert financial economic assessment of the proposed operations and who will recommend an appropriate compensation package to the claim group ahead of the meeting; We can provide you with an estimate of his fees if you are agreeable in principle to funding his services.
2.We suggest convening a Working Group meeting funded by RUSA to allow the negotiation team to meet with the members and present the proposed project in person at a venue in Geraldton;
3.We at YMAC are happy to organise and attend such a meeting upon your confirmation to agree to pay the cost outlined above which will include our legal costs for attending the meetings;
4.Such negotiations may take more than one meeting and typically take 3-4 Working Group meetings. The usual process is that all terms of agreement then need to be ratified and authorised by the wider group at a Community Meeting. However the Wajarri Yamatji claim group has recently ratified a conjunctive agreement for petroleum exploration in the northern claim area without the expense of organising a Community Meeting.
5.Once the parties come to an understanding, we draft the agreement on a costs recovery basis.
The grantee party’s 25 February 2014 reply states (SNTP5/GP3):
To address your numbered points:
1.As this application is for an exploration licence in a previously under-explored area, and given the almost complete lack of historical data to draw on, a "financial economic assessment", assuming this means an assessment of a potential petroleum resource, would necessarily rely on numerous assumptions and therefore be entirely speculative. Consequently we see no point in such an exercise and will not agree to fund one. I can provide the estimated exploration expenditure as set out in the application, which is a total of $8,100,000 over the first six-year period of the exploration permit.
2.We would welcome the opportunity to meet the Working Group and explain our proposed projects
3.Rusa declines the request to pay for any YMAC costs incurred by the Wajarri Yamatji during the negotiations.
4.Noted.
5.Rusa will consider contributing to the drafting of an agreement by a lawyer to ensure that it is correctly framed and worded to meet the requirements of the Act.
Rusa is not willing to fund the costs of the Wajarri Yamatji during the negotiation process. Rusa will of course contribute to the cost of hiring a venue and catering if required. Rusa's negotiating representative is willing to meet with the Working Group or any other representatives at a time and place of their convenience…
In your initial letter you mention that the Wajarri Yamatji has recently reached an agreement with another petroleum explorer … Rusa's exploration program is conventional in scope and will most likely be similar to the other explorer's in its proposed operations.
In the 6 March 2014 reply letter to the grantee party (SNTP6/GP4), the second native title party representative appears to indicate she had not received a copy of the grantee party’s 23 December 2013 letter to YMAC (SNTP2/GP1). She states the second native title party has not received ‘a report on the effect of the proposed work program on the land and waters’ as requested by the DMP in its initial negotiation letter, and advises:
… based on the limited information received from RUSA, RUSA’s proposed project differs substantially to that previously considered by the Wajarri Yamatji Native Title Party. For example, the Wajarri Yamatji would need to understand what is intended by a conventional exploration program for hydrocarbons and how such a program is different to a hard rock mining regime.
The 6 March 2014 reply acknowledges the grantee party’s agreement to meet with the second native title party working group, and states ‘YMAC is instructed by the Wajarri Yamatji Working Group to prioritise matters where Proponents have elected to fund meetings.’ It also states that ‘because you have advised that RUSA is unwilling to fund negotiations, YMAC is unable to offer any significant time on the agenda for the 17 March meeting. A further opportunity to address the group may be available in August.’ The letter suggests that a ‘full day may allow enough time to introduce and understand the project, identify all key issues and make significant progress to reaching an “in principle” agreement on key terms. A half day … would allow enough time to introduce and understand the project and identify most key issues. YMAC recommends a minimum of two hours time on the agenda in order to introduce each new right to negotiate matter.’ Attached to the reply is a budget estimate for what is said to be ‘Total of Estimated Cost for 2 hour pro rata meeting time’ totalling $15,629.22. The venue and catering costs totalled $620 and $807.50 respectively.
On 7 March 2014 the second native title party emailed further comments to the grantee party representative, who provided reply comments in bold (SNTP8/GP5):
The Native Title Party requires specific information as detailed in the DMP letter of 13 December 2013 [sic - 11 December 2013] and my letter of earlier this week in relation to the project proposed by RUSA. This information is required in order to assess the impact that the RUSA project will have on Wajarri Yamatji native title rights and interests. Without such information it is difficult to assess any terms of an agreement in relation to the project. - Copy of information previously provided to YMAC has now been emailed directly to you.
You have advised that the RUSA project involves "conventional drilling methods". I have advised that this term and how it is different to hard rock mining will need to be explained and clarified to the Wajarri Yamatji Working Group by way of explaining the proposed RUSA project. The most effective and efficient way to undertake this is by meeting with the working group and addressing their concerns directly for a minimum of two hours. - Agreed
In your previous correspondence you have assumed that the proposed RUSA project will result in the same terms as previously negotiated agreements. I have advised that it will not and that such terms will need to be negotiated directly between RUSA and the Wajarri Yamatji claim group in order for RUSA to adequately address the concerns of the Native title party. - I have not made such assumption. I have suggested using a previously negotiated agreement with a petroleum company as a starting point. If this is not acceptable, then fine by me.
Of course, the Native Title Party is willing to meet with RUSA. I have advised that the agenda for the next Wajarri Yamatji Working Group meeting is currently full. However I am instructed to prioritise those Proponents willing to fund meetings. Accordingly please confirm if RUSA are willing to make a contribution to the meeting on 17 March 2014 by COB 12 March 2014. - I understand that the NT Party is willing to meet with Rusa subject to Rusa contributing upwards of $16,000. I conclude that in the absence of such funding, the NT Party is not willing to meet with Rusa. Correct me if I misunderstand.
If RUSA is not willing to make such a contribution then I advise that the next opportunity to discuss the project directly with the Wajarri Yamatji Working Group will be around August subject to funding and availability. - This indicates to me that the same meeting/funding issue will arise. Again, correct me if I misunderstand.
I trust this answers your query and await receipt of:
4. Confirmation of RUSA's wish to attend the meeting of 17 March 2014. - I confirm I wish to attend on 17 March.Attached to the grantee party’s email (SNTP8/GP5) is a letter in response to the second native title party’s reply letter of 6 March 2014:
Rusa is willing and able to explain what is intended in their exploration program for hydrocarbons. Petroleum exploration and production is not the same as hard rock mining and there is little if any similarity, except maybe in the area of field camps.
I have previously addressed the 'financial economic assessment'. However if you are able to provide an example I shall see if it can be applied to Rusa's circumstances. Alternatively if you can nominate an assessor I will discuss it with them and see what they have in mind …
In respect of information from RUSA, as instructed by DMP this was provided to Michael Meehan [sic] of YMAC on 23 December 2013. I have today emailed you a copy.
Your comments on the negotiations and the requirement for community meetings are noted.
I understand that the working group is willing to meet with Rusa on 17 March 2014, following a 'DPM&C' on the previous Sunday. Rusa is not willing to fund upwards of $16,000 for the meeting, as per the estimate you provided. Rusa has previously offered to contribute to the cost of venue and catering. I am nevertheless available to attend at any time on the 17th March 2014.
The representatives were unable to reach agreement concerning the costs for a meeting with the second native title party working group, and the grantee party representative subsequently requested Tribunal mediation assistance (GP7). The circumstances surrounding the attempts to meet with members of the second native title party to progress negotiations will be discussed under heading 3 below.
On 3 June 2014, the representative for the grantee party wrote a brief email to the second native title party representative attaching ‘for your info, and for distribution to the Wajarri Yamatji Work Group … a short presentation on petroleum exploration field operations’ (GP8). In his good faith submissions, the representative for the grantee party states:
In respect of providing information on Rusa's field activities, and their impact on the land, I prepared a slideshow summarising Rusa's exploration program and field operations, and sent this to the SNTP on 3rd June 2014 (CML08)[GP8]. It was intended as a backdrop to a fuller discussion of proposed activities that might occur at a meeting of the parties … [GP Submission 2, p2]
The presentation consists of twelve slides entitled “Rusa Resources: Petroleum exploration operations and environmental impact” (GP8). Nine slides are photographs showing: a cultural heritage survey team in the Strezlecki Desert of South Australia; seismic vibrator trucks; a seismic line after recording; a seismic line after regrowth; two drilling rigs; a drill site after rehabilitation; production operation trucks; and a Google Earth satellite image of the Jingemia Oil field. Of the remaining three slides, one appears to be the grantee party’s proposed exploration program submitted in its initial application to the DMP (SNTP1) and the other two slides are as follows:
Seismic Surveying
·Typically the first field work carried out is seismic surveying. This surveying maps the sub-surface layers and identifies drilling targets.
·Cultural Heritage Surveys are carried out in advance
·Seismic lines are about 4 metres wide and as long as required, with 500m- l,00m between the lines.
·The 100km seismic survey in 2017 will take about two weeks to carry out
·Line restoration and rehabilitation generally leaves little trace of seismic lines after a few years.
Exploration Drilling
·One well scheduled for 2018 and one in 2020
·Drilling occupies about 1hectare for rig and ¼ hectare for camp
·Expect the projects to last 3-4 weeks each
·Water is sourced from a station or road bore
·Drillsites are restored with root and seed stock taken from topsoil during construction
The second native title party’s information needs regarding petroleum exploration was noted in three of the Tribunal mediation synopsis and outcomes letters. At the first mediation on 5 May 2014:
Ms Woods, Mr Young and Mr Lane then discussed what information the native title parties might require at a working group meeting. Ms Platt indicated that the State could provide enhanced maps, as well as further background information on petroleum exploration to the native title parties, and would be happy to attend any working group meeting to assist in this regard. Both Ms Woods and Mr Young agreed that this would be very helpful for the native title parties and Mr Lane welcomed the assistance. [GP7]
At the second mediation on 8 July 2014:
Ms Platt … repeated that DMP is willing to provide a detailed presentation to the working groups on petroleum exploration and associated environmental regulation, which another native title group had found to be very helpful. Ms Woods and Mr Young both agreed that such a presentation would be helpful for their clients as petroleum exploration in their clients’ areas is a new concept and not something either group has much knowledge of. [SNTP15]
At the fourth mediation on 26 August 2014:
Ms Woods … highlighted that Wajarri Yamatji have serious concerns regarding fracking, which they want to discuss with the grantee party. Ms Platt asked Ms Woods if it would assist if the State presented its petroleum training session at the meeting. Ms Woods felt that it would be a good idea as it may answer some of the environmental questions the sub-committee has. [SNTP18]
Following an email exchange regarding the status of aspects of the offers and counter-offers at that time, on 31 October 2014, the second native title party representative emailed the grantee party:
The following issues have been raised by the Wajarri Yamatji Native Title Party ("WJY NTP") that you have not addressed. In YMAC's initial letter information of RUSA's proposed project was requested in order to:
1. Assess environmental risk and impact of the proposed project on native title rights;
2. Assess economic compensation in relation to the damage and other adverse effects of the project on native title rights.
In response you have refused to address any environmental and other concerns directly with the Wajarri Yamatji people or any of their representatives. You have refused to provide any information on economic effects of the proposed project. In addition you have refused to provide any funding for negotiation meetings or to provide independent advice which allows the WJY NTP to make informed decisions in relation to RUSA’s project.
The information you have provided is inadequate to address the concerns of the WJY NTP. I first stated this in my initial letter and I have reiterated this at every mediation in the Tribunal.
To reduce this matter to one of funding for negotiations is to ignore the very real and valid concerns of the NTP in relation to how this project will impact their native title rights. In particular, how this project will impact the aquifer.
In relation to RUSA's ongoing insistent [sic] not to provide any additional information in relation to the project, exploration techniques, environmental risk assessment, or economic assessment, I advise that the WJY NTP is aware of the public media releases on the joint venture project that RUSA has with Tap Oil. This sheds a very different light on your assertion that RUSA is run by just two "ordinary guys".
I refer to your comments on the terms sheet sent through to your comments do not [at] all offer a counter to WJY NTP’s terms.
WJY NTP prefer and are more than capable of negotiating directly with proponents through the WJY WG. It is an unfair and unreasonable burden to expect the WJY NTP to bear the costs of advice and negotiations in relation to RUSA's project, particularly where the total exploration expenditure is in excess of $8 million and the WJY NTP concerns in relation to the impact of this project on their native title rights remains difficult to assess because the information to assess this project has not been provided.
Any negotiations involving only YMAC will need to be authorised by duly nominated members of the WJY NTP. To expect any less would be unethical. [SNTP23]
Searches of the Tribunal’s geospatial information system were undertaken for all s 29 notices issued by the Government party for petroleum tenure over the second native title party’s claim area. The searches were provided to all parties and verified by the Government party. Three notices have been issued for petroleum exploration permit applications being:
Application No. Applicant Notification Day Closing Day STP-EPA-0012 Pangaea Resources Pty Ltd 23 February 2011 23 June 2011 STP-EPA-0011 Rusa Resources Pty Ltd 4 December 2013 4 April 2014 STP-EPA-0127
Palatine Energy Pty Ltd
5 November 2014
5 March 2015
No notices have been issued for petroleum production licence applications. The searches show that limited exploration activity has occurred over the area of the second native title party’s claim.
Parties’ Contentions and Statements
The second native title party contends it made requests to the grantee party for further information on 10 February 2014, 6 March 2014, 25 August 2014 and 31 October 2014 (SNTP Contentions at 27) and the information the grantee party provided was insufficient to comply with the requirements of good faith negotiations and enable the second native title party ‘to make an informed choice about how to proceed in negotiations in a way that would recognize and protect native title’ (at 28). It makes particular reference to information regarding what it contends is ‘unconventional petroleum and gas exploration’ (at 26) which refers to hydraulic fracturing techniques.
In response to the second native title party’s contention at 27 (SNTP Contentions), the grantee party representative states:
It is unreasonable to be expected to reply to items that have been responded to earlier, even if those responses are deemed to be lacking in sufficient detail by someone inexpert in those areas. The “most effective and efficient way” to discuss and address any concerns that may be held by the SNTP are by way of a meeting between the parties, as Ms Woods herself suggests in her email of 7 March 2014 …
Rusa submits that the information provided by Rusa over the year-long course of negotiations and mediation, given that the SNTP was not able to arrange a meeting between Rusa and the Working Group, is sufficient to fulfil the requirements of good faith negotiations. [GP Submission 2, p2]
With reference to the grantee party’s monetary offer, the second native title party submits:
… there is in sufficient [sic] information available to assess the potential of whether the future act will poison the Byro aquifer and how this could be monitored as there is insufficient information in relation to the impact of the act on the Second Native Title Party's rights in general. [SNTP Contentions at 32]
In response to the second native title party’s contention at 32 (SNTP Contentions), the grantee party representative states:
This aquifer has not been mentioned in any correspondence by the SNTP. Nevertheless, if there was any potential to poison any aquifer by drilling then the project would not be permitted by the Department of Mines and Petroleum (DMP). The idea that the aquifer could be polluted by exploration drilling, and that compensation should be payable up-front to the SNTP, is ridiculous. The Government Party is in a better position to discuss this concern than Rusa. Environmental Risk assessments and management plans are put in place prior to undertaking field operations, not during the permit application stage. Approval to drill will not be granted by the Department of Mines and Petroleum unless the risks have been fully assessed and a management plan in place. [GP Submission 2, p3]
The grantee party representative states ‘petroleum exploration (Seismic, drilling and fraccing) has been carried out in Australia, let alone the rest of the world, for well over 50 years, and … there is anything but a lack of information’ (GP Submission 1, p1). He states ‘[t]he petroleum resource to be explored for by Rusa can be described as “unconventional oil and gas”. How that resource is evaluated (eg: by seismic and drilling) is entirely conventional in scope, using techniques that have remained largely unchanged for decades’ [GP Submission 2, p6]. He also states:
It is presented in the slide show (CML08)[GP8] that Rusa's physical footprint on the SNTP claim area is negligible in terms of area, and of a total of 8 weeks duration over the five-year period. A reasonable person might say "What's the big deal?", rather than label it as a sham. In the end it is a commercial matter, and negotiable, and Rusa has not been given the opportunity to so negotiate with the SNTP on this or any other matter. [GP Submission 2, p4]
In its reply to the grantee party’s submissions, the second native title party contends:
The GP's response refers to expert information specifically relating to key terms involved in the petroleum industry, petroleum extraction processes and the intentions of the GP to employ such processes following the grant of the Tenement. This information is the kind repeatedly requested by the SNTP in order for the SNTP to make informed decisions on the impact of this proposed project on their native title rights and interests. It has never been provided to the SNTP during the negotiation period (see GP's response page 6 and SNTP's initial contentions paras 38 - 40). [SNTP Reply at 15]
Consideration and Findings
In determining whether the grantee party negotiated in good faith as required by s 31(1)(b) of the Act, the Tribunal must consider the historical facts of the matter and consider overall the negotiations that have taken place. The Tribunal and the Federal Court have found on a number of occasions that parties must negotiate in good faith about the possible effect of the proposed future act on the registered native title rights and interests of the native title party. If a party ignores this requirement and seeks to proceed without considering, and responding to, any submissions put to it by the native title party, relevant to s 39 criteria, it will not be negotiating in good faith (Brownley v Western Australia at [24]-[25]).
The Tribunal may have regard to the individual circumstances of a native title party or grantee party. It is legitimate to take into account resource constraints upon native title parties and representative bodies in determining whether activity, or lack of activity, is reasonable in the circumstances. The Tribunal may also have regard to financial and operational pressures upon the grantee party. However, even allowing for those differing kinds of external constraints, it is nevertheless necessary that each party participate in the negotiation process to the best of their ability in the circumstances (Western Australia v Dimer at [106]).
In Cosmos v Mineralogy, Deputy President Sosso found that when assessing whether parties have complied with obligations under s 31(1)(b) to negotiate in good faith, parties’ conduct should be judged in the context of the matters related to or connected with the doing of the future act. He further found (at [32]):
The greater the possible impact of the “doing of the particular future act” on registered native title rights and interests, the greater the obligation imposed on the non-native title parties to negotiate about those possible impacts. If “the doing of the particular future act” may result in deleterious impacts on registered native title rights and interests, a non-native title party negotiating in good faith would be keen to minimise or remedy the deleterious impacts and bring to the negotiating table an offer or a package of proposals designed to address the concerns of the native title party.
In Wutha v Contact the Tribunal considered whether the grantee party’s failure to provide information regarding the type of work it intended to undertake constituted a lack of good faith. In that matter the Tribunal considered both the behaviour of the grantee party and also whether, as a result of this omission, the native title party were so disadvantaged and the negotiation process so skewed that, of itself or in conjunction with other behaviour, it demonstrated a lack of good faith by the grantee party. Recently, in Muccan Minerals v Njamal, the same issue was also considered and contrasted against Wutha v Contact (Muccan Minerals v Njamal at [46]-[52]).
In summary, in determining whether the grantee party negotiated in good faith as required by s 31(1)(b) of the Act, the Tribunal’s task must involve an assessment of the negotiations in their entirety. In Wutha v Contact, Deputy President Sosso found that the grantee party’s failure to provide information was not due to mala fides, but rather flowed from confusion on the part of the grantee party’s tenement service managers, leading to duplication of effort, mishandling of information, failure to meet time requirements and innocent omissions (Wutha v Contact at [36]). He also found that, while the native title party was not assisted by the failure of the grantee party to supply the information, taking the totality of evidence into consideration, including all of the negotiations that occurred from the outset until the time that the s 35 application was lodged, the omission did not impede the capacity of the native title party to negotiate (Wutha v Contact at [43]). Deputy President Sosso found that, given the sum of the negotiations, the grantee party had fulfilled its obligation to negotiate in good faith. However, he did note that, had the Tribunal assessed whether the grantee party negotiated in good faith at earlier stages of the process, it may have found that the grantee party did not meet the standards required by s 31(1)(b) (at [43]).
In Muccan Minerals v Njamal, the Tribunal considered the negotiations as a whole and found a number of key points which differentiated it from Wutha v Contact (Muccan Minerals v Njamal at [46]-[52]). Of particular importance was that Muccan Minerals v Njamal involved the grant of a mining lease, as opposed to ‘low impact’ tenements such as the prospecting licences which were considered in Wutha v Contact. The further difference between Muccan Minerals v Njamal and Wutha v Contact was that no draft agreements or proposals appeared to have been exchanged by parties. In Wutha v Contact, the negotiations, although ultimately unsuccessful, did take place around a draft agreement put forward by the grantee party. This contributed to the Tribunal’s findings that the lack of information regarding the proposed future act was not ideal but also not so deleterious as to impede the capacity of the native title party to negotiate.
In Muccan Minerals v Njamal, the Tribunal found that the grantee party’s failure to provide information inhibited the native title party’s ability to participate in the negotiations to some extent, and although this fact on its own did not amount to a lack of good faith it did affect the position of the grantee party in relation to its good faith obligations (Muccan Minerals v Njamal at [52]). The conclusion that the grantee party had not negotiated in good faith (at [98]) was also based upon the grantee party’s failure to provide any offer or proposal (at [74]); its behaviour in requesting an onsite meeting with the native title party in circumstances that placed an unreasonable financial burden on the native title party; and the lack of reasonable justification for why an onsite meeting was sought (at [87]).
In order to successfully submit its application for the proposed permit, the grantee party must provide, amongst other things, details or particulars of: its minimum proposed work program; its technical qualifications; and its financial resources, including evidence of its ability to fund the work program proposed (GVP1). It is apparent from the grantee party representative’s submissions that he has extensive knowledge and experience regarding petroleum exploration and production. It is equally apparent from the evidence that members of the second native title party have limited knowledge and experience in such matters (see [40] and [42] above) which the GP seemingly acknowledges (see [44] above).
It is clear from the evidence and contentions that the representatives for the second native title party and the grantee party both agreed that the information needs of the second native title party could best be met by a face-to-face meeting with the second native title party’s working group (SNTP8/GP5 see [35] above, GP Submission 2 p2 see [44] above). The grantee party agreed to attend a meeting with the second native title party and agreed to provide it with information concerning its proposed exploration program at that meeting. The grantee party is not relieved of its obligation to provide such information to the second native title party because the meeting failed to occur: if information could not be exchanged at a meeting between the parties, it would have been prudent for the grantee party to consider other mechanisms to provide the information requested. Despite mediation assistance from the Tribunal, the representatives were unable to reach agreement concerning the costs for the meeting, although the synopsis from the last Tribunal mediation held on 4 November 2014 suggests the second native title party had made considerable concessions and the parties were only $1,000 apart in negotiating a budget for the meeting (SNTP24). On 10 November 2014, the grantee party lodged its s 35 future act determination application, and its mediation request was taken to be withdrawn by the Tribunal. The circumstances surrounding this also raises questions regarding the grantee party’s commitment to the negotiation process, and therefore will be considered under heading 3 below.
In the absence of a presentation to the second native title party to explain its exploration program, the series of slides forwarded by the grantee party to the second native title party representative does not provide sufficient information regarding the grantee party’s proposed activities. In particular, the information was insufficient in light of the second native title party’s concerns in relation to hydraulic fracturing in exploration drilling and its subsequent indications that more information was required from the grantee party (SNTP18, SNTP23). In his submissions, the grantee party representative attempts to explain the ‘current controversy’ regarding hydraulic fracturing and the concerns regarding the pollution of aquifers: he states that ‘[h]ydraulic fracturing of petroleum reservoirs (known as “fraccing”) is not unconventional. It has been common industry practice for over 60 years’ and that ‘[a]pproval to drill will not be granted by the Department of Mines and Petroleum unless the risks have been fully assessed and a management plan in place’ [GP Submission 2, p6 and p3]. However, these statements do not necessarily address issues relevant to the possible impact that such activities might have on the second native title party’s registered rights and interests.
Based on the facts of this particular matter I believe the grantee party’s failure to provide sufficient information regarding the nature of its exploration activities inhibited the second native title party’s ability to assess the scale or impact of the future act on its registered rights and interests and participate in the negotiations to a considerable extent. Whilst this fact on its own does not amount to a lack of good faith, it does adversely affect the position of the grantee party in relation to its good faith obligations.
2. Failure to make a reasonable, realistic offer within a reasonable timeframe and adoption of a rigid approach once the offer was made
The second native title party contends the monetary offer proposed by the grantee party ‘was so manifestly and obviously unfair that any reasonable person would regard it as a “sham” or “unrealistic” offer’ (SNTP Contentions at 33).
Outline of evidence relating to a draft agreement
On 8 July 2014, the grantee party sent by email ‘a draft ancillary agreement’ to the native title parties’ representatives (SNTP14). The agreement includes provisions for reconnaissance surveys, land access, notification of operations, work area heritage clearances and reports, rights of access to the proposed permit and dispute resolution. The agreement is accompanied by a list of commitments ‘in respect of a s31 agreement’ including the following:
Financial Compensation
To compensate the NTP for any effect on their native title rights of the field operations, Rusa offers:
$5,000 per exploration well.
$50 per line kilometre of 2D seismic
$125 per line kilometre of 3D seismicProduction Operations (Conjunctive Agreement)
Should the NTP extend this agreement to include subsequent future acts, such as production licences, pipelines and other licences that would ordinarily invoke the future act provisions of the NTA, Rusa offers a 1% production payment calculated and paid in accordance with the statutory royalty payable to the State of Western Australia.On 13 August 2014, the second native title party representative sent by email a reply to the grantee party (SNTP17):
I advise I was able to obtain instructions on this matter and attach a confidential terms sheet detailing those instructions by way of counter offer.
The terms sheet includes requests for an environmental monitoring and implementation committee, employment, training and contracting opportunities for members of the second native title party, and for the grantee party to fund the ‘sitting fees and cost of meeting with the RUSA subcommittee to finalise this agreement’ (the subcommittee is discussed below at [77]-[86]). It declines the offer of a conjunctive agreement and provides the following counter offer relating to the Financial Compensation elements:
Per well payment not accepted.
Company is requested to provide more information on what is involved with seismic items at a Working Group meeting – otherwise not agreed.
The WJY will accept compensation on the following terms:
Signature payment on signing an agreement for exploration only $25,000
Tenement grant payment on grant of the tenement of - $50,000
Exploration payment – 2.5% of the total exploration cost per year
Administration fee of $15,000 per year for the life of the tenementOn 29 August 2014, the grantee party representative provided a reply to the terms sheet (GP13). The grantee party’s responses to the second native title party’s requests for an environmental monitoring and implementation committee, employment, contracting and training opportunities will be detailed under heading 3 below. It’s response to the second native title party’s counter offer regarding Financial Compensation was ‘Form and amount of Compensation needs to be discussed further.’ In relation to funding the sitting fees and costs of meeting with the second native title party’s subcommittee to finalise an agreement, the grantee party stated:
Rusa agrees to contribute $2500 towards WJP costs in respect of the sub-committee meetings, on a once-only basis. For the absence of doubt, the pool of money available from Rusa to facilitate negotiation and signing of a s31 Deed by the WJY is $2500.
Consideration and findings
In its reply (at 20), the second native title party contends its description of the grantee party’s monetary offer as a ‘sham’ adopts the terminology used by the Tribunal in Drake Coal v Birri People at [201].
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) and provided a useful summary of the series of decisions in which the Federal Court ruled that it is impermissible, as a general rule to determine good faith on the basis of evaluating the reasonableness of offers submitted by a negotiation party (at [195]-[197]). However, Deputy President Sosso noted:
[200] When evidence is placed before the Tribunal that a grantee party (or parties) is putting forward offers which are regarded by a government party as being the lowest for several years, and lower than much smaller projects, this necessarily and properly raises the issue of whether that party (or parties) is acting reasonably. The Act imposes an obligation to negotiate in good faith. One of the indicia of negotiating in good faith is acting reasonably. A reasonable grantee party seeking to negotiate in good faith would put to the native title party a reasonable offer. The reasonableness of the offer would depend on a number of factors, including the financial and logistic capacity of the grantee party, the potential size and revenue flow from the proposed mine and the views and aspirations of the native title party.
[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.[202] The email of Mr. Saunders has put the Tribunal on notice that the initial offers of the grantee parties were, arguably, not consistent with current marketplace negotiations. This is material to the question of whether the grantee parties have acted fairly and were negotiating in good faith …
[203] Nonetheless, there are two matters that need to be noted. First, as the grantee parties highlight, the offer Mr. Saunders referred to, was subsequently expanded by further proposals of the grantee parties. Second, although the offer Mr. Saunders commented on was less than other recent offers for comparable developments, he does not suggest that it was unrealistically low or was in the nature of a “sham” offer.
[204] In this matter, the grantee parties have consistently indicated that they were prepared to further negotiate with the native title party. This preparedness has manifested itself in the grantee parties expanding on the original offer. In these circumstances, even though the original offer was not, ostensibly, what would have been expected from an entity such as QCoal, it was not a “sham” offer and it could not be said that the grantee parties were [sic] acted unfairly in putting it forward as a starting point of negotiations.The circumstances of this matter differ significantly from those in Drake Coal v Birri People. Firstly, that matter contemplated negotiations over six coal mining leases forming part of a number of major coal mining projects owned by parent company QCoal Pty Ltd. The grantee party, Drake Coal Ltd was wholly owned by QCoal and did not directly participate in the negotiations. Secondly, independent material was before the Tribunal, in the form of an internal email sent between Government party staff, indicating the offer was ‘arguably, not consistent with current marketplace negotiations’.
This matter concerns negotiations over a single petroleum exploration permit applied for by a small company. The ‘independent material’ relied upon by the second native title party to support its contention that the grantee party’s offer was unreasonable appears to consist of: the fact the grantee party’s stated exploration expenditure is $8,100,000; and an excerpt from Tap Oil Limited’s 2013 Annual Report which states:
Tap entered into an agreement with Rusa Resources Pty Ltd (Rusa) to participate in the initial exploration of a large acreage position in the on shore Carnarvon Basin, Western Australia via a negotiated acreage option … A decision to exercise the acreage option will be made in the first half of 2014, after the native title process is finalised’ (SNTP11).
In referring to Drake Coal v Birri People (at SNTP Contentions at 18-19, 33), the second native title party appears to imply that the financial relationship between the grantee party and Tap Oil Limited is comparable to that noted in Drake Coal v Birri People and that therefore, it would be reasonable to expect the monetary offer to be higher. In any event, there is no evidence before me which suggests it might be permissible to go beyond the general rule that good faith should not be determined on the basis of evaluating the reasonableness of offers (per Strickland v Minister for Lands at 321) and supports a conclusion that the grantee party’s monetary offer was unreasonable or unrealistic. Importantly, and with reference to Drake Coal v Birri People, there is no evidence that the offer was not made within a reasonable timeframe or that the grantee party adopted a rigid approach to the offer once it was made.
3. Failure to make an appropriate commitment to the negotiation process and failure to make appropriate concessions
Outline of evidence
The 6-7 March 2014 correspondence between the second native title party and the grantee party regarding its financial contribution towards the second native title party’s working group meeting scheduled for 17 March 2014 is detailed at [33]-[36] above (SNTP6/GP4 and SNTP8/GP5). On 11 March 2014, the second native title party representative emailed the grantee party representative:
Previous correspondence refers.
The Wajarri Yamatji Working Group meeting on 17 March does not have time on the agenda to speak with you as there are a number of other matters that require the attention of the Working Group. As explained, YMAC as an Native Title Representative Body has limited funding.
Currently the only way to guarantee time on the agenda is if the proponent is willing to provide funding.
Mining companies that have committed funding to the meeting are a priority over this RUSA matter and the Working Group will be meeting with those companies first.
In addition there are some urgent matters which the Working Group will need to address that are also a priority over the RUSA matter. One such item is a right to negotiate matter that has been ongoing since 2009 but that we are hoping to finalise this year. [SNTP9]
On the same day, the grantee party representative replied:
thanks for the clarification Huia.
FYI I will apply for mediation in this matter. [SNTP9]
Following the grantee party’s 11 March 2014 request for Tribunal assisted mediation, the second native title party representative provided the following update to the Tribunal on the same day:
I confirm I have carriage of this matter on behalf of the Wajarri Yamatji claim group. I advise the Proponent was invited to attend the first Wajarri Yamatji Working Group meeting for 2014 on the basis that Wajarri Yamatji prioritise those matters where Proponents contribute to the cost of meetings.
I further note we have yet to receive any offer from the Proponent and the Proponent has not met with the Wajarri Yamatji Working Group to explain their project.
As mentioned the Wajarri Yamatji Working Group has not met this year and the first meeting will be on 17 March 2014. [SNTP10]
On 24 March 2014, the second native title party representative emailed the grantee party:
The Wajarri Yamatji Working Group met on 17 March and passed some 15 resolutions relating to their native title claim and current future act negotiations.
I confirm that I tabled your letter and additional information at the meeting. Unfortunately there was not enough time during the day to address and attain instructions [on] the RUSA project.
I advise that the next Wajarri Yamatji Working Group meeting may take place in June but as it is funded by a Proponent, RUSA matters will only be discussed once the funded matter is finished. In the event that YMAC is able to arrange a meeting prior to this date, I will advise. [SNTP12]
In her affidavit, Ms Woods deposes:
18. I note that in March 2014 the [Second] Native Title Party was involved in Federal Court case management conferences and Directions Hearings concerning the final stages of its Native Title Claim, had a work program of some eleven other right to negotiate matters in various stages and had 55 section 29 notices. [SNTP Affidavit]
On 5 May 2014, the first Tribunal mediation meeting was held at which the grantee party representative agreed to advise ‘the amount the grantee party would be able to contribute towards future meetings between the grantee party and each of the native title parties’ (GP7). On the following day, the grantee party representative emailed the Tribunal and the parties:
I advise that, subsequent to the mediation meeting, Rusa Resources confirms it will not contribute to the Native Title Parties' costs in attending any meetings they may desire with respect to negotiating an s31 agreement. Rusa will still contribute to its share of venue and catering costs. [SNTP13]
On the morning of 8 July 2014, the second Tribunal mediation meeting was held. The synopsis notes:
Ms Woods advised that due to urgent claim matters, Wajarri Yamatji have had to call an urgent working group meeting to be held on 14 and 15 July in Geraldton. The next working group meeting after that is likely to be held in September, and there are also other proponent-funded meetings being arranged which the grantee party could tack an extra meeting day onto and this would reduce costs the grantee party would face for the travelling expenses of the Wajarri Yarnatji working group …
Ms Woods advised that there may be 30 minutes available at the end of the meeting on 15 July for Mr Lane to make a presentation to the Wajarri Yamatji working group, but she could not guarantee this until the day of the meeting when she had met with the group. Mr Lane advised that he would travel to Geraldton in order to be available to make a presentation to the Wajarri Yamatji working group meeting on 15 July. [SNTP15]
The outcomes of the mediation meeting note ‘Mr Lane is to attend the Wajarri Yamatji working group meeting in Geraldton on 15 July 2014’ (SNTP15).
On the afternoon of 8 July 2014, the grantee party representative emailed the representatives of the first and second native title parties and attached ‘as discussed … a draft ancillary agreement’ (SNTP14). It is not clear when this discussion occurred and there is no record in the Tribunal synopsis and outcomes of any discussion or exchange of a draft ancillary agreement (SNTP15). As noted above at [61], the agreement included provisions for reconnaissance surveys, land access, notification of operations, work area heritage clearances and reports, rights of access to the proposed permit and dispute resolution. The agreement was accompanied by a list of commitments ‘in respect of a s31 agreement’ which included the financial offers considered in [61]-[68] above. The remaining commitments were:
Environmental Protection including water use on projects.
Each project will have an environmental management plan specific to that project and will address all relevant environmental issues. Water supply and disposal will be included in that plan. At the request of the NTP, a copy of this EMP will be provided to them and any comments or suggestions will be considered by Rusa.Employment and Training opportunities.
Major contractors providing services to Rusa will be asked to consider making places in their operations available to the NTP for employment and training positions. The NTP is to provide to Rusa a contact person who can liaise with contractors in this matter.Contracting opportunities...
The NTP is invited to provide to Rusa a business directory of contractors who would like to tender for services to Rusa's field operations.Cross Cultural awareness
The NTP is invited to provide a site induction, to the seismic field crews and drilling site
preparation crews, on matters of cultural heritage and significance of the land the operation is taking place on. Rusa will contribute a reasonable amount to the cost of this induction, by meeting the time and expenses of 2 senior members of the Gnulli [sic Wajarri Yamatji] for the field induction. [SNTP14]In her affidavit (SNTP Affidavit), the second native title party representative deposes the following events occurred at the second native title party working group meeting held in Geraldton on 15 July 2014 and at the subsequent Tribunal mediation held on 22 July 2014:
28.On 15 July 2014 I attended a meeting with the WJY WG ('the July meeting'). I updated the WJY WG in relation to the Tenement and was instructed to consult with a WJY subcommittee nominated at the meeting in relation to negotiating an agreement for the Tenement.
29.During the July meeting, two other Proponents attended the meeting to present their projects. These Proponents had entered the building where the meeting was held and waited until their allotted time on the agenda. One Proponent had telephoned and then texted me upon his arrival in Geraldton and at the meeting respectively. I am informed by working for YMAC and my experience as the Claim Lawyer that this is normal acceptable reasonable behaviour by Proponents invited to attend meetings.
30.I did not receive any communications whether by email or telephone from the Grantee Party on 15 July 2014 at any time …
32.On 22 July 2014 a mediation (the Second July mediation) was held for this matter during which I was advised that Mr Lane for the Grantee Party had travelled to Geraldton on 15 July 2014 and sat in the carpark of the meeting building. During the mediation I expressed my frustration and questioned whether the Grantee Party was making a genuine attempt to come to an agreement with the Native Title Party.
In his submissions, the grantee party representative makes the following statements regarding the events on 15 July 2014:
In comparing Rusa to other proponents negotiating with the WJY, Ms Woods notes that these other proponents had an allotted time on the agenda, and were invited. Rusa did not have an allotted time on the agenda, had not been invited, and had not been informed of the venue for the meeting by Ms Woods. Knowing that I would be in Geraldton that day, it was my expectation that Ms Woods would advise me if time was available, at what time, and where. I am informed by my experience as a professional in the upstream petroleum industry that this is normal acceptable and reasonable behaviour by others who have suggested a date for a meeting but could not nominate a time until further notice … [GP Submission 1, p1];
and
On arrival in Geraldton on the day of the meeting, I called the YMAC office to ask where the meeting was being held, was told it was being held at an educational campus in Geraldton (CML09). During the afternoon I drove to the venue and waited for a phone call from Ms Woods that might tell me there was space on their agenda for me, or not. I received no call and as the sun set I concluded that there had not been time for me, so I left for the airport and my flight home. [GP Submission 2, p7]
The grantee party representative further states:
At the subsequent mediation session [on 22 July 2014], the failure to meet in Geraldton was initially described as an "administrative error". I asked what kind of administrative error, and Ms Woods replied "We're short-staffed." When I explained that I had been sitting in the carpark all afternoon waiting for her call, Ms Woods launched into a rant, witnessed by all at the mediation, in which she laid the blame for the missed opportunity entirely on me. [GP Submission 3, p2]
The Tribunal mediation synopsis and outcomes for the mediation meeting held on 22 July 2014 do not record any of the circumstances or conversations regarding the 15 July working group meeting (SNTP16). Ms Woods attests:
33.At the Second July mediation [held on 22 July 2014], I advised the NNTT that the WJY WG had nominated a WJY Subcommittee of four members to progress this matter and this would substantially reduce costs of the negotiation. [SNTP Affidavit]
The Tribunal mediation synopsis and outcomes note:
Ms Woods advised that a subcommittee of four people had been delegated the responsibility to negotiate an agreement with Mr Lane, and she is seeking to meet with the subcommittee some time this week to present Rusa’s offer and discuss it with them. Following those discussions Ms Woods indicated she would revert with a response to Mr Lane. Mr Lane in turn advised he would respond promptly to any response from Ms Woods.
Member Shurven enquired as to whether negotiations with the smaller subcommittee would decrease the cost of meetings. Ms Woods indicated it would. Member Shurven asked Ms Woods to provide Mr Lane with a draft itemised budget for meetings with the subcommittee and Ms Woods agreed to do so. [SNTP16]
In Xstrata Coal v Bidjara People, the grantee party provided an initial offer by way of a letter which included monetary compensation, a number of undertakings with regard to its tendering process, and proposed a meeting funded by the grantee party on the terms outlined in previous correspondence (at [336]-[337]). The Tribunal observed that because no agreement was reached concerning funding for the second native title party’s participation in negotiations and therefore no meeting between the grantee party and the second native title party occurred, no counter offer or substantive response to the grantee party’s initial offer was presented by the second native title party (at [333]). The second native title party representative provided a response letter some four months later, which stated ‘an upfront payment, royalties and jobs, contracts and training for the local Indigenous people were proper issues to be considered and the real basis on which proper in good faith negotiations could be concluded’ (at [339]). The letter then went on to deal with assertions in relation to a bad faith issue. The Tribunal considered:
[339] … The letter did not constitute a substantive response to the Grantee party’s offer, in that it did not expressly reject the offer and did not make a counter offer for consideration by the Grantee party.
And found:
[343] The evidence establishes that, despite there being no face-to-face negotiations between the Second native title party and the Grantee party:
(a) the Grantee party made an offer for compensation to which a response was invited but no formal response or counter offer was received from the Second native title party, and
(b) the Grantee party’s offer was not expressed in ‘take it or leave it’ terms
In this matter, the grantee party initially submitted a written offer to the second native title party (SNTP14). The quality and format of that offer will be explored further below. Despite the fact that no face-to-face negotiations took place between the second native title party and the grantee party, the second native title party provided a counter offer in the form of a key terms sheet which addressed each of the commitments listed in the grantee party’s offer (SNTP17). The grantee party’s response to the key terms is outlined at [63] and [90] above (GP13). With reference to Xstrata Coal v Bidjara People at [339], the grantee party’s response cannot be considered a meaningful response or offer, in that it did not provide the second native title party with any opportunity to submit a response that could progress negotiations on a s 31(1)(b) agreement. The second native title party clearly communicated this concern to the grantee party in its email regarding the status of negotiations, stating ‘I refer to your comments on the terms sheet sent through to you previously and note your comments do not [at] all offer a counter to WJY NTP’s terms’ (SNTP23). Whilst the grantee party’s covering email states ‘I do not see any issue in there that cannot be further discussed and possibly negotiated’, there is no evidence that the grantee party engaged in any such discussion or endeavoured to further negotiate on the terms of an agreement. The only aspect of the grantee party’s response which the second native title party could pursue in any significant way was the grantee party’s position on funding for negotiations. The second native title party endeavoured to progress this aspect (SNTP24).
In Young v Kariyarra, the grantee parties expressed an intention to meet with the native title party, but declined to contribute towards the costs of a negotiation meeting. Nonetheless, it attempted to progress negotiations by forwarding comprehensive draft agreements which endeavoured to address aspects that the grantee parties believed were of issue for the native title party. The agreements were fully drafted documents capable of being signed (at [35]) and enabled the native title party to provide detailed counter offers, although ultimately it did not respond to the to the grantee parties’ last counter offer (at [57]). In that matter, the grantee parties contended ‘[i]f the GP had not lodged each S35 Application, it is unclear how quickly negotiations might have otherwise progressed’ (at [60]). The Tribunal found the native title party representative may not have been clear about meeting times or instructions taken (at [45] and [68]). In the circumstances, the Tribunal considered it was ‘reasonable the grantee parties did not view a meeting with the native title party to finalise any agreement was ‘in sight’, given the complexity of the native title party decision making process and given the native title party was unable to give a firm date for such a meeting’ (at [61]).
In this matter, and in contrast to Young v Kariyarra, the second native title party representative clearly communicated the second native title party’s decision-making process, meeting times, and instructions taken (SNTP3, SNTP6, SNTP7, SNTP9, SNTP12, SNTP15, SNTP16, SNTP17). Despite its resource constraints and other competing future act and claim matters (STNP Affidavit at 18, SNTP15), the second native title party attempted to accommodate the grantee party’s position: it provided time for the grantee party to meet with the working group without contributing financially (SNTP18, SNTP Reply at 32); it made changes to its preferred decision-making process by forming a subcommittee to reduce meeting costs (SNTP16); its representative sought instructions and provided a counter offer to the grantee party’s offer (SNTP17); and it made further budget concessions on the subcommittee meeting costs (SNTP24). Unlike Young v Kariyarra the grantee party had the opportunity to meet with the second native title party (on 15 July 2014) and it was the grantee party that failed to provide a meaningful response to the second native title party’s last counter offer. Furthermore, unlike Young v Kariyarra (at [61]), it appears an agreement to meet with the second native title party was ‘in sight’. At the mediation on 4 November 2014, the parties were only $1,000 apart in their budgetary positions, the grantee party agreed to respond to within 14 days and the parties agreed to reconvene on 8 December 2014 (SNTP24). In these circumstances, it is not reasonable for the grantee party to state:
The failure to reach a s31 agreement in the 12 months since the issue of the s29 notice can be attributed in the first instance to the insistence of the two NTPs that Rusa pay for the time and travel expenses of the working groups, and additionally pay for the costs of their legal advisers, being YMAC. [GP Submission 3, p1]
In this matter, in the absence of any face-to-face negotiations with the second native title party, it is also necessary to consider the quality and format of the grantee party’s 8 July 2014 written offer to the second native title party (SNTP14). At the commencement of negotiations, the grantee party representative initially advised that the grantee party ‘will consider contributing to the drafting of an agreement’ (GP3), but subsequently sought a previously negotiated agreement from the second native title party ‘as a starting point’ (GP5). During his telephone conversation with the Chairperson of the second native title party working group on 28 October 2014, the grantee party representative again suggested negotiating an agreement based on a previous agreement (GP17) and confirmed via email that he had not received such an agreement from the second native title party representative (GP17). At the last mediation meeting the grantee party representative ‘queried why the native title party couldn’t de-identify an existing agreement, provide it to him and then Rusa can provide comments on that draft’ and stated the second native title party’s position on this issue was ‘unprofessional’. (SNTP24). In this context, it appears the grantee party had reservations about whether its 8 July 2014 written offer (SNTP14) was a draft agreement which could form the basis for further negotiations. Furthermore, in his submissions, the grantee party representative appears to suggest it was the second native title party’s responsibility to provide a draft agreement ‘[i]n every other case I have been involved with where a Native Title Claim Group has had prior dealing with exploration companies, the NT party provides a draft agreement based on their most recent experience’ [GP Submission 3, p2].
In Muccan Minerals v Njamal (at [70]), the Tribunal also observed that the grantee party seemed to devolve responsibility for drafting an agreement to the native title party, and observed this expectation was not supported by the obligations outlined in s 31 of the Act. The Tribunal noted the options explored between the parties during mediation were not defined in any substantial way by the grantee party and in failing to provide offers or proposals, the grantee party’s actions fell short (at [74]). It is clear that the offer presented by the grantee party in this matter was more substantial than that described in Muccan Minerals v Njamal (at [63]-[74]), however it falls significantly short of that presented by the grantee parties in Young v Kariyarra (at [62]-[67]). At best, the grantee party’s 8 July 2014 offer was a starting point for negotiations, and following the second native title party’s counter offer, the grantee party failed to pursue its offer in any meaningful way.
I have considered the grantee party’s overall behaviour during the course of the negotiations, namely: the behaviour of its representative during the negotiations; the failure to make appropriate concessions with regard to meeting costs despite the second native title party’s considerable concessions and the Government party’s concerns regarding the grantee party’s position; the failure to provide a meaningful response to the second native title party in order to progress negotiations on any issue other than meeting costs; and the lodgement of a s 35 application even though an agreement over meeting costs was ‘in sight’. I find the grantee party’s overall behaviour did not adequately exhibit a level of commitment consistent with good faith obligations.
4. Dishonest and misleading manner
The second native title party contends the grantee party ‘acted dishonestly and in a misleading manner’ in not disclosing its intention to use hydraulic fracturing drilling techniques (SNTP Contentions at 38) which it contends are ‘non-conventional exploration operations’ (SNTP Contentions at 43). It contends ‘this misrepresentation … also prevented the Second Native Title Party from assessing the impact of the proposed Project on their native title rights and interests’ (SNTP Contentions at 40).
The second native title party’s evidence for the contention is that the grantee party’s 25 February 2014 letter to the second native title party states its ‘exploration program is conventional in scope’ (SNTP5), yet the excerpt from Tap Oil Limited’s Annual Report indicates the venture with the grantee party was ‘focused primarily on unconventional plays with the main targets being Permian shale gas and Devonian shale oil’ (SNTP Contentions at 39, SNTP11).
In response to the second native title party’s contentions, the grantee party representative states:
Para 38: Hydraulic fracturing of petroleum reservoirs (known as "fraccing") is not unconventional. It has been common industry practice for over 60 years. In my professional career, I fracced my first well in 1982 (Woodada Gas Field, near Dongara actually) and my most recent in 2008. The Wikipedia entry on Fraccing reads :
Hydraulic fracturing began as an experiment in 1947, and the first commercially successful application followed in 1949. As of 2012, 2.5 million hydraulic fracturing operations had been performed worldwide on oil and gas wells;
current controversy over fraccing is related to coal-seam gas production, which is not contemplated in Rusa's exploration program.The potential use of hydraulic fracturing in Rusa's exploration wells has been freely discussed by Rusa during negotiations.
Para 39: The petroleum resource to be explored for by Rusa can be described as "unconventional oil and gas". How that resource is evaluated (eg: by seismic and drilling) is entirely conventional in scope, using techniques that have remained largely unchanged for decades. What Tap Oil may say about Tap's projects is a matter for Tap Oil.
Para 40: There has been no misrepresentation by Rusa, or indeed the Government Party. The ability of the SNTP to assess the impact of Rusa's projects has not been affected. Presentations by both the Government Party and Rusa on fraccing have been made to the FNTP, who ultimately did not impose any funding conditions for Rusa or the GP to attend a meeting with them. [GP Submission 2, pp6-7)
With reference to my considerations at [56] above, the grantee party representative’s response again highlights the disparity of knowledge and experience between the grantee party and the second native title party. The response acknowledges the public controversy regarding the use of hydraulic fracturing suggests there is misinformation regarding its use in oil and gas exploration. With respect to the concerns of the second native title party regarding hydraulic fracturing on the lands and waters it claims native title, there is no evidence to support the finding that the grantee party acted dishonestly or misled the second native title party in this regard.
5. Approaching members of the Second Native Title Party directly for negotiations
The second native title party contends ‘the Grantee Party’s conduct offends the normal principles and meaning of the term 'negotiating in good faith' by approaching members of the Second Native Title Party directly for negotiations when he was fully aware that their authorised legal representative is YMAC’ (SNTP Contentions at 47).
Outline of evidence
On 27 August 2014, the grantee party representative emailed the second native title representative requesting ‘a contact phone number for the chairperson or similar of the working group’ (STNP19). On the same day, the second native title party representative replied:
YMAC as the legal representative for the Wajarri Yamatji People does not give out private and confidential information in relation to members of our client without their express permission as to do so would be in breach of the Privacy Act. I suggest you put any request you may have in writing together with an explanation for the reason for your request and I may forward it on to the relevant person. [SNTP19]
The following day, the grantee party representative emailed:
Please ask the relevant person to call me on [number deleted], any time. I want to see if we can get past the YMAC roadblock to the negotiating table. [SNTP19]
On 1 September 2014, the grantee party representative wrote a letter to the chairperson of the second native title party working group. The letter was addressed care of the YMAC Geraldton office and copied to the YMAC Perth office. It states:
You will be aware that Rusa Resources has applied for a petroleum exploration permit that covers a part of your native title claim area.
In accordance with the Native Title Act, an s29 notice has been issued and the State and Rusa are attempting to reach agreement with the Wajarri Yamatji People to enable the permit to be granted.
At present, we are in NNTT mediation on this matter, but as the Wajarri Yamatji People are being represented in this by YMAC, and the YMAC solicitor is unable to make decisions, it is taking a long time to make little headway.
I therefore suggest that you (or your delegate) and I have an informal meeting to discuss how we can progress this matter and arrive at a mutually satisfactory outcome. At present I cannot get past the YMAC solicitor who has refused to either give me a contact number for you (citing privacy) or forwarding my request for you to call me.
If you are comfortable with this situation, then I accept that and will continue to deal with YMAC as required. Otherwise you can call me at any time. [SNTP20]
On 14 October 2014, the second native title party representative wrote the following to the grantee party representative:
In relation to your letter addressed directly to the Wajarri Yamatji Chairperson I note:
1.if you were a lawyer this offence would be reported to the Legal Practice Board for disciplinary action.
2.The Chairperson has read your letter and is waiting on Rusa's response to the Wajarri Yamatji counter-offer.
3.delay in this matter is a direct result of your actions.
The Wajarri Yamatji People have instructed me to continue to negotiate this matter on their behalf and advise that any future attempt to contact them directly will be ignored. [GP16]
On the morning of 28 October 2014, the Director for the grantee party emailed the grantee party representative and advised that he had ‘just had a call’ from the Chairperson of the second native title party working group:
He is aware that you are our rep. His phone contact is [number deleted] and his email is [email deleted]. I said you would contact him real soon. [GP17]
On the afternoon of 28 October 2014 the grantee party representative telephoned the Chairperson of the second native title party working group. Directly following the conversation, the grantee party representative emailed the details of the conversation to the grantee party Director and another:
He is a reasonable chap and we had a long talk. He did re-iterate that the WY negotiating protocols were fixed and required funding from someone, ie Rusa. This is "normal" is his experience, and I'm sure it is.
Interestingly, he said he had not seen the letter I wrote to the Chairperson of the claim group. He is the chairperson of the working group, and he is perplexed that he hasn't seen it. I suggested that there was another Chairperson of higher rank but he didn't respond to that. He asked me to send him copies of the 2 letters (mine and the YMAC response) and so I have.
I also suggested that he dial in to the mediation session on the 4th. His concern was that neither he nor the working group had heard from the proponent yet, and I said that that was a result of YMAC insisting we pay their (YMAC) costs, and nothing to do with reluctance on our part.
I put it to him that, as the WY have already signed a conjunctive petroleum agreement, most likely with Pangaea, then the group must be educated about petroleum and we can take as read all that educational stuff and move on to negotiating an agreement based on that one. He then recalled that he had instructed YMAC to send a draft agreement, but he may have been mistaken, he was gunna check.
I finished by offering to meet him for a coffee or beer in Geraldton to see if we can find a way forward. We won't be able to, because he can't act unilaterally and there won't be another working group meeting until Feb next year. But it would be nice to meet him anyway. Such a meeting would be at nil cost to Rusa …
PS He did this on his own initiative: concerned that nothing appeared to be happening, he knew about Tap Oil, so he called them, who in a serious breach of privacy (sue!!) gave him Paul's [grantee party Director] number. [GP17]
Shortly following their telephone conversation, the grantee party representative emailed the Chairperson of the second native title party working group:
Thank you for taking the time and effort to track us down. I appreciate our phone discussion and hopefully we can work something out.
I'm happy to come to Geraldton to have a meeting with you and others, at least on an informal basis, to see if we can work out a negotiating process towards agreement.
I can confirm I have not received a draft agreement.
Attached as requested are my letter to the Chairperson of the Wajarri Yamatji, and the response from YMAC. I have also attached the budget I refer to in my letter.
I look forward to hearing from you in the near future. [GP17]
Following the above telephone conversation, the Chairperson telephoned the second native title party representative to discuss the conversation (SNTP Affidavit at 39). The Chairperson then emailed the second native title party representative:
as discussed I received a phone call from Chas Lane, Rusa Resources today. This follows a call from me to Tap Oil, making inquiries regarding Rusa resources.
Tap Oil passed onto me a number for Paul Lipski? of Rusa Resources who I spoke with and he passed on my contact details to Chas who called me.
I explained that I was the chairperson of the Wadjarri Yamatji Working group.
Chas then went on to speak of frustrations he was having with YMAC in regards to trying to get an agreement and his attempt to get a meeting with the group.
Chas said he had made a offer of $2000 dollars to YMAC to meet with 4 TOs to discuss an agreement, and that YMAC had replied with a budget of 9-10 thousand dollars to hold such a meeting. He stated that this was not suitable as the company does not have these funds.
I advised Chas that the normal process for negotiations what for the company to meet with the whole working group and that we would welcome his attendance at the next meeting.
In my explanation to Chas I advised that to hold a meeting the cost of our legal representatives would need to be covered, as we required legal advise [sic] when discussing any agreements with companies, and that 9-10 thousand was reasonable.
I went on to explain that the group is open to discussing any projects within our country and the cost for discussions are normally covered by the company who are seeking an agreement with the group.
Chas made it quite clear that the company was not willing to pay for the cost of our legal reps, it was left at that. [SNTP22]
Consideration and Findings
The second native title party contends ‘the Grantee Party failed to act in good faith when Mr Lane sought to contact the Chairman of the WJY WG directly’ (SNTP Contentions at 44). In response, the grantee party representative states that his ‘three attempts to speak directly to the Chairperson of the SNTP, via two emails on 27 August and another on 29 August’ were ‘with a view to discussing the impasse over costs, and how we could move forward on negotiations’ (GP Submission 3, p2, referencing SNTP19). He states ‘[a]ll of these attempts were refused by Ms Woods, and in a final attempt I wrote to the Chairperson, care of YMAC office, in the expectation that Ms Woods would pass the letter on to the Chairperson’ (GP Submission 3, p2).
It appears that a somewhat discordant relationship had developed between the representatives of the second native title party and the grantee party during the course of negotiations (GP Submission 3, p3) and the grantee party representative’s requests to speak with the Chairperson of the second native title party working group did not assist their relationship (SNTP19). It also appears that the grantee party’s requests were inappropriate in the context. However, it cannot necessarily be viewed that the grantee party representative’s 1 September 2014 letter to the chairperson (SNTP20) was entirely unauthorised by the second native title party representative. Firstly, whilst the second native title party representative declined to provide the grantee party representative with any contact details, she did suggest that the grantee party representative ‘put any request you may have in writing together with an explanation for the reason for your request and I may forward it on to the relevant person’ (SNTP19). Secondly, the grantee party representative’s letter to the Chairperson was sent care of YMAC, the legal representative body for the second native title party, as suggested. Thirdly, in a follow up letter to the grantee party representative, the second native title party representative states she forwarded the grantee party representative’s letter to the Chairperson (GP16). Whilst the grantee party’s attempts to contact the Chairperson can be viewed as inappropriate, there is little basis for the second native title party’s contention that the grantee party failed to act honestly and reasonably in doing so (SNTP Contentions at 48).
The second native title party contends that on 28 October 2014, the Chairperson for the second native title party working group:
notified YMAC by email that Mr Lane had contacted him directly without the authority of its legal representative and contrary to the standing instructions of the Second Native Title Party. Mr Lane discussed the Grantee Party's issues with [the Chairperson] around the Grantee Party's difficulties in obtaining a cheap meeting with the Second Native Title Party. Mr Lane then offered the sum of $2000 to [the Chairperson] in order to meet to discuss the Tenement. [SNTP Contentions at 46]
It is clear from the evidence that the telephone conversation between the Chairperson for the second native title party working group and the grantee party representative was initiated by the Chairperson (GP17, SNTP22). There is no evidence to support the native title party’s contention that the grantee party representative offered the Chairperson any money to meet with him.
Conclusion
As noted in [49] above, in determining whether the grantee party negotiated in good faith as required by s 31(1)(b) of the Act, the Tribunal must consider the historical facts of the matter and consider overall the negotiations that have taken place.
Whilst the information provided by the grantee party may not have been sufficient to enable the second native title party to assess the scale or impact of the future act on their registered rights and interests, ultimately, it was the grantee party’s overall behaviour during the negotiations, as outlined at [109]-[121] above, which form the basis for my conclusion that the grantee party has not fulfilled the requirement to negotiate in good faith with the second native title party.
Determination
I am not satisfied that the grantee party negotiated in the manner required by s 31(1)(b) in this matter. According to s 36(2) of the Act, the Tribunal does not have the power to proceed to make a determination on this future act determination application brought by the grantee party in respect of petroleum exploration permit application STP-EPA-0111. Therefore, the application is dismissed under s 148(a) of the Act.
James McNamara
Member
2 April 2015
Attachment A
Second native title party (SNTP) submissions
| SNTP Contentions | Statement of contentions, received on 20 December 2014 |
| SNTP Affidavit | Affidavit of Huia Rosemary Woods affirmed 19 December 2014 (SNTP Affidavit), received on 20 December 2014 |
| SNTP1 | Initial negotiation letter from Government party via the Department of Mines and Petroleum (‘DMP’) to the grantee party (‘GP’), the first native title party (‘FNTP’) and the second native title party (‘SNTP’) dated 11 December 2013 |
| SNTP2 | Letter from GP to SNTP re application for petroleum permit dated 23 December 2013 |
| SNTP3 | Letter from SNTP to GP outlining negotiation process, dated 10 February 2014 |
| SNTP4 | Letter from SNTP to DMP and GP outlining key negotiation issues |
| SNTP5 | Letter from GP to SNTP addressing SNTP negotiations, dated 25 February 2014 |
| SNTP6 | Letter from SNTP to GP addressing SNTP requirements for negotiations, dated 6 March 2014 |
| SNTP7 | SNTP email response to GP email of 7 March 2014 addressing SNTP requirements for negotiations to proceed, dated 7 March 2014 |
| SNTP8 | GP email response to SNTP email of 7 March 2014, attaching letter in response to SNTP letter of 6 March 2014, dated 7 March 2014 |
| SNTP9 | GP email advising SNTP of application for mediation, dated 11 March 2014 |
| SNTP10 | SNTP advice to NNTT status of negotiations, dated 11 March 2014 |
| SNTP11 | Extract from Tap Oil Annual Report for 2013, p2 |
| SNTP12 | SNTP email to GP advising outcome of 17 March 2014 Working Group meeting, dated 24 March 2014 |
| SNTP13 | GP email offering venue and catering contribution to Working Group meetings it attends, dated 6 May 2014 |
| SNTP14 | GP email attaching a draft ancillary agreement and list of commitments, dated 8 July 2014 |
| SNTP15 | Synopsis and outcomes of Mediation meeting held 8 July 2014 |
| SNTP16 | Synopsis and outcomes of Mediation meeting held 22 July 2014 |
| SNTP17 | SNTP email to GP attaching terms sheet by way of counter offer, dated 13 August 2014 |
| SNTP18 | Synopsis and outcomes of Mediation meeting held 26 August 2014 |
| SNTP19 | SNTP email to GP regarding status of negotiations, dated 28 August 2014 |
| SNTP20 | Letter from GP to chairperson of SNTP working group, dated 1 September 2014 |
| SNTP21 | NNTT email adjourning mediation to week commencing 13 October 2014, dated 15 September 2014 |
| SNTP22 | Email from Chairperson of SNTP Working Group outlining telephone conversation with GP representative, dated 28 October 2014 |
| SNTP23 | Email correspondence between SNTP and GP addressing outstanding issues, dated 30 and 31 October 2014 |
| SNTP24 | Synopsis and outcomes of Mediation meeting held 4 November 2014 |
| SNTP Reply | Contentions in reply to Grantee party submissions, received on 23 January 2015 |
Grantee party (GP) submissions
| GP Letter | Covering letter attaching GP Submissions, dated 14 January 2015 and received on 15 January 2015 |
| GP submission 1 | Comments on the affidavit of Huia Woods, received on 15 January 2015 |
| GP submission 2 | Response to the contentions of FNTP and SNTP, received on 15 January 2015 |
| GP submission 3 | Observations on the behaviour of the SNTP, received on 15 January 2015 |
| GP submission 4 | Reply to SNTP Reply, received on 4 February 2015 |
| GP1 | Letter from GP to SNTP re application for petroleum permit dated 23 December 2013 |
| GP2 | Letter from SNTP to GP outlining negotiation process, dated 10 February 2014 |
| GP3 | Letter from GP to SNTP addressing SNTP negotiations, dated 25 February 2014 |
| GP4 | Letter from SNTP to GP addressing SNTP requirements for negotiations, dated 6 March 2014 |
| GP5 | Email correspondence between SNTP and GP, dated 7 March 2014 |
| GP6 | Extract from NNTT Future Act Mediation Protocol |
| GP7 | Synopsis and outcomes of Mediation meeting held 5 May 2014 |
| GP8 | Email from GP to SNTP attaching slide presentation on GP’s proposed petroleum operations, dated 3 June 2014 |
| GP9 | Extract of Chas Lane’s mobile phone usage highlighting telephone call made in Geraldton to Geraldton YMAC office on 15 July 2014, dated 12 August 2014 |
| GP10 | SNTP email to GP attaching terms sheet by way of counter offer, dated 13 August 2014 |
| GP11 | SNTP proposed budget for SNTP Working Group subcommittee meeting |
| GP12 | Email from GP to SNTP regarding SNTP proposed budget, dated 28 August 2014 |
| GP13 | GP email to SNTP attaching response to SNTP terms sheet, dated 29 August 2014 |
| GP14 | DMP letter to GP dated 9 September 2014, and GP reply letter to DMP dated 16 September 2014 |
| GP15 | Email correspondence between GP and FNTP concerning negotiations, dated 24 and 26 September 2014 |
| GP16 | Letter from SNTP to GP attaching SNTP17 and revised budget for SNTP Working Group subcommittee meeting, dated 14 October 2014 |
| GP17 | Email correspondence between GP, GP representative and chairperson of SNTP working group, dated 28 October 2014 |
| GP18 | Synopsis and outcomes of Mediation meeting (with FNTP) held 4 November 2014 |
| GP19 | Letter from GP Director confirming that Chas Lane has authority to act for GP, dated 7 October 2014 |
| GP20 | ‘Regulation of Shale, Coal Seam and Tight Gas Activities in Western Australia Final: An analysis of the capacity of the Petroleum and Geothermal Energy Act 1967 (WA) to regulate onshore gas activities in Western Australia’, commissioned by the DMP and prepared by Dr Tina Hunter, dated July 2011 |
Government Party evidence to assist the Tribunal
State of Western Australia Petroleum and Geothermal Energy Resources Act 1967 Section 31 Application for Petroleum Exploration Permit (GVP1)
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