Western Australia/Western Australia Petroleum Pty Ltd & Anor/Hayes & Ors on behalf of the Thalanyji People

NATIONAL NATIVE TITLE TRIBUNAL

Western Australia/West Australian Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd/Leslie Hayes, Glenys Hayes, Judy Hayes, John Ard, Douglas Fazeldean, Valerie Ashburton, Laura Hicks and Albert Hayes on behalf of the Thalanyji People (WC99/45), [2001] NNTTA 18 (9 March 2001)

Application No: WF00/07

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

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IN THE MATTER of a Future Act Determination Application

The State of Western Australia (Applicant/Government Party)

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West Australian Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd (Grantee Party)

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Leslie Hayes, Glenys Hayes, Judy Hayes, John Ard, Douglas Fazeldean, Valerie Ashburton, Laura Hicks and Albert Hayes on behalf of the Thalanyji People (WC99/45) (Native Title Party)

DECISION ON WHETHER THE TRIBUNAL HAS JURISDICTION TO CONDUCT AN INQUIRY

Tribunal:                  Hon CJ Sumner, Deputy President
Place:  Perth
Date:  9 March 2001

Catchwords: Native title – future act – application for a determination in relation to a petroleum production licence – jurisdiction – whether grantee party has negotiated in good faith – evidentiary onus on native title party to satisfy the Tribunal that other parties have not negotiated in good faith – failure to negotiate about matters not related to the future act does not equate to lack of good faith – native title party failure to make a submission under s 31(1)(a) Native Title Act about the effect of the act relevant – s 31(2) Native Title Act considered – grantee party to give due consideration to negotiating proposals but not required to agree to payments of the kind mentioned in s 33(1) Native Title Act – grantee party’s negotiating behaviour reasonable in the circumstances – grantee party has negotiated in good faith – future procedures for conduct of hearings considered.
Legislation:Native Title Act 1993 ss 31(1) and (2), 33, 36(2)

Cases:Western Australia v Taylor (1996) 134 FLR 211
Western Australia/Strickland (Maduwongga) & Ors, NNTT WF97/4, Hon CJ Sumner, 10 December 1997
Western Australia/Walley (Ngoonooru/Wadjari) & Ors, NNTT WF97/5, Hon CJ Sumner, 25 March 1998
Walley v Western Australia [1999] FCA 3, (1999) 87 FCR 565
Western Australia/Leo Winston Thomas & Ors/Anaconda Nickel Ltd, NNTT WF98/7, Hon CJ Sumner, 4 September 1998
Brownley v Western Australia [1999] FCA 1139, (1999) 95 FCR 152
Rita Dempster & Ors (Southern Noongar)/Bayside Abalone Farm Pty Ltd & Anor/Western Australia, NNTT WF99/1, Hon EM Franklyn QC, 27 August 1999
Placer (Granny Smith) Pty Ltd and Granny Smith Mines Limited/Western Australia/Ron Harrington-Smith & Ors on behalf of the Koara people, NNTT WF99/5, Hon CJ Sumner, 21 December 1999
Western Australia/Arthur Dimer & Ors (Ngadju People); Cyril Barnes & Ors (Central East Goldfields People)/Equs Limited, NNTT WF99/10, Ms Patricia Lane, 9 August 2000
Colin McLennan & Ors (Birri People); James Reid & Ors (Kudjala People)/Normandy Pajingo Pty Ltd and Battle Mountain, NNTT QF00/2, Hon CJ Sumner, 29 September 2000
Risk v Williamson (1998) 87 FCR 202; 155 ALR 393
Western Australia/Strickland & Ors (Maduwongga & Karonie)/DR Crook and GK Edson, NNTT WF98/5, Mr Kim Wilson, 11 August 1998
Walley & Ors v Western Australia (1996) 67 FCR 366; 137 ALR 561

Word & Phrases: ‘negotiate in good faith’

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

Background

The State of Western Australia (‘the Government party’) proposes, under the Petroleum Act 1967, to grant Petroleum Production Licence L1/97-8 (‘the Production Licence’) to West Australian Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd (‘the grantee party’/‘WAPET’) over Thevenard Island in north-western Western Australia. On 14 April 1999, the Government party, in accordance with s 29 of the Native Title Act 1993 (Cth) (‘the NTA’), gave notice of the grant. This notification was deficient and the notice was reissued correctly on 19 May 1999. On 1 December 2000, the Government party, pursuant to s 35 of the NTA, made a future act determination application to the Tribunal.

Native title party

Leslie Hayes and Glenys Hayes, on behalf of the Thalanyji People, were the registered native title claimants over the area covered by the Production Licence at the close of the s 29 notice period on 19 September 1999 (Claim No WC96/82). The claim group was described as the biological descendants (according to Thalanyji tradition and custom) of the following individuals; Jack Hayes, Mick Fazeldean, Leslie Hayes, Glenys Hayes, Judy Hayes, Valerie Ashburton, Laura Hicks, John Ard, Douglas Fazeldean, and Albert Hayes.

On 10 November 1999, the Federal Court combined existing Thalanyji claims (including WC96/82) under the amended NTA (‘the new NTA’). The combined claim was accepted for registration and the details entered on the Register of Native Title Claims on 7 February 2000 as claim WC99/45. The registered native title claimants on the combined claim are Albert Hayes, Douglas Fazeldean, John Ard, Glenys Hayes, Judy Hughes, Laura Hicks, Leslie Hayes and Valerie Ashburton on behalf of the Thalanyji People (‘the native title party’).

As the registered claimants for the combined claim represent the same claimant group as defined in the relevant pre-combination claim and include Leslie Hayes and Glenys Hayes, the right to negotiate obtained by virtue of the WC96/82 claim was retained. The status of the native title party is not in dispute in this proceeding.

Grantee party

The current petroleum exploration permit covering Thevenard Island is EP65, title to which was granted to WAPET and Western Mining Corporation. In 1997 WMC assigned its interest to Shell Development Pty Ltd. Therefore as WAPET and Shell currently hold the legal interest in the existing licence, they will be the initial recipients of the Production Licence (if granted) and are the grantee party in this proceeding. Until 1 February 2000, numerous joint ventures in relation to various petroleum titles referred to as the Barrow, Thevenard and Gorgon Assets off the north west coast of Western Australia (including those on Thevenard Island) were operated by WAPET and thereafter by Chevron Australia Pty Ltd. Petroleum Exploration Permit EP65 is governed by a series of agreements, the most recent of which is the Thevenard Island Production Joint Operating Agreement of 9 August 1999. The current Joint Venture Participants (and beneficial owners) of EP65 (and to whom the Production Licence will be transferred if granted) are Chevron Australia Pty Ltd, Texaco Australia Pty Ltd, Mobil Australia Reserves Pty Ltd and Santos Offshore Pty Ltd. Throughout the negotiations, the negotiators for the grantee party were required to report to and seek instructions from the Joint Venture Participants about any proposed settlement. For convenience I have referred throughout these Reasons to the grantee party as WAPET, who managed the negotiations for most of the relevant period.

Good faith negotiations – jurisdiction

Before conducting an inquiry and making a determination the Tribunal must be satisfied that it has jurisdiction to do so and in particular be satisfied that the Government and grantee parties have negotiated in good faith as required by s 31(1)(b) of the NTA. The matter is to be dealt with under the NTA as amended to operate from 30 September 1998. Section 31 contains two obligations:

the Government party must give the native parties an opportunity to make submissions to it, in writing or orally, regarding the future act (s 31(1)(a)); and
the negotiation parties must negotiate in good faith with a view to obtaining the agreement of the native title parties to the doing of the future act with or without conditions (s 31(1)(b)).

Section 36(2) of the NTA says that 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.

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. (Rita Dempster & Ors (Southern Noongar)/Bayside Abalone Farm Pty Ltd & Anor/Western Australia, NNTT WF99/1, Hon EM Franklyn QC, 27 August 1999; Placer (Granny Smith) Pty Ltd and Granny Smith Mines Limited/Western Australia/Ron Harrington-Smith & Ors on behalf of the Koara people, NNTT WF99/5, Hon CJ Sumner, 21 December 1999.)

The native title party contended that the grantee party had not fulfilled its obligation to negotiate in good faith. No contention was made in relation to the Government party nor in relation to any other jurisdictional issues.

The hearing

Directions were made for the production and exchange of contentions and documents relating to the good faith issue and a hearing conducted on 1 March 2001. The grantee party was represented by Mr Marcus Soloman and Ms Sandra Brown of Gadens, lawyers; the Government party by Mr Steven Wright instructed by Ms Rhonda Howlett of the Crown Solicitor’s Office; and the native title party by Ms Sally Bruce of Corsers, Barristers and Solicitors.

Affidavits were filed by the native title party from:

Trudy Hayes, a member of the native title claim group and one of the four prime negotiators for the Thalanyji People (an original and further affidavit);
Ronald Bower, Partner of Corsers - lawyers for the Thalanyji people ;
Sally Bruce, Solicitor with Corsers – lawyers for the Thalanyji People;
Jerome Frewen, Principal of Desert Management Pty Ltd, a company employed by the Thalanyji native title party to provide economic and negotiation advice.

Affidavits were filed by the grantee party from:

Ms Lucia Lombardo, in-house lawyer for WAPET (now Chevron);
Mr Geoffrey Hales, who was Business Development Coordinator for WAPET and responsible for the early part of the negotiations;
Mr Zuwa Omoregie, who was Asset Manager for WAPET and the chief negotiator;
Ms Christine Sammut, Business Development Coordinator for WAPET;
Gregory MacMillan, Production Operator for WAPET; and
John Southalan , Legal Officer for Yamatji Barna Baba Maaja Aboriginal Corporation

Leave was granted for the grantee party to call oral evidence in reply to the further affidavit of Trudy Hayes, which was received by the grantee party the day before the hearing. Oral evidence was received from Zuwa Omoregie, Lucia Lombardo, Geoffrey Hales, Christine Sammut John Southalan and David Ritter (Principal Legal Officer -Yamatji) for the grantee and Trudy Hayes for the native title party. Leave was granted to both the grantee and native title party to cross-examine the witnesses (s 156(5) NTA). Zuma Omoregie, Lucia Lombardo, Geoffrey Hales, Christine Sammut, John Southalan and Trudy Hayes were cross-examined. Not surprisingly the recollection of some of the negotiators has been different. It has not been necessary for me to make findings on these matters as they were not critical to my decision. There was sufficient indisputable evidence from the documents, affidavits and oral evidence to enable me properly to make the necessary findings. In fact, I am now of the opinion that the matter could have been dealt with without the need for oral evidence and cross-examination (see below).

Legal principles

The Federal Court and Tribunal have in a number of matters considered the obligation to negotiate in good faith under the old NTA(when the obligation was only imposed on the Government party). Although the obligation to negotiate in good faith is now imposed on all parties, the principles enunciated under the old NTA are still relevant. They were summarised in Placer (Granny Smith) & Anor/Western Australia/Harrington-Smith & Ors, NNTT WF99/5, Hon CJ Sumner, 21 December 1999 (at 9):
‘On the assumption that it is normally the native title party that will assert that the other negotiation parties have not negotiated in good faith the position, in summary, is that the Tribunal must be satisfied that the Government and grantee parties have negotiated in good faith with the native title parties with a view to obtaining the agreement of the native title parties to the granting of the mining leases with or without conditions. Negotiation involves ‘communicating, having discussions or conferring with a view to reaching an agreement’ (Western Australia v Taylor (1996) 134 FLR 211 at 219 (‘Njamal’). Good faith requires the parties 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 and grantee parties as a whole but may have regard to certain indicia which were outlined in Njamal 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 it 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.’
This approach under the new NTA was recently endorsed by the Tribunal in Western Australia/Arthur Dimer & Ors (Ngadju People); Cyril Barnes & Ors (Central East Goldfields People)/Equs Limited, NNTT WF99/10, Ms Patricia Lane, 9 August 2000. Member Lane also said:

that each party must act both honestly and reasonably with a view to reaching agreement about whether the act can proceed (at 25); and
all parties are required to adhere to the same standard of negotiating behaviour but what they do to satisfy the obligation must be judged by reference to the interests they seek to advance in negotiations, the behaviour of the other negotiation parties and the circumstances in which the negotiations take place (at 26). The Government party is not, as a result of the amendments to the NTA, now subject to a lesser standard than previously (at 27).

The Njamal indicia are:

unreasonable delay in initiating communications in the first instance;
failure to make proposals in the first place;
the unexplained failure to communicate with the other parties within a reasonable time;
failure to contact one or more of the other parties;
failure to follow up a lack of response from the other parties;
failure to attempt to organise a meeting between the native title and grantee parties;
failure to take reasonable steps to facilitate and engage in discussions between the parties;
failing to respond to reasonable requests for relevant information within a reasonable time;
stalling negotiations by unexplained delays in responding to correspondence or telephone calls;
unnecessary postponement of meetings;
sending negotiators without authority to do more than argue or listen;
refusing to agree on trivial matters eg a refusal to incorporate statutory provisions into an agreement;
shifting position just as agreement seems in sight;
adopting a rigid non-negotiable position;
failure to make counter proposals;
unilateral conduct which harms the negotiating process eg issuing inappropriate press releases;
refusal to sign a written agreement in respect of the negotiation process or otherwise;
failure to do what a reasonable person would do in the circumstances (Njamal at 224-225).

Other relevant factors have been identified by the Tribunal and are enunciated in Western Australia/Marjorie May Strickland (Maduwongga) & Ors, NNTT WF97/4, Hon CJ Sumner, 10 December 1997 and were considered (and modified in respect of whether there is an obligation on the Government party to make reasonable substantive offers) in subsequent Federal Court decisions.

Background facts

Thevenard Island is situated approximately 22 kilometres north north-west of Onslow, Western Australia and occupies an area of 6 square kilometres. The existing tenures on the island comprise a small area of unallocated Crown land; two special leases on the east end of the island, held by Mackrel Islands Pty Ltd (one for a 1.2 kilometre airstrip and the other for a fishing holiday resort from which the lessee operates a deep-sea fishing venture, predominantly for tourism purposes). The remainder of the island is a Conservation and Land Management Department ‘C class’ Reserve for the conservation of flora and fauna. The WAPET lease from CALM covers an area of 25 hectares adjoining the Mackrel Island fishing resort lease on the east end of the island. The infrastructure facilities on the lease include oil and gas processing plants, well heads and accommodation for both WAPET staff and CALM officers when they visit the island. All grantee party staff arrive at and leave the island by air, the Mackrel Islands’ staff and guests access the island by the company’s launch boats.
The majority of oil and gas processed at Thevenard Island is sourced from offshore reservoirs and transported to the plant on the island via seabed pipelines. Production of the offshore oil and gas is authorised by already granted licences specific to the field from which it derives. The crude oil from the off-shore wells (and from Crest Well 6 when operating) is processed and separated and the refined product either transported by seabed pipeline to ships which can berth further off-shore (oil) or to the mainland (gas). In 1994, the grantee party started drilling on Thevenard Island itself, pursuant to exploration permit EP65. The purpose of the drilling was to create water disposal reservoirs for the disposal of treated water that could not be pumped out to sea for environmental reasons. The third water disposal well drilled, unexpectedly produced commercial quantities of oil and became known as Crest Well 1. After Crest 1 stopped producing sufficient oil, Crest 2 and 3 were dug from the same well casing but targeting different underground areas. In sequence, the next 2 wells, Crests 4 and 5, were dug using a different well casing but were later abandoned and plugged. The grantee party resumed drilling from the original Crest 1, 2 and 3 well casing and accessed the Mardie Greensland Reservoir. This well, known as Crest Well 6, was run under an extended production licence authorised under EP65. In early October 1998, the Department of Minerals and Energy instructed the grantee to turn the well off until they obtained a Production Licence under the Petroleum Act 1967 (WA). Consequently, the grantee party ‘shut the well in’, meaning, that certain valves were closed to prevent the flow test. At the time production from Crest Well 6 ceased it contributed a very small proportion of the total oil processed on Thevenard Island.

The Production Licence sought allows for production over the existing EP65, which encompasses graticular blocks 6236 and 6237 of the Hammersley Range map sheet. The precise location declared is an area of 6 square kilometres, being the entirety of Thevenard Island and does not include any surrounding sea. However, the only activity currently proposed pursuant to the Production Licence is recommencement of Crest Well 6 production. This simply involves the manual and electronic reopening of various valves on the existing well head and does not involve any additional infrastructure or disturbance to land. The processing facilities are currently operating well below full capacity and will more than adequately cope with any Crest Well 6 flow. A production licence is granted for 21 years with the option of renewal for a further 21 years.

Negotiations with the Thalanyji people commenced both in regard to the Production Licence and also a Pipeline Easement (PL21) sought under the Lands Administration Act 1997 (WA). The easement was intended to protect a pipeline installed on the mainland in 1993 and to facilitate maintenance works. There were no objections from the native title party at the close of the notification period for the pipeline easement on 13 December 1999. The easement was subsequently granted and played no further part in the negotiations.

Negotiations generally

There were extensive negotiations between the native title and grantee parties which commenced with a preliminary meeting on 21 April 1998 in Perth, attended by Mr Hales, and another representative of WAPET, WAPET’s solicitor, Corsers and three of the claimants. The negotiations continued with seven formal ‘Negotiation Meetings’ held between 14 November 1998 and 8 July 2000. The meetings were held on:

14 November 1998 at Karratha (Negotiation Meeting No.1);
19 December 1998 at Carnarvon (Negotiation Meeting No.2);
1 May 1999 at Onslow (Negotiation Meeting No.3);
18 March 2000 at Onslow (Negotiation Meeting No.4);
6 May 2000 at Onslow (Negotiation Meeting No.5);
3 June 2000 at Onslow (Negotiation Meeting No.6); and
8 July 2000 at Onslow (Negotiation Meeting No.7).

The Negotiation Meetings were well attended by members of the native title claimant group and most of them by either Corsers or a consultant (Mr Jerome Frewen) representing the native title party. In addition, there was a pre-mediation meeting held on 10 September 1999 by the Tribunal following referral of the matter for mediation under s 31(3) of the NTA by the native title party and three Tribunal mediation meetings conducted in 2000 towards the end of the negotiations. In addition there were meetings between the native title party’s legal representatives (Corsers), Mr Frewen and the grantee party.

The grantee party took responsibility for organising meetings and providing logistic support to them, including the hire of meeting halls, catering, transport costs and sitting fees for members of the native title claim group negotiating team and the preparation of draft agendas and minutes. The costs of legal, and on one occasion other representation (Mr Jerome Frewen), at the meetings for the native title party and the cost ($5,000) of a research report (referred to as an ‘economic and native title due diligence’ report) prepared by Mr Frewen were met by WAPET. Throughout the negotiations, the native title party was legally represented by Corsers and from early 2000 by Mr Jerome Frewen who was engaged to assist in the negotiations. Some $119,000 was paid for these purposes. In addition, the grantee party expended approximately $71,000 to fund its own participation in the negotiations (including provision of legal advice but excluding the salaries of its negotiators).

A considerable amount of correspondence of both a procedural and substantive nature was generated during the negotiation process. At the preliminary meeting, the parties agreed to prepare a Negotiation Protocol and agreed an outline of its content. A draft was discussed at the First Negotiation Meeting and signed after some further amendment by all the claimants present at the Second Meeting. Although two of the claimant group (Trudy Hayes and John Fazeldean) did not sign the Negotiation Protocol until 18 March 2000 I have no difficulty in finding that it was agreed to by the claimant group at the Second Meeting and was intended to govern the conduct of negotiations.
The native title party contended that the grantee party was engaged in a facade of negotiations. One of its ‘main objectives from the outset was to go through the motions of negotiations to enable it to invoke the jurisdiction of the Tribunal as soon as possible’. This contention suggests that WAPET never had any intention of reaching an agreement and is tantamount to an allegation that its negotiators acted dishonestly and without sincere intent to reach a negotiated outcome. In my view there is no basis for this contention. There is no evidence to suggest that any of the grantee party negotiators were other than honest and sincere in their actions and desire to reach agreement.
The other contentions of the native title party are that the grantee party did not negotiate in good faith because:

it failed to act in accordance with some of the Njamal indicia; and
did not behave reasonably in the circumstances of the negotiations as a whole.

Failure to provide comments/suggestions in relation to proposals put forward by the Thalanyji People; failure to make counter proposals

The native title party contended that the grantee party had failed to negotiate in good faith on the basis that it had not acted in accordance with some of the Njamal indicia in that it had failed to provide comments or suggestions on proposals made by the native title party and failed to make any counter proposals. The following extracts from the minutes of three of the Negotiation Meetings summarise the issues raised by the native title party.

Negotiation Meeting No.2 – 19 December 1998

‘Mr Omoregie invited ideas or submissions as to possible settlement options, which the WAPET representatives could discuss with WAPET Management and advise on the outcome of which at the next meeting.
There was general consensus amongst the Thalanyji elders that the settlement with WAPET should focus on providing assistance to senior members of the Thalanyji community. Brainstorm ideas from the elders on possible settlement options included that WAPET finance the construction/provision of:
1.A homeland for the Thalanyji old people (ie. a retreat away from towns and cities);
2.Bus to aid the Thalanyji old people to travel (possibly based in Onslow);
3.Homes for old people, possibly by joint venture between WAPET and Homeswest;
4.A four-wheel drive and trailer to the Thalanyji community; and
5.Health programs for old people.

WAPET did not comment on the appropriateness of any of these suggestions.’

Negotiation Meeting No.3 – 1 May 1999

‘The Thalanyji outlined their groups priorities as follows:
a)    the first priority is the “Homeland Movement” for old people away from the town. It was indicated that an existing station would be the best option. Infrastructure was an issue that needed to be addressed including communication technology requirements which could be used for family supervision of offenders, distance education etc;
b)   Contribution to a cultural fund;
c)    An 18 seater bus with a wheelchair lift;
d)   Housing joint ventures, partnerships with HomesWest and the Aboriginal Housing in Onslow area, the Thalanyji People hope to develop a housing Co-op;
e)    An educational trust fund scholarship program;
f)    employment options;
g)   The Thalanyji People were asked by ZSO whether they had hired anybody to assist them with their business planning. The response was “No, we have not hired anybody”; and
h)   Another option was a resource centre with a conference room and offices house any business enterprise. The Thalanyji people indicated that they needed an office to get things rolling.’

Negotiation Meeting No.5 – 6 May 2000

Minutes prepared by WAPET

‘The Thalanyji People list the following as possible settlement options (in order of priority):
a)Cash payments to individual Thalanyji members;
b)Share of production/resources from the Crest field;
c)Enterprise development eg: accommodation, shop, supermarket, truck stop, vehicle hire, medical and emergency facility, tourism with assistance from Department of Commerce and Trade and contribution made by WAPET via business development assistance;
d)Resource Centre – a Thalanyji community office;
e)Station or homeland on traditional Thalanyji land, tied in with education and cultural awareness;
f)development of a community outside of Onslow townsite, community housing out in the bush, assistance with land acquisition.’

Minutes prepared by Jerome Frewen

‘Settlement Options
New Proposals
Training
Share of Resources
Cash (distribution to Members)
Contracts and Joint Ventures
Cultural Awareness Programs
Enterprises
-     truck stop
-     supermarket
-     accommodation
-     vehicle hire (business)
-     tourism

Medical and emergencies
Station for homelands
Community (infrastructure)
Land Acquisition
Previously suggested (and still under consideration)
Contribution to Culture fund
22-seater bus and lift
Housing JV
Educational Trust (and scholarships)
Employment
Business Plan/skills analysis
Resource centre
(Bolded items were priorities)’

The proposals put forward at the Second Negotiation Meeting were as a result of what was described as a brainstorming session which was instigated and facilitated by the grantee party.

The first and most obvious point to be made about this list of proposals is that the law is now clear that the Government party and grantee party are not obliged as part of good faith negotiations to negotiate about matters that are not related to or connected to the doing of the future act.

In Maduwongga (Western Australia v Marjorie May Strickland and Anne Joyce Nudding & Ors, NNTT WF97/4, Hon CJ Sumner, 10 December 1997) the Tribunal said (at p 15):

‘… that the Government party can not be accused of lack of good faith in its negotiations if it uses as a reference point the matters which must be considered in the arbitral phase and the sort of conditions which the Tribunal can impose on any determination that the act can be done.’

In Risk v Williamson (1998) 87 FCR 202; 155 ALR 393 (O’Loughlin J, 10 June 1998) the Federal Court commented that good faith negotiations are not required to involve matters which exceed the existing legal rights of the native title party (FCR 224).

In Western Australia/Walley (Ngoonooru Wadjari)/WMC, NNTT WF97/5, Hon CJ Sumner, 25 March 1998 the Tribunal decided (at 42) that the right to negotiate is about the proposed future act and that the Government party’s obligation only extends to negotiating about issues which are related to or connect to the doing of the act. The Tribunal elaborated on its reasons (at 47):

‘The starting point for consideration of this issue is the subject matter, scope and purpose of the Act. In Koara [ReKoara People (1996) 132 FLR 73] (at 93) the Tribunal concluded that the wide discretion given to make an arbitral determination and impose conditions is exercised by reference to the criteria in s 39 and 'controlled by the subject matter, scope and purpose of the Act' (Hot Holdings Pty Ltd v Creary (1996) 134 ALR 469 at 484). It applied the same principle to consideration of s 39(1)(f) when it said that a matter can only be relevant if it falls within the subject matter, scope and purpose of the Act.
It is my view that the scope of negotiations which the Government party is required to conduct (as opposed to those which may be voluntarily undertaken) must also be limited by reference to the subject matter, scope and purpose of the Act. The subject matter of the Act is indisputably native title. It was passed in response to the High Court decision in Mabo v State of Queensland (No.2) (1992) 175 CLR 1 which for the first time in Australian common law recognised that native title could continue to exist. One of the considerations taken into account by Parliament in enacting the Act was that Aboriginal people and Torres Strait Islanders are as a group the most disadvantaged in Australian society as a consequence of the progressive dispossession of their lands. However, this does not mean that the Act purports to deal with all aspects of disadvantage and social and economic deprivation suffered by Australia's indigenous people. It is concerned with one, albeit very important, measure to deal with that disadvantage - the recognition and protection of native title. All of the paragraphs of s 3 of the Act refer to native title and confirm that this is its principal focus. As far as future acts are concerned, the policy of the Act, in the Prime Minister's words, is to accord a right to indigenous people to be asked about actions affecting their land. That right arises because what the Government party proposes may affect native title. Obviously, negotiations can and an arbitral determination must include consideration of issues which go beyond the affect of the act on native title, but it is important to bear in mind that the central purpose of the Act and trigger for consideration of those issues is the affect of the act on native title.’

On appeal the Federal Court (Walley v Western Australia (1999) 87 FCR 565; [1999] FCA 3 Carr J, 6 January 1999) upheld the Tribunal’s decision that the obligation to negotiate in good faith should be judged in the context of matters related to or connected with the doing of the future act. (See also Brownley v Western Australia (1999) 95 FCR 152; [1999] FCA 1139, Lee J, 19 August 1999 (at para 24).)

Based on these statement of the law the Tribunal in Normandy Pajingo Pty Ltd and Battle Mountain/Queensland/Colin McLennan and Ors, NNTT QF00/2, Hon CJ Sumner, 29 September 2000 said:

‘Of course, it is possible for the parties to consider, in the negotiations, whether positive benefits can flow to native title parties from the grant of the mining lease to help overcome past injustice or current disadvantage but the actual obligation on the Government party and grantee party to negotiate in good faith only extends to dealing with issues which are related to the doing of the future act and which fall within the subject matter, scope and purpose of the NTA.’

These decisions were based on the provisions of the old Act and were reflected in the new Act by the insertion of s 31(2) which says:

‘31 Normal negotiation procedure

Negotiation in good faith
(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 that paragraph.’

It is clear that no question of failure to negotiate in good faith arises if there is a refusal or failure to negotiate about matters unrelated to the effect of the act on the registered native title rights and interests of the native title parties. This section should not be read too literally. If it were then the scope of good faith negotiations may not include some matters referred to in s 39(1)(a) of the NTA (such as the effect of the future act on the way of life, culture and traditions or the development of the social, culture and economic structures of the native title parties) yet conditions could be imposed in an arbitral determination in relation to them. What the previous Tribunal and Federal Court decisions and s 31(2) mean is that the focus of good faith negotiations is about the effect of a future act on the native title party’s registered native title rights and interests, while not excluding negotiations about other matters of native title party concern set out in s 39(1)(a).

The Tribunal’s decision in Walley was made on 25 March 1998, the appeal decided on 6 June 1999 and s 31(2) of the NTA came into effect on 30 September 1998. During the negotiations the parties (including the native title party, or at least their advisers) should have been aware of what matters fall within the scope of good faith negotiations.

The crux of the native title party’s contention is that the grantee party never expanded on or made an offer in relation to the matters that were identified at the Second, Third and Fifth Negotiation Meetings but gave the impression that they were considering them. It said that this failure to make an offer was compounded by what the native title party regarded as the relatively small offer of $25,000 made at the Sixth Meeting toward the end of the negotiations.
In my view the grantee party was not required to negotiate about most of the matters identified above. They do not fall within the scope of what is required by good faith negotiations. This does not mean that they should not have been raised for discussion as part of the negotiations. There may be a variety of reasons for a grantee party’s preparedness to negotiate about matters unrelated to the doing of the act. Good neighbour policies, a desire to maintain harmonious long term relationships with native title claimants and the local Aboriginal community or simply a desire to achieve a quick commercial settlement come to mind. It could be suggested that the grantee party did not make it clear that it was not obliged to negotiate in good faith about these matters and that this misled the native title party in a way which called into question whether there were negotiations in good faith. There is no reasonable basis for this suggestion. The native title party was legally represented throughout the negotiations and the law should have been known to its advisers.
It is my opinion that it would have been preferable for the grantee party at the outset of the negotiations to have spelled out the limitations on good faith negotiations. That is, to have made clear (preferably in writing) following the listing of the items in the brainstorming session that it was prepared but not obliged to negotiate and make offers about them. Although it is my personal view that the failure to do this was a mistaken approach to the negotiations it does not amount to a lack of good faith.
Even if these matters had properly fallen with the scope of good faith negotiations, I would not have found that the grantee party had failed to negotiate in good faith about them. On the evidence I have little doubt that during the negotiations the grantee party made it clear that it could not fund all these matters and that it was looking at making a contribution commensurate with the future act involved. The negotiators informed the claimants of the expected low economic value of production from Crest Well 6. The grantee party offered to make a contribution to one or more of these proposals (excluding cash payments and a share of production) through a trust or foundation but that they could not fund all these proposals. The grantee party had a legitimate expectation that the native title party would provide a more detailed submission on the effect of the act on their native title rights and more detail of the proposals which had been raised.
Early in the negotiations WAPET asked the claimants for a copy of their management plan so that they could assess areas of concern for the Thalanyji community so as to assist them to come up with ideas as to how WAPET could benefit the community as part of an agreement. The native title party declined to provide this management plan and as I have not seen it I cannot comment on the reasonableness of this stance. It is understandable that there may be matters in it which the native title party wished to keep confidential. However, whether via the management plan or some other means it would have assisted the negotiations if the native title party had been able to indicate more precisely what proposals they had for settlement so that the grantee party could give consideration to them, even if not strictly obliged as a matter of good faith negotiations to do so.

Conduct of the native title party – impact of the future act on native title rights and interests

The Tribunal has previously explained its view that the negotiation process involves the two obligations contained in s 31(1) (Western Australia/Walley (Ngoonooru/Wadjari), NNTT WF97/5, Hon CJ Sumner, 25 March 1998 at 47).
‘I have concluded that the provisions of s 31(1)(a) and (b) should be read together as laying down a procedural framework for the negotiations. Parliament envisaged that the native title party would make a submission to the Government party regarding the act and that the submission would form a basis upon which the negotiations could proceed. In the future an appropriate way for these matters to be dealt with to optimise the possibility of agreement is as follows:
(1)The Government party will send out its initiating letter with its negotiating protocol and will take all reasonable action in a procedural sense to facilitate the negotiations as between the parties;
(2)The native title party will consider the act that is being proposed (having received details of it from the Government party in its initiating letter) and will then make a submission to the Government party which will detail the native title party's views of the likely effect of the act on native title and the other factors in s 39. It may also advance substantive proposals which the Government party should consider as a part of the negotiations and also may propose matters appropriate for consideration by the grantee party. Submissions of this kind from a native title party will provide some context within which the negotiations can occur and assist the Government and grantee parties to consider appropriate substantive proposals. Obviously the information that should be provided by the native title party would not need to be of the detailed nature that might be necessary in an arbitral determination, but some basic information about the factors in s 39(1)(a) and (c) [old NTA; s 39(1)(a) and (b) of new NTA] would assist the conduct of negotiations. In circumstances where the mining lease involves a proposal for a productive mine then the Government and grantee parties should provide to the native title party full details of the proposal, including its economic significance, details of any public interest in the proposed act proceeding and any assessment carried out under s 39 (1)(b).’ [old Act reference to any assessment of the effect of the act on the natural environment.]

It has always been accepted that the behaviour of a native title party is relevant to whether the other parties have negotiated in good faith. (See Walley v WA (1996) 67 FCR 366 at 381; 137 ALR 561 at 576; WA v Taylor (1996) 134 FLR 211 at 250 (Njamal); Western Australia/Strickland (Maduwongga & Ors/Crook, NNTT WF98/5, Mr K Wilson, 11 August 1998).

There is no doubt that, on several occasions, the grantee party requested the native title party to provide a submission in accordance with s 31(1)(a) and to indicate the effect of the grant on their native title rights and interests. The minutes reveal that the request was made orally by Mr Omoregie at the Second Negotiation Meeting on 19 December 1998 at Carnarvon. Even if the nature of the request was not clear then, it was clear at the latest by 5 March 1999 when a letter to Corsers from WAPET requested the native title party to provide a statement of the impact that the grant of the Production Licence would have on the native title rights and interests claimed. That letter also asked for an outline of possible settlement options proposed by the Thalanyji People. At no stage during the negotiations did the native title party provide any information in response to these requests which was in a form that enabled the negotiations to proceed productively. In response to the usual request from the Government party for submission under s 31(1)(a) Corsers made a written submission to the Department of Mineral and Energy on 19 April 2000 which was provided to the grantee party. Regrettably this letter did little to advance the negotiations and provided no information about the impact of the proposed future act on native title rights and interests or the other matters of native title party interest specified in s 39 of the NTA. The letter went on to indicate that the native title party wished to reach agreement in relation to the management use and control of the land in order to achieve some recognition and protection of their interests and said that such agreement or conditions might contain the following elements.
‘· Payment to Native Title Holders for deprivation of land, land use, use of access roads and native title claimant expenses.
·The Grantee Party not to damage or interfere with and report Aboriginal sites and significant Aboriginal areas or objects.
·Furnishing of work programmes by the Grantee Party to the Native Title Party.
·Minimisation of Environmental impact and rehabilitation of disturbed areas.
·Entitlement of Native Title party to any facility of the Grantee Party not removed within three months of expiry of Production Licence 1/97-8.
·Permits for the Grantee Party personnel to enter the area prescribing conditions of entry.
·Co-operation of the Grantee Party in development and avoidance of disruption of Aboriginal social, cultural and economic structures.
·Use of roads and Grantee Party facilities by Native Title Holders.
·Freedom of movement and pursuit of traditional and customary activities on the land by Native Title Holders, where applicable.
·Instruction of Grantee Party personnel in Aboriginal culture.
·Prohibition of liquor in the area without the consent of the Native Title Party.
·Employment and contract preferences to Native Title Party, taking into account cultural needs and training in job skills and accommodation to Aboriginal employees.
·Regulation of transport, access and accommodation within the area.
·Rights of the Native Title Party to inspect and gather information concerning the Grantee Party’s activities (subject to confidentiality condition).
·A liaison Committee to implement the Agreement.
·Restrictions on Assignment or change of control only with consent (not unreasonably withheld of Native Title Claimants) to Reputable Corporation.
·Native Title Party’s First Option to acquire the interest of the Grantee Party.
·Notice of Encumbrances by Grantee Party to Native Title Party.’

Although some of these proposals, in a hypothetical sense, may be said to arise from the effect of the act on registered native title rights and interests and therefore a proper subject for good faith negotiations, there was virtually no attempt to relate the proposals for settlement to the specific circumstances of this case. Regrettably in the Tribunal’s experience in future act negotiations and inquiries, documents are often filed which are of a formulaic nature and do nothing to assist the parties or Tribunal to engage in the real issues underlying the negotiations, s 31 mediations or inquiries.

Trudy Hayes’ evidence at the hearing was that the claimants had difficulty in talking about certain special or spiritual places. The Tribunal understands these concerns. The Courts and Tribunal have developed means to enable this type of issue to be dealt with sensitively while still ensuring that they have the necessary information to enable them to make decisions. Any of the native title party’s concerns in this respect should have been raised in the negotiations (through the native title party’s advisers) and attempts could then have been made to deal with them. Ms Hayes gave evidence that she mentioned the special spiritual nature of Thevenard Island to Mr Omoregie but neither Corsers, Mr Frewen or any of the native title party claim group in the formal negotiations appear to have raised any difficulty based on Aboriginal law and custom in providing information about their native title rights and interests and the impact of the future act on them.

Even if there were such concerns it is difficult to see why the native title party could not have given at least some evidence or provided some information about the exercise of native title rights and interests on Thevenard Island. This is knowledge which they have and which is necessary to ensure that negotiations proceed. It should be borne in mind that if the matter proceeds to an inquiry this is evidence which will need to be produced to enable the Tribunal to make a determination. Negotiations in good faith must be informed by submissions on the effect of the act on the enjoyment of a native title party’s registered native title rights and interests if they are to evolve and be concluded in a productive manner.

To assist in assessing the effect of the future act on native title rights and interests it was suggested at a mediation meeting conducted by the Tribunal on 10 August 2000 that an affidavit sworn by Brian Hayes (one of the native title claimant group) should be made available. It had been filed in the Federal Court in support of the native title parties application for determination of native title. Corsers declined to provide this affidavit on the basis that it wanted it kept confidential. The grantee party as one of the parties to the Federal Court proceedings obtained a copy of the affidavit. The affidavit gives very few details about the significance of Thevenard Island to the Thalanyji People but it does say that Thalanyji People used to camp and hunt turtles there and that Mr Hayes continues to take his children on fishing trips there. It seems to the Tribunal that as Mr Hayes was able to provide this information about the enjoyment of his native title rights and interests claimed to exist on Thevenard Island it should have been well within the capacity of other members of the claimant group to have done the same. This would have provided a more firm basis upon which the negotiations could have proceeded. The reasons given by Corsers for refusing to make this affidavit available (see letter to the Tribunal of 7 September 2000) was that if it were given to WAPET it would be liable to be subpoenaed by the Government party as part of its defence against the claim for native title. They said it was their judgement that while the Government party policy on the use of subpoenas of material exists, they should discourage their clients from doing anything which renders their confidential material liable to be subpoenaed. The letter said that this advice was explained to their clients and their decision was to withhold the affidavit. On the evidence before me it is impossible to understand this advice nor see any justifiable reason for not making the affidavit available. This refusal and the general failure of the native title party to provide this type of information clearly had an adverse impact on the negotiations.
The minutes of the First Negotiation Meeting on 14 November 1998 indicate that Mr Hales advised the claimants that WAPET had applied for a Production Licence with respect to a small area on the eastern end of the Thevenard Island and that there was to be no change in current or future practices at the location. Subsequently, and at least from the time that the s 29 notice was given on 19 May 1999, it became clear that the Production Licence was for the whole of the Thevenard Island being an area of six square kilometres. I accept that it is possible that the claimants in the early stages of the negotiations were under the impression that the Production Licence only related to the existing Crest Well 6 and the area on the eastern end of the Island where the production infrastructure already exists. This gave rise to genuine concern expressed by the native title parties at the Fourth Meeting on 18 March 2000 about a Production Licence being granted over the whole of Thevenard Island and the possibility that the act would potentially extinguish native title over it. While I accept the genuineness of the claimant’s concern, it should have been clear to them (or at least to their advisers) from at the latest 19 May 1999 that the whole of Thevenard Island was involved. There was certainly no basis for Mr Frewen’s assertion at that meeting that the Production Licence covered 300 square kilometres. Mr Omoregie responded to this concern by reaffirming that the only reason for the Production Licence was to enable WAPET to produce from the Crest field. He suggested looking at trying to obtain the Production Licence for the Crest field only (thus excluding the rest of the island) or that the parties look at an agreement whereby the Thalanyji People consent to production from the Crest field but reserve their rights over any production activity over the remainder of the Island. These possibilities were discussed but ultimately were found to be incapable of resolution. WAPET’s legal advice was that it was not possible to limit the grant of the Production Licence to only the land covering the Crest field. The fact that the grantee party was prepared to consider these options is indicative of good faith negotiations.
On the present known intentions of the grantee party it is difficult to envisage any impact that the future act will have on the enjoyment of any native rights and interests as the grantee party only intends to activate an existing well, the infrastructure for which already exists. However, the Production Licence extends over the whole of Thevenard Island and is granted for a term of 21 years with a right of renewal of a further 21 years. Clearly, if granted the possibility exists that it could be used to drill further wells and exploit other resources found on the island. I note that the grantee party’s application to DME for the Production Licence indicates that there may be future drilling within its area depending on information it obtains from Crest Well 6. On the evidence, the likelihood of this occurring at this stage are low as the grantee party’s current intentions are to do nothing more than activate the existing Crest Well 6. However, this issue was obviously a legitimate one for consideration in the negotiations and the possibility of future disturbance (even if remote) is one which could have been considered by the parties. The reality is that the weight to be given to this factor in the negotiations could not properly be explored because of the failure of the native title party to provide information about the enjoyment of its native title rights and interests on Thevenard Island.

Conduct of native title party – failure of some claimants to sign the Negotiation Protocol

The Negotiation Protocol had been agreed at the Second Negotiation Meeting on 19 December 1998 when it was signed by all the claimants present. Subsequently Trudy Hayes refused to sign the Protocol unless it included payment for lost wages for attending meetings. Although Ms Hayes gave evidence that she was making the request for lost wages not only on her behalf but on behalf of all the claimants the evidence is clear that her position was that she would not agree to sign off on the protocol unless she personally was paid for time taken off work to attend meetings (see letter from Corsers to WAPET dated 23 September 1999). To overcome the difficulties in Ms Hayes losing wages to attend meetings WAPET offered to fly her to and from meetings on the day of the meeting. Attempting by these means to meet Ms Hayes’ needs was consistent with the grantee party’s obligation to negotiation in good faith. The Negotiation Protocol was eventually signed by Ms Hayes and Mr Fazeldean at the Fourth Negotiation Meeting on 18 March 2000, some 15 months after it had been agreed to by the claimant group. Although not a major factor in my decision, I have no doubt that this failure to sign the Negotiation Protocol was a distraction to the negotiations and not conducive to a productive outcome.

A rigid pre-determined position - s 33(1) of the Native Title Act 1993 (Cth)

As an example of the grantee party adopting a rigid, predetermined position and lacking a willingness to compromise, the native title party relied on the grantee party’s failure to agree to payments based on a share of the resources produced. Section 33 of the NTA specifically contemplates that such payments may be included in any negotiations and agreement (although they are prohibited in an arbitral determination):
‘33 Negotiations to include certain things
Profits, income etc.
(1) Without limiting the scope of any negotiations, they may, if relevant, include the possibility of including a condition that has the effect that native title parties are to be entitled to payments worked out by reference to:
(a) the amount of profits made, or
(b) any income derived; or
(c) any things produced;
by any grantee party as a result of doing anything in relation to the land or waters concerned after the act is done.’
The history of Tribunal and Federal Court consideration of this issue can be briefly summarised. In Njamal, (at 250) (when the obligation was only imposed on the Government party under the old NTA) the Tribunal queried whether the Government party would be negotiating in good faith if it adopted a policy of not agreeing to s 33 type payments even if the grantee party was prepared to enter into an agreement to pay them to the native title party.
In Western Australia v Strickland & Ors (Maduwongga & Ors), NNTT WF97/4, Hon CJ Sumner, 10 December 1997) (at 15) the Tribunal (citing Njamal) repeated its view that the Government party may not be negotiating in good faith if it opposed such a condition being agreed to. The native title party’s contentions misquoted this passage when it said that ‘a negotiation party may not be negotiating in good faith if it adopts a position during negotiations which oppose such a condition being agreed to’. By way of clarification, the Tribunal in Njamal was faced with a situation where there was a suggestion that the Government party would adopt a blanket policy of not agreeing to s 33 payments even if the native title and grantee party wished to. It was in this context that the Tribunal made its comments and in these circumstances they remain valid. However, it cannot be said that just because a grantee party opposes the making of s 33 type payments it has failed to negotiation in good faith (see below).
In Western Australia/Thomas/Anaconda Nickel Ltd, NNTT WF98/7, Hon CJ Sumner, 4 September 1998 the Tribunal (at 45):

noted the policy of the Government party (Western Australia) not to provide for royalty type payments as compensation; and that Australian law generally provides that minerals are the property of the Crown and royalty payments are made to the Crown and not individuals; and
held that this approach to compensation did not reveal a failure to negotiate in good faith.

In Brownley v Western Australia [1999] FCA 1139 (1999) 95 FCR 152 the Federal Court on an application for judicial review declined to overturn this finding. The Court (Lee J) said (at 168-170 [50-57]):

‘Although not stated directly, the thrust of s 33 is that a grantee party and a Government may agree that a registered native title claimant is entitled to payment from a venture to be established by the grantee party by reason of an act of Government which grants to the grantee party a right to mine, or confers on the grantee party rights or interests, after compulsory acquisition by the State of native title rights and interests. The section suggests that the negotiation of an agreement with the applicants to the doing of an act by the State may have included a requirement that the State grant the mining leases on the condition that Anaconda make payments to the applicants, calculated by reference to profits, income or production of minerals. Such payments may have a compensatory aspect but they may represent more than that. They may be a beneficial interest in an enterprise conducted on land in which native title is claimed, with the intention that holders of such title receive a means of economic advancement related to their interest in the land.
It is an area of negotiation in which the role of the State could be significant, including, of course, the need for the State to agree to imposing the relevant condition on the grant of the mining lease. Furthermore, the Act is predicated upon the responsibility of Governments to redress the effects upon indigenous persons of dispossession of their lands, and negotiation in respect of the matters provided in s 33 of the Act is directed to that end. The State would be obliged to receive, and consider, such a proposal and to assess what response should be made thereto. No doubt the views of Anaconda would be sought and considered.
In s 38(2), under the sub-heading "Profit-sharing conditions not to be determined", the Tribunal is instructed that matters for negotiation described in s 33 are not matters able to be made the subject of a condition as part of a determination made by the Tribunal under s 38(1)(c). It is, therefore, a matter to be dealt with by an accord reached between the parties in negotiation, or not at all. Such a provision elevates the requirement that the State, as the party able to impose such a condition, engage in genuine discussion on that issue.
A matter on which a registered native title claimant is entitled to negotiate, provided for in s 33, is not to be confused with the entitlement of a native title holder set out in s 23 of the Act to compensation for the doing of a permissible future act.
If the State had a policy that it would not reach an accord with a registered native title claimant to facilitate an agreement with a grantee party for the making of payments described in s 33, and that policy were applied to control the participation of the State in negotiations prescribed in s 31(1)(b), it may be said that the State would not be negotiating in good faith with the native title party.
If, in negotiations with native title parties for the obtaining of the agreement of those parties to the grant of a mining lease, the State maintained an inflexible position that it "would not pay compensation" and relied upon that position to decline to engage in negotiations in respect of matters provided for in s 33, it may be said that the State would not be participating in negotiations in good faith. The State is not obliged to reach agreement on such a matter but it is required to receive, and consider, a proposal from a registered native title claimant in a manner that has regard to the particular facts of the case and to the merit of the proposal in all the circumstances.’

In Normandy Pajingo Pty Ltd & Battle Mountain/Queensland/Colin McLennan & Ors (Birri) and James Reid & Ors (Kudjala), NNTT QF00/2, Hon CJ Sumner, 29 September 2000 the Tribunal (when considering whether the Government party had negotiated in good faith) provided the following reasons for deciding that the Government party’s adoption of a rigid non-negotiable position and refuse to negotiate on this issue did not mean that the Government party had not negotiated in good faith overall (at 33 (para 30)):
‘First, it was only one aspect of the Government party’s negotiating behaviour. Second, the Government did not preclude the possibility that compensation other than the type provided for in s 33 might be paid. Third, the Government party did accept that the grantee party and native title parties could enter into such an agreement and knew they were negotiating about it. Fourth, there was no specific proposal advanced by the native title parties which was tailored to the specific circumstances of this case. Fifth, a similar decision made by the Tribunal in Brownley was not overturned by the Federal Court.’
In the case of a Government party it is clear that the adoption of a policy which refused in all cases to sanction the native title party and grantee party entering into an agreement for s 33 type payments will raise serious questions about whether it is negotiating in good faith. It also seems that a Government party may need to consider a proposal for the Government party itself to make royalty type payments to the native title party. Presumably it could agree to pay a proportion of its royalties to a native title party, although as far as I am aware this is not the general policy of State or Territory Governments. It is not necessary to further pursue this issue in this case.

In the case of a grantee party, in Lee J’s words, it must receive and consider a proposal in a manner which has regard to the particular facts of the case and to the merit of the proposal in all the circumstances, without being under any obligation to reach agreement. (Applied by the Tribunal in Western Australia/Arthur Dimer & Ors (Ngadju People); Cyril Barnes & Ors (Central East Goldfields People)/Eques Limited, NNTT WF99/10, Ms Patricia Lane, 9 August 2000 (at 40)). The grantee party is not required to capitulate in order to reach agreement but must give genuine consideration to proposals put forward by the native title party. The importance of the particular facts to a decision on this issue is confirmed by the qualified terms of s 33(1).

In the present matter I accept that the grantee party initially indicated that it was not prepared to consider payments of this kind but subsequently did examine the issue. The grantee party took the view that as minerals were owned by the Crown and the native title party’s registered claim excluded them because native title does not include ownership of minerals it would not make an offer which included s 33 type payments. These reasons were conveyed to the native title party. Objectively speaking I am of the view that these reasons are not a basis for refusing to negotiate about this issue. If valid they would, on the current state of the law, always be a justification for not negotiating about such payments.
At the hearing Mr Omoregie advanced further reasons for not agreeing to any s 33 type payments. He said that the value of the well was unclear, the grantee party hoped to be able to make a single one off payment and not be involved with the administration of ongoing payments which were likely to be quite small and it was difficult to justify open ended payments without information about the impact of the grant on the Thalanyji People. Viewed objectively and in the overall context of the negotiations the failure of the grantee party to agree to s 33 type payments is not indicative of a failure to negotiate in good faith. First, although its starting position was that it would not agree to such payments it did further consider the issue and conveyed its reasons for refusing to the native title party. Although those reasons are not sufficient justification for failing to consider s 33 payments, there is no doubt that the grantee party genuinely held this view. Second, the grantee party was prepared to make other payments to the native title party. Third, the failure of the native title party to make submissions on the effect of the act on its native title rights and interests and advance proposals for settlement which related to the future act involved meant that the grantee party had no reasonable basis upon which to consider making such payments.

The extinguishment issue

The native title party contended that the grantee party had not negotiated in good faith in relation to whether native title would be extinguished by the grant of the Production Licence. During the negotiations the decision in Western Australia v Ward [2000] FCA 191; 99 FCR 316; 170 ALR 159 was handed down by the Federal Court and raised concerns about whether native title would be extinguished by the grant. The native title party’s advisers are of the view that this is the effect of the Ward decision and that this possibility should have been considered in the negotiation. The native title party proposed that an independent lawyer be engaged by the parties (and paid for by the grantee party) to provide advice on this topic. The grantee party declined to do this but obtained its own advice which indicated that native title would not be extinguished. The Negotiation Protocol requires the grantee party to pay for a ‘technical expert’ if both parties agree. The grantee party said that legal advice did not fall within the requirements of that clause but raised no objection to the $5,000 provided for the production of a research report by Mr Frewen being used instead to obtain the legal advice.
At the hearing the Government party was quite emphatic that the extinguishing effect of past mining leases (and possibly past petroleum production licences) as decided in Ward is confined to grants made prior to the commencement of the NTA. Whatever the situation at common law the Government party says it is clear that under the NTA (s 24MD(3)) the non-extinguishment principle applies to this grant and that native title would not be extinguished but suspended for the period of the grant (Western Australia v Commonwealth (The Native Title Act Case) 1994-1995, 183 CLR 373 (at 454, 458)). It is not the Tribunal’s role in this proceeding to make findings about whether the Production Licence will extinguish native title. This may become an issue at the inquiry proper. The issue to be determined here is whether the attitude of the grantee party was indicative of its failure to negotiate in good faith. In my view it was not. The facts are that a difference of opinion arose during the negotiations on the extinguishment issue which was discussed at Negotiation Meetings and Tribunal mediation meetings. The fact that it could not be resolved is not an indication of a failure to negotiate in good faith.

Costs of the negotiations to be taken into account in the final settlement

There was conflicting evidence on the question of whether the grantee party made it clear to the native title party that it had a budget for these negotiations and that the costs of negotiation meetings would need to be taken into account in any final settlement. Trudy Hayes said that she and the claimant group were surprised when Mr Omoregie mentioned this at the Sixth Meeting on 3 June 2000. The grantee’s position is that this was made clear to the native title party very early in negotiations and there should not have been any cause for surprise. Mr Omoregie deposed that he advised the claimants of this situation at the First Meeting on 14 November 1998 and at subsequent meetings. I accept that had this position not been openly exposed at the commencement of the negotiations then it would have been adverse to the grantee party’s contentions that it had negotiated in good faith. However, it is clear that this position should have been known to the native title party (or at least their advisers). It is set out in the Negotiation Protocol (para 26) and referred to in a letter from the grantee party’s then solicitors (Freehill, Hollingdale and Page) to Corsers of 25 September 1998. I also accept that the grantee party did not adopt a rigid approach to its budget, and that it was increased during the negotiations.

Unilateral conduct which harms the negotiating process

The native title party complained that WAPET had acted inappropriately in writing to some of the claimants individually about complaints that had been received about the conduct of some Thalanyji guests staying at the accommodation booked by WAPET and the late return and damage to a car hired by them. The complaint about these letters was aired at the Fifth Meeting on 1 May 2000 at Onslow. I have carefully considered the letter that was sent by WAPET and do not consider that there was any reasonable basis for offence to be taken to its contents. The accommodation and car hire had been booked by WAPET and the complaints were made directly to them by the business houses. They were obliged to bring the problems to the attention of the claimants. At the Fifth Meeting Mr Omoregie apologised for any offence caused and proposed that in future WAPET would provide an allowance to Thalanyji negotiating team members directly so that they could arrange their own accommodation. While it may have been possible for WAPET to raise the complaints in person with the claimants in the first instance their action did not indicate any cultural insensitivity let alone amount to conduct which was indicative of lack of good faith in the negotiations. The facts simply are that the business houses raised complaints with WAPET who had booked and paid for the accommodation and WAPET passed these complaints on to the claimants. I see nothing untoward or unreasonable in their behaviour in this respect.

Lack of cultural understanding

The native title party (through Ms Trudy Hayes’ affidavit) asserted at the hearing (but as far as I can ascertain not prior to it) that there was a lack of cultural understanding on the part of WAPET negotiators which adversely impacted on the negotiations. The test to be applied by the Tribunal is whether in the overall circumstances the grantee party has negotiated in good faith not whether it has behaved in a culturally insensitive manner in some respects. However, it is clearly possible to accept that in some circumstances a lack of cultural sensitivity might be relevant to whether a party had negotiated in good faith. I also acknowledge that differences in cultural attitudes can lead to difficulties in relationships between negotiators and that perceptions of insensitivity can easily arise. In this case there is no reasonable basis for the native title party’s contentions that there was a lack of cultural understanding on the part of the WAPET negotiators such that their genuineness in negotiating to reach a settlement was called into question. The evidence does not establish that the WAPET negotiators behaved in a culturally insensitive way. They were surprised by the allegations made at the hearing and I accept that they did their best to behave in a way which respected the native title party’s culture and feelings.

Pressure for the early resolution of negotiations

The native title party also complained that, despite the grantee party’s failure to provide a response to proposals raised by the native title party, the grantee party was continually pressing for an early resolution of the issues by specifying that agreement should be reached within a certain number of meetings. It also said that the grantee party unreasonably refused to continue with the negotiations and mediation and resorted to arbitration. No justified complaint can be made in this respect. Although the dates were not adhered to, the Negotiation Protocol anticipated that there would be five meetings between 14 November 1998 and the end of April 1999. In fact there were seven meetings extending to 8 July 2000. At a Tribunal mediation meeting on 10 August 2000 Mr Omoregie indicated that WAPET wanted to proceed to a determination. The possible involvement of Yamatji Land and Sea Council was then raised and Mr Omoregie agreed to defer for four to six weeks the making of a s 35 application to give Yamatji a chance to liaise with the Thalanyji People. The giving of notice of intention to proceed to a determination but agreeing to defer it was consistent with the grantee party’s obligation to negotiate in good faith. At the time of the final Tribunal mediation meeting (on 26 September 2000) the position of the parties was still so far apart that agreement was highly unlikely and, six months having passed from the date of the s 29 notice, the grantee party was perfectly entitled to resort to arbitration (Strickland v Western Australia (1998) 85 FCR 303 at 322).
At the Sixth Meeting on 3 June 2000 the grantee party put its settlement proposal of $25,000 (indicating that the cost to date for the grantee party had been $120,000). The Thalanyji People’s proposition was for $1.6 million cash with an additional item of 25% long term investment for the future (the meaning of this is unclear to me) and 2% royalty payment. At the Seventh Meeting on 8 July 2000, Mr Omoregie on instructions from the joint venturers put an increased offer of $40,000 which was some evidence of their willingness to compromise. The Thalanyji People counter offered by offering to reduce the one-off payment from $1.6 million to $1.3 million in addition to $250,000 a year if the resource were found. It is clear to the Tribunal that the parties were so far apart on what monetary amount would be necessary to settle the matter that it was highly unlikely that further negotiations could have resolved the issue.

Concluding comment

Regrettably these negotiations did not evolve in a way which enabled the parties to engage in a discussion of the real issues involved in the grant of the Production Licence. This is principally because of the failure of the native title party to make a meaningful submission on the effect of the future act on their native title rights and interests and other matters referred to in s 39(1)(a) of the NTA, but also because there seemed to be an assumption from the outset that good faith negotiations involve negotiating about anything that is put on the table by any of the parties. With respect to the grantee party’s negotiating behaviour it is my view that it would have been preferable for it to have:

made it clear at the outset that the Production Licence was over an area greater than just Crest Well 6, thus avoiding the potential for any subsequent misunderstanding;
made it clear in writing that it was prepared to talk about the provision of benefits unrelated to the grant but that it was not obliged to do so as part of negotiations in good faith; and
set out in writing its negotiating position including that it was prepared to make a financial contribution to one or other of the projects nominated by the native title party and giving some indication of what that amount might be, or at least confirming what it said at the Negotiation Meetings that the quantum of any settlement would be limited in the particular circumstances of this Production Licence. This would have avoided the native title party being surprised and shocked as they said by the offer of only $25,000 which was made quite late in the negotiating process.

However, whatever criticisms can be made of the grantee party’s negotiating behaviour they certainly do not amount to the grantee party failing to negotiate in good faith. The question is not whether things could have been done differently or indeed whether mistakes in the process may have occurred. There is no doubt in my mind that the grantee party genuinely wished to arrive at an agreement and conducted negotiations in good faith to that end including by making a substantial financial commitment to the process.

The law relating to negotiation in good faith is now reasonably well settled and was so for most of the negotiation period (the decision in Walley was handed down on 6 January 1999 and the new NTA came into effect on 30 September 1998). It is understandable that the parties themselves (and particularly native title parties) may not be fully aware of what the law requires. There is, therefore, a heavy responsibility on professional advisers to ensure that their clients are aware of what is required by good faith negotiations and that there is engagement and effective communication between the parties. Unless this happens the right to negotiate will not function in the way which enables parties to come to grips with the real issues before them and which achieves the objectives of the NTA to ensure as far as possible that, by negotiation, indigenous interests in land and the interests of the broader community in the grant of mining titles and are properly taken into account.
In my view, given the nature of the future act proposed, and the lack of evidence of its impact on native title rights and interests, the expectations of the native title party were unrealistic and this should have been known to be the case, at least by their professional advisers. It would be a major concern if the negotiations which occurred in this matter were indicative generally of how the right to negotiate under the NTA operates. Very substantial resources (public and private) were committed to the negotiations and now further considerable resources expended in what has been a largely unmeritorious challenge to good faith negotiations.

Future procedures for good faith hearings

I have formed the opinion that in retrospect this matter should have been dealt with on the papers without the need for supplementary oral evidence or cross-examination. When the Federal Court decided that the s 31(1)(b) obligation was not only a mandatory requirement but a jurisdictional pre-condition to conducting an inquiry, it expressed the view that the Tribunal would devise methods for rapid determination of what is a preliminary jurisdictional issue. This comment was made in response to the concern that proceedings would get bogged down with evidence and argument. (Walley and Ors v Western Australia (1996) 137 ALR 561, 67 FCR 336 (FCR at 378).)

In fact the concern expressed in Walley about the length of time taken and substantial cost involved in deciding good faith issues has, in hindsight, been justified. It is not surprising that some of the early hearings required voluminous documents and lengthy submissions on the law. However, this trend has continued despite the fact that the law has been reasonably clear since at least early 1999.

Plainly s 36(2) of the NTA was inserted to try to overcome some of these problems, but in my opinion has not been of great help in narrowing the issues and ensuring that these matters are dealt with as simply and expeditiously as possible. In my experience when oral evidence and cross-examination have been permitted it has rarely added anything of significance to the documentary evidence before the Tribunal. Oral evidence and cross-examination may be necessary where there is a fact or facts in dispute which are critical to making a decision. Not surprisingly there is often a difference of opinion about what was said but it is usually not necessary to resolve these matters. The documents usually tell sufficient of the story.

Section 151 of the NTA empowers the Tribunal to determine a matter ‘on the papers’ provided it can be adequately dealt with in that way. In future the Tribunal will require the parties, prior to the hearing to:

make submissions on whether the Tribunal should hear the matter on the papers;

identify the facts which are in dispute and outline how a finding on these issues will be critical to the Tribunal’s decision; and
attempt to clarify any facts in dispute by consultation or correspondence.
Hon C J Sumner
Deputy President
9 March 2001

Key Legal Topics

Areas of Law

Indigenous Peoples & Native Title Law

Legal Concepts

Jurisdiction
Native Title
Good Faith
Procedural Fairness

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Citations

Western Australia/Western Australia Petroleum Pty Ltd & Anor/Hayes & Ors on behalf of the Thalanyji People [2001] NNTTA 18

Most Recent Citation

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Cases Cited

4

Statutory Material Cited

0

Brownley v Western Australia [1999] FCA 1139

Western Australia v Ward [2000] FCA 191

[2001] NNTTA 18

9 March 2001

Key Legal Topics

Areas of Law

Indigenous Peoples & Native Title Law

Legal Concepts

Jurisdiction

Native Title

Good Faith

Procedural Fairness