The Bills Digest at a glance

What the Bill does

The Indigenous Land Corporation (ILC) was established to assist Aboriginal and Torres Strait Islander people to acquire and manage land. The Bill extends the remit of the ILC’s functions to enable it to include water-related functions. Consistent with these broader functions, the ILC is renamed as the Indigenous Land and Sea Corporation (ILSC).

The amendments in the Bill recognise the evolution of native title law to include recognition of Aboriginal and Torres Strait Islander peoples’ traditional rights—not only to land—but also to water and sea.

The Government considers that the Bill is compatible with human rights because it indirectly advances the right to self-determination and the right to enjoy and benefit from culture.

Support for the Bill

The Bill is supported by Labor, the Greens, the ILC and a large majority of Indigenous stakeholders. An inquiry into the Bill was conducted by the Senate Financial and Public Administration Legislation Committee which recommended that the Bill be passed subject to a suggested amendment to address what the Committee considered was a possible drafting error.

Key issues

Some provisions of the Bill may place some geographical and financial limitations on Aboriginal and Torres Strait Islander people’s purchase and use of water-related rights.

As the Bill expands the ILC’s remit without expanding its budget, it can be expected that the ILC will face increased competition between Indigenous stakeholder groups for its funding and management assistance, which may give rise to stakeholder dissatisfaction and calls for increased funding from government.

Context of the Bill

The Bill is part of a package of three Bills concerning the ILC which are currently before the House of Representatives. The other two Bills are:

• the Aboriginal and Torres Strait Islander Land and Sea Future Fund Bill 2018 (ATSI Land and Sea Future Fund Bill), which replaces the Aboriginal and Torres Strait Islander Land Account with the Aboriginal and Torres Strait Islander Land and Sea Future Fund as a dedicated fund, to be managed by the Future Fund Management Agency, for the making of annual and discretionary payments to the ILC and
• the Aboriginal and Torres Strait Islander Land and Sea Future Fund (Consequential Amendments) Bill 2018 (the Consequential Amendments Bill) which makes largely consequential, technical and transitional changes to other legislation.

These two Bills are discussed in a separate Bills Digest.

While the three Bills have been tabled as a package, they accomplish separate legislative and policy purposes, and the Bill discussed here does not depend upon the passage of the other two Bills to be effective.

Purpose of the Bill

The purpose of the Aboriginal and Torres Strait Islander Amendment (Indigenous Land Corporation) Bill 2018 (the Bill) is to amend the Aboriginal and Torres Strait Islander Act 2005 (the ATSI Act) to:

• give the Indigenous Land Corporation (ILC) functions in relation to water-related rights
• require the ILC to prepare a National Indigenous Land and Sea Strategy and Regional Indigenous Land and Sea Strategies
• align rules for dealings in water-related rights granted by the ILC, or acquired with ILC assistance, with rules for dealings in land granted by, or acquired with, ILC assistance
• include experience in water management as a qualifying criteria for membership of the ILC Board and
• amend the ATSI Act and the Remuneration Tribunal Act 1973 to rename the ILC as the Indigenous Land and Sea Corporation (ILSC).[1]

Context of the Bill

The Bill is part of a package of three Bills concerning the ILC which are currently before the House of Representatives. The other two Bills are:

• the Aboriginal and Torres Strait Islander Land and Sea Future Fund Bill 2018 (ATSI Land and Sea Future Fund Bill), replaces the Aboriginal and Torres Strait Islander Land Account with the Aboriginal and Torres Strait Islander Land and Sea Future Fund as a dedicated fund, to be managed by the Future Fund Management Agency, for the making of annual and discretionary payments to the ILC and
• the Aboriginal and Torres Strait Islander Land and Sea Future Fund (Consequential Amendments) Bill 2018 (Consequential Amendments Bill), Schedule 4 of which contains amendments to the ATSI Land and Sea Future Fund Bill reflecting the ILC’s change of name to the Indigenous Land and Sea Corporation.

These two Bills are discussed in a separate Bills Digest.

While the three Bills have been tabled as a package, they accomplish separate legislative and policy purposes, and the Bill discussed here does not depend upon the passage of the other two Bills to be effective.

Structure of the Bill

The Bill contains two Schedules.

Schedule 1 of the Bill has 99 Items:

Items 1­–6 insert relevant definitions of ‘indigenous waters’, ‘internal waters of Australia’ (Schedule 1, item 1), ‘water-related rights’ (Schedule 1, item 5) and other, more generic, terms into the ATSI Act.

Items 7–44 updates all sections of Part 4A of the ATSI Act (which relates to the ILC and Aboriginal and Torres Strait Islander Land Account) relating to the ILC’s land acquisition, loans and grants, management, divestment, et cetera, functions to also empower the ILC to acquire, make loans and grants for, manage and divest water-related rights (except section 191E(1)(b), which currently grants the ILC the power to carry out land management activities on ILC land, is left partly unamended in a possible drafting error).

Items 45–72 change the existing requirements on the ILC to prepare National and regional land strategies to require the ILSC to prepare National and regional ‘land and sea’ strategies (‘land and sea’ is understood to include fresh water). Item 68 removes an obsolete requirement that the ILC consult the former Aboriginal and Torres Strait Islander Commission (ATSIC) Regional Councils (abolished in 2005 when ATSIC was abolished) when formulating regional strategies, instead giving the ILSC Board the power to consult any persons or bodies the ILSC Board considers appropriate.

Items 73–98 update Division 4 of Part 4A of the ATSI Act, which concerns disposal of land obtained with ILC assistance, to cover disposal of water-related rights obtained with ILC assistance.

Item 99 delays the requirement on the ILC to produce national and regional land and sea strategies by six months from commencement, in order to give the ILC time to prepare these revised strategies.

Schedule 2 of the Bill has two Parts:

Part 1, items 1–106, renames the ILC as the Indigenous Land and Sea Corporation (ILSC) and makes appropriate amendments to the ATSI Act and the Remuneration Tribunal Act. This renaming does not change the corporate continuity or identity of the corporation.

Part 2, items 107–110, amends sections of the ATSI Act which concern the Aboriginal and Torres Strait Islander Land Account to refer to the ILSC instead of the ILC. As the Aboriginal and Torres Strait Islander Land Account is being repealed by the Consequential Amendments Bill, to be replaced by a new Aboriginal and Torres Strait Islander Land and Sea Future Fund under the ATSI Land and Sea Future Fund Bill (currently before Parliament), this part of the Bill only takes effect if the Consequential Amendments Bill has not commenced at the time the Bill commences, and consequently the Aboriginal and Torres Strait Islander Land Account continues to exist in its current form.

Background

Development of land and water rights

The Land Rights Act

In 1974 the Woodward Royal Commission recommended that sea waters up to two kilometres beyond the boundary of an Aboriginal land grant should be deemed part of that land. The Aboriginal Land Rights (Northern Territory) Act 1976 (the Land Rights Act) enacted by the Fraser Government did not include this offshore ‘buffer zone’ or other water rights. Instead, the Land Rights Act gave the Northern Territory Legislative Assembly the power to make certain laws regarding access, fishing, wildlife and sacred sites.[2] A significant proportion of still unfinalised Land Rights claims under the Land Rights Act concern claims over the beds and banks of rivers,
inter-tidal zones, and other such areas which were left in an ambiguous state as a result of the Land Rights Act not explicitly providing for waters and lands beneath waters.[3]

Response to the Mabo decision

The Keating government responded to the High Court’s decision in Mabo v Queensland [No. 2] (1992)[4] in a number of ways:

• first it enacted the Native Title Act 1993
• second it established the ILC and the associated Land Fund (subsequently the Land Account) to acknowledge that many dispossessed Indigenous people would be unable to regain control of land under the Native Title Act (either because of historical extinguishment or disconnection from traditional lands). The creation of the ILC was intended to complement native title laws and assist dispossessed Aboriginal and Torres Strait Islander people to acquire and manage land[5] and
• the third part was intended to be a social justice package which, apart from the creation of the office of the Aboriginal and Torres Strait Islander Social Justice Commissioner, was not legislated before the Keating Government lost office.

Developments in case law and state/territory law

Developments in native title case law following the passage of the Native Title Act and the establishment of the ILC clarified that the common law was capable of recognising native title rights with respect to the use of water, and the taking of resources from waters, for any purpose including commercial purposes.[6]

Parallel developments recognising Indigenous rights over waters include the recognition of rights over inter-tidal zones and fisheries under the Land Rights Act arising from decisions such as Northern Territory v Arnhem Land Aboriginal Land Trust (2008) (widely known as the Blue Mud Bay case).[7] Subsequently, in 2017, the Minister for Indigenous Affairs Nigel Scullion announced a grant of $7.5 million to the Northern Land Council to assist with finalising unresolved claims over intertidal areas and river beds under the Land Rights Act in the post Blue Mud Bay era, and a review of relevant issues by the Aboriginal Land Commissioner.[8] Indigenous water rights have increasingly been incorporated into other state and territory legislation and water policy, although not without contestation.[9]

Support for UNDRIP

The UN Declaration on the Rights of Indigenous Peoples (UNDRIP), adopted by the General Assembly of the United National in 2007 also recognised indigenous rights to water. Australia has supported UNDRIP since 2009.

These developments in the law and public policy acknowledge the relationships of Aboriginal and Torres Strait Islander peoples to waterscapes and their view that land and water are inseparable. As Collings and Falk explain:

In Aboriginal culture in Australia, there is no clinical distinction between land and water, either of water that flows over the land, rests upon it or flows beneath it. Land and Water interface as equal components of country.[10]

This Bill and the evolution of native title law it recognises can be seen as a return to the more expansive Whitlam-era concept of land rights which included water rights.

Consultation

From July to September 2017, the ILC consulted Aboriginal and Torres Strait Islander people across Australia about including freshwater and sea country in the ILC’s remit. A clear majority (81% of forum participants and 83% of submissions received) supported expanding the ILC’s functions to water.[11]

A few stakeholders expressed concerns that the ILC’s resources would be ‘overburdened’ attempting to support Indigenous groups to acquire water as well as land resources, and that the ILC would be departing from its original mandate or would be in competition with other groups by doing so.[12]

Committee consideration

Senate Finance and Public Administration Legislation Committee

The Bill was referred to the Senate Finance and Public Administration Legislation Committee (the Committee) on 28 March 2018 for inquiry and report by 8 May 2018.[13] The inquiry considered all three of the Bills in the legislative package.

The Committee noted strong support for this Bill from almost all submitters to the inquiry and in the consultations conducted by the ILC.[14] Whilst the Committee noted that ‘there were concerns around the management of the ILC and its resources’ it also noted that those concerns were ‘unrelated to the Bills’ before it.[15]

The Committee noted an issue raised by the ILC in their submission, being an omission from the Bill in relation to the current paragraph 191E(1)(b) of the ATSI Act, which enables the ILC to carry out land management activities on land held by it. The Bill currently does not include an amendment to this provision which explicitly references water. Accordingly, the Committee recommended that the Bill be amended to ensure that the ATSI Act gives the ILC ‘management of water or waters for which the Indigenous Land Corporation has water-related rights’.[16] Subject to this recommendation, the Committee recommended that the Bill be passed.[17]

Senator Siewert, of the Australian Greens (the Greens), concurred with these recommendations.[18]

Australian Labor Party (Labor) Senators on the Committee noted the ‘complex overlapping jurisdictions and regulatory schemes governing water’, and recommended the Bill should make clear that the ILC has the right to hold water licenses in all jurisdictions, regardless of any potential limitations placed on licensing by state or territory governments.[19]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills considered the Bill in Scrutiny Digest 5 of 2018, and made no comment.[20]

Policy position of non-government parties/independents

Labor and Greens Senators on the Committee made additional comments in relation to the Bill which are summarised above. At the time of writing, no other parties or independents had expressed positions, and the Bill had not yet been debated in the House of Representatives.

Position of major interest groups

The ILC and almost all Indigenous stakeholders who made submissions to the Committee—in particular the Torres Strait Regional Authority— supported the extension of the ILC’s powers to water.[21]

The National Congress of Australia’s First Peoples’ submission to the Committee expressed doubts that the ILC would be competent to manage water-related rights given its past performance in managing land and property, and suggested that a different specialist Indigenous water-management agency might be better placed to do so.[22]

Extension of the ILC’s powers to water was almost unanimously (more than 80%) supported by Indigenous stakeholders in the community consultations carried out by the ILC.

Financial implications

The Government has stated that there are no financial implications arising from this Bill.[23] However, the extension of the ILC’s remit without any expansion in its budget may give rise to ILC or stakeholder requests for additional funding in future. This is discussed in ‘Key Issues and provisions’ below.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[24]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights examined the Bill in its Report 4 of 2018 and considered that it did not raise human rights concerns.[25]

Key issues and provisions

Key Issue – Committee recommendation on ILC management functions

Section 191C of the ATSI Act sets out the functions of the ILC. Essentially these are land acquisition functions and land management functions. The Bill amends these terms so that they become general acquisition functions and management functions.[26] The description of acquisition functions in section 191D of the ATSI Act is amended to make clear that the acquisition functions include water-related rights.[27]

Similarly the description of the management functions in section 191E of the ATSI Act is amended to make clear that the management functions include to carry on, or arrange for the carrying on of, management activities in relation to indigenous waters.[28] Further item 27 of Schedule 1 to the Bill repeals and replaces paragraphs 191E(1)(d)–(f) so that the management functions of the ILC include:

• to make grants of money for the carrying on of management activities in relation to indigenous-held land and indigenous waters
• to make loans of money (whether secured or unsecured) for the purpose of carrying on management activities in relation to indigenous-held land and indigenous waters and
• to guarantee loans made for the purpose of carrying on management activities in relation to indigenous-held land and indigenous waters.

What constitutes management activities is set out in detail in proposed subsection 191E(5) inserted by item 37 of the Schedule 1 to the Bill. The activities include but are not limited to:

• carrying on a business that involves the use, care or improvement of land, water or waters[29]
• providing certain services (whether on a commercial basis or otherwise) in connection with a business that involves the use, care or improvement of land, water or waters[30]
• providing training (whether on a commercial basis or otherwise) in the skills and knowledge relevant to the carrying on of a business that involves the use, care or improvement of land, water or waters or the managed use, care or improvement of land, water or waters.[31]

As stated above, the Committee noted that the Bill does not amend subsection 191E(1)(b) of the ATSI Act to explicitly enable the ILC to carry out management activities on indigenous waters for which it holds a water-related right. Paragraph 191E(1)(b) currently reads ‘to carry on, or arrange for the carrying on of, land management activities in relation to land held by the Indigenous Land Corporation;’. Item 25 of the Bill merely alters this to read ‘to carry on, or arrange for the carrying on of, management activities in relation to land held by the Indigenous Land Corporation;’ which could be read as not applying to water.

However any concerns may be allayed by item 26 which inserts proposed subsection 191(E)(ca) to allow the ILC ‘to carry on, or arrange for the carrying on of, management activities in relation to indigenous waters’.

In addition, the power to conduct water management activities appears to be encompassed by the drafting in item 37 of proposed subsection 191E(5) which, as stated above, sets out in detail the activities which are management activities.

Key issue—Labor comment on potential limitations

Labor senators on the Committee recommended that the Bill should ‘make clear that the ILC has the right to hold water licenses in all jurisdictions, regardless of any potential limitations placed on licensing by state or territory governments’. This may have reflected concern expressed in some of the ILC’s community consultations that existing state and territory legislation could impede Indigenous people’s realisation of water interests.[32]

It is not clear what potential limitations the Labor senators may have had in mind, as section 109 of the Constitution provides that a Commonwealth law prevails over a state or territory law to the extent of any inconsistency, and any attempt by states or territories to specifically prevent the ILSC (as an Indigenous body) from purchasing or otherwise legally acquiring water licences or property in general would probably fall foul of the Racial Discrimination Act 1975 (as established by the High Court in the Koowarta v Bjelke-Petersen case).[33]

Key issue—restriction to Australian waters

Section 191B of the ATSI Act provides that the first purpose of the ILC is to assist Aboriginal persons and Torres Strait Islanders to acquire land. Item 7 of Schedule 1 to the Bill amends this purpose (paragraph 191B(a)) to include water-related rights. That term is defined in item 6 (which inserts proposed section 4C(1) into the ATSI Act) as any legal or equitable right or interest in, or in relation to, water or waters (including the internal waters of Australia) within the outer limits of the exclusive economic zone of Australia.[34]

The terms of proposed subsection 4C(1) are in keeping with the purpose of the ILSC, to enable Aboriginal and Torres Strait Islander people to purchase Australian land and water-related rights to compensate for their previous dispossession of lands and waters. However, this limitation to Australian waters might restrict the operation of the ILSC in the Torres Strait and Northern Australia. For example, if a Torres Strait Islander corporation were to seek to obtain water-related rights (for example, fishing rights) which might be made available for purchase by the Papua New Guinean or Indonesian governments in waters in the exclusive economic zones of these immediately neighbouring states, the ILSC would be unable to assist them to do so, even though those waters might form part of their traditional fishing grounds.[35]

Key issue—encumbered water assets

Section 191S of the ATSI Act currently provides that a body corporate which has acquired land with the ILC’s direct or indirect assistance cannot dispose of or give a charge over the land without the ILC’s consent.[36] Items 74–78 of Schedule 1 to the Bill amend section 191S to also apply to water rights.

Since the passage of Prime Minister and Cabinet Legislation Amendment (2017 Measures No. 1) Act 2018 in February 2018, the Department of the Prime Minister and Cabinet and the ILC’s ‘sister body’ Indigenous Business Australia (IBA) have had the power to waive the requirement of consent to dispose of or give a charge over assets held by Indigenous body corporates. In contrast, the ILC can only waive this consent over lands in which it ‘inherited’ consent requirements from the former Aboriginal and Torres Strait Islander Commission (ATSIC), but not over lands that the ILC itself has assisted body corporates to acquire.[37]

The consent requirement is regarded by banks and other financial entities as an encumbrance that prevents them issuing loans against the land, and so limits the ability of the landholders to use the land as a security.[38] Similar limitations would presumably apply to any water rights obtained under the Bill. Thus holders of water rights gained with the ILSC’s assistance might find themselves unable to use those rights as a security, or, owing to the extra step of obtaining consent to each trade, might experience difficulties in trading them in water markets with frequent trades such as those in the Murray Darling basin.

Key issue—reference to ‘sea’ in the new name

Schedule 2 of the Bill renames the ILC as the Indigenous Land and Sea Corporation and makes consequent amendments to the ATSI Act and the Remuneration Tribunal Act. The ILC raised concerns about the possibility of 'uncertainty among stakeholders about the inclusion of
fresh-water country within the remit of the ILC' as the new name describes the organisation as the Indigenous Land and Sea Corporation. The ILC has proposed a preamble to the ATSI Land and Sea Future Fund Bill which would clarify this matter (as well as other matters specific to that Bill).[39] The proposal for a new preamble was not supported by the Government.

Key issue—increased pressure on ILSC resources

While approving the extension of the ILC’s remit to include water, a number of stakeholders in the ILC’s consultation process raised concerns that this would increase the competition for limited ILC funds and management resources between Aboriginal and Torres Strait Islander groups seeking ILC assistance, as the number of potentially purchasable assets and rights has expanded but the ILC’s annual budget has not. The ILC expressed the view that Aboriginal and Torres Strait Islander organisations would have to accept ‘competition’ for ILC funds as a reality.[40]

This increased competition for funds and for attention and assistance from ILSC management and staff may lead to increased stakeholder dissatisfaction with the ILSC’s performance, and/or stakeholder requests to increase the ILSC’s capital base and hence flow of funds through an increased appropriation, in future. In one sign of this potential dissatisfaction, a submission from the National Congress of Australia’s First Peoples to the Committee inquiry expressed doubts that the ILC could competently expand its activities to manage water-related rights given its past performance in managing land and property, and suggested that a different specialist Indigenous water-management agency might be better placed to do so.[41]

It might be argued that the reforms to the ILC’s Special Account proposed in the ATSI Land and Sea Future Fund Bill (which are discussed in detail in a separate Bills Digest) will address concerns about the ILC’s funding. However, while that Bill places the ILC’s special account capital base on a more financially sustainable footing, it does not increase the ILC’s annual funding; in fact, the abolition of mandatory additional payments means that, in the absence of discretionary payments (which are made at the discretion of relevant Ministers), the ILC’s annual funding will be limited to its base value of $45 million (in 2010 dollars) + a CPI-linked indexation factor in future.[42] In the short term, the demands on the ILC’s funds are likely to intensify rather than diminish.