8 April 2004
Ms Sarah Low
Native Title Unit
Attorney-General's Department
Robert Garran Offices
National Circuit BARTON ACT 2601
Dear Ms Low
Proposed regulations for trust monies under the Native Title Act
I refer to the 10 March letter from Mr Anderson about proposed regulations under the Native Title Act ('NTA') regarding monies to be held in trust from future act determinations. Thank you for forwarding the Draft Outline for Regulations Under sections 36C(5), 41(3) and 42(5) ('Outline') and inviting my comments on this document.
Before turning to the Outline, I want to emphasise an important background issue. The regulations may facilitate or encourage a position that traditional owners are only entitled to redress for impacts on their interests to the extent that courts recognise native title rights. The relevant sections of the NTA enable a tribunal or minister to rule that a future act can proceed on the basis that money be placed in trust to be received by the native title claimants only if and when a court makes a native title determination in their favour. My concern with this approach is that it may allow legitimate Indigenous interests to be impacted upon without reparation.
There are decisions in which the courts have acknowledged that the relevant Indigenous community has interests and connection to land but receives no native title recognition or protection (De Rose1 and Yorta Yorta2 are two recent examples). Some future act agreements exist where the developer has accepted it is dealing with the legitimate traditional owners of an area and reached agreement with that community regardless of current or future outcomes of native title court proceedings (examples of these agreements include the Burrup Peninsula and the Western Cape Communities Co-Existence Agreement). These court decisions and future act agreements suggest that tribunals and ministers should be encouraged to make orders respecting traditional owners' legitimate interests, regardless of the vagaries of Australia's native title laws. Instead, these regulations may facilitate the opposite occurring.
The basis for my concerns about the trust fund arrangements is founded on international human rights standards, particularly those on protection of culture and self-determination. Australia has an obligation to ensure that Indigenous people are not denied the right to enjoy their culture. This requires the Government to take positive measures of protection against the acts of other parties (including legislative, judicial and administrative acts, and also acts of non-government parties within Australia) where those acts constitute a breach of the obligations in the International Covenant on Civil and Political Rights.
I realise the Attorney has not requested submissions in relation to the relevant provisions of the NTA. In some respects, I must the take the legislation as a given, and simply consider the proposal for regulations about the management of monies from future act determinations. My submissions on the proposed regulations are outlined below, but they should be understood in the context of these over-arching concerns about the system in which the regulations seek to operate.
The majority of my comments on the proposed regulations concern the expenses in administering the trust, and how these are to be met. This is a matter requiring careful attention, particularly in light of consistent complaints from many different sectors about the lack of resources making the native title system unworkable. My basic concern with the proposed regulations is the lack of protection of the trust fund, because the trust fund is the amount determined as the appropriate redress for the development's impact on native title rights. Under the proposed regulations, this amount is made available to cover administrative expenses, and the trustee's actions in managing the fund are insufficiently controlled. I explain the details of my concerns below.
The Outline (in para's 18 & 20) proposes that the trustee's expenses can be reimbursed from the trust fund. This may be appropriate for a standard trust arrangement, but it is not appropriate here. The usual legal arrangements for a trust commonly arise where a benefactor has donated money and established an arrangement for that money to be used to assist the trust's beneficiaries. In such a case, there is no justification for the beneficiaries having any entitlement to the trust fund, apart from the terms of the trust itself. In these situations, it is appropriate that the trustee's administration expenses are reimbursed from the trust fund. However, the situation of these trust monies under the NTA is quite different. Where native title is found by the courts, it is understood to have been a pre-existing right. Accordingly, any amount considered to be appropriate redress for a future act's impact should have been provided to the claimant group from the time the impact occurred. It is not appropriate for the monetary amount to be treated as normal trust funds, and be available for administrative expenses.
Even if the Attorney were minded to proceed with the expenses arrangement as proposed, I suggest an alternative wording for one clause. Paragraph 23 of the Outline specifies examples of costs the trustee may recoup from the trust funds. For most examples, the Outline states the reimbursed expenses must have been 'reasonably incurred'. However, for expenses incurred in locating a person entitled to be paid trust funds, the Outline does not suggest these expenses be qualified by the word 'reasonable'. In the context, the lack of the word 'reasonable' suggests that all such expenses may be reimbursed. I see no reason for this to be the case and suggest that the word 'reasonable' be inserted where appropriate.
The Outline indicates (in para 30) that the regulations will include legal protection for the trustee. The trustee will not be liable for investment and payment decisions made under the regulations or legislation. This may expose the trust fund, which is the amount previously determined to be appropriate reparation for traditional owners, to diminution from incorrect decisions made by the trustee. You may wish to consider whether the proposed regulation is within the power to make regulations under the NTA. It does not appear that the proposed legal protection is necessary or convenient for carrying out or giving effect to the NTA. The NTA seems to contemplate regulations which prescribe the manner in which trusts are to be operated and managed, rather than extending to issues of liability for the administration of the trusts or authorising regulations which may depart from established principles of common law.
The Outline proposes that the Registrar of the National Native Title Tribunal will act as the trustee for any monies to be held in trust under this system. The Outline explains that the costs of administering the trust 'may be lower if the...[trust can be] an add-on to the National Native Title Tribunal's existing business, rather than...as may be the case were another person to be appointed trustee'. As noted above, the proposed regulations have the trustee's expenses directly impacting on the extent to which a native title community may receive redress to which they are entitled. Accordingly, I consider it appropriate that the trustee arrangements be determined on something more solid than the costs 'may' be lesser if the Tribunal administers any trust. Has the Attorney-General's Department investigated the options and come to a considered position on what is the most economical model? Alternatively, if this is too onerous, perhaps the regulations should allow a wider range of trustees, allowing the parties to agree on the trustee. Given the range of trustee corporations operating under controls of Commonwealth and States legislation, perhaps there are other options that would provide the parties sufficient security and still maintain competition in relation to operating costs.
If you have any questions regarding this matter, please contact John Southalan who works with me in the Human Rights and Equal Opportunity Commission.
In the interests of transparency and openness, I consider it useful for matters to be widely discussed. Accordingly, I intend to make this letter available on the Commission's website.3 If you have any concerns about this proposal please contact John Southalan to discuss before 22 April.
Yours sincerely
Dr William
Jonas AM
Aboriginal and Torres Strait Islander Social Justice Commissioner
1.
De Rose v State of South Australia, trial decision [2002] FCA
1342, per Lindgren J at [903].
2. Members of the Yorta Yorta Aboriginal Community
v Victoria & o'rs, trial decision per Olney J at [122]-[128];
Full Federal Court decision per Black CJ at [81]-[83]; and High Court
per Gleeson CJ, Gummow & Hayne JJ at [69].
3. www.humanrights.gov.au/social_justice/native_title
