September 2017

Essays

Paul Cleary

Title fight

Andrew “Twiggy” Forrest. © Tom Rovis-Hermann / Newspix

The people of the Pilbara take on Australia’s great philanthropist

The iron ore trains, more than 2 kilometres long, take a good 15 to 20 minutes to pass you by as they wind their way through the red hills of the Pilbara from the mine to the port. These trains typically consist of more than 200 wagons, and they demonstrate in stark terms who gets what from extracting our common wealth. The income generated from the iron ore in ten of those wagons pays the royalty to the Western Australian government, while about one wagon’s worth goes to the traditional owners of the land.

The payments to traditional owners are made under agreements negotiated as a result of the Native Title Act 1993 (NTA). That wagon’s worth of income is based on a 0.5% royalty on the gross value of production, and this level of compensation is the very best deal that traditional owners in the Pilbara have managed to secure under this law.

A quarter of a century after the High Court granted native title to the Meriam people of the Torres Strait in the Mabo decision, the results of the law that recognised native title have been mixed. Some academics hail the NTA as “transformative” in that it has led to some 330 determinations of native title. Further, 1100 land use agreements have in many cases delivered income flows to remote communities around Australia. But in practical terms the Act has only given communities the right to negotiate with developers, rather than a right of veto, and two-thirds of the 2.4 million square kilometres of native title recognised so far is in the form of non-exclusive possession rather than exclusive possession. Non-exclusive possession affords visiting rights to communities for cultural purposes, not unlike gaining permission to hold regular barbecues or footy matches at a local park.

The lesson of Mabo is that success requires great determination and leadership. It took Eddie Koiki Mabo and his team a full ten years to defeat the Queensland government’s attempt to acquire islands in the Torres Strait without paying any compensation to the traditional owners. Mabo’s fight resulted in the High Court’s recognition of native title and its overturning of the doctrine of terra nullius, or the land belonging to no one. Now, a struggle in the Pilbara that also spans a decade, which also involves the refusal to pay compensation, is applying the lessons of Mabo and showing what the law of native title can mean in practice when communities resist, persevere and astutely pursue their rights.

Led by Michael Woodley, 45, the tenacious chief executive of the Yindjibarndi Aboriginal Corporation (YAC), this community has waged legal battles on a shoestring budget to secure rights to its ancestral lands in the high country of the Pilbara. While multinational companies operating in the Pilbara have paid the 0.5% royalty and helped set up trust funds to manage the money, the Yindjibarndi are up against Australia’s Fortescue Metals Group (FMG), founded by Andrew “Twiggy” Forrest, which dismisses these payments as sit-down money or “mining welfare”. Some of FMG’s early deals involved compensation of a few cents per tonne, or about one-twentieth of the industry standard – or one-twentieth of one of those 200 wagons. This approach saves FMG a lot of money, and has also led to the company mining Yindjibarndi country without paying any compensation to YAC, which is the group authorised by the Federal Court to represent the Yindjibarndi’s native title interests.

FMG’s tactics and YAC’s resistance have resulted in a tsunami of litigation on multiple fronts for almost a decade. Between 2009 and 2013 there were 18 separate legal and administrative proceedings concerning FMG’s development of its biblically inspired Solomon Hub mining complex on Yindjibarndi land. YAC had to initiate another two Federal Court proceedings after the mining company and the WA government sought to undermine its native title claim. Despite being poorly resourced, the Roebourne-based Yindjibarndi have had some big wins and broken new legal ground along the way.

In July, Federal Court judge Steven Rares delivered the latest and largest victory. Rares granted the Yindjibarndi exclusive native title rights over the Solomon area, which they had been seeking for 14 years. This is the first time that any group in the resource-rich Pilbara region has won exclusive possession. The Solomon Hub operation consists of two mines that produce around 70 million tonnes of iron ore each year, or about 40% of FMG’s total production. FMG has been earning around $4–5 billion a year in gross revenue from Solomon since production commenced in 2013, and the resource size is so great that these mines could be in operation for more than half a century. The total value of Solomon’s proven iron ore resources at today’s prices is more than $300 billion.

The legal proceedings underway through the Federal Court are unprecedented. They are likely to result in a court granting significant compensation to a native title group for mining on traditional lands. While the decision does not mean that the Yindjibarndi can stop the mines – the term “exclusive possession” is something of a misnomer in this regard – it certainly does create a right to compensation.

Vance Hughston, a senior counsel acting for YAC, says the legal ramifications of the case are immense, and the compensation could be very large indeed.

“There’s no case which provides any guidance in terms of what a miner might be obliged to pay by way of compensation when it gets mining leases to construct and operate a huge mine on Aboriginal country. The reason why there’s no precedent and no guide is because all miners acting as responsible corporate citizens reach agreement with Aboriginal people. There is a market value for these things.

“It has got to be looked at in the context of the Yindjibarndi people who fought this mine – they didn’t want it to happen, but it has happened anyway. It’s on and very close to very important sacred sites. It really disturbs them on their land. And it is happening over a large scale. It is being done without their consent.”

Until now, FMG has been able to get its way with native title groups, but not with the Yindjibarndi and the indefatigable Woodley, which is why this dispute is taking on heroic proportions.

“FMG is making a lot of money out of [the mines],” says Hughston, “and ensuring that other Aboriginal people who support them are making money out of it, and the Yindjibarndi people are getting nothing out of it.”

Michael Woodley says that when it comes to valuing the FMG mining operation on his country “the yardstick for compensation should be based on exclusive possession” and that it “must take in the precedents of all other legal tenure holders who have gained far greater royalties than those with native title claims and non-exclusive rights”. (Here he is referring indirectly to a 2.5% royalty negotiated by Lang Hancock and his partner Peter Wright with Hamersley Iron – now part of Rio Tinto – back in the 1960s, and which is still being paid to Hancock’s daughter, Gina Rinehart, and Wright’s descendants. When Woodley began negotiations with FMG, he asserted Yindjibarndi sovereignty by asking for a 5% royalty, equivalent to what the company paid the state government.)

“As Aboriginal Australians we deserve an equal share of riches from our country, if not more,” he adds.

FMG has said the decision to grant YAC exclusive native title will have “no material financial impact” on its business, but it intends to appeal. YAC says it will have to deal with the appeal before launching a case for compensation. State treasurer Ben Wyatt, who is also minister for Indigenous affairs and a man with Yamatji heritage, has urged FMG not to appeal, saying that the matter had been before the courts for “too long”. But according to FMG chief executive Nev Power the decision has far-reaching ramifications for other sectors of the economy. “The Federal Court decision is complex; the determination has application beyond Fortescue’s operations and potential impact on attracting new investment in resources, agriculture and tourism,” he says in a statement to the Monthly.

Wyatt responded by telling the Monthly that he had offered to act as a facilitator to achieve a settlement. In a carefully worded statement he said, “The relationship between the Yindjibarndi and FMG is clearly tense and, unfortunately, much of what is being considered by both parties is in this context. But clearly the native title law is well known … I hope an out-of-court settlement can be reached between Fortescue Metals and Yindjibarndi, and I expect all parties to negotiate in good faith.”

FMG’s claim that the decision will have no impact is also at odds with its extraordinary effort to undermine the Yindjibarndi claim and YAC. In late 2010, FMG began funding a rival Yindjibarndi group, the Wirlu-murra Yindjibarndi Aboriginal Corporation (WMYAC), in order to thwart YAC’s opposition and expedite the approval process.

In June 2015, FMG secretly funded and orchestrated a meeting aimed at replacing YAC with the FMG-backed group, and in turn weakening the native title claim. Justice Rares issued a withering assessment of FMG’s conduct in his decision. He noted that Resolution 5 of this meeting asked the Yindjibarndi people to seek non-exclusive possession. He said that each member who agreed to vote was given a $400 Woolworths shopping voucher, purchased by WMYAC. Rares said in his judgement, “There was a close correspondence between the persons who voted Yes [and] the subsequent use of 180 vouchers on the afternoon and evening of 23 June, after the close of voting.”

Justice Rares ruled that FMG had been intimately involved in staging and funding a meeting that would have delivered it a massive commercial benefit. Furthermore, “the significant role that FMG played in the promotion and conduct of the meeting, and the benefit to it if Resolution 5 were passed, were not revealed to persons who might be interested in voting”.

Asked why the company had gone to these lengths, Nev Power said FMG had been fully transparent about its funding of WMYAC. “Fortescue is proud to support the Wirlu-murra Yindjibarndi Aboriginal Corporation, as representatives of the Yindjibarndi people, and all that we have achieved together,” he told the Monthly. We are transparent in our relationship with WMYAC and provide support for the group, including for the meeting in question. This assistance did not seek to influence the outcome of the meeting.”

Six months after this meeting, the Eastern Guruma people, an Aboriginal group closely aligned with FMG, launched a native title claim that overlapped with the Yindjibarndi claim that had been registered back in 2003. Again, Justice Rares dismissed this belated attempt to undermine the Yindjibarndi and noted in his judgement the link between the claim and FMG’s Solomon mine: “The overlap area covers the Solomon Hub.” Rares described the Eastern Guruma claim as “an abuse of process”. One unfortunate result of native title law is that it has allowed mining interests to encourage competing claims over land they are seeking to exploit, making it difficult for courts to grant native title and often sowing the seeds of disharmony among Indigenous communities.

Jon Altman, a research professor in anthropology at Deakin University, has been following land rights and native title for four decades. He is greatly impressed by what the Yindjibarndi people have achieved and says their struggle is a watershed moment for Indigenous peoples. “If big business and governments act like bullies, native title interests can get rolled. But this case shows that if they persevere and don’t take the trinkets offered along the way, Aboriginal claimants can win in a big way. Woodley’s efforts are heroic.”

Altman points to some other important victories by native title interests: Century Mine in Queensland in the late 1990s, and the Timber Creek native title compensation case in the Northern Territory this year. But Altman says the scale of the compensation sought by the Yindjibarndi people makes it significant. He explains that, instead of the $4 million a year that was offered by FMG, YAC could secure a compensation package in the order of $100 million retrospectively based on regional precedents, plus ongoing payments during the life of the Solomon Hub mines.

“What is especially pertinent is that in the age of populism and the corporate state, Federal Court judges are of growing importance as arbiters to ensure fair outcomes in the native title system,” he adds.

Former WA premier Peter Dowding, who was a legal counsel on the very first Yindjibarndi claim, made jointly with the Ngarluma people, in 1994, is equally impressed with Woodley’s leadership: “[He] has been very committed and very brave for a very long time and should be commended.”

What seems to have energised Michael Woodley in this long struggle is not just the pursuit of a few more wagons on each iron ore train but also the tactics used by FMG.

The company founded by major shareholder Andrew Forrest in 2003 has earned accolades from politicians and in the national media for its treatment of Indigenous people. It’s true that FMG employs more than 1200 Aboriginal people and has awarded $1.95 billion in contracts to Indigenous businesses, but when it comes to compensation for access to traditional lands FMG has taken a very different approach. Instead of paying a percentage of the production value, FMG pays dollars and even cents: 2.5 per tonne in the case of an agreement signed by six Nyiyaparli elders in relation to 40,000 square kilometres of the Pilbara’s Chichester Range. FMG also offered a signature fee of $400,000 and the company agreed to “maximise vocational, educational, training and employment opportunities” for Aboriginal people. Another agreement with the Eastern Guruma people offered similar terms.

Lawyer Ron Bower, who acted for WMYAC when it staged a meeting in 2011 to undermine YAC’s claim, wrote at the time about the “extremely mean-spirited terms” that FMG stuck to in its negotiations with the Eastern Guruma people:

Because of the limited rights provided to traditional owners in the Native Title Act (and all other possibly relevant legislation, common law or policy) it probably made no difference whether the Eastern Guruma people won, lost or drew in legal contests entered into with FMG because no formal legal procedure or combination of procedures would, in and of themselves, force FMG to accept agreement terms proposed by Eastern Guruma.

But the experience of the Yindjibarndi people shows that strong leadership and a steadfast approach can make a real difference. It’s shaping up to be a David and Goliath struggle. And thanks to a string of successive court victories, David appears to be winning.


Michael Woodley, born in the Pilbara town of Roebourne in 1972, is the son of a Yindjibarndi woman, Susie Woodley, and a white father who came to the region to work on the Robe River railway project. At this time, the Yindjibarndi were living in a reserve on the edge of Roebourne after being discarded by the pastoral industry in the 1960s. For almost a century, Aboriginal people in the Pilbara were a source of cheap labour for the pastoral and pearling industries, but this engagement ended when these industries were forced to pay fair wages.

Susie was 16 years old when she gave birth; she was one of the many teenage girls targeted by the well-paid construction workers and miners who flooded into Roebourne at the time. Woodley has never known his father, and Susie died at a young age. Roebourne was established to colonise the region in the 1860s. It was and remains a divided and impoverished town. Located 50 kilometres inland from the middle-class suburbia of Karratha, home to workers from the mines and gas operations, Roebourne is where the young Yindjibarndi boy John Peter Pat died of head injuries in September 1983 after being arrested and taken to the local police station. Pat’s death and the subsequent acquittal of the arresting officers for manslaughter led to the Royal Commission into Aboriginal Deaths in Custody.

Woodley’s grandfather was the Yindjibarndi law man Woodley King, who had led the struggle against the damming of the Harding River in the 1960s. When Michael Woodley was in sixth grade, he started getting into mischief, so King took him out to Yindjibarndi country to learn about law and culture. Justice Rares noted this influence in his July decision:

He is the grandson of Woodley King, a respected Yindjibarndi elder as [Justice Robert Nicholson] found … and is now a Yindjibarndi elder in his own right. Michael Woodley gave detailed and reliable evidence of Yindjibarndi law and custom in both their historical and contemporary forms. He spent more than 20 years learning about Yindjibarndi culture from his grandfather, Woodley King, with whom he lived on the Moses land at Ngurrawaana, after finishing primary school in Roebourne. Michael Woodley’s grandfather was principally responsible for his education after primary school together with other male and female Yindjibarndis.

King was one of three Yindjibarndi applicants on the original claim lodged with the National Native Title Tribunal in July 1994. This claim, developed with the assistance of Peter Dowding, was lodged jointly with the Ngarluma people, whose traditional country encompasses the lowlands around Roebourne and Karratha, while Yindjibarndi land is in the high country that begins about 60 kilometres inland. The claim culminated in a decision by Justice Robert Nicholson to award non-exclusive native title, even though he said that he was “satisfied that … historical circumstance has not broken the Yindjibarndi connection with their land and waters”. Justice Nicholson acknowledged that “despite the substantial impact of European settlement on both peoples, they have remarkably maintained a strong sense of connection to their lands. This is particularly so in the case of the Yindjibarndi people.”

YAC’s legal counsel George Irving believes that Justice Nicholson’s judgement “perpetrated a travesty of injustice upon the Yindjibarndi people”. He says that evidence that could have established a determination of exclusive possession simply was not called.

The Yindjibarndi were unfazed by this setback, and in July 2003, one week after the Nicholson decision, YAC lodged a claim for an adjoining area to the south, which is where the Solomon mines are located. As this second claim area covered unallocated Crown land, or vacant land, this put the Yindjibarndi in a strong position to argue there had been no prior extinguishment of native title and that they were entitled to exclusive possession.

After about a decade of living on traditional country, Woodley, then 21, gained a position with Rio Tinto’s Aboriginal Training and Liaison division, where he worked for five years. For a time he was considered so promising that the company featured him in one of its promotional brochures. But Woodley decided to leave Rio and work in community development roles, firstly with the Ngurrawaana community organisation and then with a Yindjibarndi cultural organisation, Juluwarlu Aboriginal Corporation (JAC), which he had founded in 2000 with his wife, Lorraine Coppin, to record and promulgate Yindjibarndi culture. JAC has since produced four substantial volumes on Yindjibarndi land, language and culture, as well as more than 50 video productions.

The decade-long contest between FMG and the Yindjibarndi began in June 2007 when FMG began exploration drilling on Yindjibarndi country. Back then, FMG was still a fledgling business; its first mine, Cloudbreak, was still under construction ahead of a first shipment in May 2008, while it was developing a second mine and related railways and port facilities. All of this development was underpinned by the very favourable early agreements with traditional owners.

It was also in 2007 that Michael Woodley, then aged 35 and the father of six young children, became chief executive of YAC. FMG soon found itself up against someone who personifies the clash of civilisations that exists in the Pilbara.

FMG’s strategy in the Pilbara went beyond mere mining; it also seemed to be driven by the need to accumulate vast tenements. Andrew Forrest had built up FMG with great expectations. After acquiring a stake in Allied Mining and Processing, a company with a few mining tenements, for 8 cents a share in 2003, he gained a controlling interest and renamed it Fortescue Metals Group. (Today, Forrest’s private company controls 33% of FMG, which is capitalised at $17 billion.) By 2007, the company, which was still yet to ship any iron ore, had a greater area of tenements than BHP and Rio Tinto put together.

The Solomon prospect proved to be a resource bonanza, and the company began negotiating a land use agreement with YAC in March 2008. FMG wanted a wide-ranging land access agreement covering the Yindjibarndi claim area. The disparity between the two sides was stark. In that financial year, YAC reported income of $115,705 whereas FMG earned trading income of $201 million. In a meeting attended by Andrew Forrest on 10 March that year, FMG pursued what it called a “Whole of Claim Land Access Agreement” that involved YAC granting “any and all tenure desired by FMG” for an unspecified project. It seemed that FMG was trading in real estate as much as iron ore.

YAC responded to the ambitious claim by saying that, in return for the free, prior and informed consent of the Yindjibarndi people, FMG should pay an “uncapped” 5% royalty, which was equivalent to the royalty paid to the state government. FMG responded by saying that native title did not equate to property rights and therefore native title parties were not entitled to compensation. Senior FMG executives have consistently used this line of argument in their background briefings to the media and other third parties. (It’s also very significant that in July 2012 FMG applied to the Federal Court to be joined as a respondent party to the Yindjibarndi #1 Claim, which was recognised with exclusive possession in July, on the grounds that it faced a compensation liability if the claim succeeded.)

At a subsequent negotiation session in Roebourne in June 2008, YAC repeated its request for a royalty of 5%. An FMG representative countered with an upfront signature payment of $250,000, plus $2 million in training investment and a further $3 million as a capped, un-indexed royalty. FMG claimed the request for 5% amounted to extortion. A video recording of this meeting shows how FMG’s chief negotiator responded to the request. “That number is extortionately high; it’s way beyond, it is probably ten times higher than any other number,” he said. Later in the day he explained how such a royalty was completely inconsistent with FMG’s approach to drive down costs to the bare minimum. “FMG wants to be the lowest-cost iron ore producer – that’s our goal, that’s our number one goal out there,” he said. “And we recognise that we don’t pay quite the same money as some other companies, so we have put our energy and focus into other areas, and that is employment support and business support.”

At the same meeting, the FMG executive said that if the Yindjibarndi did not accept the terms offered by FMG the company would use considerable legal leverage to get its way. And he justified this approach by saying the company was in a rush to develop. “Fortescue will always use legal avenues to get our mining leases and roads and whatever else,” he said. “I’m not going to hide that. We will do that every time, because we are in a hurry, in a rush.”

YAC gave ground in negotiations in late 2008 and reduced its ask to a 2.5% royalty, in line with the percentage paid to Gina Rinehart and the Wright family. Finally, as iron ore prices climbed above $150 a tonne, YAC fell back to the industry standard for Pilbara iron ore of 0.5% of the production value – but the company still refused.

FMG refers to the compensation as sit-down money, but YAC counsel Vance Hughston says the same description could be applied to the millions FMG has paid to WMYAC. He adds that the Eastern Guruma people, who sided with FMG in an earlier agreement, have also received substantial commercial contracts for work on the Solomon mines, but that no one from YAC has received anything. (In any case, Hughston rejects the characterisation of “sit-down money”, pointing out that it goes into a trust to benefit the community.)

But Andrew Forrest, now Australia’s biggest philanthropist, would contend that his company has done much more than pay sit-down money. FMG claims an Indigenous employment rate of around 15%, and it has awarded massive contracts to Indigenous businesses, including those run by groups who have had to accept its tough compensation terms. These contracts, however, are for services needed by the mine operations. In May this year, Forrest announced a $400 million philanthropic program, which was launched by the actor Russell Crowe and Malcolm Turnbull. Between May 2008 and December 2017, FMG has generated revenue from iron-ore production of $64.3 billion. Had it paid a 0.5% royalty, it would have distributed $320 million to the Indigenous peoples of the Pilbara.

It’s true that the company has paid some compensation, except to YAC, and it has invested in Indigenous jobs and training, but there’s no escaping the conclusion that those “extremely mean-spirited terms” have saved FMG a heap of money while boosting its shareholder value and giving it an edge over its more orthodox competitors.

FMG’s Nev Power says his company has good relations with many Indigenous groups in the Pilbara. “At Fortescue we are proud of our long-standing relationships with Aboriginal people in the Pilbara, including the seven successfully negotiated Land Access Agreements which balance compensation payments with training, employment and business development opportunities. We are committed to working with Aboriginal people to ensure the strength of our business benefits the communities in which we operate.”


Vance Hughston says that the recent decision in the Timber Creek case indicates that the compensation for his Yindjibarndi client could be very large because the Federal Court is now looking at compensation in the same way as it would with personal injury claims. That case, which was settled on appeal in July, involved 1.27 square kilometres of land where native title had been extinguished by the building of government infrastructure on sacred sites. The court awarded $500,000 for the value of the land (plus interest of $1.5 million), and another $1.3 million for the hurt the community had suffered due to the government’s actions. And in that case the traditional owners had only secured non-exclusive native title.

Hughston says the Yindjibarndi would seek compensation based on section 51 of the Native Title Act, which talks about “just terms” compensation. He explains, “When the Federal Court looked at [Timber Creek], it questioned whether there was a value in the land. They said the proper approach is to compensate the native title holders for their hurt, the effect it has had on them and their community. They used the analogy of a personal injury claim where the court tries to assess an amount of general damage which is compensation for the pain and suffering.

“It’s important to see here that we [the Yindjibarndi] have native title rights and interests of the strongest kind. That’s why exclusive possession is so important, a recognition that you do have the right to control who comes onto your land and what they do on your land. But more importantly, it recognises that your connection, your spiritual connection, is of such a magnitude that it gives you this right of exclusive possession. We’re looking at not a single person, we’re looking at compensating the whole of the Yindjibarndi community. There’s probably about 800 people, you’ve got to compensate them for past suffering over this mine, and you’ve got to compensate future generations.”

Hughston says the Timber Creek ruling talked about the principle of the defendant, in this case the developer, being able to say they had done the fair thing. If doing the fair thing means paying the 0.5% that other miners have paid, then the cost over the life of the Solomon project would be in the order of billions. “We are talking a lot of money, yes.”

“The real difficulty for FMG,” says Hughston, “is it has no idea what is going to happen in any future compensation claims because there is no precedent. The argument that we will put forward is a perfectly sound legal argument. It may not ultimately be accepted, but I think it has pretty good prospects.”

But Greg McIntyre, a senior counsel whose decades of native title experience includes acting as the solicitor on the Mabo case, says the Yindjibarndi win puts native title into uncharted territory.

“Other than Timber Creek, there are no cases on how you value compensation. In the case of mining, there’s no precedent,” he explains.

FMG’s Nev Power agrees there’s very little legal precedent to go on. He also cites the Timber Creek case, and adds that the company already pays a lot of money to the state in royalties, including $629 million in the 2016 financial year.

Importantly, too, he notes that “Native title expressly excludes reference to the value of minerals from calculations of compensation.”

McIntyre concurs that any compensation to be paid to the Yindjibarndi would have to be linked to the value of the land, but that would exclude the mineral rights.

“When you are talking about mining leases, the question is to what extent does the mining impede the capacity to exercise native title rights. They can make a compensation application but it’s not going to be based on the value of the iron ore.” But Deakin University’s Jon Altman, who was called as an expert witness in the Timber Creek case, says the decision affirms that compensation can be paid for non-economic pain and suffering, as well as the economic loss.

Asked about the role of Justice Rares, McIntyre wonders about the impact of the tactics used by FMG that have left the Yindjibarndi community deeply divided.

“Rares was pretty concerned about a mining company getting as heavily involved in internecine disputes. That’s good, it’s good that the courts keep an eye on those things.”

Paul Cleary

Paul Cleary is a policy analyst and author of five nonfiction books. He has a doctorate from the ANU for a thesis on Australia’s policy framework for managing its resources wealth and outcomes for Indigenous communities in the Pilbara.

September 2017

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