Federal Court finds Fortescue didn’t cause Yindjibarndi rift

A feud between rival Yindjibarndi factions over support for Fortescue’s Solomon Hub iron ore project was not caused by the miner.

That finding from Federal Court Justice Stephen Burley was among several notable points to emerge from the redacted 354-page judgement published on Friday behind the decision to award the Yindjibarndi people $150 million in compensation from Fortescue for building the Solomon Mining Hub without their consent.

Blame for a rift between the Yindjibarndi people in Roebourne and surrounding remote communities has long been laid at Fortescue’s feet.

The story for more than a decade has gone that Fortescue and its founder, Andrew Forrest, drove a wedge between supporters of Yindjibarndi Aboriginal Corporation and a splinter group known as Wirlu-Murra Yindjibarndi Aboriginal Corporation, whose members wanted to strike a deal with the miner.

That wedge led to a bitter rivalry forming, causing a breakdown in family and broader relations particularly in the Yindjibarndi people’s adopted home of Roebourne where social dysfunction was, for a time, rife.

In the reasoning for his verdict, Justice Burley found no evidence to support the assertion Fortescue caused the division.

“The twin root causes of the disagreement leading to the social division do not lie with the conduct of [Fortescue],” he said.

“While [Fortescue] may have facilitated or exploited this to some extent, it did not cause it. 

“The division within the Yindjibarndi community ultimately stemmed from there being differing views within the community as to how negotiations with [Fortescue] should have been approached.”

Justice Burley found sufficient evidence to determine there were ‘genuine and strong’ differences which would have bubbled to the surface regardless of Fortescue’s actions.

YAC had pressed the case for $112m in compensation for social disharmony they alleged Fortescue caused, an argument which ultimately failed.

“To find otherwise would be to conclude that the members of the Yindjibarndi community who took objection to the manner in which YAC conducted its affairs and who took a different view to the manner in which the negotiations with FMG were conducted were not capable of and failed to exercise their own will in relation to these matters,” Justice Burley found.

“No evidence supports that proposition.”

The rift has partially healed since exclusive possession was determined in 2017.

Some tension remains and the breakaway WMYAC organisation still operates today.

Economic loss

One of the more contentious decisions of Justice Burley was to estimate compensation for economic loss at $100,000 plus interest, based on freehold value of the land.

Yindjibarndi Ngurra Aboriginal Corporation had argued for $678m on the basis of a standard royalty rate of ore mined from Solomon.

Justice Burley largely sided with convention on this matter, noting minerals in the ground were owned by the state, regardless of who controlled the land.

“Since 1899 all minerals in the land the subject of the determination area, including iron ore, have belonged to the state,” he found.

“There would be an oddity about determining compensation (payable either by the State or FMG) by reference to minerals owned by the state.

“The approach propounded by YNAC would lead to an incongruous outcome that the compensation for economic loss for the suspension of native title rights and interests in the present case would far exceed – by a multiplier of over 100,000 – the compensation for economic loss arising had there been a compulsory acquisition and extinguishment of the native title rights and interests of the Yindjibarndi people.”

Yindjibarndi’s figure for economic loss was derived from a royalty of about 0.5 per cent of the value of ore mined, which is understood to be a ballpark figure for several deals struck in the Pilbara between miners and native title bodies.

In 2008 Yindjibarndi had pressed for a 5 per cent royalty – later reduced to 2.5 per cent – while Fortescue wanted an access deal covering all Yindjibarndi lands. Neither eventuated.

“[YNAC] submits, the evidence reveals that native title parties in the Pilbara are prepared to enter into negotiations and to agree to the grant of mining tenements over the land for the effective extinguishment of their rights and interests,” Justice Burley said.

“Miners can, and do, negotiate and reach agreement with native title holders. 

“Accordingly, YNAC submits that there is no need to confine the assessment of economic loss to the freehold value of the land, because the exchange value of the native title rights and interests held by the Yindjibarndi people is the negotiation value that a miner would be prepared to pay to them for their approval to the grant of the mining lease.”

Justice Burley found YNAC did have an opportunity to negotiate with Fortescue. 

He noted there had been no finding by regulatory bodies that Fortescue failed to negotiate in good faith.

Good faith negotiations require miners to do their best to come to an agreement with native title bodies. 

Mines could still go ahead with government consent should a deal not be forthcoming, as was the case for the Solomon hub.

“Accordingly, the respondents submit that the fact that no agreement was reached and the future acts were subsequently granted without the Yindjibarndi people’s consent does not equate to a ‘loss of opportunity’ to negotiate and secure commercial benefits,” Justice Burley said.

A Fortescue spokesperson said the company had consistently sought to reach an agreement outside of court.

“At Fortescue, we have always believed that when you operate on someone’s country, the people of that country should share in the opportunities created from it,” they said.

“For more than two decades, we have worked alongside Traditional Custodians across the Pilbara to create those opportunities through jobs, local business development, skills training and long-term economic participation. 

“Those partnerships have always been about much more than compensation alone.”

Owner or occupier

Elsewhere in the full verdict, Justice Burley noted Fortescue had argued Yindjibarndi, under the law, were classed as occupiers of their country, rather than owners. 

The WA government submitted that Yindjibarndi people could be owners of the land they have exclusive possession for, and occupiers of non-exclusive land.

Justice Burley struck down both parties’ arguments as outdated.

“In my view the emphasis in the definition of ‘occupier’ (inclusively) on it being any person in actual occupation of the land ‘under any lawful title granted by or derived from the owner of the land’ tends to suggest that parliament did not have native title holders in mind when the term was drafted,” he found.

The cultural loss component which made up most of the compensation figure was based closely on an extrapolation of the compensation awarded in the Timber Creek and McArthur River mine cases, both of which were on non-exclusive land.

In court Justice Burley did note a potential compensation figure for Yindjibarndi derived from the above findings of $576m but found that figure to be excessive without explaining why.

In his full reasoning it was revealed Justice Burley took the view that the higher figure would have been based on compensation for a wider claim area, rather than the portion impacted by Fortescue’s operations.

“If applied only to the area of the Solomon Hub Project (being 135.48sqkm), it would yield an amount of approximately $139 million,” he said.

“In considering the appropriate amount of compensation I note that the compensation claim area is not the only area where the Yindjibarndi people may exercise their traditional customs and gain spiritual nourishment. 

“However, this observation is tempered by the fact that for the Yindjibarndi people, harm to one part of their country is not easily cauterised. It is like a limb of a body coming off, leaving the whole weakened and damaged.

“Even with physical access restored the effects on other rights and interests will be felt permanently.”

Justice Burley was convinced by evidence from several Yindjibarndi witnesses that Fortescue’s actions had left Yindjibarndi spirits feeling ‘lost and homeless’, that story telling was ‘gone’, and that ngurra and its people were ‘broken’.

“In this context, I make very slight allowance for the non-extinguishment as factoring in to the assessment of cultural loss,” he said.

YNAC had argued for $1 billion compensation for cultural loss – about $1m per Yindjibarndi person.

Fortescue argued for $8m and the state government argued for $5m to $10m.

Justice Burley awarded $150m.

A Fortescue spokesperson said the miner would take time to review the court’s findings.

“After more than 20 years, our hope is that the compensation determined by the Court can now flow to the Yindjibarndi community and be used to support elders, families and future generations,” they said.

“If given the opportunity, we stand ready to pay that compensation tomorrow. 

“However, cash payments alone will not deliver the practical, long-term outcomes communities need. 

“The longer this remains tied up in a legal process, the harder it is for all parties to focus on broader solutions and opportunities that come with long-term partnerships, including employment, training, business development and economic participation.”

YNAC is yet to decide on an appeal.