Drawing the line between economic and cultural loss in Yindjibarndi

The Yindjibarndi compensation claim has become a pivotal test of how Australian law values native title rights and interests, both in economic terms and through the lens of cultural connection. Emerging from mining tenements granted over what is now FMG’s Solomon Hub Project, the decision of Yindjibarndi Ngurra Aboriginal Corporation v State of Western Australia required the Court to apply the reasoning in Northern Territory v Griffiths (2019) 269 CLR 1 (Griffiths) and the Native Title Act to contrasting assessments of loss, ultimately breaking new ground in compensation for future acts where native title continues to exist. 

Background of the compensation claim

The claim arose from mining tenements granted by the State of Western Australia (the State) over land in the Pilbara, which later developed into FMG’s Solomon Hub Project (a collection of large-scale iron ore mines). In 2003, the Yindjibarndi People lodged a native title claim over the area, which resulted in the Federal Court determining that the Yindjibarndi People had exclusive rights to possession, occupation, use and enjoyment of parts of the land and non-exclusive native title rights and interests over the balance of its determination area.

The Yindjibarndi Ngurra Aboriginal Corporation (YNAC), as the registered native title body corporate, subsequently sought compensation for the impact of the mining tenements on native title rights and interests under the Native Title Act 1993 (Cth) (Native Title Act). For economic loss, YNAC claimed $800 million, based on a royalty percentage of mining profits made at the Solomon Hub Project. For cultural loss it has suffered since the grant of the tenements, it sought $1 billion.

FMG and the State argued that the economic loss was approximately $100,000 and tied to the value of the freehold estate in the land. Both contended that the cultural loss claim was ‘manifestly excessive’ and should fall in the range of $5 to $10 million.

Application of Griffiths and the impact on the Yindjibarndi People

Burley J determined that the reasoning in Griffiths was key to the determination of the case and that it was necessary to first recognise a clear division between economic loss and cultural loss when considering compensation. Burley J emphasised that economic loss is grounded in objective metrics, and applied an adapted ‘Spencer test’ (Spencer v The Commonwealth (1907) 5 CLR 418). Cultural loss, on the other hand, required engagement with evidence that highlighted the spiritual and cultural connection of the Yindjibarndi People, and compensated based on loss or diminution of traditional attachment to land. To this end, his Honour noted the significant scale of the infrastructure and operations at the Solomon Hub Project and the corresponding impact that the mines had on the Yindjibarndi People and their culture.

The parties also raised a number of preliminary issues, with Burley J deciding that:

• the claim properly arose under the Native Title Act, not the Mining Act 1978 (WA) (Mining Act);
• the mining tenements constituted “future acts” under the Native Title Act; and
• exclusive native title rights were relevant to the assessment of compensation and applied from the date of the claim in July 2003.

Assessment of economic loss under the Native Title Act and Mining Act

YNAC advanced the argument that the basis for calculating economic loss should hinge on the value of profits made at the Solomon Hub Project (called the ‘exchange case’). This argument was rejected, and it was held that the correct approach was set out in s 51(3) of the Native Title Act, which required consideration of the principles and criteria for determining compensation under the s 123(2) of the Mining Act. Reference to the freehold value using this approach does not offend the requirement in s 51(1) of the Native Title Act that compensation be awarded “on just terms”, as was concluded in Griffiths.

Further, while his Honour found that the Racial Discrimination Act 1974 (Cth) was applicable, it was unnecessary to determine YNAC’s argument that a compensation claim under s 123(2) of the Mining Act may be discriminatory, given his primary findings that the claim was properly brought under the Native Title Act.

Liability and constitutional issues: Section 125A of the Mining Act

Importantly, his Honour stated that under s 125A of the Mining Act, the State had legislated to make a holder of a mining tenement liable to pay any compensation under the Native Title Act, and concluded that FMG’s challenge to the constitutional validity of s 125A pursuant to s 109 of the Constitution should not succeed as there was no s 109 inconsistency.

Cultural loss: Impact on Yindjibarndi Country and heritage

Burley J noted that calculating cultural loss was a complex balance of factors to determine the spiritual relationship that the Yindjibarndi People had with their country, and then the translation of that spiritual hurt caused by the compensable acts into compensation. His Honour again highlighted the significant connection that the Yindjibarndi People had to Country, and that the evidence supported a conclusion that substantial damage has been done to Yindjibarndi songlines and other areas of cultural heritage, as well as sites sacred to the Yindjibarndi People being removed, damaged or destroyed during mining operations. The use of groundwater at the Solomon Hub Project had drained creeks and surface water and had led to further cultural loss. Burley J did however reject an argument that social division within the Yindjibarndi People, stemming from the granting of the mining tenements was compensable under cultural loss.

Implications for native title jurisprudence

This case is yet another watershed moment in the development of the jurisprudence of compensation under the Native Title Act. It is the first time the Courts have assessed compensation for a ‘future act’ where exclusive native title rights and interests have not been ‘extinguished’. It is also the first time the validity of a State law passing on the liability for compensation under the Native Title Act to the beneficiary of the relevant government act has been considered. There is no doubt the parties to the case will review the reasons for the decision very carefully and, we suspect, one or more of the parties are likely to appeal the decision.