Issue Brief 24 / 1997

Recent agreements

Aboriginal communities are increasingly involved in negotiating mineral development agreements with mining companies and relevant State agencies. Analysis of five recent agreements suggested that agreements are varied in three major ways:

• the parties they involve (various combinations of Aboriginal communities and governments and mining companies);
• the range and type of provisions they include; and
• the relative importance of mining companies and governments in providing benefits to Aboriginal communities.

There is a clear distinction between agreements negotiated in relation to Aboriginal land within a legislative framework which requires developers to seek Aboriginal consent to mining, and those which are not.

Legislative framework

Where agreements must be negotiated within a legislative framework, they tend to incorporate substantial benefits for Aboriginal communities, especially in the key areas of royalty and other forms of economic benefit and of control over environmental and heritage issues. Most, if not all, of those benefits are funded by the developer, not by government. Examples of these are:

• the Northern Land Council's exploration licence agreements made under the Aboriginal Land Rights (Northern Territory) Act 1976;
• the Cape Flattery-Hope Vale Agreement; and
• the Mapoon-Skardon River Agreement.

Evaluating agreements

There are three criteria for evaluating mineral development agreements involving Aboriginal people.

• The extent to which an agreement reflects an effective mobilisation of bargaining power available to Aboriginal people. Agreements which confer limited benefits might still be favourable if Aboriginal bargaining positions were weak, such as the Placer/Kalkadoon Tribal Council Agreement and the Mt Todd Agreement.
• The extent to which an agreement meets community aspirations.
• The extent to which agreements establish precedents which influence the broader negotiating environment and so the capacity of other Indigenous groups to subsequently achieve their objectives.

How can Indigenous interests achieve benefits from mining negotiations?

Two factors which can determine the extent to which Indigenous Australians can achieve benefits from such negotiations, or can utilise them to avoid outcomes they regard as undesirable are the bargaining power available to communities, and the ability of communities to mobilise such leverage and use any opportunities to enhance that power.

• Use of bargaining power

Maximisation and effective use of bargaining power does not occur automatically. Aboriginal communities and organisations need to develop appropriate processes and structures to make the most of negotiations. The use of bargaining power should cover several issues, outlined below.

• Establishing community goals

To establish community goals in relation to negotiations it is necessary to seek community views on relevant issues, as well as disseminate information on impacts and options. This should continue throughout the negotiation process.

• Ensuring access to information

It is crucial that information be acquired about: community values; the historical or likely impact of a mining operation; management of significant sites; mine rehabilitation; and details of project economics such as commodity prices, revenue, costs and profits, the size and structure of the workforce, anticipated environmental impacts, and the corporate structure and strategies. In the negotiations over the Cape Flattery-Hope Vale Agreement, for example, it was extremely important to obtain information about the structure of the international corporation as a whole, not just the subsidiary responsible for the specific project.

• Access to resources

It is difficult to accurately estimate the costs involved in any set of negotiations. There is a fundamental inequality between mining companies and governments on the one hand, and Indigenous communities on the other, in relation to resources available for negotiations. Funding and time constraints, especially during project development, can create severe problems in accumulating information and undertaking consultations with Aboriginal landowners.

• Institutional structure

Aboriginal communities need an effective institutional framework which allows them to pursue negotiations. This permits accumulation of knowledge and expertise, ensures that the lessons learned from one set of negotiations are addressed and applied in the next, and facilitates monitoring agreements once they are concluded.

• Relationships between 'technical' staff and community leaders

The development of effective communication and good working relationships between technical staff (negotiators, legal and economic advisers) and political decision-makers is crucial.

• Implementation

It is necessary to ensure that agreements are carried out, requiring continued attention over time. One approach is to insert provisions regarding monitoring of implementation in the mineral development agreement. For example, the Northern Land Council now seeks an annual administration fee as part of the conditions for granting a mining lease on Aboriginal land and seeks provisions regarding access to the project site and information, to assist effective monitoring.

Conclusion

Negotiation of mineral development agreements can yield significant benefits to Indigenous communities, but if positive outcomes are to occur they must develop appropriate processes and structures to identify community aspirations and concerns, and obtain information and resources. They must also make sure that the benefits included in agreements do actually happen. Communities will need the support of governments to effectively address these issues.

This issue brief summarised CAEPR Discussion Papers No. 85, 'Mineral development agreements negotiated by Aboriginal communities in the 1990s', and No. 86, 'Negotiations between mining companies and Aboriginal communities: process and structure' by C. O¹Faircheallaigh in 1995. It was prepared by Hilary Bek and Lynette Liddle.