CHAPTER 4
ILC Report
The ILC
4.1 The ILC is an independent statutory authority established under s.191A
of the ATSIC Act. Its role is to assist indigenous Australians to acquire
and manage land in a sustainable way to obtain economic, environmental,
social and cultural benefits pursuant to s.191B.
4.2 Funding for the operations of the ILC is provided from the Land Fund
pursuant to Division 10 of the ATSIC Act. Responsibility for reporting
on the Land Fund resides with ATSIC; this report has already considered
ATSIC's Land Fund reporting for 1996-97.
Statutory Reporting Requirements
4.3 The statutory requirements in relation to the ILC's annual report
are found in section 193K of the ATSIC Act, which applies the requirements
found in section 63H of the Audit Act 1901 to the ILC.
4.4 Pursuant to this legislation, the ILC is obliged to prepare and submit
to the Minister a report of its operations during the year together with
financial statements in respect of that year in the approved form. (At
p.21 the Committee's fifth report stated that the Minister's delegate
approved the form of the financial statements for the ILC on 8 June 1995.)
Pursuant to s.63H(2) of the Audit Act 1901, copies of the ILC report are
to be laid before each House of Parliament within fifteen sitting days
after the completion of the report.
4.5 Prior to submitting the annual report to the Minister, the financial
statements must be presented to the Auditor-General, who has a reporting
responsibility to the Minister pursuant to s.63H(2) of the Audit Act.
The ILC's financial statements were audited by the Australian National
Audit Office and an independent audit report was issued on 3 October 1997
(reproduced at pp.55, 56 of the ILC report).
Other Reporting Requirements
4.6 As stated in the Committee's fifth report (p.19), as a statutory
authority the ILC should also comply with the Guidelines for the Content,
Preparation and Presentation of Annual Reports by Statutory Authorities
tabled in the Senate on 11 November 1982. In summary, the guidelines require
that reports include the following information:
(i) enabling legislation;
(ii) responsible minister;
(iii) powers, functions and objects;
(iv) membership and staff;
(v) financial statements;
(vi) activities and reports;
(vii) operational problems; and
(viii) subsidiaries.
Compliance
Tabling
4.7 The report was presented to the Minister on 13 October 1997 and tabled
in the House of Representatives on 23 October 1997 and in the Senate on
28 October 1997. It accordingly satisfied the tabling requirements.
Enabling Legislation
4.8 The Committee is pleased to note that its suggestion about referencing
legislation in the ILC's first annual report (referred to at p.20 of the
Committee's fifth report) has again been followed for the ILC's 1996-97
annual report. At page 6 of its third report, the ILC complied with the
requirement to clearly state the legislation under which it operates.
Responsible Minister
4.9 The ILC complied with the guidelines in respect of this item at page
6 of its third report.
Powers, Functions and Objects
4.10 The ILC report (pp.6,7) details the core powers and functions of
the ILC. It lists the priorities required under the ATSIC Act in relation
to its land acquisition and land management functions. This discussion
is enhanced by references to the relevant sections of the ATSIC Act.
4.11 The Committee, in its eighth report (p.9), recommended that a more
complete treatment of the powers of the ILC be outlined under the Functions
and Powers section of the ILC report. In particular the Committee recommended
that it consider the specific constraints on the ILC's borrowing of capital
pursuant to Division 11 of Part 4A of the ATSIC Act. Notably, the ILC's
1996-97 report provides more information under the Functions and Powers
section (pp.6, 7) than previous reports.
Membership and Staff
4.12 At pages 50 to 53 of the annual report under consideration, the
ILC reported on membership and staff. The ILC is commended for including
a section on consultants and for including two useful charts on salary
range and staff structure (pp.51, 52). Important information detailing
the total amount spent on consultants, however, was not individually itemised
in the ILC's 1996-97 financial statements. The Committee recommends that
the Administration Expenses (as detailed in the ILC's annual report 1995-96
at page 42), be reproduced in future reports.
Financial Statements
4.13 The ILC received an unqualified audit opinion from the Australian
National Audit Office. It confirmed (pp.55, 56) that the financial statements
are in accordance with the Guidelines for Financial Statements of Commonwealth
Authorities.
Activities and Reports
4.14 It is stated in the third ILC report (pp.37, 38), and more substantively
in the National Indigenous Land Strategy 1996-2001 (pp.10-12), that the
particular challenges facing the ILC in its operations arise from dispossession
and the resultant complex tribal and land attachments formed. The ILC
has reported (p.8) that, pursuant to s.191D of the ATSIC Act, the land
acquisition functions include:
- purchasing land for the purpose of making land grants to Aboriginal
and Torres Strait Islander corporations;
- granting land so acquired to Aboriginal or Torres Strait Islander
corporations;
- granting money to Aboriginal or Torres Strait Islander corporations
to acquire land; and
- acting as guarantor for loans to Aboriginal or Torres Strait Islander
corporations so that they may acquire land.
4.15 The ILC's functions include the acquisition of land for indigenous
people who are unlikely to be recognised as native title holders or have
other legislative mechanisms for land acquisition.
4.16 The ILC has acknowledged that it faces a major problem in developing
a strategic approach to addressing land needs and land management problems,
due to the paucity of information and research in both areas. The 1996-97
annual report states (p.33) that:
While broad strategies have been developed at the regional (ie state)
level, the ILC recognises that if its land acquisition activities are
to reflect the greatest needs of indigenous peoples, strategies need to
be developed as a result of planning at a community, rather than state
or federal level. Considerable research effort has therefore been devoted
during the year to the development of the ILC Land Needs Planning Process
(LNPP).
4.17 The Land Needs Planning Process (LNPP) is essentially a land acquisition
framework which focuses on the development of strategies at a community
(or `sub-regional') level (p.33). The process brings indigenous regional
organisations (such as ATSIC Regional Councils, Native Title Representative
Bodies and other regional indigenous organisations) together with local
groups in order to establish their association with surrounding land and
subsequent land needs (including acquisition priorities).
4.18 A trial of the LNPP began in several regions towards the end of
1996-97 and will progressively be refined and applied in all regions over
the next two years.
4.19 The report notes (pp.39-49) that ILC officers consulted broadly
with indigenous organisations, Commonwealth agencies, State Government
agencies, and the private sector. A comprehensive list of community consultations
is reported at pages 82 to 89.
4.20 The ILC Board approved the purchase of 45 properties to 30 June
1997, in accordance with the principles set out in the National Strategy.
At the end of the reporting period the ILC had acquired 15 properties
representing a number of different land tenures, ranging from pastoral
leaseholds to freehold title. The title to four properties was divested
to bodies representing the traditional owners of the acquired land (p.18).
4.21 The ILC, in accordance with its own policy, purchased all land at
or near the certified property valuation. In the majority of cases properties
were purchased at a price below the valuation.
4.22 In accordance with recommendations made by the Committee in its
eighth report, the ILC has provided a more detailed picture of its land
purchases for 1996-97. A useful map (p.18) details ILC land purchases
for 1996-97 and a chart (p.19) shows the breakdown between properties
approved for purchase, settled properties and divested properties for
the period 1996-97. The ILC report also provides a more detailed description
of the stage negotiations have reached, in relation to approved purchases
yet to be settled.
4.23 The annual report (p.21) indicates the land management functions
of the ILC. In its eighth report (para 3.21), the Committee recommended
that a comprehensive account of land actually under management should
appear in the ILC's next annual report. It had been suggested at a meeting
with the ILC on 24 March 1997 (Evidence, p.NT3,4) that the annual report
for 1996-97 should contain a register of properties under ILC management.
This has not occurred. The Committee is concerned that its recommendation
concerning reporting about land management has not been followed by the
ILC in its 1996-97 annual report.
Operational Challenges
4.24 From p.37ff, the ILC report for 1996-97 identifies a number of operational
challenges, including identification of traditional owners, unrealistic
expectations of property vendors, legislative obstacles, and accommodating
commercial activity.
4.25 In order to identify traditional owners and minimise disputes, the
ILC has undertaken extensive consultations with the indigenous interests
associated with particular acquisitions. Traditional landowners are identified
on the basis of indigenous knowledge, supplemented where necessary by
professional advice from anthropologists, historians and other sources
(p.38).
4.26 The ILC report also notes that negotiations toward land acquisition
have been protracted, and in a very few cases have fallen through because
vendors' asking prices were generally above independent valuations and
above market prices (p.38). The ILC has confirmed its policy to pay only
at or near independent valuation of the market value (as assessed by the
Australian Valuation Office) of the property, even where some purchases
may fall through as a result. The Committee applauds the ILC's resistance
to paying inflated prices. As previously stated, the benefit of this approach
for indigenous people should be apparent.
4.27 The ILC faced a substantial legislative obstacle in Queensland during
1996-97, due to certain restrictive provisions of the Land Act 1994 (Qld).
According to the ILC report (p.38), the Act requires that:
Grazing Homestead Freeholding Leases (GHFLs) and Grazing Homestead Perpetual
Leases (GHPLs) be held by individuals and operated, in effect, as family
farms. Such leases may not be transferred to corporate ownership, including
to the ILC. In addition the ILC's legislation prevents it from acquiring
land on behalf of individuals.
4.28 The land held as GHFL or GHPL constitutes a significant proportion
of land in Queensland which is of potential interest to the ILC. To date
this legislative obstacle has directly affected thirteen land acquisition
proposals in the Queensland Region. Discussions between the ILC, the Queensland
Government and the Commonwealth Minister for Aboriginal and Torres Strait
Islander Affairs, Senator the Hon John Herron, have not yet resolved the
issue (pp.38,39).
Subsidiaries
4.29 Section 191G of the Aboriginal and Torres Strait Islander Commission
Act 1989 provides that the ILC may enter into an arrangement with a subsidiary.
Section 191G(5) provides for a subsidiary to perform functions corresponding
to the ILC's land management function.
4.30 The ILC's first subsidiary, Mogila Merino Stud Pty Ltd ACN 078 466
761 was incorporated on 8 May 1997. It is a proprietary limited company
by virtue of the ILC holding its issued share capital (ILC report p.24).
Summary
4.31 The 1996-97 annual report of the Indigenous Land Corporation complies
with the legislative and other requirements.
4.32 Nevertheless, the Committee records its concern that the ILC has
not complied with its recommendation concerning the provision of information
about land management. Further, the ILC has not provided a comprehensive
account of the consultancies that it engaged during the 1996-97 financial
year. The ILC is now requested to provide that information to the Committee
as soon as possible.
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