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Issues paper No.7

Compulsory acquisition of native title and compensation: Issues for local government

Ed Wensing FAPI MPIA
August 2000

Contents

1. Introduction
   • Background
   • Future act processes
2. Other avenues that do not involve compulsory acquisition
   • Indigenous Land Use Agreements
   • Other processes under the Native Title Act 1993 (Cth)
3. Compulsory acquisition
   • Can native title be compulsorily acquired?
   • What are local government's compulsory acquisition powers?
   • What is the effect of compulsory acquisition on native title?
   • What conditions apply?
   • When does the right to negotiate or the right to be consulted apply?
4. Compensation for compulsory acquisition
   • What are the compensation implications arising from compulsory acquisition?
   • How are native title rights and interests valued in the event of compulsory acquisition?
   • When are native title holders entitled to compensation?
   • How may compensation be paid?
   • Who determines compensation?
5. Who should council negotiate with?
6. Who can councils contact for assistance?
7. Conclusions
8. References
   • Cases
   • Legislation
   • Books, Reports, Guides

1. Introduction

1.1 Background

In some jurisdictions, local Councils are being advised to resolve native title matters through compulsory acquisition ahead of other procedures. Placing compulsory acquisition ahead of other processes is contrary to the intent of the Native Title Act 1993 (Cth). The Native Title Act 1993 (Cth) makes it clear that the other provisions for dealing with native title matters are hierarchical, and compulsory acquisition is an act that passes the freehold test which is lower in the list than other provisions that may not require compulsory acquisition.

The compulsory acquisition of native title rights and interests is a difficult area of law that is yet to be explored fully in every jurisdiction. There is a complex interplay between the powers of councils under state local government and land acquisition legislation on the one hand, and Federal native title legislation, racial discrimination legislation and the Australian Constitution on the other.

At the time of publishing the Working with Native Title Guide, the Australian Local Government Association (ALGA) was advising councils to view the process of compulsory acquisition as a means of last resort and that there may be other preferable avenues for resolving native title matters.

This paper explores the issues and canvasses the matters that local councils need to consider before embarking on the compulsory acquisition of native title rights and interests, and updates the material in the ALGA's Working with Native Title Guide that was published in 1999. This paper is not a guide to compulsory acquisition. It is intended to provide local government with an update on information about the issues that require consideration when contemplating the compulsory acquisition of native title rights and interests.

This paper also makes a clear distinction between compulsory acquisition and the voluntary surrender of rights and interests in land or waters.

• Compulsory acquisition is where a government takes, under statutory powers, land belonging to a subject and usually against their wishes.
• The surrender of land is voluntary on the basis of mutual agreement between government and the landholder and on mutually beneficial terms between the parties.

In all cases, the primary reason why a local council will want to acquire the native title rights and interests is because it wants to carry out a future act that will affect the native title rights and interests. An act 'affects' native title if it extinguishes the native title rights and interests or if it is otherwise wholly or partly inconsistent with their continued existence, enjoyment or exercise (Native Title Act 1993 (Cth) s.227.

Councils also need to be aware that the High Court in Western Australia v Ward ([2002] HCA 18, 116, 117) has emphasised that native title is property in the context of the Racial Discrimination Act 1975 (Cth). Even though native title does not derive from the Crown and has different characteristics from other forms of title, the High Court has reinforced the view that native title cannot be treated differently from other titles.

1.2 Future act processes

One of the primary purposes of the Native Title Act 1993 (Cth) is to provide ways for working with native title, especially in relation to economic or other development activities that will affect native title rights and interests.

In situations where the native title holders or claimants are known, parties proposing future acts have the option of either:

• developing an Indigenous Land Use Agreement (ILUA)

or:

• following the other provisions under the Native Title Act 1993 (Cth) for future acts

The Act sets out various categories of future acts, only some of which are relevant to councils. The future act provisions are hierarchical. To the extent that a future act is covered by a particular provision in the future act hierarchy in the Native Title Act 1993 (Cth), it will be made valid by that particular provision and will not be covered by any provisions relating to a category lower in the list.

ALGA has generally taken the view that the provisions relating to ILUAs should be viewed as taking precedence over all other procedures for dealing with future acts (Native Title Act 1993 (Cth) ss24AA and 24AB). The provisions relating to compulsory acquisition are near the bottom of the hierarchy (see Part 2.2 below) and should, therefore, be used only in situations where the extinguishment of native title rights and interests are really necessary.

In any particular cases council should seek professional advice on the implications of attempting to compulsorily acquire native title rights and interests for an area before proceeding too far with this course of action.

2. Other avenues that do not involve compulsory acquisition

2.1 Indigenous Land Use Agreements

An Indigenous Land Use Agreement (ILUA) is a voluntary agreement made under the Native Title Act 1993 (Cth) between people who hold, or claim to hold, native title in an area and other people who have, or wish to gain, an interest in that area. They are negotiated agreements, they are inclusive not exclusive, and when registered they are binding on all who hold or may hold native title for the area the subject of the agreement (Wade 2001:1).

One of the most important reasons for negotiating an ILUA is to ensure that council's future acts are valid. Other circumstances that give rise to considering an ILUA include validating invalid future acts already undertaken or agreeing to alternate processes than those provided for under other provisions in the Native Title Act 1993 (Cth).

If council can negotiate an Indigenous Land Use Agreement (ILUA) with the registered native title body corporate and/or registered native title claimants about a future act or classes of future acts, the subsequent provisions for dealing with future acts do not apply. In other words, the complex processes for dealing with future acts in the Native Title Act 1993 (Cth) can be set aside and the parties can seek to work it out directly between themselves.

An ILUA can be negotiated at any time.

For more information on ILUAs, refer to Issues Paper No. 3. For a discussion of the issues with ILUAs involving local government, refer to Issues Paper No. 4.

2.2 Other processes under the Native Title Act 1993 (Cth)

If it is not possible, for whatever reasons, to develop an ILUA about a particular future act or entire classes of future acts, then council will need to follow the future act processes in the Native Title Act 1993 (Cth).

These processes must be applied in areas where native title exists or may exist, irrespective of whether or not there are any native title determination applications or determinations in relation to the area.

A proposed future act in an area where native title exists or may exist may fall within any one of the future act provisions. The order of application of the future act provisions, is as follows:

1. Indigenous Land Use Agreements (ILUAs) (s24BA, 24CA, 24DA)
2. Section 24FA protection (non-claimant applications) (s24FA)
3. Primary production and associated activities (s24GB, 24GD, 24GE)
4. Management of water and airspace (s24HA)
5. Renewals and extensions of leases, licences, permits etc (s24IA)
6. Use of reserved land and reserved Council lease-holdings(s24JA)
7. Providing or maintaining facilities for services to the public (s24KA)
8. Low impact future acts (s24LA)
9. Acts that pass the freehold test (including compulsory acquisition) (s24MD)
10. Acts affecting offshore places (s24NA)

These provisions are hierarchical. To the extent that a future act is covered by a particular provision in the future act hierarchy in the Act, it will be made valid by that particular provision and will not be covered by any provisions relating to a category lower in the list. By checking the hierarchy and, where relevant, following the correct processes for the relevant category set out in the Native Title Act 1993 (Cth), council is able to ensure that a proposed future act will be valid.

If a particular future act is not covered by any of the provisions in the future act hierarchy, it can only be validly done by way of an Indigenous Land Use Agreement (ILUA). Unless a future act is covered by one of the provisions in the future act hierarchy, including by way of an ILUA, the future act is invalid to the extent that it affects native title (s24OA of the Act).

Note, not all of these provisions are relevant to local government - numbers 1, 2, 6, 7, 8 and 9 may be of most relevance. In some jurisdictions, number 4 may also be of relevance.

• For information on Indigenous Land Use Agreements involving local government, refer to Issues Paper No.4.
• For information on how to follow the other provisions for future acts under the Native Title Act 1993 (Cth) refer to Issues Paper No.5.
• For information on what to do in situations where the native title holders are unknown refer to Issues Paper No.7.

3. Compulsory acquisition

3.1 Can native title be compulsorily acquired?

Yes, in certain circumstances, and only if the relevant processes under the Native Title Act 1993 (Cth) and relevant state/territory land acquisition legislation are fully complied with.

A future act that involves the compulsory acquisition of native title rights and interests in relation to an onshore place must be carried out in accordance with the future act provisions relating to the freehold test. Background information to the freehold test is provided in the Working with Native Title Guide (pp 181-183). The compulsory acquisition of offshore native title rights and interests must be carried out in accordance with the future act provisions relating to offshore future acts. (See pp 183-184 of the Working with Native Title Guide).

Under the Act, only a Government party may carry out the compulsory acquisition of native title rights and interests. A Government party is defined as including the Commonwealth, state or territory under s26(1). Whether local government falls within this definition is not clear and has not been subject to any consideration to date.

A threshold issue is, who the future act is attributable to? Under s239(c), an act is attributable to the Commonwealth, a State or a Territory if the act is done by any person under a law of the Commonwealth, the state or the territory. Given that local councils are established under an Act of state/territory parliament or legislative assembly, does this mean that an act of compulsory acquisition by a local council is an act attributable to the state or territory? In some jurisdictions, local councils can only undertake compulsory acquisitions with the prior approval of the relevant state or territory minister. In others, this is not the case.

Although local government is not specified as a Government party, councils may still have the power to compulsorily acquire native title rights and interests in certain situations, or may have the power to request the relevant state, territory or Commonwealth government to compulsorily acquire the native title rights and interests on the council's behalf.

When council is acting in some roles, such as an infrastructure provider, council may have the same powers of compulsory acquisition as other infrastructure agencies. When it is acting in other roles, it may not necessarily have the same powers.

Notwithstanding that council may have the power to compulsorily acquire native title rights and interests, and may choose to do so, it should be recognised that this does not lead automatically to compensation being litigated. The circumstances of the acquisition and the determination of compensation are matters that can readily be dealt with by agreement. In some circumstances the compensation will become a contingent liability until such time as there is a determination recognising that native title exists for the area in question.

Council may find that with effective consultation, most future acts can be carried out without having to acquire the native title rights and interests for the area. If it is necessary to acquire and extinguish native title rights and interests for the area to permit a particular future act or acts, councils may find that compensation for the extinguishment of those rights and interests by agreement may be less than if the parties seek to contest the matter through the courts. There is no existing case law in this area, so if a party chooses to contest a compulsory acquisition it will most likely become a test case. Such a case will firstly involve a determination of whether native title exists for the area in question and the principles involved are now more clearly understood in the light of several recent High Court decisions. If a determination is made that recognises the existence of native title for the area in question, then the test case will be about the level of compensation for the extinguishment of those native title rights and interests.

This is an area where councils will need to obtain independent professional advice.

3.2 What are local government's compulsory acquisition powers?

Where compulsory acquisition of native title rights and interests takes place, all relevant conditions under the authorizing Act, for example a Land Acquisition Act, must be complied with in addition to the conditions set out in the Native Title Act 1993 (Cth).

The principal land acquisition statutes currently in force are:

• Land Acquisition Act 1989 (Cth)
• Land Acquisition (Just Terms Compensation) Act 1991 (NSW)
• Land Acquisition and Compensation Act 1986 (Vic)
• Acquisition of Land Act 1967 (Qld)
• Land Administration Act 1997 (WA)
• Land Acquisition Act 1969 (SA)
• Land Acquisition Act 1993 (Tas)
• Land Acquisition Act 1988 (NT)
• Land Acquisition Act 1994 (ACT)

Each of these statutes provides a comprehensive code governing the procedure to be followed in compulsorily acquiring land. Some of the state/territory land acquisition statutes have been amended to take account of the existence of native title rights and interests. It is important to understand there is an intricate relationship between Commonwealth and state/territory law in this area and that council proceed with the utmost of caution.

The statutes creating a power to take land compulsorily bestow that power upon an acquiring authority. The statutes do not merely state that land may be taken compulsorily, they state that a particular authority may do so. Most of the acquisition statutes refer to an authority to identify the officer of the Crown, the agency or instrumentality who, or which, is authorised by statute to exercise the powers of taking land by compulsory acquisition (Brown 1996:10). In some jurisdictions, a local government council is included in the definition of an authority.

The relevant authority and powers of land acquisition of local government in each state/territory (Brown 1996:11) are as follows:

New South Wales

Under section 4(1) of the Land Acquisition (Just Terms Compensation) Act 1993 (NSW), a local government council is included in the definition of an 'authority of the state' to compulsorily acquire land. Under Section 186(1) of the Local Government Act 1993 (NSW), a council may acquire land for the purposes of exercising any of its functions. Under Section 187(1), a council may acquire land by agreement or by compulsory process in accordance with the Land Acquisition (Just Terms Compensation) Act 1993 (NSW). Under Section 187(2) an acquisition notice (known as PAN under the Land Acquisition (Just Terms Compensation) Act 1993 (NSW)) requires the prior approval of the minister.

Victoria

Under Section 187(1) of the Local Government Act 1989 (Vic), a council may purchase or compulsorily acquire land which is or may be required by the council for or in connection with, or as incidental to, the performance of its functions or the exercise of its powers. Under Section 187(2), the Land Acquisition and Compensation Act 1986 (Vic) applies to the Local Government Act of 1989.

Queensland

Under section 4 of the Acquisition of Land Act 1967 (Qld), the term 'construction authority' means the Crown or any person or local authority authorised by the 1967 Act or any other Act to take land for any purpose. Under Section 8.1(1) of the Local Government (Planning and Environment) Act 1990 (Qld) in addition to its powers under the Acquisition of Land Act 1967 (Qld), a local Council may purchase or, with the prior approval of the governor-in-council, take land.

Western Australia

Under section 5(3) of the Land Acquisition and Public Works Act 1902 (WA), the minister is the authority. Under Section 3.55 of the Local Government Act 1995 (WA), a local council can only take land under the Land Acquisition and Public Works Act 1902 (WA).

South Australia

Under section 6 of the Land Acquisition Act 1969 (SA), the authority means the person authorised by the special Act to execute the authorised undertaking. Under Section 191 of the Local Government Act 1999 (SA), a local council may acquire land compulsorily with the minister's written approval. The Land Acquisition Act 1969 (SA) applies to the acquisition of land under this section. However, ministerial approval is not required for the compulsory acquisition of land for a purpose classified by the regulations as an approved purpose. Under s190 of the Local Government Act 1999 (SA), a council may acquire land by agreement.

Tasmania

Under section 3(1) of the Land Acquisition Act 1993 (Tas) acquiring authority means the Crown, a public authority, a local authority or a promoter. Under Section 176 of the Local Government Act 1993 (Tas), a local council may acquire land for prescribed purposes.

Northern Territory

Under section 32 of the Lands Acquisition Act 1978 (NT) the Minister acts as the authority. Under Section 130 of the Local Government Act 1993 (NT), a local council may apply to the minister to compulsorily acquire land on its behalf under the provisions of the Land Acquisition Act 1988 (NT) and for the purpose of performing its functions.

Council should check with the relevant state/territory agency or agencies with responsibility for land administration and native title matters and seek independent professional advice before undertaking the compulsory acquisition of native title rights and interests.

3.3 What is the effect of compulsory acquisition on native title?

If all conditions are satisfied (see Part 3.4 below), and if Council has provided the native title holders and/or registered claimants with all necessary procedural rights to ensure validity (ALGA Working with Native Title Guide, Question 5.4 on page 194-195), compulsory acquisition will extinguish all or part of the native title rights and interests in the area.

Where the right to negotiate applies to the compulsory acquisition, parties may reach an agreement in relation to the compulsory acquisition during the course of negotiations. If native title holders/registered claimants agree to surrender their rights under such an agreement, the surrender will extinguish all or part of the native title rights and interests. Native title may only be surrendered to the Crown and the Crown (the relevant state, territory or Commonwealth government) must be a party to such an agreement.

3.4 What conditions apply?

For a compulsory acquisition of native title rights and interests to be valid to the extent that it affects native title, the compulsory acquisition must be done in accordance with the two sets of legislation - the relevant state/territory legislation authorising the acquisition, and the Native Title Act 1993 (Cth).

The Native Title Act 1993 (Cth) provides for compulsory acquisition to occur, so long as certain procedural rights are provided to all registered native title bodies corporate, registered native title claimants and native title representative bodies for the area.

Extinguishment of native title by a compulsory acquisition of native title under s24MD(2) must:

• be carried out under a Commonwealth, state or territory law that permits the compulsory acquisition of both native title and non-native title rights and interests
• acquire the whole or part of native title rights and interests as well as the whole or part of any non-native rights and interests in the area
• apply non-discriminatory practices and procedures in acquiring any rights and interests
• not cause the native title holders any greater disadvantage than is caused to non-native title rights and interests

If these requirements are met, then the compulsory acquisition extinguishes the whole or the part of the native title rights and interests. If compensation on just terms is provided under a law of the Commonwealth, state or territory to the native title holders for the compulsory acquisition, and they request that the whole or part of any such compensation should be in a form other than money, the person providing the compensation must consider the request and negotiate in good faith in relation to the request.

All native title and non-native title rights and interests must be acquired in the relevant area when carrying out a compulsory acquisition. Council cannot validly compulsorily acquire only the native title rights and interests for an area and leave any non-native title interests in the area unaffected.

Depending on the purpose of a the compulsory acquisition, and if a state/territory alternative regime does not provide otherwise, native title holders and registered native title claimants for the area will be entitled to either:

• the same procedural rights as if they were instead freehold owners - where the acquisition is for the purpose of conferring interests on the government party(s24MD(6A) NTA 1993 (Cth))
• the right to negotiate (s26)
• the right to be consulted (s24MD(6)(b))

In many jurisdictions, local government is not able to compulsorily acquire property for the purposes of passing it on to a third party.

In certain circumstances, procedural rights under the relevant state/territory alternative regime may apply to future acts involving the compulsory acquisition of native title that are attributable to that state or territory in place of the Commonwealth right to negotiate regime. If a state/territory regime does apply, the state/territory procedures for the compulsory acquisition of native title rights and interests must be complied with instead of the Commonwealth regime. As at December 2002, South Australia is the only state that has established its own alternative regime.

3.5 When does the right to negotiate or the right to be consulted apply?

The Commonwealth right to negotiate under the Act applies to the compulsory acquisition of native title if there is no state/territory alternative right to negotiate scheme that applies to the compulsory acquisition of native title done by the state/territory.

In the absence of an alternative state/territory regime, the right to negotiate or the right to be consulted apply in the manner set out in the table below.

Neither the right to negotiate nor the right to be consulted apply to compulsory acquisitions that are for the purpose of conferring rights and interests on the government party, if the government party makes a statement to that effect before carrying out the compulsory acquisition. In this situation, the government party (such as council) is obliged to provide the same procedural rights to the native title holders and/or registered claimants as ordinary title holders would be entitled to in the same circumstances.

The right to negotiate does not apply to a compulsory acquisition of native title rights and interests by a Government party that is for the purpose of conferring rights or interests on a non-Government third party and involve:

• the construction or provision of an infrastructure facility
• an acquisition that takes place within a town or city (only within WA, NT and SA, or if the Commonwealth minister has made a determination under s251C(5) that an area was a town or a city as at 23 December 1996)
• the intertidal zone

In these circumstances, the right to be consulted applies. In all other cases where the compulsory acquisition is for the benefit of a non-government third party, generally the right to negotiate will apply.

The procedural rights that must be provided to native title holders/claimants depend on the purpose of the acquisition. Only a government party has the power under the Native Title Act 1993 (Cth) to carry out the compulsory acquisition of native title rights and interests, whether it is for the purpose of conferring interests on the government party or a non-government third party. If a local council has the power to compulsorily acquire land or waters under legislation, the council will generally be regarded as a government party. (As mentioned under 3.1 above, the issue of whether local government is regarded as a government party has not yet been clarified.) Most compulsory acquisitions carried out by a local council would be to confer interests on themselves (the government party), and not to confer interests on a non-government third party. There may be some purposes, however, for which council may have to request the state/territory to carry out the compulsory acquisition on council's behalf. Where a state/territory is carrying out a compulsory acquisition on behalf of council, depending on the purpose of the acquisition, council may in limited circumstances be regarded as a non-government third party.

The following sets out the details of when the right to negotiate and the right to be consulted under the Native Title Act 1993 (Cth) apply in relation to the compulsory acquisition of native title rights and interests. The Commonwealth right to negotiate will apply to compulsory acquisitions of native title attributable to a state/territory as set out below only in the absence of a state/territory alternative scheme or schemes. (Although it may be worth noting that the right to negotiate may apply under alternative state/territory regimes.)

When the 'right to negotiate' and the 'right to be consulted' apply to compulsory acquisitions of native title rights and interests.

If the purpose of the compulsory acquisition is to confer new rights on the government party in relation to an onshore place, the native title holders or registered claimants are entitled to the same rights as a freeholder is entitled to under the relevant state/territory compulsory acquisition legislation.

If the purpose of the compulsory acquisition is to confer rights on a third party in relation to an onshore place, and is:

• to develop an infrastructure (as defined in s.253 of the Native Title Act 1993 (Cth)) facility
• wholly below the mean high water mark
• within a declared town or city (only in WA, SA or the NT or if the Commonwealth minister makes a determination that an area was a town or city as at 23 December 1996)

then:

• the right to be consulted/object to the proposal and for it to be heard by an independent party applies

If the purpose of the compulsory acquisition is to confer new rights on a third party in relation to an onshore place and is:

• outside a town or city
• does not involve providing an infrastructure facility
• is not wholly below the mean high water mark

then:

• the right to negotiate applies

4. Compensation for compulsory acquisition

4.1 What are the compensation implications arising from compulsory acquisition?

If it is necessary to compulsorily acquire native title rights and interests either in whole or in part, then native title must be compulsorily acquired in accordance with two sets of legislation - the procedures set out under the Native Title Act 1993 (Cth) as well as the conditions under the relevant state/territory Land Acquisition Act. In addition, native title may have to be valued in accordance with the two sets of legislation for the purposes of compensation.

Native title holders have the same rights to compensation 'on just terms' as all Australian property holders.

Compensation is payable 'on just terms' for the compulsory acquisition of native title under the Native Title Act 1993 (Cth). For the purposes of valuing native title rights and interests on 'just terms', these rights and interests can be valued according to two systems of valuation. They could be valued under the particular State/Territory legislation that was used to compulsorily acquire the native title rights and interests, and they could be valued under the Native Title Act 1993 (Cth). The relevant considerations are:

• Under which system should these rights and interests be valued?
• What happens if the value under the state/territory legislation is considerably different to the valuation provided under Commonwealth legislation?

At this stage, there is little guidance in relation to these questions. Nonetheless, it may be prudent to ensure that any valuation under the state/territory legislation is no less than what is provided for under the Commonwealth native title regime. If compensation 'on just terms' is not provided under a law of a state/territory or the Commonwealth, the native title holders are entitled to compensation under the Native Title Act 1993 (Cth).

That there are two concurrent compensation systems to work with, Commonwealth and state/territory, make the option of compulsory acquisition more complex for councils. There are as yet many unresolved issues in relation to the valuation of native title rights and interests.

It is also important to note that councils may be designated under the relevant state/territory law to pay compensation in relation to any compulsory acquisitions that they carry out.

4.2 How are native title rights and interests valued in the event of a compulsory acquisition?

All property rights, other than native title rights and interests, arise from original grants by governments under Australian land law. Australian governments have powers to change many aspects of property rights. Section 51(xxxi) of the Australian Constitution however, requires the Commonwealth Government to compensate owners for the acquisition of their property 'on just terms'. Similar constraints apply to territory governments, but not to all state governments, although they normally compensate owners whose property rights are resumed.

The underlying theme in the compensation provisions of the various Land Acquisition Acts is to ensure that the dispossessed landholder is no worse off, and no better off, as a result of the compulsory acquisition of their rights and interests in the land or waters. Each of the Land Acquisition Acts sets out relevant matters that are to be considered in determining the amount of compensation in the relevant state or territory (Brown 1996:85).

The basis for valuation of native title rights and interests is not at all clear, because they:

• may be more or less than freehold rights. Land valuations are normally based on freehold title
• may co-exist with the rights of other title holders, such as on some leasehold land
• cannot be bought or sold in the same way as freehold land is bought and sold, because native title is an inalienable right

The Australian Property Institute (the professional association for property valuers) has stated that as native title was not recognised in Australia until 1992, there is not yet any substantive case law on the nature and valuation of native title rights and interests. Any relevant case law will break new ground for both the courts and the property valuation profession.

The Australian Property Institute also advises that it has released Guidance Note 27 (GN 27) 'Native title: the valuation of land subject to' for its members on the valuation of land that may be subject to native title rights and interests.

Similarly, Smith (2001:v) maintains that native title compensation is, like native title, sui generis, or unique, and that native title compensation will require an innovative jurisprudential approach, recognising that it involves the intersection of Aboriginal and Western laws.

Councils are urged to seek independent advice on matters relating to the valuation of native title. It is important to note that in most states of Australia formal valuations can only be undertaken by a valuer registered under the relevant state legislation. Most valuers are members of the Australian Property Institute, and details of a locally based member can be obtained from the institute's state divisions.

4.3 When are native title holders entitled to compensation?

Native title holders may be entitled to compensation, damages or other common law remedies under the general law, for invalid acts that affect their native title rights and interests. The Federal Court may award such compensation or damages in proceedings relating to the invalidity of the particular act.

Any registered native title body corporate for an area and/or a compensation claim group can make a compensation application in relation to compensation for the effects of any valid acts on their native title rights and interests. This is an application to the Federal Court for a determination of compensation. Native title would have to be determined to exist for the area before the native title holders will be entitled to any compensation for the effect of valid acts, including future acts, on their native title rights and interests. At this stage, no compensation applications have been determined by the Federal Court, with the exception of the Crescent Head Agreement involving the Dunghutti People on the north coast of New South Wales, although the compensation was worked out by agreement and not in response to a compulsory acquisition. This case involved a determination of native title and the voluntary surrender of native title by agreement. The compensation payments are staggered, conditional and derived from various sources and includes the possibility of royalties from future sales of land as an alternative tot compensation payments in lump sum. (See Horrigan and Young 1997, p407.)

If native title is determined to exist as a consequence of a compensation application, native title holders will be entitled to compensation for most kinds of valid acts that affect their native title rights and interests. In giving an order of compensation, the Federal Court must set the method (if any) for determining the amount or the kind of compensation, and the method of dispute resolution. Compensation does not have to be in monetary form and parties may agree to any arrangement as to the payment of compensation. Under the Act, compensation is payable only once for valid acts that are essentially the same.

An arbitral body may also make a determination that a future act to which the right to negotiate applies may be done subject to conditions, with one condition being that an amount must be held in trust until dealt with under s52 of the Act (see Part 4.4 below).

Native title holders may have also have a right to compensation under the relevant state/territory law for the effect of an act on their native title rights and interests, for example, under the authorising legislation such as a Mining Act or a Compulsory Acquisition Act.

Registered native title claimants are generally not entitled to compensation for validated past act, intermediate period acts or valid future acts until they obtain a determination of native title. Registered native title claimants may be able to obtain other common law remedies, such as an injunction to stop certain invalid future acts from going ahead where the correct processes have not been followed.

4.4 How may compensation be paid?

Under the Native Title Act 1993 (Cth), compensation is only payable once for acts that are essentially the same. Compensation may include money, land or any other form of arrangement or combination of legal arrangements agreed to by the Aboriginal or Torres Strait Islander people affected by the act and the persons obliged to pay the compensation. Native title holders may request for all or part of the compensation to be paid by way of the transfer of property or the provision of goods or services or the payment of money. If the Court or the person liable to pay does not agree to such a request, compensation may only be in monetary form. (These provisions are not entirely clear and are yet to be tested. It is conceivable the applicant could ask the court to determine that the compensation comprise part money/part transfer of land.)

For future acts to which the right to negotiate applies, in the course of negotiations the parties may agree to establish a trust fund, which in special circumstances may deal with the payment of compensation.

4.5 Who determines compensation?

There are two different kinds of compensation determinations:

• a determination of compensation made by the Federal Court or a recognised state/territory body in accordance with a compensation application (s50 of the Native Title Act 1993 (Cth))
• a determination by an arbitral body that a future act to which the right to negotiate applies may be done subject to conditions, with one condition being that an amount must be held in trust until dealt with under s52 of the Act. In certain circumstances, this trust may deal with the payment of compensation

Although the National Native Title Tribunal may make determinations in relation to future acts to which the right to negotiate applies, it cannot make determinations in relation to compensation. The capacity to make compensation determinations is limited to the Federal Court and recognised bodies. At present, only the Supreme Court of SA and the ERD Court in SA are the only state/territory recognised bodies that can make compensation determinations.

If the Federal Court determines that compensation is payable under a compensation application, the Court's order must set out:

• the name of the person or persons entitled to the compensation or the method for determining the person or persons
• the method (if any) of determining the amount or kind of compensation to be given to each person
• the method for determining any dispute regarding the entitlement of a person to an amount of the compensation

If an arbitral body makes a determination that an amount is to be held on trust under the right to negotiate procedures, the following applies.

If an amount is being held on trust under the right to negotiate procedures and:

• an approved determination is made that the native title parties are the native title holders for the area affected by the act
• the registered native title body corporate advises the trustee it wants to accept the trust amount instead of any compensation to which the native title holders may be entitled under Division 3 of Part 2 of the Native Title Act 1993 (Cth)
• the person who paid the trust amount agrees to the registered native title body corporate accepting the trust amount instead of compensation under Division 3 of Part 2 of the Native Title Act 1993 (Cth)

then the trustee must pay the trust amount to the registered native title body corporate and, subject to the requirement of just terms compensation for any acquisition of property resulting from the future act, the native title holders will not be entitled to compensation under Division 3 of Part 2 of the Native Title Act 1993 (Cth).

If an amount is being held in trust under the right to negotiate procedures and a determination is made on a claim for compensation in respect of the future act that a person is entitled to an amount of monetary compensation in accordance with Division 5 of Part 2 of the Native Title Act 1993 (Cth) or on just terms under a compulsory acquisition law, the following applies:

• where the trust amount is the same as the amount determined, the trustee must pay the trust amount to the person
• where the trust amount is less than the amount determined, the trustee must pay the trust amount and the Government party must pay the shortfall to the person
• where the trust amount is more than the amount determined, the trustee must pay the person that amount from the trust and refund the excess to the person who paid the trust, or apply to the Federal Court for direction if that person no longer exists

If a determination is made for non-monetary compensation, the trustee must apply to the Federal Court for a direction as to the payment of the trust amount. If a determination is made that no compensation is payable to any person, the trustee must repay the trust amount to the person who paid it to the trustee, or, if that person no longer exists, apply to the Federal Court for a direction as to payment.

If none of the above applies, the Federal Court may decide, on application by any person, that it would be just and equitable to pay the trust amount to that person or another person.

5. Who should council negotiate with?

Who should Council negotiate with in the Indigenous community is a recurring question from many local councils. Local councils need to be mindful that they contact the correct native title holders for an area before entering into formal discussions about compulsory acquisition. Indeed, councils are required by law to discuss the issues with the relevant native title holders, registered native title claimants and/or the relevant native title representative body well before embarking on the formal processes of acquisition.

There are two agencies that can provide assistance with these matters: the relevant native title representative body (NTRB) for the area concerned and the National Native Title Tribunal.

The notification of an application for a determination of native title that council receives from the National Native Title Tribunal will generally include the contact details for the nominated representative of the claimants. You can contact this person or you can approach the native title representative body.

The Native Title Act 1993 (Cth) enables the Federal Minister with responsibility for Aboriginal and Torres Strait Islander matters to appoint native title representative bodies (NTRB's) to represent the interests of Aboriginal peoples or Torres Strait Islanders within a particular region on native title matters. These bodies may be local Indigenous Land Councils or legal aid services that have a special responsibility to assist and represent native title holders and claimants. To find the relevant NTRB for your area visit the NTRB website

The NTRB has a responsibility to ensure you make contact with the correct native title holders for an area. They may also be able to assist with protocols and communication with the native title holders or claimants. It is advisable therefore, to establish good working relations with the relevant NTRB.

The National Native Title tribunal can also provide assistance with information about who must be party and who may be party to the different types of ILUAs.

6. Who can councils contact for assistance?

Local councils can obtain assistance from several sources.

• Your state/territory local government association.
• Your state/territory Government agency with primary responsibility for native title matters. This may be the Premier's or Chief Minister's Department, the Crown Solicitors Office or the Department with responsibility for land management.
• Australian Local Government Association
  Email: alga@alga.asn.au
  Phone 02 6122 9400
  
• Commonwealth Attorney-General's Department (in relation to financial assistance)
  Phone 02 6250 6770.
• National Native Title Tribunal
  Phone freecall 1800 640 501
  To find the relevant NTRB for your area visit the NTRB website at www.ntrb.net and click on the map of NTRB's for Australia.
• The Australian Property Institute
  John Sheehan, National Native Title Spokesperson
  Phone: 02 9299 1811
  Email: national@propertyinstitute.com.au

7. Conclusions

This Issues Paper draws attention to some of the complexities involved in the compulsory acquisition of native title rights and interests by local government, and reinforces the view that compulsory acquisition of native title should be viewed as a means of last resort. There are times when it may be necessary to use compulsory acquisition. However, councils are urged to explore and exhaust all other possible methods prior to commencing the processes of compulsory acquisition. If compulsory acquisition is necessary, consult your state/territory government, seek independent professional advice, and proceed with caution.

Acknowledgements: ALGA gratefully acknowledges the many people and organisations that commented on earlier drafts of this paper.

References

Cases

Western Australia v Ward [2002] HCA 28

Legislation

Commonwealth

Land Acquisition Act 1989 (Cth)

Native Title Act 1993 (Cth)

Racial Discrimination Act 1975 (Cth)

New South Wales

Land Acquisition (Just Terms Compensation) Act 1991 (NSW)

Local Government Act 1993 (NSW)

Victoria

Land Acquisition and Compensation Act 1986 (Vic)

Local Government Act 1989 (Vic)

Queensland

Acquisition of Land Act 1967 (Qld)

Local Government (Planning and Environment) Act 1990 (Qld)

Western Australia

Land Acquisition and Public Works Act 1902 (WA)

Local Government Act 1995 (WA)

South Australia

Land Acquisition Act 1969 (SA)

Local Government Act 1999 (SA)

Tasmania

Land Acquisition Act 1993 (Tas)

Local Government Act 1993 (Tas)

Northern Territory

Land Acquisition Act 1988 (NT)

Local Government Act 1993 (NT)

Australian Capital Territory

Land Acquisition Act 1994 (ACT).

Books, Reports, Guides

Australian Local Government Association (ALGA), Aboriginal and Torres Strait Islander Commission (ATSIC), National native Title Tribunal (NNTT) (1999) Working with Native Title: A practical guide for local government, 2nd Edition, ALGA, Canberra.

Australian Local Government Association (ALGA), Aboriginal and Torres Strait Islander Commission (ATSIC) (1999) Working out Agreements: A practical guide to agreements between local government and Indigenous Australians, 2nd Edition, ALGA, Canberra.

Australian Local Government Association (ALGA) (various dates) Issues Papers

Australian Property Institute (2000) Guidance Note 27 The Valuation or Management of Land Subject to Native Title, Special Publication, Australian Property Institute, Canberra.

Brown, Douglas (1996) Land Acquisition: An examination of the principles of law governing the compulsory acquisition or resumption of land in Australia and New Zealand. (4th Edition), Butterworths, Sydney.

Horrigan, Bryan and Young, Simon (eds.) (1997) The Commercial Implications of Native Title, The Federation Press in association with The Centre for Commercial and Property Law, Queensland University of Technology.

Smith, D E (2001) Valuing native title: Aboriginal, statutory and policy discourses about compensation. Discussion Paper No. 222/2001, Centre for Aboriginal Economic Policy Research, ANU, Canberra.