The “clean energy” movement is rapidly developing at a rate that is outpacing legislators and regulators. According to the Clean Energy Council, there are 89 renewable energy projects in construction or due to start construction soon across Australia. The transition to renewable energy represents the biggest shift in our lifetime, affecting all aspects of the global economy, and native title agreements are no exception. A new era of energy and commerce requires a new era of native title negotiations and relationships.
Over 62.8% of Australia’s land mass is now subject to native title claims or determinations, which encompasses the location of a large portion of Australia’s richest renewable resources. Traditional Owners recognise the opportunity in leading the clean energy revolution and negotiating agreements which set the standard for generations. Negotiating native title agreements for renewable energy projects has seen a change in focus. Traditional Owners are taking a more active role to facilitate participation and collaboration with proponents and developers. Renewable energy projects present a huge opportunity to create lasting, intergeneration benefits for Traditional Owners. However, renewable energy imposes a cost on country that is often forgotten in the well-intentioned race to net zero.
For the above reasons, Traditional Owners are key stakeholders in any project conducted on native title land and companies, now more than ever, need a social licence to operate. From a native title perspective, this means:
- early engagement;
- a better standard of negotiation; and
- respecting discussions with Traditional Owners and the positions that they come from.
The First Nations Clean Energy Network (Network) was established on 17 November 2021 to encourage and facilitate partnerships between Aboriginal communities and renewable energy developers and construct renewable projects which in turn provide reliable power and end energy insecurity for Aboriginal communities. The Network, which is backed by the National Native Title Council, the Australian Council of Trade Unions and the Clean Energy Council, will also provide resources, educational training and support to empower Traditional Owners in negotiations with companies in respect of renewable energy projects.
Balancing bargaining power: participation and collaboration
There are a number of key “themes” we have seen arise during native title negotiations for renewable energy projects. One central theme is enhanced empowerment for Aboriginal people through a mutual redistribution of bargaining power. Traditional Owners at the negotiating table are experienced, commercially aware and focussed on sufficiently protecting country and their rights to ensure meaningful participation and collaboration between the parties.
We consider best practice for negotiations is that the agenda, nature and timeline of negotiations should be developed between the Traditional Owners and the company in a way to ensure that Traditional Owners have sufficient time and resources to meaningfully negotiate. In particular, it is best practice to ensure that Traditional Owners have access to qualified and independent experts to provide advice for negotiations. For this reason, it is often beneficial for companies to enter into a Negotiation Protocol or Negotiation Funding Agreement with the company they are engaging with, particularly in respect of large projects and agreements such as Indigenous land use agreements.
Negotiations must take place in a respectful manner and in good faith. Many renewable energy companies are supported by infrastructure funds (including from offshore) that have never entered into native title agreements and may require guidance to ensure that they are engaging in a productive and culturally appropriate manner.
The cost of decarbonisation: the role of Aboriginal heritage and environmental protection
As Tony McAvoy SC, founding member of the Network and Australia’s first Indigenous Senior Counsel, rightly stated “the clean energy boom, while necessary, is not cost free”. Renewable energy projects have a different impact on country than traditional mining projects, however, this impact is still serious and in many cases, will continue for an indefinite period of time. Renewable energy projects can tie up huge expanses of land and, at the very least from a visual and amenity perspective, have a large impact on country. Traditional Owners are the custodians of the land and have a duty to maintain and protect their country. Adherence to the protection of Aboriginal heritage and the environment is a part of every renewable energy company’s social (and potentially legal) licence to operate.
Protection of and access to sites of cultural significance on country is of key importance to Traditional Owners. The sheer scale of renewable energy projects risks interrupting this access. Early engagement with the Traditional Owners is key in this respect, as Traditional Owners can provide advice about their country’s landscape and key areas of significance so the project can be developed with appropriate respect paid to those areas.
While the environmental impacts of traditional mining projects and their duration is widely known and understood, the impacts of renewable energy projects are less certain. From a certain point of view, the development of a renewable energy project involves developing technology being used for an unknown period in circumstances where tenure solutions and regulation are being developed by the States (apparently independently of each other). Renewable energy companies and Traditional Owners should work together to ameliorate uncertainty in this respect.
Recent events, such as the destruction of the caves at Juukan Gorge and subsequent Federal inquiry have thrown the importance of protecting Aboriginal cultural heritage sites into the spotlight. Now, more than ever, companies are being held to account for their actions in respect of Aboriginal heritage. We expect that Aboriginal heritage will continue to be an increasingly significant focus of native title agreement negotiations.
Opportunity and stability
Renewable energy projects present an opportunity for long-term, stable income for Aboriginal corporations. In light of the long term nature of these projects, Aboriginal corporations are looking to generate inter-generational wealth through economic participation and commercial involvement. However, they each present difficulties and issues which must be overcome.
Native title agreements for renewable energy projects present an opportunity to be creative in the ways that economic benefits are shared. The economic benefits shared can range from an equity ownership stake, management positions, royalty streams and break fees if there is uncertainty as to whether the project will proceed. There is no “one size fits all” solution and each individual agreement should be tailored to factor in the circumstances of that specific project and the priorities of the local communities affected. Similar to the industry itself, companies should look to get ahead of this and foster positive relationships with the communities they are working with to develop innovative and meaningful ways for those communities to participate, collaborate and derive benefit from renewable energy projects.
Social cohesion and inclusion
A key opportunity for collaboration between Traditional Owners and renewable energy companies is through forward planning for training and education. Renewable energy projects often have long project lead up times. These time periods provide community and companies the opportunity to establish training and education programs and scholarships. Such programs to enable the inclusion of Aboriginal skilled workers to contribute to the project upon commencement.
There are different phases of renewable energy projects, with different workforces required for construction, as opposed to operation. Early engagement with Traditional Owners and a clear and open dialogue about the needs of the project in each stage enables the company and community can work together to ensure an inclusive, diverse and efficient allocation of employment opportunities.
Besides employment, training and economic benefits, renewable energy projects can provide other benefits such as energy security to remote communities. Energy security is a basic right, yet many Aboriginal people living in remote communities still do not have access to reliable and inexpensive energy sources. In lieu of meaningful State and Federal programs, we foresee native title agreements for renewable energy projects clearly moving towards this trajectory and this is a key aim for the Network.
Opportunities, not obstacles
Given the importance of land to the viability of renewable energy projects, Traditional Owners are integral stakeholders. Traditional Owners are the custodial protectors of their country and bear a huge amount of the risk by allowing renewable energy projects of large scale to be constructed on country over an indefinite and uncertain timeline. As such, their rights to participate and have their say and share of the benefits of the project should be protected and representative of the risk assumed.
Renewable resources are indefinite by nature. Renewable energy projects may span generations so it is key that Traditional Owners are provided an opportunity to collaborate and set the parameters of their relationship with such projects. When commencing engagement with Traditional Owners, renewable energy companies must ensure there is a whole company commitment to upholding these principles, especially from the company leadership.
Negotiations and drafting can take a similar form to traditional mining native title agreements, however, these principles and examples should only be used as a guide or a starting point, as renewable energy projects should go further in the empowerment of Traditional Owners and the creative opportunities and benefits offered, in recognition that this is a new frontier, and that decisions now will have effect in generations to come.
If you have a renewables project being constructed and would like tailored and strategic advice as to how to engage and commence negotiations in a culturally appreciative and sensitive way, please contact Amelia Arndt, Arabella Tolé or Marshall McKenna.