Much of the concern about potential compensation claims that will flow from this week’s native title ruling in the High Court is overblown.
Yes, the judges have opened the way for claims to be lodged against the federal government in relation to past actions that extinguished native title without payment of compensation.
And if all potential claims succeed, it’s logical to expect that tens of millions of dollars would be transferred from federal taxpayers to Indigenous claimants.
But here’s the harsh reality that seems to have been lost on those who are either celebrating this ruling as another Mabo or are now terrified about the cost to the federal budget.
One of the most lucrative categories of potential claims – those concerning mineral rights in the Northern Territory – seem set to fail at the first hurdle.
One of the High Court judges has identified the vulnerability of such claims.
In order to succeed, claimants in the Territory would need to prove they actually had native title rights to minerals which the federal government had arranged for others to mine.
That could be impossible because native title rights to minerals in the NT appear to have been legally extinguished before the federal government took control of the territory from South Australia.
Much of the media’s attention this week has centred on the High Court’s leading judgment which was written jointly by Chief Justice Stephen Gageler and Justices Jacqueline Gleeson, Jayne Jagot and Robert Beech-Jones.
Had more attention been given to the separate judgment of Justice Simon Steward, it would have been clear that compensation claims concerning the extinguishment of native title over mineral deposits in the territory could be fatally flawed.
The case before the High Court arose from a claim by the Gumatj clan in Arnhem Land who want compensation because the Commonwealth in 1968 allowed bauxite mining on land they said was covered by their non-exclusive native title.
Those rights, according to the Gumatj clan, included rights to the minerals under the ground.
But Steward’s judgment says native title rights to those minerals had already been extinguished before the Territory was carved off from SA in 1911 and surrendered to the Commonwealth, which ran it until self-government in 1978.
That has profound implications.
If Steward is right the federal government’s decision in 1968 to allow bauxite mining in Arnhem Land was not a breach of the just terms guarantee of compensation in the Constitution because there was no native title to those minerals.
And if there was no native title to minerals, there was no property to be acquired and no role for the constitutional obligation to pay compensation in just terms.
It would mean the Commonwealth had not infringed the native title rights of the Gumatj people because those rights no longer existed. They had been extinguished by SA at least 65 years earlier.
Steward’s argument is compelling. He cites several pre-1911 statutes from SA including that state’s Northern Territory Mining Act of 1903 which he describes as a comprehensive exercise of sovereignty over the natural resources of the NT.
“That assertion by the crown was inconsistent with any enduring native title rights to minerals,” he writes.
In his view “ … the operation of the NT Mining Act did extinguish any native title right to take and use minerals in the claim area”.
“This is a case where the NT Mining Act went further than mere regulation,” Steward writes.” It provided for the giving of title to third parties in the very thing – namely minerals – which is the subject matter of the particular native title right in question.
“And in order for this to be possible, the crown had to have asserted lawful dominion or sovereignty over all minerals on crown lands in the Northern Territory.
“Any competing native title right would have been necessarily inconsistent with such a regime.”
The critical point to keep in mind is that the constitutional obligation to pay just terms compensation when acquiring property only applies to the Commonwealth, not the states.
SA could allocate the Territory’s mineral rights in 1903 in a way that extinguished inconsistent native title rights – and it could do so without incurring the sort of constitutional liability that would arise if such an action had been undertaken by the Commonwealth.
Now that the High Court has resolved the legal and constitutional questions it was asked to address, this case will return to the Federal Court.
When that happens, Steward’s analysis could be devastating for the fate of the Gumatj people’s claim.
It could mean that in 1968, when the federal government allowed bauxite mining on the Gove Peninsula, it was not extinguishing native title rights because any native title rights to minerals –- even non-exclusive rights – had been extinguished 65 years earlier when the territory was part of SA.
As the judge writes: “The regime for the management of minerals on crown lands created by the NT Mining Act did not permit or countenance non-exclusive ownership of minerals.”
The impact of Steward’s analysis could extend well beyond the NT.
If he is right about those early SA mining laws, there is a possibility that other states might have similar statutes tucked away in their archives.
So before the federal government starts writing cheques to native title claimants it might be wise to examine the archives of the states to see if other old mining laws have also had the effect of extinguishing native title rights to mineral resources.
