Carbon farming on native title land

The indigenous estate and carbon farming have many touch points.  In the past year there have been two cases in the context of carbon farming projects on native title land.

The primary issue in the first case relates to the confused legislative history of the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) (CFI Act).  Parliament seems undecided as to whether the consent of a registered native title body corporate is required for both (long term) sequestration and (short term) emissions avoidance offset projects.  A second issue, touched on briefly by both cases, is the significance of a native title right to undertake controlled burning within the CFI Act framework, which requires the project proponent to have a "legal right to carry out" any offsets project based on burning.  The answer may be different according to whether the determined native title is exclusive or partially extinguished.

Country Carbon Pty Ltd v Clean Energy Regulator 

In Country Carbon Pty Ltd v Clean Energy Regulator [2018] FCA 1636, Country Carbon Pty Ltd applied to the Clean Energy Regulator for a declaration of two "eligible offsets projects" under the CFI Act.  Country Carbon applied to obtain carbon credits by undertaking controlled savannah burning on pastoral lease land in respect of which non-exclusive native title had been recognised in Greenwool for and on behalf of the Kowanyama People v State of Queensland [2012] FCA 1377 (Kowanyama Determination).  Abm Elgoring Ambung Aboriginal Corporation (Aboriginal Corporation) is the registered native title body corporate representing the common law holders of native title.

In judicial review proceedings, the Court was required to consider, in summary:

• the power of the Regulator to refuse to issue Country Carbon with carbon credits on the basis that Country Carbon had not obtained the consent of the Aboriginal Corporation (as an "eligible interest holder" under the CFI Act) to undertake the Projects; and
• whether, it is a precondition to the making of a declaration by the Regulator that an offsets project is an eligible offsets project, that the project proponent have "the legal right to carry out the project".  (The Aboriginal Corporation challenged the existence of such a right on the basis that it would be inconsistent with the native title rights in the Kowanyama Determination.)  

Did the CFI Act require Country Carbon to obtain the Aboriginal Corporation's consent?

The CFI Act recognises two different kinds of offsets projects: sequestration and emissions avoidance offsets projects.  In mid-2015, the Regulator declared that Country Carbon's savannah burning projects were eligible "emissions avoidance" offsets projects under section 27(2) of the CFI Act (the Projects).  However, under section 28A of the CFI Act, the Regulator imposed a condition that Country Carbon obtain the consent of any "eligible interest holders" before it could be issued with any carbon credits under the CFI Act.  Section 45A of the CFI Act states that native title holders will be an "eligible interest holders" where the area is native title land and there is a registered native title body corporate for the area of land.  

It was not disputed that the Aboriginal Corporation was the registered native title body corporate for the project area.  However, Carbon Country asserted that the requirement for eligible interest holder consent only applied with respect to sequestration projects and not emissions avoidance projects such as that proposed by Carbon Country. 

To this end, Country Carbon argued that section 28A of the CFI Act should be construed as if it read (with the word to be "read in" indicated in bold):

• Section 28A applies if an application under section 22 has been made for a declaration of a sequestration offsets project as an eligible offsets project.

Country Carbon relied extensively on the legislative history of the CFI Act and the effect of the amendments to the CFI Act in 2014.  Country Carbon argued that:

• prior to the 2014 amendments, a provision indicating consent of eligible interest holders was only required for sequestration projects (because in some circumstances land in respect of carbon sequestration projects may be subject to a carbon maintenance obligation which could expose land owners to risk in the future of having to "make good" the land); and
• the Carbon Credits (Carbon Farming Initiative) Amendment Bill 2017 (Cth), currently before Parliament, expressly seeks to restrict the application of section 28A to sequestration projects in order to address an error introduced when the CFI Act was amended in 2014.

Despite these extrinsic materials, the Court held that section 28A applies to a declaration in relation to all eligible offset projects because the text of section 28A: 

"…has a clear meaning… and that meaning is not irrational or unreasonable, and does not produce capricious results. ..The applicant’s contentions about what the Court should do to correct a 'drafting mistake' fall on the wrong side of the line in terms of the Court’s function, on present authorities."

Justice Mortimer was not convinced there was sufficient ambiguity or irrationality on the face of section 28A to warrant reading in the word "sequestration" as advocated by Country Carbon.  However, she stated that although the law required such a conclusion regarding the scope of section 28A, she made it with some reluctance given the lack of clarity in the CFI Act.

The legal right to undertake a carbon farming project

As noted, the Aboriginal Corporation asked the Court to determine whether a project proponent's "legal right to carry out the project" is a "jurisdictional fact" that is a necessary precondition to the Regulator's discretion to declare the Country Carbon projects to be eligible offsets projects.  The Aboriginal Corporation also sought relief in the form of a declaration that Country Carbon does not have the "legal right to carry out the project" within the meaning of the term "project proponent" in the CFI Act.
The Court determined the jurisdictional fact question in the negative.  It concluded that whether a person has a "legal right to carry out the project" so as to fall in the CFI Act definition of "project proponent", is a matter to be established to the satisfaction of the Regulator.

Having decided this, the Court did not need to consider whether Country Carbon's asserted right to undertake savannah burning, which derived from the rights of the pastoral lease holder, was in conflict with the native title rights specified in the Kowanyama Determination.  A fascinating question for another Court.

Balanggarra Aboriginal Corporation v State of Western Australia 

Balanggarra Aboriginal Corporation v State of Western Australia [2018] FCA 1538 is a decision in a contest regarding the award of legal costs.  This issue arose in the context of a dispute over the application of State laws to the Balanggarra 1 Fire Project (Fire Project) between the State and the Balanggarra Aboriginal Corporation (BAC), a registered native title body corporate holding exclusive native title rights on trust for members of the Balanggarra Community (see Cheinmora v State of Western Australia (No.2) [2013] FCA 768; Cheinmora v State of Western Australia (No.3) [2013] FCA 766 (Balanggarra Determinations)).  

The Fire Project involves burning carried out on the Oombulgurri Reserve within the Balanggarra exclusive native title determination area by members of the Balanggarra community.  It is intended to rejuvenate the land, curb the incidence of wildfires and protect sites of spiritual significance.  Fire Project is a declared emissions avoidance offsets project under the CFI Act.

Between 2015 and 2017, before the BAC issued proceedings, the State had asserted that the applicant could not lawfully carry out the Fire Project without first obtaining various permissions under the Land Administration Act 1997 (WA).  In correspondence, the State asserted that under the Balanggarra Determinations, the native title rights had to be exercised "for personal, domestic and communal needs including cultural and spiritual needs but not for commercial purposes".  On that basis, it was asserted, a deed of licence permitting the Fire Project was required.

The Court did not need to consider any of the substantive issues.  Soon after the BAC commenced proceedings seeking declarations that the Balanggarra community could carry out the Fire Project without permission and injunction restraining the State from bringing any enforcement action, the State "appeared to abandon its earlier position".  As a result, the BAC discontinued the proceedings.

In the costs contest, the Court found that the presumption that the discontinuing party is liable to pay the costs of each other party should be displaced in the circumstances of this case.  The Court accepted that the State had quickly capitulated once proceedings were issued.  Justice Barker also noted that there were strong grounds to believe that had the matter gone to trial it would have been found that the bulk of the land was not Crown land and so was not, in fact, regulated by the Land Administration Act as had been asserted by the State over several years.  That is, had the proceeding continued, the BAC would have essentially achieved what it had set out to do.