Sunstate Sands Bundaberg Pty Ltd v First Nations Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People Aboriginal Corporation RNTBC
[2021] NNTTA 44
•24 August 2021
NATIONAL NATIVE TITLE TRIBUNAL
Sunstate Sands Bundaberg Pty Ltd and Another v First Nations Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People Aboriginal Corporation RNTBC [2021] NNTTA 44 (24 August 2021)
Application No: | QF2021/0001 |
IN THE MATTER of the Native Title Act 1993 (Cth)
- and -
IN THE MATTER of an inquiry into a future act determination application
First Nations Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People Aboriginal Corporation RNTBC (QCD2017/010)
(native title party)
- and -
Sunstate Sands Bundaberg Pty Ltd
(grantee party)
- and -
State of Queensland
(Government party)
DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT AN INQUIRY
| Tribunal: | Ms Helen Shurven | ||
| Place: | Melbourne | ||
| Date: | 24 August 2021 | ||
| Catchwords: | Native title – future act – application for a determination in relation to a mining lease – power to make determination – whether grantee party has negotiated in good faith – grantee party has not negotiated in good faith – Tribunal does not have power to proceed with future act determination inquiry | ||
Legislation: | Native Title Act 1993 (Cth) ss 29, 30(1)(a), 30A, 31, 35, 36, 38 Aboriginal Cultural Heritage Act 2003 (Qld) s 23, Part 3, Part 7 | ||
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) Atlas Iron Pty Ltd and Another v Nyamal Aboriginal Corporation [2020] NNTTA 75 (Atlas Iron v Nyamal) Blackman on behalf of the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People v State of Queensland (No 3)[2017] FCA 1637 (Blackman v Queensland) Charles, on behalf of Mount Jowlaenga Polygon # 2 v Sheffield Resources Limited [2017] FCAFC 218 (Charles v Sheffield Resources) FMG Pilbara Pty Ltd v Cox (2009) 175 FCR 141; [2009] FCAFC 49 (FMG Pilbara v Cox) Kevin Peter Walley on behalf of the Ngoonooru Wadjari People v Western Australia & Ors (1999) 87 FCR 56; [1999] FCA 3 (Walley v WA) Muccan Minerals Pty Ltd and Another v Taylor and Others on behalf of Njamal [2014] NNTTA 74 (Muccan Minerals v Njamal) Western Australia v Dimer (2000) 163 FLR 426; [2000] NNTTA 290 Western Australia v Taylor (1996) 134 FLR 211; [1996] NNTTA 34 | ||
| Representatives of the native title party: | Jeff Dillon, Dillon Bowers Lawyers | ||
| Representative of the grantee party: | Holly Stjernqvist, McCullough Robertson | ||
| Representatives of the Government party: | Gina Antony, Department of Resources Margot Clarkson, Crown Law | ||
REASONS FOR DETERMINATION
Background
On 20 March 2020, the State of Queensland (the State) notified under s 29 of the Native Title Act 1993 (Cth) (the Act) that it intended to do the future act of granting mining lease ML100242 to Sunstate Sands Bundaberg Pty Ltd (Sunstate Sands). According to the notice, the lease comprises an area of just over 1.75 square kilometres, located approximately 19 kilometres south-east of Bundaberg. The lease is contiguous and adjacent to other leases which form part of Sunstate Sands Coonarr Creek Project[1] (see [4] and [13] – [14] below). Mapping shows the area is near to the coast of the Coral Sea.
[1] Which tenements were granted between 1972 and 1991, prior to the Native Title Act.
Any person who, four months after the notification day, is a native title party (a registered native title claimant or a body corporate) in relation to any of the land or waters that will be affected by a future act, has a procedural right to negotiate with respect to the grant of the future act (see s 30(1)(a) and s 31 of the Act). The First Nations Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People Aboriginal Corporation RNTBC (QCD2017/010) are the native title party in this inquiry because they hold native title rights and interests for the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People over the lease area. The Federal Court in Blackman v Queensland (at [25]) recognised ‘the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People, as holders of the native title in the determination area. They are entitled to the use and enjoyment of the land and waters in accordance with traditional laws and customs’.
The normal negotiation procedure is that the ‘negotiation parties’ must negotiate in good faith with the native title party with a view to obtaining their agreement to the doing of the future act (s 31(1)(b) of the Act). The ‘negotiation parties’ with respect to the grant of the lease in this inquiry are the State, Sunstate Sands and the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People (s 30A of the Act). Under s 35 of the Act, any negotiation party may apply to the arbitral body for a determination under s 38 of the Act if there is no such agreement, provided at least six months have passed since the s 29 notification date.
The future act determination application
On 24 May 2021, the National Native Title Tribunal accepted an application from Sunstate Sands for a future act determination in relation to the mining lease (see ss 35 and 38 of the Act). The application outlined that:
The act is the proposed grant of MLA 100242 including any renewal, replacement, substitution, consolidation, subdivision, variation, or extension of the mining lease on the same terms in accordance with the Mineral Resources Act 1989 (Qld). MLA 100242 proposes to facilitate an extension of existing mining operations conducted under existing mining leases held by the Applicant (being Mining Lease (ML) 1229, ML 1228, ML 1178, ML 1180, ML 1185, ML 1181, ML 1182 and ML 1183) for the purpose of producing silica sand as part of the Coonarr Creek Project…
I was appointed by the Tribunal President to conduct the inquiry and make the s 38 future act determination in relation to the application.
Tribunal power to make a determination
If any negotiation party satisfies the Tribunal that any other negotiation party (other than the native title party) did not negotiate in good faith, the Tribunal must not make a determination (see s 36(2) of the Act). The implication of s 36(2) was explained by the Full Federal Court in FMG Pilbara v Cox (at [11]) 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.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People allege Sunstate Sands failed to negotiate in good faith. Therefore, before I can proceed to make a determination about the grant of the future act, I must be satisfied Sunstate Sands negotiated in good faith with a view to obtaining the agreement of the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People (as required by s 31(1)(b)).
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People made no such allegation against the State, so this part of the inquiry focuses only on materials provided by Sunstate Sands and the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People.
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 the 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.
Legal Principles for assessing negotiation in good faith
I set out the legal principles for assessing negotiation in good faith (as outlined in s 31 of the Act), in my decision Atlas Iron v Nyamal (at [15]-[20]). I adopt those paragraphs and reasoning for the purposes of this inquiry.
The Queensland heritage regime
The Aboriginal Cultural Heritage Act 2003(Qld) (ACHA) requires anyone who carries out a land-use activity to exercise a duty of care. This duty of care means land users must take all reasonable and practicable measures to ensure their activity does not harm Aboriginal cultural heritage.
A land user can meet their duty of care obligations in a number of ways. A cultural heritage agreement (often referred to as a CHA or cultural heritage management agreement (CHMA)) may be negotiated between parties on a commercial basis. Alternatively, an approved cultural heritage management plan (CHMP) may be required, depending on the heritage involved and the likely level of impact of the land user’s activities. Both are legally binding on parties and set out how cultural heritage will be managed for the relevant activities. Disputes arising in relation to a CHMP can be referred to the Land Court, whereas disputes arising under a CHMA cannot.
A CHMP must be developed and approved under Part 7 of the ACHA when an environmental impact statement is required for a project, whereas a CHMA does not fall under that statutory scheme. Key cultural heritage protection provisions are outlined in Part 3 of the ACHA. Section 23 in Part 3 outlines that ‘A person who carries out an activity must take all reasonable and practicable measures to ensure the activity does not harm Aboriginal cultural heritage’. A CHMP must be prepared in consultation with relevant Aboriginal groups (s 103).
Cultural heritage features as an issue in this present inquiry. In summary, there is an existing CHMP which appears to relate to the project as a whole. Parties initially commenced negotiating a CHMA for the specific mining lease in this matter. However, when it became apparent there was an existing CHMP, the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People sought information about that document. Further detail is outlined below as relevant.
The inquiry process
A preliminary conference was held after notifying parties of the future act determination application. At that conference, parties indicated mediation may assist in their endeavours, and the Tribunal undertook to commence mediation with the parties as soon as possible – the mediation was conducted separately to the inquiry process, by another Tribunal team. As at the date of this decision, there has been no mediated outcome on the matter.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People provided contentions outlining their view of the course of negotiations, and alleging Sunstate Sands had not negotiated in good faith. Sunstate Sands provided a chronology of events and their contentions outlining that, in their view, they had negotiated in good faith. Finally, the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People provided a reply to Sunstate Sands’ contentions. The Tribunal wrote to parties indicating there was, in my view, sufficient material for me to make my decision on the papers, and no party took exception with that approach.
The allegations of lack of good faith negotiations
At [10] above I refer to the principles I adopted in determining this inquiry. This includes the principles outlined in Western Australia v Taylor, where the Tribunal provided a series of indicia of conduct to be taken into consideration when assessing good faith, which was endorsed by the Federal Court in Walley v WA (at [9]) and has been consistently referred to in Tribunal decisions. The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People contentions (at 29-30) refer to these indicia, and focus on the following, which they assert support their contentions that Sunstate Sands has not negotiated in good faith:
(a)“failing to respond to reasonable requests for relevant information within a reasonable time”; and
(b)“adopting a rigid non-negotiable position”; and
(c)“failure to do what a reasonable person would do in the circumstances”.
The good faith indicia as a whole focuses on conduct which is ‘unreasonable’, ‘unexplained’ or ‘unnecessary’. I must look at the overall conduct of the grantee in all of the circumstances (see Western Australia v Dimer at [85] and Adani Mining v Diver at [34]). The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People reply (at 8) focuses on the following obligation, as outlined in Western Australia v Dimer, to be relevant in this inquiry:
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
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People contentions (at 19) outline the significance of coastal sand dunes, including the mining lease:
because of:
(i)the history of the Native title party’s occupation and use of areas containing coastal sand dunes; and
(ii)the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People’s burial practices in accordance with their law and custom in and around the coastal dune areas…
Sunstate Sands contentions (at 8) assert that ‘The parties failed to reach agreement on the grant of the MLA despite negotiations and communications between the parties occurring between July 2020 and May 2021’.
What occurred during the negotiations?
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People contentions outlined that (at 3 and 4, emphasis in original):
3. The future act is proposed to be granted over an area over which the Grantee party holds Mineral Development Lease 145[2] [ML100242] (the future act area).
4. The future act would permit the extension of existing mining operations in areas immediately adjacent to and covering the future act area (the existing operations). The Grantee party has been undertaking its existing operations since 2009.
[2] I note the MDL was granted in December 1993, and the ML was applied for in January 2020.
I note that the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People were granted various native title rights and interests by the Federal Court in Blackman v Queensland (as outlined at [2] above), and in their contentions for this inquiry, they have emphasised the rights and interests as outlined in the Federal Court’s order 8(h) and 9(b) as follows:
8h. maintain places of importance and areas of significance to the native title holders under their traditional laws and customs and to protect those places and areas from physical harm;
9. the native title rights and interests referred to in paragraph (8) are subject to and exercisable in accordance with:
… (b) the traditional laws acknowledged, and the traditional customs observed by the native title holders
In relation to negotiations and meetings, the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People assert there were two meetings in 2020 – one on 10 July, and one on 28 August (that meeting included inspecting the mining lease and the surrounds of the Coonarr Creek Project). There is no disagreement between parties on the timing of those meetings. I note the Sunstate Sands chronology refers to 3-10 July as a period when amendments were exchanged on a draft Cultural Heritage Management Agreement (CHMA) provided by the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People, and then the chronology emphasises the requests from Sunstate Sands for the execution of the CHMA on 10 July and thereafter. The Sunstate Sands contentions (at 24) outline they agreed to execute the CHMA, ‘subject to minor amendments’, and that:
it was mutually understood between the parties that the CHMA would be executed by the Native Title Party at the July Meeting, however the CHMA was not in fact executed by the Native Title Party as it became concerned regarding past cultural heritage management in respect of the broader Project site (comprising completed and existing operations) and accordingly, indicated that it wished to inspect the whole Project site prior to executing the CHMA.
The Sunstate Sands chronology indicates the CHMA negotiations commenced on 3 July 2020 and parties exchanged amendments between 3-10 July, with Sunstate Sands describing the document as being tabled ‘for execution by parties on 10 July’. The Sunstate Sands chronology outlines they subsequently provided an executed copy of the CHMA to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People representative on 28 July ‘and confirms next steps regarding preparation of the section 31 deed and ancillary agreement for the MLA…’ and the two parties arranged a meeting on 28 August. On 7 August 2020, Sunstate Sands provided a copy of their proposed ancillary agreement to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People representative, in advance of the 28 August meeting.
The Sunstate Sands contentions (at 24(d) - emphasis in original) outlines they:
informed the Native Title Party at a meeting held on 28 August 2020 (August Meeting) that it had an existing environmental management plan (EMP) which included a cultural heritage plan, and that that plan was currently being updated to incorporate the Native Title Party’s preferred practices under the CHMA.
However, there is little in the materials that indicates how the cultural heritage plan (CHMP) was being updated, or particularly how it was being updated to incorporate the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People’s ‘preferred practices’.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People reply (at 17) notes that they informed Sunstate Sands that ‘it was no longer willing to execute the proposed CHMA until such time as it had reviewed the Grantee party’s current “Cultural Heritage Management Plan”…’
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People contentions (at 20) refer to the 28 August meeting, and assert:
The parties discussed establishment of a cultural heritage management agreement pursuant to section 23 of the ACHA in relation to both the future act area and the balance of the area of the Grantee party’s existing operations but negotiations stalled when it was found that there had been no previous engagement by the Grantee with the Native title party since it had commenced its operations in 2009. It was at this time that the Native title party requested the ‘Cultural Heritage Management Plan’ from the grantee party.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People contentions (at 20-27) asserted that Sunstate Sands had not engaged with the native title party on this lease, nor had the grantee provided sufficient information to enable the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People to assess the grantee’s financial offers.
Sunstate Sands agree they had not engaged with the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People on the surrounding tenements. Their contentions (at 24(d)) state they:
acknowledged at the August Meeting that there had been no engagement with the Native Title Party in respect of cultural heritage management since the Grantee Party took over the Project site in 2006, but welcomed the opportunity to engage, learn and renew the relationship through adoption of the Native Title Party’s preferred practices under the CHMA.
The Sunstate Sands chronology also refers to 28 August 2020 as a day of site inspection and an exchange of offer and counter offer on a draft ancillary agreement (provided by Sunstate Sands to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People on 7 August – see [24] above). The chronology then refers to offers and counter offers being exchanged between the two parties up to late September 2020.
The Sunstate Sands chronology notes that on 21 September 2020, they advised the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People that the native title party ancillary agreement terms were not economically viable for the grantee. From 25 September onwards, the two parties communicated about the provision of evidence and information as to why the native title party’s counter offer was not economically viable. Between that time and January 2021, parties exchanged information and views about the sufficiency of the information each has provided in support of their respective offers and counter offers.
The chronology indicates negotiations stalled in February 2021, and after a teleconference in April 2021, the grantee notified the other parties of it’s intention to lodge the future act determination application. Sunstate Sands contentions indicate (at 10) that parties participated in Tribunal mediation in July 2021, which is conducted parallel to this inquiry.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People did not take issue with the Sunstate Sands chronology, apart from the following relevant information in its reply document (at 5):
(b) the description of “Event 4” [the 10 July 2020 meeting] fails to provide context as to why the CHMA was not executed, which, as recorded in Annexure A of the Native title party’s contentions, included that:
(i) the Grantee party informed the Native title party that it had undertaken no cultural heritage inspections on the site;
(ii) it was agreed that the “next meeting [would be] on site to see the operation”…
(c) the description of “Event 9” [3] is inaccurate, insofar as the better interpretation of the email is that the Native title party informed the Grantee party that they wished to complete cultural heritage inspections of the sites before agreeing to the CHMA (not merely a one off inspection)…
(e) the description of “Event 17” [4] is rejected: the Grantee party did not (then or subsequently) provide information regarding the Grantee party’s operating position; it provided some information regarding a group of companies of which the Grantee party was but one, with no way for the Native title party to determine the operating position of the Grantee party from the information provided.
[3] Event 9 in the Chronology is dated 14 August 2020 and described as ‘Dillon Bowers Lawyers notifies McCullough Robertson that the CHMA has not been executed and will not be executed by the Native Title Party until the Native Title Party attends a site visit of the MLA’
[4] Event 17 in the Chronology is dated 17 November 2020 and described as ‘McCullough Robertson provides information to Dillon Bowers Lawyers regarding the Grantee Party’s operating position in response to its request of 25 September 2020’
The two central issues
Throughout the party materials, it is clear there are two central issues to the allegations of lack of good faith negotiations. The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People reply (at 8) encapsulate those issues as:
1. Heritage Protection – the form and content of the existing CHMP did not, as far as the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People understand, require Sunstate Sands to consult with the native title party in relation to exercising its determined native title rights and interests (in particular in relation to the rights and interests set out in the Federal Court order 8(h) and 9(b) – as outlined at [22] above).
2. Agreement on commercial terms – Sunstate Sands did not provide sufficient or clear information to enable the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People to assess whether their counter offer to agree about the grant of the future act was or was not economically viable for Sunstate Sands.
I will deal with each of those issues in turn.
Heritage Protection
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People reply (at 24) emphasises that they unequivocally requested the existing CHMP at the August 2020 meeting, and contemporaneous minutes from that meeting from the group support that. Sunstate Sands argue they had not seen those minutes until this inquiry. However, I accept the minutes are a record of the meeting, and that they were created for the purpose of Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People records - there was no obligation for the group to provide the grantee with a copy of those minutes, and it was open for the grantee to take their own minutes or make their own record at the time. I have no reason to believe the request for the CHMP as recorded in the minutes does not accurately reflect that request – in addition, there is sufficient information in the communications between parties to support that the issue of the CHMP, and cultural heritage in general, was of great significance to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People in the context of these negotiations. For example, the minutes of the July 10 meeting refer to the area as being ‘a key gathering spot for our people’, and there was discussion throughout that July meeting about cultural heritage.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People reply (at 25) outlines that:
The Grantee party’s contention that, absent the request being repeated in writing following the meeting, it was reasonable for it to ignore the request, is unreasonable. No such requirement was disclosed to the Native title party. The Grantee party chose to respond to other verbal requests during the negotiations. For example, the Grantee party arranged a site visit following the August meeting despite there being no written request for same.
The minutes of the 28 August 2020 meeting refer to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People wanting to ‘get the full picture’, wanted to see Sunstate Sands ‘cultural heritage procedures’ and ‘Queries whether the PBC can look at that document [the CHMP]’ and ‘Curious to see what protection of cultural heritage is included’. The bulk of that meeting involved discussion about the importance of cultural heritage, protections of cultural heritage on the lease area, and how that would be achieved.
A copy of the CMHP was ultimately provided to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People on 12 July 2021, subsequent to this future act determination being lodged.
I am satisfied the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People communicated to Sunstate Sands the central nature of cultural heritage to the negotiations and why negotiations could not be progressed without a copy of the existing CHMP – for example, so the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People could assess the extent to which any of the terms of their preferred CHMA were captured by the existing CHMP. It is often the case that cultural heritage considerations form a significant focus of native title negotiations. I do not consider it was reasonable for Sunstate Sands to provide the CHMP almost a year after it was initially requested by the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People.
Agreement on commercial terms
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People reply (at 22) asserted that the information provided by Sunstate Sands in response to the native title party request for financial information did not clarify:
(a) that the Grantee Party had experienced net losses;
(b) that investment had been made in the Grantee Party…; or
(c) that the path to recovering the investment made was not yet known, and would not be known “until the MLA is worked”.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People reply (at 35-36) argues Sunstate Sands did not provide the financial information it had committed to providing. They summarise their arguments (at 37) as follows:
The Grantee party’s contention that “the Grantee Party provided the Native Title Party with all information reasonably available in response to its request” should not be accepted:
(a) at no time did the Grantee party inform the Native title party that it was unable to provide statements by its external auditors of the net profit after tax for the Grantee party for the last 3 years (including FY2020);
(b) the Native title party continued to request this information;
(c) the Grantee party never provided the Native title party with an explanation as to why it failed to provide the information it had committed to providing; and
(d) the financial information requested, and committed to be provided, was reasonable and of direct relevance to the parties reaching agreement about the grant of the future act.
Sunstate Sands provided 90 annexures to their submissions in this inquiry, many of which were copies of emails and email exchanges relating to meeting logistics and not containing substantive information. Document 60 - 62 are relevant to my consideration of the request for financial information. For example, document 61 contained a response from a Sunstate Sands representative to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People representative which outlined, in response to the request for profit and loss (P&L) statements of the grantee party:
1. In relation to the request for P&L statements, as SSB [Sunstate Sands] operates as part of a consolidated group of companies, there are not individual statements. That said, our client is in the process of completing the financial statements for the consolidated group for FY2020 (and they should be completed by 30 October 2020). While individual P&L statements are unavailable, our client is willing to organise statements by its external auditors of the NPAT [net profit after tax] for SSB for the last 3 years (including FY2020);
2. Either before or after you receive the externally audited NPAT statements, our client has requested we seek the rationale for a $50,00 payment upon granting the ML (as our records indicate that it was not discussed at either of our earlier meetings); and
3. Finally, once 1 and 2 above have been completed, we look forward to the receipt of your client’s counteroffer (as it remains our client’s preference to reach agreement).
Document 62 contained an attachment for the attention of the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People representative, which is described as being ‘in relation to the operating position of Sunstate Sands Pty Ltd’. The attachment is a short letter from a global accounting organisation. The letter, for the purposes of assessing the information sought by the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People, was, at best, opaque. Given it’s brevity, and the central nature of the issue of provision of financial information, I quote the letter in full, omitting anything that may be commercially sensitive:
The purpose of this letter is to provide information on the operating performance of Sunstate Sands Pty Ltd and its controlled entities (“Sunstate Group”) for the three financial years ended 30 June 2020. I advise that this firm acts (and has done so for over 15 years) as the external auditor for [a named Pty Ltd entity] and its subsidiaries (collectively “[a named] Group”), of which Sunstate Sands Pty Ltd is a wholly owned subsidiary. We only audit the Sunstate Group as a part of the [named Group] audit, and therefore we do not provide a separate audit opinion over the Sunstate Group.
We confirm the net loss after tax of the Sunstate Group, prior to any [named Group] restructuring costs and other extraordinary items, included in the audited consolidated financial statements of [the named Pty Ltd entity] was: [the letter then goes on to list, in 3 lines, the figure for 2018, 2019 and 2020].
As our audit is performed over the [named Group], we have not performed procedures to a sufficient and appropriate level, to be able to provide a separate opinion over the stand-alone results of the Sunstate Group. Therefore we do not provide any opinion or assurance on the accuracy of the numbers above, and are not responsible for any reliance placed on the same.
I am of the view that Sunstate Sands provided reasons why they were unable to provide the financial information to the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People, rather than why the suggested terms were not financially viable for the grantee party. I do not consider the information provided was reasonable in all the circumstances.
Conclusion
I am assessing the overall conduct of Sunstate Sands during the negotiations in this matter, and the relative weight of any individual element of conduct in that overall assessment depends on the circumstances. Good faith focuses on an assessment of whether conduct is ‘unreasonable’, ‘unexplained’ or ‘unnecessary’, and such negotiations require a party to actively participate – that includes making proposals and providing information. The period of good faith negotiation does not cease when a future act determination application is made (see Charles v Sheffield Resources at [59]).
As noted in Muccan Minerals v Njamal (at [94]), a grantee must negotiate in good faith with the native title party in relation to the doing of the relevant act. The act in this inquiry related to mining, and so may have a greater effect on the rights and interests of the native title party than prospecting or exploration activities. The extent to which a grantee party actively participates and provides information in a timely manner, or gives clear reasons as to why information could not be provided, is important for a native title party to be able to participate in the negotiations. Looking at the good faith indicia as a guide for drawing my conclusions in this matter, I conclude there has been unreasonable behaviour by Sunstate Sands.
In this inquiry, Sunstate Sands provided the CHMP to the native title party during negotiations, however, it was provided approximately 12 months after it was requested, and I consider their conduct in not providing it earlier was not reasonable, as the Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People indicated cultural heritage was an issue of great importance.
The Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People were not able to meaningfully negotiate due to Sunstate Sands’ failure to provide the CHMP earlier in the negotiations and its failure to provide financial information, or a clear reason why the information could not be provided. A grantee party does not need to lay bare its financial situation by any means, but it does need to actively participate in negotiations and explain its position clearly to enable a native title party to provide meaningful responses on their own part.
Determination
I am not satisfied Sunstate Sands Bundaberg Pty Ltd negotiated in good faith as required by s 31(1)(b) of the Act. I do not have the power to proceed to make a determination on the future act determination application brought in respect of ML100242. I dismiss Sunstate Sands Bundaberg Pty Ltd future act determination under s 148(a).
Helen Shurven
Member
24 August 2021
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