Dean Smith (WA, Liberal Party) Share this | Hansard source

Last week I had the honour to address the Association of Mining and Exploration Companies convention in my home town of Perth, Western Australia. It is no secret that the mining industry in Western Australia and across the world is becoming more challenging. On a global level, miners are facing increasing challenges with declining grades, deeper deposits, harder oil and labour productivity problems. Here in Australia our biggest impediment continues to be the current regulatory environment for exploration activities that present a constant and ever-present threat to the prosperity of resource based states, like my state of Western Australia. A central feature to this in my consideration is the impact of the current native title regime, which continues to limit land access and increase compliance costs for explorers.

At a time when Australia not only needs opportunities for future job growth but is also calling for greater energy security, the constraints placed upon the exploration activities of our mineral and energy sector can no longer be ignored. Three weeks ago marked the anniversaries of two major events in Australia's history: the 50th anniversary of the 1967 referendum and the 25th anniversary of the Mabo decision. The 1967 referendum is widely recognised as a crucial point in Australia's reconciliation journey. For the first time, Australians properly acknowledged the identity, the culture, the history and the citizenship of Indigenous Australians. However, 1967 was also important because, following the Mabo case of 1992, it provided a basis for the Commonwealth to create and enact native title. The Native Title Act was a major step in recasting the relationship between Indigenous and other Australians, recognising past injustices and setting the scene for a more equitable future.

On the face of it, native title has achieved a lot for our country. Since its assent, Aboriginal and Torres Strait Islander peoples' rights and interests in land have been formally recognised over 40 per cent of Australia's land mass. Almost 400 native title determinations have been made by the Federal Court and about 170 prescribed bodies corporate have been established to represent the rights of traditional owners. However, it is important to note that the Native Title Act does not confer a new title to land but gives recognition to an ancient title. Inherent in this recognition is a 'right to negotiate'. This right to negotiate is significant in two important aspects: firstly, it is more extensive than any other right held by members of other races facing a compulsory acquisition of property; and, secondly, it is available not only to people with established rights but also to those who merely claim them.

This right to negotiate has resulted in making native title negotiations notoriously complex and has created significant challenges for a resource based state like Western Australia. Increased approval time lines for the grant of mineral licences and petroleum exploration permits, coupled with the complexity and length in resolving native title claims, is significantly impacting on the productivity of Western Australia's mining and energy sectors. Approximately 85 per cent of Western Australia is subject to either a native title claim or a native title determination that recognises the existence of native title rights and interests. Today there are 79 currently filed native title claims in Western Australia, on top of 60 native title determinations, comprising over 50 per cent of the land area. Just under half of these current claims in Western Australia were filed more than 15 years ago. Since the Native Title Act commenced in 1994, more than 90 per cent of all future act applications have been made in Western Australia. The majority of these future acts relate to resource based activity, primarily low-impact activities such as exploration or prospecting. Forty-eight per cent of these objections remain unresolved, which means activities like mineral exploration—the necessary precursor to resource development and employment growth—cannot occur.

The current native title regime requires explorers to have negotiated an agreement with any native title holders and registered claimants to enable an exploration permit or licence to be issued. However, the act requires that collective groups are nominated by communities to make authorisations on behalf of claimants, which can number into the thousands. However, there are no statutory rules that govern how these groups, known as 'prescribed corporate bodies' or 'native title representative bodies', should exercise that power, which, in my mind, is akin to the fiduciary duty of directors acting on behalf of shareholders. Prior to the grant of an exploration title, mining and resource companies are required to negotiate an access agreement, which includes land use regulations and compensation arrangements with the representatives. The onus to negotiate an access arrangement rests solely on the explorer, and the costs are borne before explorers are able to determine whether recoverable mineral discoveries actually exist. This results in increased project costs, reducing the ability to respond to changing market conditions, impeding project financing and, ultimately, deferring potential development and revenue opportunities.

In addition, the grant of an exploration license also requires a heritage survey specifying how an explorer will engage with traditional owners or other consultants to protect Aboriginal heritage sites. Although heritage legislation is separate to native title legislation, the two are dangerously intertwined when it comes to damaging the opportunity and capacity for mineral exploration. The process for an exploration company to engage with traditional owners in order to conduct their heritage survey to ensure there is no impact on any Aboriginal sites during exploration is costly and is time consuming. Once again, the onus rests solely on the explorer.

Estimates that heritage compliance costs, including the native title access agreements, are estimated at 10 per cent of exploration expenditure. The quantum of the costs, which often includes a fee for the meeting to begin the negotiations, is largely dependent on the traditional owners or the representative body: their availability, the fees they charge and their willingness to participate. Additional barriers can arise when there are multiple traditional owners groups covering a single area. This increases the costs and time to consult with all groups and coordinate representatives from all groups to participate in these surveys.

It is no secret to those familiar with these arrangements that some traditional owner groups have in the past—and I suspect will continue in the future—used the heritage process as a lever in native title negotiations in order to place pressure on the company to come to a native title settlement. In order to obtain heritage approvals and progress work, an explorer may feel pressured by time and come to settle its native title negotiations in less favourable terms. In addition, the identification of Aboriginal sites is open to interpretation and potential abuse. Anecdotal shows that withholding cultural heritage information after a heritage survey is completed is becoming increasingly prevalent as a means to extract further payments from resource companies.

Protecting Aboriginal cultural heritage is important, and it is a necessary aspect of exploring and mining minerals in Australia. But I believe the time has come to restart a debate that highlights the inefficiencies of the current native title regime that is resulting in unnecessary delays, leading to higher costs of exploration. The complexity of native title—which often involves some very entrenched interests and, to be fair, the legitimate claims on both sides of the table—demands a negotiating process that is scrupulously fair. It also demands a process that is more transparent and better understood by all parties. Until the role and responsibilities of prescribed corporate bodies and native title representative bodies are thoroughly reviewed and their levels of governance and transparency significantly improved, the WA mining industry and the traditional owners they support will continue to be constrained by the native title process that was, once upon a time, conceived in the spirit of helping the people it now seeks to punish.