Native Title Year in Review 2022-2023

Summary 

In December 2022, the National Native Title Tribunal handed down its determination in Santos NSW Pty Ltd and Another v Gomeroi People and Another [2022] NNTTA 74, following proceedings considering the proposed grant of petroleum production leases for the Narrabri Gas Project.

The Tribunal made two key findings: 

• in response to the good faith challenge brought by the Gomeroi against Santos, Santos had not failed to negotiate in good faith; and 
• an evaluation of the factors in section 39 of the Native Title Act showed that the proposed act would be in the public interest and that any impacts on native title rights or heritage would be appropriately managed.

The Tribunal made a number of useful observations regarding 'good faith', including the relevance of the reasonableness of offers made during negotiations and that, in assessing 'good faith', the Tribunal must consider the whole of both parties' conduct during negotiations.

Appeal proceedings are currently on foot and are to be heard by the Full Bench of the Federal Court in August 2023. The Full Court's decision will be an important contemporary benchmark, as it will deal with the conduct of relatively sophisticated parties over a long period of time.

Right to negotiate and failure to reach agreement 

The National Native Title Tribunal's decision in Santos NSW Pty Ltd and Another v Gomeroi People and Another  [2022] NNTTA 74 is one the most high-profile good faith decisions in recent years. 

The decision relates to Santos's Narrabri Gas Project in New South Wales.  The Project falls within the area of the Gomeroi people's native title claim.

The State gave notice of its intention to grant four petroleum production leases (PPLs) for the Project in May 2014, triggering the right to negotiate process.  Santos, the Gomeroi and the State were required to negotiate in good faith with a view to obtaining the Gomeroi claimant's agreement to the proposed grants (section 31(1), Native Title Act).

Despite persistent attempts to reach agreement with the Gomeroi native title claimants over nearly seven years, the parties were ultimately unable to reach agreement.

Future act determination application

In 2021, Santos filed a future act determination application, seeking a determination from the Tribunal that future acts, namely the grant of the PPLs, could be done.  

During proceedings, the Gomeroi people alleged, among other things, that Santos had failed to negotiate in good faith, and that the PPLs should not be granted based on an assessment of the factors set out in section 39 of the Native Title Act.

Determination summary

On 19 December 2022, the Tribunal handed down its determination, finding that:

• the evidence before it did not justify a finding that Santos had failed to negotiate with the Gomeroi people in good faith; and
• based on consideration of the section 39 factors, the future act could be done, subject to a condition that Santos conduct an "Additional Research Program" to identify and protect Aboriginal cultural heritage before construction of the Project commences.

The "Additional Research Program" had been put forward in the Project Cultural Heritage Management Plan as a measure to identify additional tangible and intangible Aboriginal cultural heritage in the Project area that had not been uncovered during preparation of the Environment Impact Assessment.  During the course of the hearing, Santos proposed bringing forward the Program by 12 months in response to Gomeroi people's concerns about identification and protection of cultural heritage.

No failure to negotiate in good faith

The Tribunal is unable to make determinations in a future act determination application where it is satisfied that the grantee party (or State) has not negotiated in good faith.  

The Gomeroi people made numerous assertions in support of their contention that Santos had failed to negotiate in good faith, including claims that Santos had:

• contributed to conflict between the Gomeroi people and their legal advisors, and within the members of the Gomeroi applicant;
• negotiated with the wrong Gomeroi applicant during negotiations; and
• offered compensation that was unreasonably below market value and adopted a fixed position on compensation.

The Tribunal rejected every allegation made by the Gomeroi people and found that there was "no basis for finding that at any time since the notification day, or before that day, Santos failed to negotiate in good faith, with a view to obtaining the Gomeroi Native Title Party's agreement to the proposed grants".

In coming to this decision, the Tribunal found that:

• the duty to negotiate in good faith arose on the section 29 notification day.  Events occurring prior to notification could be considered by the Tribunal to the extent that they shed light on conduct occurring after notification day;
• in assessing 'good faith', the Tribunal must consider the whole of both parties' conduct during negotiations; and
• Santos had actively engaged with the Gomeroi people across a period of many years and had provided a substantial amount of financial support to them in that time. 

Further, the Tribunal consistently accepted the evidence of the Santos witnesses, preferring their evidence over that of the Gomeroi people.  The Tribunal found the advice of the latter's  financial experts to be unsatisfactory and, at times, incorrect and suggested that this may have contributed to the ongoing disagreement between parties.

Consideration of s 39 factors – act may be done

Section 39 of the Native Title Act requires the Tribunal to take into account a range of factors when making a determination, including (among other things) potential impacts on the native title party's enjoyment of their native title rights, access to the area, and sites of particular significance, as well as the economic significance and public interest in doing the act.

The Tribunal considered each of the section 39 factors, concluding that:

• the Gomeroi poeple's evidence failed to show that the Project would negatively impact their culture, lands and waters or that it would contribute to climate change;
• the Project would be to the public benefit (economically, culturally and socially); and
• any impacts on Aboriginal cultural heritage would be appropriately managed and conditioned, including through  the Cultural Heritage Management Plan, Aboriginal Research Program, and the flexible design and micro-siting of wells. 

Appeal to Full Federal Court

In January 2023, the Gomeroi people filed an appeal from the Tribunal's decision.  Appeal proceedings are currently on foot and will be heard by the Full Bench of the Federal Court in August 2023. 

Key insights

Be aware that good faith challenges continue to be made in future act determination applications.  Although Santos was found to have passed the good faith test, in 2022 the Tribunal found that three other mining companies had failed to negotiate in good faith (see "Small-scale miners struggle to satisfy good faith standard in the right to negotiate process").

Proponents who are seeking the grant of a tenement that triggers the right to negotiate process can drive a hard bargain, but in doing so they must engage in genuine attempts to reach agreement with the native title party.  This will require, among other things, approaching negotiations with an open mind, acting honestly, and being willing to compromise. 

Good faith challenges remain a feature of the native title landscape.  Small-scale miners in particular seem to struggle with the requirements.  However, few cases progress on appeal.  The Full Court's decision in the Gomeroi people's appeal will be an important contemporary benchmark, as it will deal with the conduct of relatively sophisticated parties over a long period of time.

Authors: Samantha Marsh, Lawyer, Alice Jiang, Lawyer and Clare Lawrence, Partner.