By Dr Don Fuller

As pointed out by Reeves in a review of the Northern Territory Aboriginal Land Rights Act in 1998, Justice Woodward had recommended the establishment of the Northern Land Council and the Central Land Council.

The Woodward Commission into the means of recognising Aboriginal Land Rights was announced in 1973 and in that report he noted that the commission had received very few submissions from Aboriginal people in the Northern Territory, despite the fact that he had visited a large number of Aboriginal communities and had spoken to a large number of Aboriginal people.

Despite this, he still said he “felt very strongly the lack of a cohesive organisation linking these various peoples to whom [he had] … spoken”.

He expressed the need, as a matter of urgency, to, “mobilise Aboriginal opinion”.

This indicated a serious lack of understanding by Woodward of the high level of diversity and cultural differences amongst Aboriginal people.

It was quite natural that many Aboriginal tribal groups and their elders would not feel comfortable sitting with, and aligning with, other groups as Aboriginal people have always demonstrated a high level of cohesive, private, tribal behaviours.

In some cases they had been, at various times, in serious conflict over the centuries.

It could be argued that Woodward made a serious mistake attempting to force different and diverse groups of Aboriginal peoples together, as if they were one large, homogeneous, voting bock.

This has led to many of the differences and difficulties being experienced in the Land Council structures of today.

As a result of Justice Woodward’s recommendations, the NLC and CLC were established during the second half of 1973.

The newly formed land councils were also provided with funds to employ solicitors and barristers to make submissions to the commission detailing the attitudes of Aboriginal people in the Northern Territory to those matters.

This was another serious mistake. It significantly enhanced the power of the land councils to the detriment of the communities and people they were supposed to represent, and turned discussions away from Indigenous forms of governance and dialogue to bureaucratic, legal forms that many traditional Aboriginal people could not participate in.

It has led to land council structures that are not properly representative of the community interests they are supposed to stand for.

This in turn, has allowed the executives of these land councils to establish bodies such as investment arms, aimed at accumulating wealth over the long term, rather than serving the dire and urgent needs of Aboriginal people in health, housing, education and infrastructure, for example.

Recently a number of Arrente traditional owners have called for a federal investigation into governance of the CLC, including the lack of adequate representation, accountability and transparency in decision making.

In addition, it has been reported recently that the Anindilyakwa Land Council offices have been raided by the National Anti-Corruption Commission. In June the National Indigenous Australians Agency confirmed that corruption allegations levelled against the land council by traditional owners had been referred to the NACC.

The NLC has also been raided recently by the NACC, following allegations of corrupt behaviours.

While the Land Rights Act has been very effective in granting traditional Aboriginal land in the Northern Territory, it has been very ineffective in providing Aboriginal people with effective control over activities on their lands.

Currently, around 48 per cent of the Northern Territory’s land mass, and 80 per cent of its coastline is classed as Aboriginal land. Very little of this enormously wealthy asset has been engaged for productive economic purposes to the detriment not only of Aboriginal people, but Australia as a whole.

This raises the obvious question as to how and why this has been allowed to happen, in a manner which continues to severely disadvantage Aboriginal people on their traditional lands.

One of the most important reasons is that under the way in which the Land Rights Act was designed, Aboriginal lands are not held privately by traditional Aboriginal owners, but by land trusts. That is, they are held collectively, for the wider Aboriginal community that is entitled to use and occupy the land.

The land councils are required to consult with not only the traditional Aboriginal owners of the land, but also ‘any other’ Aboriginal people who may use the land. They are also required to consult with any Aboriginal community or group that may be affected by the proposed action.

This requirement has allowed land councils to always find an individual or group that opposes development for reasons that may include personal jealousy or animosity, except in the case where an undisputed ‘big man’ or ‘big woman’, completely dominates the social and cultural region, or the executive of a land council.

It has therefore often been almost impossible for an Indigenous individual or family to utilise land on which to establish a business when the land is communally owned.

This severely restricts the ability of individuals to establish joint-venture arrangements with non-Indigenous companies who could provide much needed capital and management expertise, for a successful entrepreneurial venture in areas such as fishing and tourism, for example.

In addition, royalties paid on mining for example, or other economic activities on Aboriginal land, which are paid communally, inevitably lack accountability and transparency and result in significant corruption, with a few ‘big men and women’ appropriating most of the benefits paid, thereby restricting capital to potential business ventures.

One of the most fundamental requirements of a successful market based economy such as Australia, is a strong system of property rights.

Property rights are in fact regarded by many as a basic human right, and the impact of their absence can be seen in sharp relief with regard to the effects on poverty and distress that have resulted from Aboriginal collective land ownership.

In addition to determining the use of a resource, private property rights also confer two other fundamental rights essential to economic growth and development.

One is the exclusive right to the services and returns provided by the resource.

Beside this, a private property right includes the right to lease, or sell any portion of the rights at whatever price the owner determines.

Many believe that restrictions on property rights, as established by the Aboriginal Land Rights Act, act as the major brake on Aboriginal social and human development and how Aboriginal people can work closely with mainstream Australia.

This is because under a private property system the market values of property reflect the preferences and demands of the rest of society.

No matter who the owner is, the use of the resource is influenced by what the rest of society believes is its most valuable use.

An owner who chooses some other use, must forsake that highest valued use, and the price others would pay for the resource or for the use of it. This results in private property decisions being subject to public, or social, evaluation.

However, the main purpose of property rights, and their major accomplishment, is that they eliminate destructive behaviours for the control of economic resources, such as land.

Such behaviours and conflicts are ever present in land council decisions involving land because of the absence of private property rights.

Well defined and well protected property rights replace competition by violence, aggression and negative behaviours with competition by peaceful means.

The extent and degree of private property rights fundamentally affect the ways people compete for control of resources.

Substantially weakened private property rights occur in socialist systems and where resources such as land are commonly owned. Under socialism, government agents exercise control over resources. The rights of these agents to make decisions about the property they control are highly restricted.

Aboriginal land under the Land Rights Act is currently held in the form of a commonly owned resource.

A main problem with the manner in which these ownership arrangements were designed however, is not only the absence of private property rights but, that the motives and ownership interests of the common ownership group have been very badly defined from an economic and legal point of view, to include an impossibly wide range of disparate and conflicting interests in the land.

Private property rights to a resource need not be held by a single person. They can be shared, with each person sharing in a specified fraction of the market value while decisions about uses are made in whatever process the sharing group deems desirable.

However, the group needs to be well defined and share common objectives and interests.

A major example of such shared property rights is the corporation. In a limited liability corporation, shares are specified and the rights to decide how to use the corporation’s resources are delegated to its management.

Each shareholder has the unrestrained right to sell his or her share. Limited liability insulates each shareholder’s wealth from the liabilities of other shareholders, and thereby facilitates the anonymous sale and purchase of shares.

In other types of enterprises, especially where each member’s wealth will become uniquely dependent on each other member’s behaviour, property rights in the group are usually saleable only if existing members approve of the buyer.

This is typical for joint ventures and partnerships.

If economic development is to proceed on Aboriginal land, it is essential that existing land rights legislation be reformed as a matter of priority.

The Federal Government’s White Paper on Developing Northern Australia emphasised that there was a priority need to build a strong, prosperous economy and that this was essential for a safe, secure Australia.

It also stressed that secure land and property rights underpin investment and development, and that more certainty is required for investors to facilitate such development and economic growth in the north of Australia.

As pointed out by Warren Mundine recently, despite the vast land resources owned by Aboriginal groups in the Territory, the fundamental building blocks of a successful market based economy in Australia are absent due to land rights legislation, and the suffocating presence of the land councils with their large, unwieldy, expensive bureaucracies.

This inability to build economic activity on Aboriginal land sets up a self-reinforcing cycle of very weak business activity, low school attendance, low educational outcomes, social dysfunction and crime.

However, while Aboriginal people suffer the most as owners of these assets, their non-productive use also affects the economic and social situation of Australians as a whole, in a substantial way.

This is occurring as royalties meant for desperate Aboriginal people are being funnelled by bodies associated with land councils, into long term asset accumulation for purposes unknown.

Dr Don Fuller holds a first class Honours degree and PhD in economics from the University of Adelaide. He has worked as a senior public servant in the Territory and as Professor of Governance and Head of the Schools of Law and Business at Charles Darwin University. He grew up in Darwin and attended Darwin High School.

He was also involved with the establishment of the first NT medical school under the leadership of Flinders University vice-chancellor Professor Ian Chubb.

Dr Fuller was also an adviser to the former CLP MLA Maralampuwi Francis Xavier, was briefly the senior private secretary to Chief Minister Paul Everingham, and is a former member of the CLP and the ALP.