NATIVE TITLE AND THE PETROLEUM INDUSTRY: RECENT DEVELOPMENTS, OPTIONS, RISKS AND STRATEGIC CHOICES

Abstract

The Native Title Act 1993 (NTA) introduces a new dimension to Australia's land tenure systems; new property rights are established for native title parties via the creation of a 'right to negotiate' (RTN) with respect to future acts on land where native title might be determined. There is growing recognition that, legal uncertainties about the potential co-existence of native title on pastoral leases aside, there are elements of the NTA that are resulting in sub-optimal outcomes for the petroleum industry. Within a Coasian analytical framework it is demonstrated that owing to unclear property rights, transactions costs for negotiating exploration and production with native title parties are high. Recognising this, the Commonwealth government has proposed a package of amendments that attempt to address industry concerns while balancing these against indigenous interests. These recommendations include a once-only RTN, a higher threshold for registration of claims, automatic renewal of existing production leases and mandatory statutory functions for Native Title Representative Bodies (NTRBs) that will require them to resolve competing native title claims and to sign-off agreements with resource developers. Noting that strategic behaviour by industry, indigenous parties and especially State governments have hampered effective operations of the NTA, the paper ends by considering the choices available to the petroleum industry to ensure that statutory amendments are in its best interests.