TI­TLE FIGHT

The great phi­lan­thropist vs the peo­ple of the Pil­bara

The Monthly (Australia) - - FRONT PAGE - BY PAUL CLEARY

The great phi­lan­thropist vs the peo­ple of the Pil­bara

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 onetwen­ti­eth 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 Roe­bournebased 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 cap­tialised 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 ironore 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.”

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