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Authorisation pitfalls for resource projects Prepared by Sunil Sivarajah Associate, MacDonnells Law http://www.macdonnells.com.au/

Queensland's Coal Seam Methane LNG projects are

providing a testing ground for Australia's native title laws

and procedures. The Native Title “Registrar” has recently

refused to register an indigenous land use agreement

(ILUA) for one major resource project. The company has

lodged an application for judicial review of the Registrar’s

decision.

The technical requirements to conclude an ILUA are

complex as these circumstances illustrate. The company

reached an in principle agreement with the native title

party on the terms of the ILUA. The native title party

authorised the making of the agreement at a publicly

notified community meeting. One of the native title party’s

named applicants subsequently refused to sign the ILUA,

which resulted in the Registrar's refusal to register the

ILUA.

The scenario raises important questions for any resource

company seeking to conclude an ILUA:

1. Is it necessary for the native title party's

authorisation process for a proposed ILUA to

culminate in each and every named applicant

signing the agreement?

2. What happens if one or more named applicants

refuse to sign the agreement after the entire

claim group has 'properly' authorised (and

directed) the applicant to sign the agreement?

General principles

Before considering the questions, it is worth recapping on

the key legal requirements to register an ILUA under the

Native Title Act 1993 (NTA).

An ILUA is a commercial agreement which generally

facilitates a regulatory approval for the development of a

resource project in circumstances where the project may

impact on native title rights. An ILUA enjoys the full force

of the law only after it has been registered. For an ILUA

to be registered it must be properly authorised by the

native title party which generally involves, amongst other

things, a two-step process after an agreement in principle

has been reached. First, it is necessary to make all

reasonable efforts to ensure that all persons who hold or

may hold native title in relation to the agreement area

have been identified to consider the ILUA. The proposed

ILUA is usually considered at an authorisation meeting.

Second, it is necessary to ensure that all of those

persons identified, authorise the making of the

agreement in accordance with their traditional or agreed

and adopted decision making process.

Relevantly, where there is a registered native title claim,

all of the persons authorised to make the native title

application itself, ‘are jointly, the applicant’ (that is, a

singular entity comprising all the named applicants under

section 61(2) of the NTA).

First glance – Must all the named applicants sign an

ILUA?

Returning to our first question, we understand that the

Registrar takes the view that a proposed ILUA must be

signed by all of the named applicants, before it can be

registered. Furthermore, a number of Federal Court

Judges presiding over native title applications have,

during directions hearings, pointed to a nexus between a

registered native title claim group’s status under the NTA

to enjoy procedural rights and any ILUA concluded by

that group, which presumes that only the named

applicants could have signed an ILUA over their claim

area.

While it is reasonable to presume that all of the named

applicants might sign an ILUA over their claim area, for

reasons outlined below, there may be some specific

instances when it is not necessary for all of the named

applicants to sign an ILUA.

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Future act agreement processes

The requirements to conclude an agreement under

section 31 of the NTA are often confused with the

requirements to conclude an ILUA under the NTA. It is a

requirement for all of the named applicants of a

registered native title claim group to execute a Section 31

Agreement, pursuant to section 29 of the NTA which

specifies that the native title party to a Section 31

Agreement is the applicants.

In contrast, an ILUA must be authorised by any person

who may hold native title in the agreement area, which

could include persons who are not included within the

formal claim group description or even persons who are

part of a competing native title claim group, such as

some Indigenous respondents. If that is the case, then it

follows that the native title party for the proposed ILUA

may direct or authorise persons, other than the named

applicants of the claim, to sign the ILUA. To this end, it is

a technical requirement under the NTA, to ensure that

any authorisation process for a proposed ILUA invites

any person who may hold native title, rather than only

those persons who are defined by the claim group

description.

ILUA over unclaimed areas

The process to conclude an ILUA over an area not the

subject of a registered native title claim (unclaimed area)

should also be noted, although it is not directly relevant to

our questions. In those circumstances, there is no claim,

so no named applicants and the native title party must

decide, under the same above mentioned requirements

of the NTA, who will execute the agreement.

Given that the same provisions under the NTA apply to

the registration of an ILUA over a registered native title

claim or over an unclaimed area, those provisions cannot

be interpreted to mean that the named applicants, if any,

must sign an ILUA (i.e. as is the case for the

requirements to conclude any section 31 agreement).

Suggestions

There may be instances when all the named applicants

need not sign a proposed ILUA. However, in relation to

our second question, such instances will only arise when

they are contemplated in advance of any authorisation

process, particularly, the making of any resolutions.

It will be more difficult to use the argument, “after the

event”, to explain why an ILUA should still be registered

even though one of the named applicants refused to sign

the ILUA. In effect, one dissatisfied member of an

applicant group may frustrate the ILUA process. In the

circumstances, the only option may be for the native title

party to make an application under section 66B of the

NTA to remove the recalcitrant person as one of their

named applicants.

A number of proposed ILUAs are never registered,

despite the best efforts of all parties. It is often the last

steps in the authorisation process which prevent or delay

the registration of an ILUA. By the time an application to

register an ILUA is made, it may be too late to easily

correct any authorisation deficiencies.

Accordingly, resource companies should ensure that all

parties to an ILUA and the relevant representative body

collaborate before, during and after reaching an

agreement on the terms of any ILUA, to ensure the ILUA

can be registered. We recommend careful planning of all

stages of any ILUA process. Resource companies should

proceed in a considered manner using experienced

advisers.

For further information please contact Jenny Humphris

(07 3031 9720), Sunil Sivarajah (07 3031 9777) or Paul

Jardine (07 3031 9714). __________________________________________________________

This article was prepared by Sunil Sivarajah.

MacDonnells Law has negotiated and concluded numerous ILUAs and

recently advised Surat Gladstone Pipeline Pty Ltd on an approval process

to secure a 470km long gas pipeline in Queensland.

MacDonnells Law boasts one of the largest Resources, Infrastructure and

Native Title and Aboriginal Cultural Heritage practices in Australia. That

team includes Paul Jardine, Partner, and Jenny Humphris, Partner.

The firm has also, in conjunction with the Local Government Authority of

Queensland (LGAQ) represented 16 Councils in the negotiation with three

claim groups of a template Local Government ILUA, which was cited by

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the Commonwealth Parliament as an example of "national best practice"

native title agreement making.

Sivarajah has private practice experience at a national law firm in Perth

and MacDonnells Law in Brisbane as well as working as the coordinating

lawyer for a native title representative body in the resource-rich Pilbara

region.