MINING RULES AND THE SHEEP’S BACK: NON-GOVERNMENT THIRD PARTY RESPONDENTS

MINING RULES AND THE
SHEEP’S BACK

Non-government third party
respondents

Caught between the drill and the plough

Native title began life with potent enemies. The mining industry, by far the most dominant sector of the Australian economy, was implacably opposed to the NTA from the outset. The pastoral industry was more ambivalent about the passage of the legislation, but only because the majority of legal opinion guessed that native title had probably already been extinguished by pastoral leases. Once the NTA had been passed, apart from pressing for amendments, resistance to native title could only be articulated within the system. The NTA allowed any ‘person’ (whether human or corporate) whose interests might be affected by a determination of native title to become party to a claim and the result was that thousands of individual non-government respondents became involved in various proceedings.¹ It was not uncommon for a single native title claim to have hundreds of respondent parties.² The most prominent and powerful came from primary industry, including miners, pastoralists, petroleum producers, resource explorers, fishing interests and aquaculturalists, but even minor concerns like recreational shooters, tour operators and jetty licensees could and did become involved.³ In a political context, respondents with common interests (like ‘mining lease holders’ or ‘pastoral lease holders’) tended to be represented collectively by industry-based peak bodies.⁴ Outwardly, the respondent peak bodies lobbied government, made submissions to relevant public inquiries, participated in various consultative forums organised by the NNTT and the Federal Court, provided ‘industry perspective’ speakers to innumerable conferences and issued regular streams of media comment. Inwardly, the role was to provide information and support to the constituent members of the organisation in question, as well as to formulate positions and strategies.

The focus of this chapter is on the mining and pastoral industries, which were represented by various national and state associations and were by far the most politically and economically significant of the organised respondents. All production requires land (or water) on which to operate, but the kind of permission that is required varies greatly, depending on what activities are involved. All industry shares the basic requirement for tenure that is both sufficiently certain to secure investment and robust enough to permit the business to be carried on without impediment. However, different enterprises require varying types of tenure, from the intensive long-term needs of heavy industry to the temporary and shifting rights of more transient activities like fishing or early minerals exploration. There are numerous kinds of legal relationships with land in Australia, from the absolute beneficial ownership comprised by freehold to the flimsiest of licences and permissions to collect wood or for recreational fishing. After Mabo and then the enactment of the NTA, the fundamental dilemma of how native title interacted with these different permissions was not answered all at once, but incrementally on a case-by-case basis. The process was pivotal in determining how respondents would behave within the overall native title system. As the former President of the NNTT later recalled, ‘[t]here was never going to be any real prospect that these respondents would agree to native title determinations without a clear understanding of the impact of those determinations on their interests, whether as land managers, holders of tenements or as leaseholders’.⁵ Only as the case law unfolded would particular industries know precisely where they stood.

Although this chapter concentrates on mining and pastoralism, other sectors also faced their own peculiar concerns in relation to native title. The fishing industry, for instance, was not an insignificant political player and had very specific reason for nervousness. Guy Leyland, long-standing native title spokesperson for the Western Australian Fishing Industry Council, admitted in 1994 that it was ‘true’ that the fishing industry was ‘paranoid’ about native title, but for ‘very good reason’, because his constituents only ever possessed ‘very weak rights’ to conduct their business activities on the water.⁶ Fishing interests merely held commercial licences to operate and to take certain species in line with government limits. Given that Mabo had been confined to land, the fishing industry was concerned about whether native title could even exist over the ocean and, if so, with what effect. The NTA did not decide the matter but permitted claims to be made over water as well as land, to which in due course fishing interests became party. The fishing industry received the comfort that it craved when the courts eventually ruled that existing commercial fishing rights could not be displaced and that it would be difficult to establish any exclusive native title rights anywhere over the ocean.⁷

There will always be limits to the cooperation that occurs within industry peak bodies, because businesses are also in competition with one another. A leading mining spokesperson explained the duality in 1996:

We have a role and a duty to ensure that the people who make the rules that govern us all understand what is important to our industry . . . The other role we have is as business people, that is, within the rules whatever they are we negotiate our position in order to enable projects either to continue or proceed, that is new projects. This of course includes notions of clarity of conditions of operation, confidence in contracts, whatever contracts are entered into or agreements, and of course, an expectation on return of investment . . . The first one again is participation in the debate over the rules and the second one is as business people negotiating our position for long term businesses that have to be profitable.⁸

All firms in a particular sector will share some common imperative, but at any time the overall ‘industry position’ is subordinate to the commercial self-interest of each individual business. The moment that a collective stance ceases to be of benefit to a particular firm, the standpoint will be swiftly abandoned by management, though the shift may occur clandestinely. For instance, while the mining industry’s formal position was to deplore the proliferation of overlapping claims in minerals-rich areas of Western Australia in the mid-1990s, the phenomenon was actually fed by individual miners being prepared to enter into multiple arrangements with different groups as an expedient way of resolving their own approval delays without regard for the precedent being created. In one notable instance, each time a new claim was lodged the company in question simply made a further payment, merely encouraging yet more claims to follow. The firm’s own tenure needs were eventually met, but a mess of overlapping claims was left behind. A decade later, while ‘the industry position’ was to keep a cap on the daily fees charged by native title claimants conducting heritage assessment surveys (which had remained, with some exceptions, largely static at $300 per day for Indigenous participants for around a decade), inflationary pressure was created by one company which took the initiative of offering larger than usual payments as an incentive to secure the participation of traditional owners outside of native title representative body processes and in preference to alternative work with other developers.⁹ One particularly extreme case of an individual company purporting to act in its own interests but contrary to the broader cause of industry involved a firm actually paying for the lodgment of a number of overlapping claims.¹⁰

A senior case manager at the NNTT noted in 1998 that representative organisations often entered the native title process ‘with policy agendas’ that had the capacity to ‘get in the way of the actual interest holder being able to effectively enter into the process and to progress’.¹¹ It is likely that industry associations did instil some discipline among their membership, at least through the promulgation of certain norms and ideas about how the system should work. The sharing of lawyers and other technicians also no doubt contributed to a harmonising of approach. Throughout the history of the native title process, the large commercial law firms have almost invariably acted for non-government third party respondents. On some occasions there was even dialogue and cooperation between the peak bodies of different industries because of the political advantages to be obtained from a common front.¹² Nevertheless, cooperation across industry peak bodies should not be exaggerated and at times gave way to outright hostility or antipathy, particularly when larger and richer interests contemplated arrangements untenable to smaller concerns. In Western Australia real tensions existed between the top end of town represented by the Western Australian Chamber of Minerals and Energy (WACME), the middle to smaller companies which tended to join the Association of Mining and Exploration Companies Inc. (AMEC) and the long-suffering non-corporate economic minnows eligible to belong to the Amalgamated Prospectors and Leaseholders Association (APLA). In Queensland, Frank Brennan recalled that a heads of agreement reached by environmentalists, Aboriginal groups and local pastoralists represented by the Cattlemen’s Union up on Cape York was regarded as suspect by the National Farmers’ Federation, who were worried that the broader strategic position had been compromised and ‘smelt a rat’.¹³

Mining I: The hard approach to hard legislation

In Australia all minerals are owned by the state, which then grants tenements to those who wish to mine and explore, with the right to sell the material that has been extracted. The state is paid rent for all tenements, as well as receiving royalties based on what is actually produced. The overall principle behind Australian mining legislation is to maximise the amount of exploration that occurs by requiring minimum amounts of annual expenditure on all tenements, which are held for finite periods of time and progressively reduced in size.¹⁴ Where the requisite expenditure does not take place, tenements may be resumed by the state. The land requirements of the resources industry itself are multidimensional. Mining companies need security of tenure and freedom to conduct and vary operations according to technical and commercial imperatives, but the industry as a whole constantly craves access to new ground to regenerate the pool of commercially viable deposits. Vast programs of exploration have to be completed, most of which will ultimately prove to be fruitless, because to some extent it is only through sheer quantity of geological investigation that new resources are uncovered. Accordingly, after Mabo, the minerals industry was not only concerned to shield existing mining tenements from any consequences, but to ensure that it remained easy to get access to exploration areas. Mining and exploration tenements can be granted over other land holdings, meaning that the interaction of native title and other tenure types—including particularly the vast pastoral leasehold estate—were also of interest to the extractive industries. Many of Australia’s most lucrative mining operations are found within the boundaries of pastoral leases.

Historically, the resources sector had relied on a ‘hard’ public approach to Indigenous affairs, crashing through (sometimes literally) any Aboriginal opposition to mining or exploration, usually with the tacit or even explicit support of the relevant state government.¹⁵ Initially, the mining lobby responded to native title in much the same way, adopting remorseless and denunciatory positions on the Mabo decision and the native title legislation.¹⁶ The Minerals Council of Australia (MCA) did not support the original NTA, writing off the new system as ‘unworkable’ because it had ‘created considerable uncertainty about acquisition of future titles and security of past and future titles’.¹⁷ The most volatile point of discord was the operation of the right to negotiate, which industry detested as an obligation to ‘negotiate economic benefits with unspecified groups of people with unproven claims involving unproven rights’.¹⁸ The miners collectively despised the extent to which the right to negotiate encouraged and rewarded overlapping claims, a trend that reached its zenith in the debacle of the Goldfields in the mid-1990s. Even where individual companies were successful in reaching agreement with all existing claims, there was no mechanism in the NTA to prevent further claims by new (or newly splintered) groups on the next occasion the firm in question required additional tenure. A company might reach agreement with a dozen overlapping claim groups over known tenure requirements but then a year later have need of another lease, inviting further claims by new groups. In practice, the unamended NTA demanded extraordinary efforts be made before a resource company could determine with any confidence that it had resolved all native title questions over a project. Rio Tinto’s audacious Yandocoogina agreement with native title groups in the Central Pilbara in 1997 was one of a small number of deals that showed it was possible to get through the morass in orderly fashion, but the resources, effort and risk involved were very considerable.¹⁹

The question of precisely how damaging native title was to industry in the early years of the NTA is a matter of considerable professional, scholarly and political debate.²⁰ It does seem likely that the disruption to normal business marked by the introduction of the NTA would have caused at least some downturn, because—politically motivated exaggeration aside—companies truly did ‘face an unpredictable future for their development plans’.²¹ The NTA was, after all, by any measure a long and confusing item of legislation and native title was a new thing in Australia. Nevertheless, the interpretation of domestic productivity data is contested and complicated by global economic trends.²² There is also the question of strategic behaviour: a more cooperative approach by state governments in the early years of the Act would doubtless have made for a significant qualitative improvement in the functioning of the legislation.²³ Even the ‘backlog’ of applied-for-but-not-yet-granted tenements in Western Australia—so often adduced as one of the principal indications of the ‘unworkability’ of the future act system—is a highly questionable indicator, because of the practice of ‘tenement parking’.²⁴ Indeed, an accumulation of unprocessed tenement applications could actually be of significant pecuniary benefit to mining companies.²⁵

Mining II : The soft approach to seeking softer legislation

The passage of the NTA no doubt came as a shock to the mining industry: the fact that the legislation had got through at all marked a very considerable political defeat. Clearly, a new public and political approach was warranted.²⁶ According to AMEC’s George Savell, speaking at a conference in 1996, the sector had been ‘slow to grasp the concept of collective action’ and had found itself at a disadvantage because the ‘public affairs debate’ over native title had ‘been skewed by a whole range of issues which [had] their genesis in social justice questions’. According to Savell, ‘[c]ommercial reality [was] a dry subject’ and did not easily achieve ‘the sort of exposure in the media which human interest issues attract’.²⁷ Notwithstanding the shortness of Savell’s memory in relation to the effectiveness of the anti-land rights campaigns of the 1980s, his words nevertheless signify recognition within the mining peak bodies that the packaging of their policy agenda merited an overhaul. In July 1996, senior political journalist Michael Gordon reported on a general change in tactics on the part of the mining lobby to ‘an emphasis’ on ‘persuasion, rather than attempting to bludgeon opponents into submission—or secure victory over their heads’.²⁸ The approach was ‘essentially one of seeking to persuade government and community to the position that the industry would judge in its own and the community’s best interests’.²⁹

The hallmark of the new softer style was the pairing of overt ‘acceptance’, ‘respect’ and ‘recognition’ of native title with renewed insistence that the system must be tooled to suit the needs of the resources sector. Indicatively, in 1997 the MCA’s annual survey report, which had previously carried an uncompromising case against native title,³⁰ now described