Australia's Fortescue Metals loses court battle with Aboriginal community

Published by MAC on 2017-07-20
Source: The Australian, ABC

Native title blow for Forrest’s Pilbara mine

Andrew Burrell, WA Chief Reporter

The Australian

20 July 2017

The (Australian) Federal Court has found a major indigenous group in the Pilbara is entitled to exclusive native title rights over land on which Andrew Forrest’s Fortescue Metals Group has built its multibillion-dollar Solomon iron ore mine, paving the way for a potentially massive compensation claim against the company.

In a historic ruling after one of the nation’s longest-running native title cases, Justice Steven Rares today found in favour of the Roebourne-based Yindjibarndi Aboriginal Corporation, which has been at war with Fortescue over royalties and land access since 2007.

Yindjibarndi leader Michael Woodley has long promised to pursue Fortescue for compensation — potentially for hundreds of millions of dollars — if the group was able to prove it had exclusive native title rights.

Justice Rares found today that the Yindjibarndi were entitled to exclusive native title rights over all unallocated Crown land in the claimed area and the Yandeeyara Reserve, except for a small area occupied by Rio Tinto’s Tom Price railway.

“That is because I am satisfied that the Yindjibarndi established … that a manjangu (or stranger) still has to obtain permission from a Yindjibarndi elder before entering or carrying out activity on Yindjibarndi country,” he said.

The claim — first lodged in 2003 — includes unallocated Crown land occupied by Fortescue’s Solomon Hub mine.

The YAC rejected Fortescue’s compensation offer of $4m a year for access to its land — an amount well below the industry norm. The company was later able to proceed with the mine without signing a land-use deal with the Aboriginal representative body.

Fortescue instead funded a splinter group, the Wirlu-Murra Yindjibarndi Aboriginal Corporation, which broke away from the YAC and has won lucrative contracts on the Solomon project.

In 2015, evidence given to the Federal Court showed Fortescue had covertly arranged a meeting of the Yindjibarndi people aimed at removing Mr Woodley and his allies as leaders of the YAC.

Justice Rares found at the time the notice of meeting was ­“calculated to mislead” because the Yindjibarndi people were unaware they were voting to give up exclusive possession of their land.

Fortescue has rejected suggestions that it sought to influence the outcome of the meeting.

Comment is being sought from Fortescue and Mr Forrest, the company chairman who has long argued that paying indigenous people too much in cash for access to their land is akin to “mining welfare’’.

Fortescue shares fell 3.5 per cent after news of the judgment broke, closing this afternoon at $5.19.

After the market closed the company told the ASX that the court’s decision would have no impact” on its operations or mining tenure at its Solomon mining hub.

Fortescue said it did not anticipate any “material” financial impact following the court’s decision.

“Fortescue will continue its approach of providing training, employment and business development opportunities for Aboriginal people to ensure the strength of its business benefits the communities in which it operates,” it said.

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Pilbara native title claim surrounding Solomon Hub mine owned by Andrew Forrest's FMG upheld

By Angus Sargent

ABC

20 July 2017

The [Australian] Federal Court has recognised an exclusive native title claim in WA's ore-rich Pilbara, potentially allowing an Indigenous group to sue Andrew Forrest's Fortescue Metals Group for millions of dollars in compensation.

Key points:

 * Native title claim covers land in WA's Pilbara on which FMG's Solomon Hub iron ore mine is located
*  The Yindjibarndi Aboriginal Corporation says it will launch a compensation bid
*  A bitter row broke out among rival Aboriginal groups after FMG failed to reach an agreement on royalties

The decision, handed down in Sydney, grants exclusive native title to the Yindjibarndi people over an area of land that includes FMG's multi-billion-dollar Solomon Hub mine.

The native title claim has run alongside a dispute over royalty payments generated from the FMG project, which is located to the north of Tom Price on Yindjibarndi land.

The claim for exclusive native title was first lodged by the Yindjibarndi Aboriginal Corporation in 2003 and covers about 2,700 square kilometres of land just north of Karijini National Park.

"I have found that the Yindjibarndi are entitled to exclusive native title rights and interests over all of the unallocated Crown land in the claimed area and the Yandeeyara Reserve, except for a small area occupied by the Tom Price railway," Justice Steven Rares found.
"This includes the unallocated Crown land occupied by FMG's Solomon Hub mine."

Yindjibarndi Aboriginal Corporation chief executive Michael Woodley said it was a memorable day for his people.

"This is a moment in our time, we all today," he said.

"You know we talk about legacies — we leave the legacy today for all Yindjibarndi, whether you're with us or against us, this is your moment too."

Native title expert Richard Bartlett said it was a "landmark" case that would set a precedent for others.

"It certainly is a landmark case with respect to settling compensation in relation to an existing mine, because it will guide us on principles and will be of very great interest in that respect," Professor Bartlett said.

Court decision won't have any financial impact: FMG

But FMG downplayed the significance of the ruling.

"The court's decision has no impact on the current and future operations or mining tenure at the Solomon Hub," company secretary Alison Terry said in a statement.

"We have no commercial concerns and do not anticipate any material financial impact following the court's determination."

Negotiations between FMG and the YAC have been messy and protracted, dividing the Pilbara town of Roebourne and putting local indigenous families at war with each other.

FMG also controversially provided support and funding to a splinter group — the Wirlu-Murra Yindjibarndi Aboriginal Corporation, which separated from YAC in 2011 to negotiate their own royalty terms which were favoured by FMG.

The Wirlu-Murra were seeking to wrest control of Yindjibarndi away from the existing leadership.

This would have enabled Fortescue to enter into a formal agreement with Yindjibarndi on the financial terms proposed by Wirlu-Murra.

Fortescue had also previously awarded $200 million in service work on its Solomon hub to the Eastern Guruma and Wirlu-Murra Aboriginal corporations.

Yindjibarndi has previously stated that it intended to sue Fortescue Metals Group should it be granted exclusive native title.

There were shouts and cheers from jubilant Yindjibarndi representatives in Roebourne, where proceedings were sent via videolink as Justice Rares handed down his decision.

Compensation bid coming

Speaking in Perth, Yindjibarndi lawyer George Irving said the group had "got everything they were asking for" but warned that a compensation bid was looming.

"It seems to me that compensation would be far in excess of what FMG has been prepared to accept," he said.

Mr Irving said the matter was not over.

"Of itself it can't settle the dispute with FMG, obviously it's open to FMG and to the state and other parties to appeal against the decision of His Honour," he said.

"We always hope that's not going to happen because it would place an awful strain on the resources of Yindjibarndi."

Aboriginal Affairs Minister Ben Wyatt congratulated Yindjibarndi people as "determined and committed advocates" who had won despite "not insignificant obstacles over many years".

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 Fortescue likely to appeal native title ruling

The Australian

21 July 21 2017

Andrew Forrest’s Fortescue Metals Group is likely to appeal a Federal Court ruling that delivered exclusive native title rights to a Pilbara indigenous

group over a swath of land on which the company has built its multibillion-dollar Solomon iron ore project.

Fortescue chief executive Nev Power said he believed yesterday’s landmark ruling in favour of the Yindjibarndi people was wrong, signalling the costly and complex legal battle could drag on for several more years.

He also challenged suggestions the miner is facing a bill of more than $100 million to compensate the Yindjibarndi people for the revenues generated from the Solomon mine.

“I think we are likely to appeal (to the full bench of the Federal Court,” Mr Power told ABC radio in Perth.

“It’s a very unusual decision in that the judge has found exclusive native title possession on this land, which we think is unlikely to be the case.

Fortescue up for ‘huge’ sum

“So we will be looking at it definitely and considering an appeal.”

Mr Power said Fortescue believed the Yindjibarndi should only have been granted non-exclusive possession rather than exclusive native title, which delivers the group a right equivalent to freehold title over the 2700 sq km area.

He described as “wildly inaccurate” speculation that Fortescue could be liable for a compensation bill of more than $100 million.

“This is a very complex area, however it comes down to the level of compensation under the Native Title Act,” he said.

“And the only case that has been heard was a case in the Northern Territory where there was around $3 million awarded for a number of native title extinguishments, and that was over a whole town.

“So we think the level of compensation will be way less than that.”

But as I has reported, rival iron ore miner Rio Tinto has struck native title agreements in the Pilbara worth 0.5 per cent of revenue, which if replicated over Solomon would deliver the Yindjibarndi around $20m a year in royalties at current iron ore prices.

Applying a 0.5 per cent royalty over the ore mined historically by Fortescue at Solomon could deliver a back payments to the Yindjibarndi of around $100 million.

In his decision, Justice Rares found the Yindjibarndi were entit­led to exclusive native title rights over all unallocated crown land in the claimed area and the Yandeeyara Reserve, except for a small area occupied by Rio Tinto’s Tom Price railway.

“That is because I am satisfied that the Yindjibarndi established … that a manjangu (or stranger) still has to obtain permission from a Yindjibarndi elder before entering­ or carrying out activity on Yindjibarndi country,” he said.

Negotiations between the Yindjibarndi Aboriginal Corporation and Fortescue broke down in 2008 when the indigenous body rejected an offer of $4m a year for access to its land — an amount well below the industry norm.

The company was later able to proceed with the mine without signing a land-use deal with the Aboriginal representative body.

Fortescue instead funded a rival group, the Wirlu-Murra Yindjibarndi Aboriginal Corpora­tion, which broke away from the YAC and has won lucrative contracts­ on the Solomon project.

In 2015, evidence given to the Federal Court showed Fortescue had covertly arranged a meeting of the Yindjibarndi people aimed at removing Mr Woodley and his allies­ as leaders of the YAC.

Justice Rares found at the time the notice of meeting was “calcul­ated to mislead” because the Yindjibarndi people were unaware they were voting to give up exclusive possession of their land.

Fortescue has rejected suggestions that it sought to influence the outcome of the meeting.

Mr Power said today he continued to back the Wirlu- murra Yindjibarndi Aboriginal Corporation and insisted the miner had not split the community by supporting the breakaway group.

Fortescue told the Australian Stock Exchange yesterday it believed the case would have no material financial impact and that output from its Solomon mine would be unaffected.

Fortescue’s share price fell 3.5 per cent after news of the judgment broke, closing yesterday at $5.19. The shares are down a further 2.5 per cent today.