Background
2.1
The Aboriginal Land Rights (Northern Territory) Amendment (Economic Empowerment) Bill 2021 (the bill) was introduced to the House of Representatives on 25 August 2021. The third reading was agreed to on 18 October 2021, and the bill was introduced to the Senate on the same day.
2.2
The purpose of the bill is to empower Aboriginal peoples in the Northern Territory (NT) to activate the economic potential of their land 'for generations to come'.
2.3
The bill seeks to amend the Aboriginal Land Rights (Northern Territory) Act 1976 (Land Rights Act) in four key areas by:
(1)
Establishing the Northern Territory Aboriginal Investment Corporation (NTAIC).
(2)
Streamlining the exploration and mining provisions of the Land Rights Act.
(3)
Improving and clarifying the land administration provisions of the Land Rights Act.
(4)
Aligning the Aboriginals Benefit Account (ABA) with the Commonwealth's financial framework.
2.4
The Minister for Indigenous Australians, the Hon Ken Wyatt MP characterised the reforms as a 'new era of land rights' that would empower Aboriginal people to unlock the potential of their land and grow their communities, businesses and culture. He stated:
Taken together, the reforms provided in this bill realise the longstanding aspiration of Aboriginal people in the Northern Territory for greater control over decision-making and realise the potential of their land.
Co-design process and role of Land Councils
2.5
The Land Rights Act provides a legislative framework for claims to, and the grant, regulation and management of, Aboriginal land in the NT, which is a form of freehold land. Aboriginal land is the strongest form of traditional land title in Australia, and approximately 50 per cent of the NT is Aboriginal land under the Land Rights Act.
2.6
Traditional Owners of Aboriginal land hold decision-making powers over land access and use. Land Councils assist Traditional Owners to acquire and manage their land. Land Councils must consult with Traditional Owners and affected Aboriginal people to ensure land use proposals are understood and consented to by the Traditional Owners.
2.7
The explanatory memorandum (EM) to the bill stated that amendments to the Land Rights Act were 'not common'. It explained that Aboriginal stakeholders in the NT have strong voices through their four Land Councils:
the Anindilyakwa Land Council (ALC)
the Central Land Council (CLC);
the Northern Land Council (NLC); and
the Tiwi Land Council (TLC).
2.8
The EM emphasised that the Commonwealth Government had committed to only amend the Land Rights Act with the support of the Land Councils.
2.9
This commitment was also highlighted by the minister upon the introduction of the bill:
Aboriginal stakeholders in the Northern Territory have strong voices through their land councils and this government has committed to only amend the land rights act with their support.
2.10
The EM stated that the bill was informed by an 'extensive co-design process' with Aboriginal Territorians, facilitated through the Land Councils.
2.11
For example, it highlighted that:
(a)
The ABA Reform Working Group, made up of representatives from the Commonwealth, Land Councils and the Aboriginals Benefit Account Advisory Committee (ABAAC), had been meeting since 2018 to design ways to increase Aboriginal decision-making over the ABA for the benefit of Aboriginal peoples in the NT, and to clarify the administration of Aboriginal land.
(b)
Negotiations regarding options for beneficial amendments to the exploration and mining provisions of the Land Rights Act had been 'long-standing'. A Working Group comprised of representatives from the Land Councils, the NT Government and the Commonwealth Government was established in 2015 to consider the findings of the 2013 report of the Review of Part IV of the Aboriginal Land Rights (Northern Territory) Act 1976. Additionally, significant consultation had been undertaken with relevant industry peak bodies.
(c)
The National Indigenous Australians Agency (NIAA) had consulted the Executive Director of Township Leasing (EDTL) in relation to the amendments contained in Schedule 3 of the bill.
(d)
During 2019–20, the Gove Peninsula Futures Land Tenure Working Group, comprised of representatives from the Rirratjingu Aboriginal Corporation, Gumatj Corporation, NLC, NT Government, Rio Tinto and the NIAA, requested enhanced certainty for parties negotiating agreements in respect of land that is the subject of a deed of grant held in escrow.
2.12
Further discussion on the consultation undertaken during the development of the bill is contained in Chapter 3 of this report.
Schedules of the bill
2.13
The bill is comprised of four schedules, as summarised below.
Schedule 1: Northern Territory Aboriginal Investment Corporation
2.14
Schedule 1 to the bill establishes the NTAIC as a new Aboriginal-controlled corporate Commonwealth entity in the Land Rights Act to:
strategically invest in Aboriginal businesses and commercial projects; and
make other payments for the benefit of Aboriginal peoples in the NT.
2.15
As the Minister for Indigenous Affairs summarised, the NTAIC:
…will be funded from the ABA to invest in projects that will grow wealth, create jobs and support sustainable Aboriginal economies in the Northern Territory for the long term — for generations ahead. It will have the ability to invest in a wide range of projects from agriculture and aquaculture, tourism opportunities and community art centres. It will also make decisions about and administer beneficial payments shifting decision-making from Canberra to the Northern Territory.
Purpose
2.16
The bill provides that the NTAIC's purposes are:
(a)
to promote the self-management and economic self-sufficiency of Aboriginal people living in the NT; and
(b)
to promote the social and cultural wellbeing of Aboriginal people living in the NT.
Funding
2.17
The NTAIC will hold substantial funding from the ABA. The ABA is established under the Land Rights Act to receive and distribute monies equivalent to royalties generated from mining on Aboriginal land in the NT.
2.18
The ABA currently provides:
operational funding for Land Councils;
payments for Traditional Owners and other Aboriginal people affected by mining operations;
funding for township leasing;
funding for the administration of the ABA; and
payments for the benefit of Aboriginal people living in the NT (known as 'beneficial payments').
2.19
The balance of the ABA has 'grown significantly' in recent years as a result of the mining boom, almost doubling from around $634 million in 2016–17 to around $1.3 billion in 2021.
2.20
The bill provides for an initial $500 million endowment from the ABA to the NTAIC, as well as committed funding of $60 million per year for the first three years of its operation. The bill also sets out a process for the NTAIC to obtain ongoing funding from the ABA, consistent with the process Land Councils follow to seek their yearly funding.
Governance
2.21
The bill provides for strong governance mechanisms that support 'culturally-informed, best practice governance'.
2.22
For example, the NTAIC's Board must ensure the proper, efficient and effective performance of the NTAIC's functions. It will be comprised of 12 members to balance Aboriginal representation and cultural expertise, government involvement, and independent financial expertise.
2.23
The bill provides for a Board composition of:
two members appointed by each Land Council (i.e. eight members in total across the four Land Councils);
two members appointed by the Commonwealth; and
two independent members appointed by the Board.
2.24
Additionally, the bill provides for an investment committee of at least four members, at least two of whom must have expertise in business or financial management and be external to the Board. The investment committee is to:
provide advice to the Board on the entering into, management and disposal of investments;
provide advice to the Board on the development and revision of strategic investment plans; and
any other functions relating to the investment of the NTAIC's money.
2.25
The bill also provides for mechanisms to manage financial risk and provide appropriate safeguards for ABA funding. For example, the NTAIC will be required to seek the minister's approval of any single investment with a value of over $100 million. Additionally, ministerial rules will guide loans, borrowing and guarantees made by the NTAIC.
Strategic investment plan
2.26
The bill provides that the Board of the NTAIC must develop a strategic investment plan and ensure one is in force at all times from 18 months after the commencement of the relevant section of the bill.
2.27
According to the EM, the strategic investment plan is:
…intended to ensure there is transparency about the Board of the NTAI Corporation's investment and funding priorities and to ensure accountability to Government and the broader Aboriginal community.
2.28
The bill provides that the strategic investment plan must set out the NTAIC's priorities and principal objectives relating to payments and financial assistance to or for Aboriginal people living in the NT and investments (including investment of its surplus funds) for a three to five year period.
2.29
The NTAIC must consult with Aboriginal people living in the NT and Aboriginal corporations in the NT and have regard to any advice provided by the investment committee when developing the plan.
2.30
The bill also sets out a process for the strategic investment plan to be tabled in Parliament and published on the internet.
Beneficial payments
2.31
Through the establishment of the NTAIC, the bill provides an 'historic opportunity' for Aboriginal Territorians to make decisions regarding beneficial payments. Currently, all decisions about ABA funding are made by the Commonwealth Government. Beneficial payments are currently approved by the Minister for Indigenous Australians under subsection 64(4) of the Land Rights Act, on advice from the ABAAC.
2.32
To enact this change, the bill repeals section 65 of the Land Rights Act which establishes the ABAAC. The NTAIC will replace the ABAAC and take on responsibility for administering the beneficial payments.
Schedule 2: Mining
2.33
Schedule 2 to the bill seeks to reduce inefficiencies associated with exploration and mining processes on Aboriginal land in the NT by:
(i)
Improving the application and consent process for exploration licences on Aboriginal land so that:
applications can be amended without the need to recommence the application process;
Land Councils can take a more flexible approach to meetings with traditional Aboriginal owners; and
the minister's consent is not required following the Land Council providing notice of consent for the grant of an exploration licence.
(ii)
Enabling more efficient and consistent administration of exploration and mining on Aboriginal land.
(iii)
Updating terms and definitions relating to exploration and mining to align with related NT legislation.
Schedule 3: Land administration
2.34
Schedule 3 to the bill seeks to improve land administration and enhance local decision-making by:
prescribing the nomination and approval processes and funding arrangements for approved entities that may hold a township lease under section 19A of the Land Rights Act;
providing that Land Councils may enter into agreements in respect of land that is the subject of a deed of grant held in escrow;
increasing the amount at which Land Councils must seek ministerial approval to enter into a contract from $1 million to $5 million;
removing the requirement that a permit issued under section 5 of the Aboriginal Land Act 1978 (NT) may only be revoked by the issuer of the permit; and
repealing unused powers for the delegation of Land Council functions to corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).
Schedule 4: Technical amendments relating to the Aboriginals Benefit Account
2.35
Schedule 4 to the bill seeks to align the Land Rights Act with the Commonwealth financial framework by:
aligning the ABA with NT legislation for the payment of mineral royalties; and
clarifying the purposes of the ABA.
Legislative scrutiny
2.36
Pursuant to Senate Standing Order 25(2)(A), this section of the report will take into account comments published by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny committee).
2.37
As noted in Chapter 1 of this report, the Scrutiny committee examined the bill in its Scrutiny Digest 15 of 2021, where it raised a number of concerns and requested further information from the Minister for Indigenous Australians. It further considered the bill in its Scrutiny Digest 16 of 2021, taking into account responses provided by the minister.
2.38
The concerns of the Scrutiny committee can be broadly categorised as:
the inclusion of a 'no-invalidity clause';
the placing of significant matters in delegated legislation;
the use of instruments not subject to parliamentary disallowance;
the tabling of documents in Parliament; and
the placing of further significant matters in delegated legislation.
2.39
This section will provide an overview of each of the concerns raised, as well as the responses from the minister to those concerns and the Scrutiny committee's final views.
No-invalidity clauses
2.40
Schedule 1 to the bill seeks to amend the Land Rights Act to establish the NTAIC. Proposed section 65BH provides that the NTAIC must not make a particular investment that has a value of more than $100 million, or a higher amount specified in the rules, without the written agreement of the Minister. Proposed subsection 65BH(3) provides that a failure to comply with this requirement does not affect the validity of the transaction.
2.41
Additionally, item 25 of Schedule 3 of the bill seeks to insert proposed section 12D into the Land Rights Act to provide that Land Councils may enter into agreements with proponents in relation to land that is the subject of a deed held in escrow. Proposed subsection 12D(4) provides that a Land Council must not enter into the agreement unless it is satisfied that the Traditional Owners consent to the proposed grant, adequate consultation has occurred, and the terms and conditions on which the proposed grant is to be made a reasonable. Proposed subsection 12D(7) provides that a failure to comply with subsection 12D(4) does not invalidate the agreement.
Concerns
2.42
A legislative provision that indicates that an act done or decision made in breach of a particular statutory requirement or other administrative law norm does not result in the invalidity of that act or decision may be described as a 'no-invalidity' clause.
2.43
The Scrutiny committee stated that it held 'significant scrutiny concerns' with no-invalidity clauses as they may limit the practical efficacy of judicial review to provide a remedy for legal errors. In light of this, the committee noted that it expects a 'sound justification' for the use of a no-invalidity clause to be provided in the explanatory materials to a bill.
2.44
Given the EM to the bill contained no justification for the no-invalidity clauses in either proposed subsection 65BH(3) or proposed subsection 12D(7), the Scrutiny committee requested the minister's advice as to why it was necessary and appropriate to include the no-invalidity clauses.
Minister's response
2.45
In response, the minister advised that:
In regard to proposed subsection 65BH(3): the no-invalidity clause is necessary and appropriate as it protects the rights of, and provides business certainty for, entities transacting with the NTAIC.
In regard to proposed subsection 12D(7): the no-invalidity clause will facilitate arrangements by giving certainty to proponents entering into arrangements with a Land Council. The minister advised that this was considered important to ensure the integrity and certainty of the agreement where compliance with proposed subsection 12D(4) may be called into question at a later time.
Scrutiny committee finding
2.46
The Scrutiny committee acknowledged this advice but reiterated its scrutiny concerns. It advised that it generally did not accept 'a desire for certainty' as a sufficient justification for the inclusion of no-invalidity clauses.
2.47
As a result, the Scrutiny committee:
requested an addendum to the EM containing the key information provided by the minister be tabled in the Parliament as soon as practicable; and
drew its concerns to the attention of senators, noting that it left it to the Senate as a whole to determine the appropriateness of including the
no-invalidity clauses.
Significant matters in delegated legislation (Schedule 1)
2.48
Item 6 of Schedule 1 to the bill seeks to insert Part VIA in relation to the NTAIC into the Land Rights Act.
2.49
A number of these provisions leave significant elements of the operation of the NTAIC and its decision-making processes to the NTAIC rules (the rules):
proposed subsection 65BH(2) provides that the rules may increase the limit on the value of investments that the NTAIC may make without the written agreement of the minister;
proposed subsection 65BI(1) provides that the rules may prescribe limits or conditions on the making of loans by the NTAIC;
proposed subsection 65BJ(2) provides that the rules may prescribe the circumstances in which the NTAIC may borrow money and limits or conditions on the borrowing of such money; and
proposed subsection 65BK(3) provides that the rules may prescribe requirements relating to the granting of guarantees by the NTAIC.
Concerns
2.50
The Scrutiny committee noted that it consistently drew attention to framework provisions which contained only the broad principles of a legislative scheme and relied heavily on delegated legislation to determine the scope and operation of a scheme. It explained that this was because such an approach 'considerably limits' the ability of Parliament to have appropriate oversight over new legislative schemes.
2.51
It put forward a view that significant matters (such as key details regarding the operation of the NTAIC) should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. It noted that the EM did not contain a justification for the approach.
2.52
Additionally, it observed that a legislative instrument made by the executive is not subject to the full range of parliamentary scrutiny inherent in bringing proposed changes in the form of an amending bill.
2.53
In light of this, the Scrutiny committee requested the minister's detailed advice as to:
why it was considered necessary and appropriate to leave key details regarding the operation of the NTAIC to delegated legislation; and
whether the bill could be amended to include at least high-level guidance regarding these matters on the face of the primary legislation.
Minister's response
2.54
In response, the minister advised:
It is necessary and appropriate that these matters be prescribed by rules so that they can be adapted when necessary, for example, in addressing changes to the NTAI Corporation's risk profile, asset base, capital structure and organisational capability of the NTAI Corporation as it evolves. This flexibility will enable any risks associated with the NTAI Corporation's performance of its investment related functions to be addressed, adapted and limited when appropriate. Doing so by legislative instrument also allows changes to be quickly adopted to respond to urgent circumstances. As such, rules made by legislative instrument is an appropriate mechanism to respond to evolving commercial requirements without further amendments to the Bill.
Scrutiny committee finding
2.55
The Scrutiny committee was not satisfied that the minister's response provided a sufficient justification for leaving a number of significant matters to delegated legislation. It noted that it generally did not accept a 'desire of administrative flexibility' to be sufficient in such circumstances.
drew the matter to the attention of senators, noting that it left it to the Senate as a whole to determine the appropriateness of leaving key details regarding the operation of the NTAIC to delegated legislation; and
drew the matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.
Instruments not subject to parliamentary disallowance
2.57
Proposed section 65C seeks to provide that the NTAIC Board must develop a strategic investment plan to set out the NTAIC's priorities and principal objectives relating to payments and financial assistance to or for Aboriginal people in the NT. Any strategic investment plan must be tabled in both Houses of the Parliament and published online, and consultation with relevant stakeholders must occur. However, the strategic investment plan is not specified to be a legislative instrument.
Concerns
2.58
The Scrutiny committee noted that any strategic investment plan would not be subject to the tabling, disallowance or sunsetting requirements that apply to legislative instruments. Given the lack of parliamentary scrutiny of
non-legislative instruments, it noted that it expected the EM to include a justification for why a strategic investment plan was not considered to be legislative in character.
2.59
It requested the minister's 'more detailed' advice as to:
why a strategic investment plan made under proposed section 65C was not a legislative instrument; and
whether the bill could be amended to provide that a strategic investment plan is a legislative instrument to ensure that it is subject to appropriate parliamentary oversight.
Minister's response
2.60
In response, the minister advised that a strategic investment plan is an 'administrative document' setting out the NTAIC's priorities and principal objectives in relation to performing its functions, developed in consultation with Aboriginal people and organisations in the NT.
2.61
He also advised that a strategic investment plan:
…is not determining the law or altering its content, does not affect rights or interests and is clearly administrative in nature, acting to guide how the NTAI Corporation exercises its functions and powers in particular circumstances.
Scrutiny committee finding
2.62
The Scrutiny committee acknowledged the minister's advice, but concluded that it remained unclear why the matters that may be included in the strategic investment plan are purely administrative in nature. It explained:
The committee notes, for example, that proposed subsection 65C(5) provides that the rules may prescribe matters that must be included in a strategic investment plan. It appears that these additional matters may determine or alter the content of the law.
In any event, from a scrutiny perspective, the committee considers that, given the significant nature of the investment plan, it would be appropriate to allow for additional parliamentary scrutiny and oversight of the plan.
2.64
As a result, the Scrutiny committee:
requested that an addendum to the EM containing the key information provided by the minister be tabled in the Parliament as soon as practicable; and
drew the matter to the attention of senators, noting that it left it to the Senate as a whole to determine the appropriateness of providing that a strategic investment plan made under proposed section 65C is not a legislative instrument and therefore not subject to parliamentary scrutiny beyond tabling in the Parliament.
Tabling of documents in Parliament
2.65
Item 19 of Schedule 1 to the bill provides that the minister may, during the three-year period starting on the NTAIC commencement day, request the NTAIC Board prepare a progress report in relation to a strategic investment plan. Subitem 19(4) provides that the minister 'may cause' any progress report to be published on the internet. There is no requirement that any progress report be tabled in both Houses of Parliament.
Concerns
2.66
The Scrutiny committee raised concern that the bill did not require a progress report to be tabled or published online. It considered that it was unclear why these requirements were not mandatory, and noted that the EM did not contain any appropriate justifications for the omission.
2.67
Additionally, it noted that proposed subsection 65C(8) provides that the strategic investment plan itself is required to be tabled in both Houses of the Parliament and published online.
2.68
The Scrutiny committee commented:
The committee's consistent scrutiny view is that tabling documents in Parliament is important to parliamentary scrutiny, as it alerts parliamentarians to the existence of documents and provides opportunities for debate that are not available where documents are not made public or are only published online.
2.69
Accordingly, it requested the minister's advice as to whether the bill could be amended to provide that:
the minister must arrange for a copy of any progress report on the strategic investment plan to be tabled in both Houses of the Parliament; and
the minister must publish any progress report on the strategic investment plan on the internet.
Minister's response
2.70
In response, the minister advised that the progress reports under item 19 of Schedule 1 to the bill are an 'additional transitional measure' that can be invoked at the discretion of the minister to provide supplementary information to government during the first three years of the NTAIC's operation. He advised that the 'transitional reports' were likely to be 'operational in nature' and followed by published and tabled strategic investment plant.
2.71
Additionally, the minister stated:
A requirement to publish and table progress reports may not be appropriate if the reports contain commercially sensitive material or other sensitive information. This creates a need for discretion to publish in order to protect sensitive commercial information, particularly where third parties may be involved.
Scrutiny committee finding
2.72
The Scrutiny committee was not satisfied with the response and reiterated its view that tabling documents is important to parliamentary scrutiny. It emphasised that it remained unclear why progress reports on the strategic investment plan cannot be tabled. It further observed that if it was mandatory to publish any progress report, amendments could be included to allow for the removal of any 'genuinely sensitive' material.
2.73
As a result, the Scrutiny committee:
requested that an addendum to the EM containing the key information provided by the minister be tabled in the Parliament as soon as practicable; and
drew the matter to the attention of senators, noting that it left it to the Senate as a whole to determine the appropriateness of not providing that a copy of any progress report on the strategic investment plan must be tabled in both Houses of the Parliament and not requiring the minister to publish a copy of any progress report online.
Significant matters in delegated legislation (Schedule 3)
2.74
Item 4 of Schedule 3 to the bill seeks to insert proposed section 3AA into the Land Rights Act to set out the approval process for bodies to become approved entities to hold a township lease. Proposed paragraph 3AA(9)(a) provides that the minister may, by legislative instrument, determine the conditions that the minister must be satisfied of for the approval of an Aboriginal and Torres Strait Islander corporation as an approved entity under proposed subsection 3AA(2). Proposed paragraph 3AA(9)(c) provides that the minister may, by legislative instrument, determine the matters to which the minister must or may have regard to in deciding whether to approve a body as an approved entity under proposed subsection 3AA(6).
Concerns
2.75
The Scrutiny committee put forward its view that significant matters, such as key details regarding the process for when a body will be an approved entity to hold a township lease, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. It observed that the EM did not contain such a justification.
2.76
In raising its concerns, the Scrutiny committee highlighted that a legislative instrument, made by the executive, is not subject to the full range of parliamentary scrutiny inherent in bringing proposed changes in the form of an amending bill.
2.77
As a result, it requested the minister's 'detailed advice' as to:
why it was considered necessary and appropriate to leave key details regarding the process for when a body will be an approved entity to hold a township lease to delegated legislation; and
whether the bill could be amended to include at least high-level guidance regarding the matters on the face of the primary legislation.
Minister's response
2.78
In response to the committee's requests, the minister drew attention to the growing interest in 'community-controlled' township leasing and explained that there was a need to standardise and clarify the processes around, and operation of, community township entities in the Land Rights Act.
It is necessary and appropriate to provide sufficient flexibility to determine, by legislative instrument, additional conditions, information and matters that must or may be taken into account in the nomination and approval processes for Aboriginal and Torres Strait Islander corporations as approved entities. It is not possible to predict all of the conditions, information and matters that will need to be the subject of ministerial determination in the future. This flexibility is a prudent mechanism that will ensure that the processes mature over time as more community entity township leases are granted.
Scrutiny committee finding
2.80
The Scrutiny committee acknowledged the minister's advice but stated that it did not generally accept a 'desire for administrative flexibility' as sufficient justification for leaving significant matters to delegated legislation. It observed that despite the minister's response it remained unclear why 'at least high-level guidance' could not be included in primary legislation in relation to the matters.
requested that an addendum to the EM containing the key information provided by the minister be tabled in the Parliament as soon as practicable;
drew the matter to the attention of senators , noting that it left it to the Senate as a whole to determine the appropriateness of leaving key details regarding the process of when a body will be an approved entity to hold a township lease to delegated legislation; and
drew the matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.