Chapter 4
ILC Annual Report 1997-98
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 Aboriginal
and Torres Strait Islander Land Fund Reserve (the Land Fund) pursuant
to Division 10 of the ATSIC Act. Responsibility for reporting on the Land
Fund resides with ATSIC; at Chapter 3 this report has already considered
ATSIC's Land Fund report for 1997-98.
Statutory Reporting Requirements
4.3 The statutory requirements in relation to the ILC's annual report
are found in s.193K of the ATSIC Act, which applies the requirements found
in s.9 of the Commonwealth Authorities and Companies Act 1997 (the
CAC Act) to the ILC.
4.4 Pursuant to s.9 of the CAC Act, the ILC must present a report to
the Minister by 15 October each year and the Minister must table the report
in both Houses of Parliament as soon as practicable.
Other Reporting Requirements
4.5 As stated in the Committee's Fifth Report (p.19), as a statutory
authority the ILC should 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
4.6 The report was presented to the Minister out of session on 10 October
1998: it was tabled in the Senate on 10 November 1998 and in the House
of Representatives on 11 November 1998. It accordingly satisfied the tabling
requirements.
Enabling Legislation
4.7 The Committee is pleased to note that its suggestion about referencing
legislation in the ILC's first annual report (referred to at page 20 of
the Committee's Fifth Report) has again been followed for the ILC's 1997-98
annual report. At page 11 of its fourth report, the ILC complied with
the requirement to clearly state the legislation under which it operates.
Responsible Minister
4.8 The ILC complied with the guidelines in respect of this item at page
11 of its fourth report.
Powers, Functions and Objects
4.9 The ILC report (pp.11,12) 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.
4.10 In its Eighth Report (p.9), the Committee recommended that a more
complete treatment of the ILC's powers 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. The Committee is
pleased to note that the ILC's 1997-98 annual report (pp.11-14) follows
the format of the 1996-97 annual report in providing detailed information
of its functions and powers.
Membership and Staff
4.11 The ILC reported on membership and staff at pages 70 to 73 of the
annual report under consideration. The report includes tables on staffing
in divisional offices, salary range and staffing structure (pp.71-73).
4.12 The ILC is again commended for including a section on consultants.
Appendix 3 of the ILC annual report 1997-98 (pp.104,105) individually
itemises the amount spent on consultants as recommended by the Committee
in its Thirteenth Report (p.20).
4.13 The Committee's Thirteenth Report (p.20) also recommended that future
reports contain a list of administration expenses as found in the ILC's
1995-96 report. A similar table of administration expenses is not contained
in the current report; however all of the relevant information is contained
in the financial statements (pp.75-81) and in Appendix 3 (pp.104,105).
Financial Statements
4.14 At page 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.
4.15 The ILC's financial statements were audited by the Australian National
Audit Office and an independent audit report was issued on 10 September
1998 (reproduced at pp.75,76 of the ILC report). The ILC received an unqualified
audit opinion from the Australian National Audit Office. It confirmed
that the financial statements are in accordance with the Guidelines
for Financial Statements of Commonwealth Authorities.
4.16 Nonetheless, there is a minor typographical error under the heading
10B. Receivables (p.88). The total value of receivables is incorrectly
calculated in column four as $1,717,625. The correct figure is $1,717,624,
as recorded in column two of the same table. This error is carried over
to line two, column four of the section headed Financial Assets (p.79).
Activities and Reports
4.17 The primary functions of the ILC relate to land acquisition and
land management pursuant to ss.191D and 191E respectively of the ATSIC
Act (pp.12,13). The ILC has reported (p.31) that when performing its land
management and acquisition functions, the ATSIC Act requires it to:
- give priority to ensuring indigenous peoples derive social, cultural
and environmental benefits (s.191F(2));
- apply sound business principles when acting commercially (s.191F(1));
and
- give priority to pursuing sound land and environmental management
practices when performing its land management functions (s.191E(3)(a)).
These legislative requirements underpin the ILC's land acquisition and
land management policy. The ILC report states (p.30) that:
The precarious ecological state and geographic remoteness of indigenous-held
land requires careful and sensitive planning. Comprehensive research
about the land, its nature and the people who own it is needed in order
to develop a comprehensive and cohesive land management policy that
will provide genuine long-term benefits for indigenous peoples.
Land Acquisition
4.18 In accordance with recommendations made by the Committee in its
Eighth Report, the ILC has again provided a detailed account of its land
purchases and divestments for 1997-98. A map (p.26) details ILC land purchases
and divestments for 1997-98 and a table (p.25) shows the breakdown between
properties approved for purchase, settled properties and divested properties
for the period 1996-98. A pie chart, included in the report (p.25) for
the first time, records the total cost of properties settled on a regional
basis.
4.19 The ILC Board considered 90 proposals and approved the purchase
of 77 properties to 30 June 1998, in accordance with the principles set
out in the National Strategy (p.24). This is a significantly greater number
than in previous years (p.23). At the end of the reporting period the
ILC had acquired 30 properties representing a range of different land
tenures, with the majority of properties being freehold title. This brought
the total number of properties acquired by the ILC to 45. Properties have
been acquired in all ILC regional areas. At 30 June 1998 negotiations
were continuing for the purchase of 57 properties through the ILC's agent,
Knight Frank Price Waterhouse (p.24).
4.20 During the reporting period, the ILC divested 10 properties to incorporated
bodies representing, where practicable, the traditional owners of the
land. A total of 14 properties purchased by the ILC had been divested
to indigenous interests by 30 June 1998. By that date the ILC
held title to a further 31 properties that it expected to divest to indigenous
groups in 1998-99 (p.28).
4.21 Section 191D(4) of the ATSIC Act requires the ILC to search the
National Native Title Tribunal registers to ascertain whether there have
been any claims lodged, accepted or determined in relation to land under
consideration. At the public hearing on 25 March 1999, the ILC
General Manager stated:
Our legislation obliges us only to consult the native title register;
there is no practical guidance as to what we ought to do with the results
of that consultation of the register. [1]
4.22 The ILC's National Strategy (pp.5,13,14) and the ILC's guidelines
(A6,C1) commit the ILC to give priority to acquisition of land for indigenous
people who are unlikely to be recognised as native title holders or have
other legislative mechanisms for land acquisition. The General Manager
of the ILC stated at the public hearing on 25 March 1999 that:
Hypothetically, if there is a prospect of native title which approaches
the level of full beneficial ownership being established in pretty short
order as a result of a native title claim, that would give us something
of substance to say to the proponents, `You have got a really good crack
at this block. Why should we pay for it?'
…But realistically the prospects for native title resulting in
anything, so far as pastoral leases are concerned, like full beneficial
ownership or the full rights of a lessee are zero. People are still
left in the position where the ILC is the most practical and logical
resort. [2]
4.23 The Committee draws attention to the fact that this may be inconsistent
with the ILC's stated policy and function of giving priority to the
acquisition of land for indigenous people who are unlikely to be recognised
as native title holders. The Committee also considered this issue in
its Eighth Report (p.12) in relation to evidence given that the Wik
decision had no impact on the ILC's land acquisition activities.
Land Management
4.24 In its Thirteenth Report (para 4.23 and para 4.32; pp.23,25) the
Committee expressed concern that its recommendation (suggested at a meeting
with the ILC on 24 March 1997 [3]) that a comprehensive
account of land under management should appear in the ILC's 1996-97 annual
report, was not followed.
4.25 However, the Committee is pleased to note that the 1997-98 annual
report has adopted this recommendation. Appendix 4 of the ILC annual report
(pp.106-110) details the land management expenditure during 1997-98 on
land held by the ILC as well as assistance provided to indigenous landholders
(p.33).
4.26 The ILC entered into land management service agreements with the
Northern Land Council (NLC) and the Central Land Council (CLC) in the
Northern Territory and with the Kimberley Aboriginal Pastoralists Association
(KAPA) in Western Australia. This was aimed at assisting with the transition
to the ILC's First Land Management Policy (FLMP) (p.35).
4.27 The ILC reported that it is currently negotiating a joint funding
arrangement with the Northern Territory Government, the NLC and the White
Eagle Aboriginal Corporation to address the eradication of the weed Mimosa
pigra from a number of indigenous-held properties in the Northern
Territory (p.36). At the public hearing on 25 March 1999 and in the annual
report, the ILC referred to the fact that Mimosa pigra is not listed
as a weed of national significance (pp.35,36). [4]
Operational Challenges
4.28 From p.53ff, the ILC report for 1997-98 identifies a number of operational
challenges, including land needs planning, expectations of property vendors,
ongoing obstacles to purchase in relation to Grazing Homestead Freeholding
and Grazing Homestead Perpetual leases in Queensland, divestment of title
and land management.
4.29 The ILC reports that its Land Needs Planning Program (LNPP), developed
throughout 1996-97, has progressed well in Victoria and Tasmania but experienced
difficulties in other regions (p.53). In April 1998 the ILC board agreed
to commit further resources to the LNPP (pp.29,53).
4.30 At the public hearing on 25 March 1999 the General Manager of the
ILC stated that:
…one of the issues we come up against constantly is vendor expectations
and the common perception that the ILC will pay considerably in excess
of fair market values. [5]
This led to protracted negotiations in a number of cases and the failure
of negotiations in a few instances (p.54); however, the ILC also reported
that in several cases it was able to resume negotiations and purchase
the desired property (p.54).
4.31 Also at the 25 March public hearing the ILC General Manager reported
that a review of acquisitions had shown that 66 percent of the ILC's
property negotiations had resulted in an acquisition at below valuation,
with the balance being achieved at, or close to, the market valuation.
[6] The Committee again commends the ILC's strict
adherence to its policy of paying approximate market valuation for properties.
4.32 The ILC continued to face a substantial statutory obstacle in Queensland
during 1997-98, due to the provisions of the Land Act 1994 (Qld)
in relation to Grazing Homestead Freeholding Leases (GHFL) and Grazing
Homestead Perpetual Leases (GHPL) (pp.54,55). This issue was reported
in detail in the 1996-97 annual report (ILC annual report 1996-97, pp.38,39).
4.33 Under the Queensland legislation, these forms of tenure must be
held by individuals and operated, in effect, as family farms. The ILC's
legislation prevents it from acquiring land on behalf of individuals.
And such leases may not be transferred to corporate ownership, including
to the ILC (p.54).
4.34 During 1997-98 the ILC had 12 proposals before it for the purchase
of land held under GHFL or GHPL and which it was unable to purchase. The
ILC report states that representations throughout 1997-98 at a State and
Commonwealth level had not been able to resolve this issue (p.54).
4.35 The Committee is pleased that at the public hearing on 25 March
1999 the ILC General Manager was able to report that a short-term solution
had been achieved. [7] The State Governor-in-Council
agreed to exercise discretion to transfer the lease of one of the properties,
Currawillinghi Station on the Queensland-NSW border, to the ILC so that
it could then be transferred to an Aboriginal corporation. The ILC is
currently pursuing similar exercises in relation to a number of other
properties. [8]
4.36 The General Manager also advised at the public hearing that the
Queensland legislation was under review and that the ILC had made a submission
to the effect that the spirit of the legislation would be retained with
an amendment to allow for the transfer to Aboriginal corporations. [9]
4.37 Further, however, the ILC was unable to finalise divestment of title
in a small number of cases due to unresolved disputes concerning traditional
ownership or difficulties in accommodating different interests in the
land in the title holding body (p.55). This has caused the ILC some problems,
particularly in relation to the general policy of divesting title within
12 months of purchase and the resultant liability for stamp duty (p.55).
The ILC has maintained a strong policy of not divesting title to persons
who are not recognised under traditional law or cannot demonstrate a connection
with the land, to avoid the situation where the ILC may actually further
the dispossession of indigenous people (p.55).
4.38 The ILC has introduced a number of strategies to overcome this problem,
including mediation, negotiation and the establishment of representative
land holding structures (p.55). Where the dispute involves conflicting
assertions or claims of native title or other traditional rights and agreement
has not been possible, the ILC has taken the sensible approach of awaiting
the outcome of the mediation and determination processes of the National
Native Title Tribunal (p.55).
4.39 The ILC reports (p.56) that its First Land Management Policy 1997-99
(FLMP) was not universally approved or accepted as it represented a significant
shift in focus from previous land management policies. The ILC's FLMP
expired on 30 June 1999. A new policy will be implemented on the
basis of consultations that have been undertaken with the indigenous community
and the results of its Land Use/Land Management surveys (p.56).
4.40 The ILC experienced a low rate of return of its Land Use/Land Management
survey, which provides the basis for indigenous landholders to approach
the ILC for assistance (pp.33,57). The ILC acknowledges that this has
affected its ability to provide land management assistance in some regions
(p.57) and it has recognised the need for greater efforts in explaining
its policy (p.57).
Subsidiaries
4.41 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.
4.42 In 1997-98, the ILC continued to operate its first subsidiary Mogila
Merino Stud Pty Ltd ACN 078 466 761 which was incorporated on 8 May 1997
as a proprietary limited company with the ILC holding its issued share
capital. Two other subsidiaries were also established (p.39).
4.43 Mt Clarence Pastoral Company Pty Ltd (ACN 079 814 976) was registered
on 22 August 1997 to operate a pastoral business on Mt Clarence Station.
The company has received operational funding from ATSIC over a period
up to two years. It holds the non-fixed assets as a loan to the ILC.
The board of directors is made up of representatives of the ILC, the property's
traditional owners, ATSIC, and, for most of the reporting period, the
manager of a neighbouring pastoral property (pp.40,41).
4.44 Cardabia Pastoral Company Pty Ltd (ACN 080 766 463) was incorporated
on 17 November 1997 as a proprietary limited company. Consistent with
the model of the Mogila Merino Stud Pty Ltd, the ILC holds the shares
in the company and they will be transferred over time to an Aboriginal
corporation representing the traditional owners (p.42).
4.45 The ILC Board decided in June 1998 to establish a wholly owned subsidiary,
Land Enterprises Australia (LEA) (p.48, 57) to focus on the commercial
aspects of the ILC's land management function (p.57). At the public hearing
on 25 March 1999, the ILC Chairman confirmed that Land Enterprises Australia
had been established and he explained the process by which this was accomplished:
Then came the hard decisions about the ILC with its land management
policies and dealing with the social, cultural and environmental sides
that we have a responsibility for, separating out the commercial activity
and the hard decisions that we have to make dealing with the commercial
reality … Eventually we got to that point where we decided to separate
out the commercial side. So LEA was born. [10]
Consultation
4.46 The report notes (pp.58-69) 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 in Appendix 7 (pp.113 -120).
Publications
4.47 A list of the ILC's publications for 1997-98 is contained at Appendix
6 (p.112).
Summary
4.48 The 1997-98 annual report of the Indigenous Land Corporation complies
with the legislative and other requirements.
The 1997-98 Report: Issues
Response to the Committee's Thirteenth Report
4.49 In its Thirteenth Report, the Committee drew attention to two specific
matters about the ILC's 1996-97 annual report: land management and consultancies.
Land Management
4.50 The Committee's Thirteenth Report (pp.23,25) noted concern that
its recommendation (suggested at a meeting with the ILC on 24 March 1997)
that a register of properties under management should appear in the ILC's
1996-97 annual report, was not followed. The ILC wrote to the Committee
about this issue following publication of the Thirteenth Report.
4.51 Appendix 4 of the ILC's 1997-98 annual report (pp.106-110), the
Committee is pleased to note, includes a register of properties under
management and details the land management expenditure during 1997-98
on land held by the ILC as well as assistance provided to indigenous land
holders (p.33).
4.52 Notably, from 1 July 1997 the ILC assumed sole program responsibility
at the federal level for management of indigenous held land, covering
land purchased and granted to indigenous land holders by the ILC as well
as for land historically held by or on behalf of indigenous peoples (p.29).
4.53 The ILC introduced its First Land Management Policy 1997-99
(FLMP) on 1 July 1997 in response to its expanding role in land management.
The FLMP moved away from grant funding as the main means of providing
assistance to indigenous land holders towards more direct support such
as: technical and financial assistance for property management, business
planning, infrastructure development and research (p.32).
4.54 The FLMP provided for a transition period from 1 July 1997 to 30
June 1999 to ensure that indigenous landholders are not disadvantaged
(p.31). During this period, the ILC has stated (p.32) that it will give
priority to:
- assisting indigenous land-based enterprises that have a proven commercial
capacity to achieve commercial viability;
- assisting indigenous landholders to identify and develop alternative
land uses where existing enterprise is not or cannot become commercially
viable;
- providing support to indigenous landholders for a range of land management
needs where the desired outcomes are cultural, social or environmental
in nature, rather than commercial;
- gathering information on the specific needs of indigenous landholders;
and
- research to inform the development of longer-term land management
policy.
4.55 It is important to note that the Committee has been concerned whether
there were shared land management arrangements between the ILC and ATSIC
in the period leading up to 1 July 1997. This has been the subject of
correspondence between the Committee, the ILC and ATSIC. The Committee
was concerned to clarify the exact land management status of ILC purchased
land, particularly in the 1996-97 financial year.
4.56 The issue was raised in the ILC annual report for 1996-97; and it
was considered at a public hearing on 24 March 1997. Further reference
was made to it in the Committee's Thirteenth Report, and the Committee
also wrote to the ILC on 25 June 1998. The ILC responded in a letter to
the Committee dated 26 June 1998 indicating that the ILC did not fund
land management activity prior to 1 July 1997:
… the ILC became responsible for land management funding activity
from 1 July 1997 when ATSIC's former Land Acquisition and Management
(sic) Program ceased to operate. In other words, the ILC, during the
relevant reporting period, had no formal responsibility for land management
program funding. It is the case, as your letter of 25 June points out,
that the ILC [h]as engaged in land management policy development before
1 July 1997 but that activity obviously did not encompass the actual
management of properties.
4.57 Notably, and in response to an inquiry from the Committee dated
13 July 1998, ATSIC advised in writing on 2 June 1999 that it had no responsibility
under its Land Acquisition and Maintenance Program (LAMP) for the management
of ILC purchased land in 1996-97. The question arose as to how the land
purchased by the ILC in the 1996-97 financial year had been managed, if
neither by ATSIC nor the ILC.
4.58 Accordingly, the Committee wrote to both ATSIC and the ILC on 2 June 1999
seeking clarification of this matter. The response from the ILC dated
7 June 1999 (included in this report as an Appendix) supports
ATSIC's statement that ATSIC had no responsibility to 1 July 1997 under
its Land Acquisition and Maintenance Program (LAMP) to manage ILC owned
properties.
4.59 The ILC confirmed that it has land management functions for ILC
owned land under s.191E(1)(b) of the ATSIC Act; however, it codes expenditure
on these properties as land-holding, rather than land management, costs.
Such expenditure is said to include items such as essential maintenance
and repairs, animal husbandry expenses and insurance.
4.60 Importantly, the ILC response states that:
… the ILC did, in fact, expend funds during the period of interest
to the Committee on such land-holding costs.
That is, the ILC was in fact involved in the actual management of land
purchased by the ILC in the 1996-97 period.
4.61 In regard to ATSIC's land management role up to 1 July 1997, it
administered the LAMP; LAMP is the acronym for the Land Acquisition and
Maintenance Program. The ILC annual report for 1997-98 incorrectly refers
to LAMP as the Land Acquisition and Management Program in both
the body of the report (p.29) and in the index (p.125). Nevertheless,
it is correctly referred to in Appendix 8 (p.122) which contains a list
of acronyms and abbreviations.
4.62 The Committee will continue to monitor the land management (and
land-holding) activities of the ILC and welcomes the ILC's advice that
its next annual report will treat the issue of land holding costs in more
detail than previously.
Consultancies
4.63 The Committee's Thirteenth Report (p.20) recommended that a detailed
list of consultancies be included in the ILC's annual report. This recommendation
is adhered to in Appendix 3 of the 1997-98 report (pp.104,105).
4.64 The Committee's Thirteenth Report (p.20) also recommended that future
ILC reports contain a list of administration expenses as found in the
financial statements in the ILC's 1995-96 report at page 42. Administration
expenses do not appear in the same form in the 1997-98 ILC report; however,
the itemisation of consultants' expenses in Appendix 3 and the financial
statements (pp.75-81) provide all of the relevant information.
Other Matters
Aboriginal and Torres Strait Islander Heritage Protection Act 1984
4.65 The ILC made two written submissions to the Committee's inquiry
into the Aboriginal and Torres Strait Islander Heritage Protection
Act 1984 during the reporting period. The Chairman, General Manager
and Deputy General Manager of the ILC appeared before the Committee at
a public hearing in Adelaide on 1 August 1997 (p.51).
4.66 The ILC report expressed concern that legislation amending the Aboriginal
and Torres Strait Islander Heritage Protection Act 1984 was introduced
into Parliament on the same day (2 April 1998) that the Committee
released its Thirteenth Report (p.51). (In that event no consideration
was given to the Committee's nine recommendations.)
4.67 The bill was referred to the Committee for consideration and report.
The Committee reported on 1 June 1998 and recommended five amendments.
4.68 The ILC's 1998-99 report should record that a revised bill, the
Aboriginal and Torres Strait Islander Heritage Protection Bill 1998
which adopted several of the Committee's recommendations, was introduced
into Parliament on 12 November 1998. The bill was passed by
the House of Representatives on 11 February 1999 and introduced
into the Senate on 15 February 1999. The Senate Legal and Constitutional
Legislation Committee tabled a report on the bill on 31 March 1999.
The bill remains on the Senate Notice Paper.
Native Title Amendment Bill 1997
4.69 During the reporting period, the ILC made two written submissions
to this Committee's inquiry into the Native Title Amendment Bill 1997.
The Chairman of the ILC gave evidence to the Committee on this inquiry
in September 1997 (p.48).
Style
4.70 The footnoting style of the ILC's fourth annual report is generally
confusing and inconsistent. Footnotes recommence (at number 1) at
the beginning of chapter 4, and again several times throughout the
chapter.
4.71 Further, the footnote number for the reference, National Strategy
for Rangeland Management (p.30) is incorrectly numbered as
8 at the foot of the page; it should be numbered as 7. It is correctly
numbered in the body of the text.
Footnotes
[1] Evidence, p. NT 22.
[2] Evidence, p. NT 23.
[3] Evidence, pp. NT 3, 4.
[4] Evidence, p. NT 8.
[5] Evidence, p. NT 6.
[6] Evidence, p. NT 6.
[7] Evidence, p. NT 11.
[8] Evidence, p. NT 11.
[9] Evidence, p. NT 11.
[10] Evidence, p. NT 18.
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