For Gilbert + Tobin

The world is seeking to decarbonise rapidly to keep the Paris Agreement climate targets—and the planet—alive. Against that backdrop, Australia’s greenhouse gas intensive energy and resources industries are looking to the so-called “clean energy transition” to provide clean and green fuel for the future.

However, this transition has more than climate change at its heart: it represents a holistic shift towards embracing wider environment, social and governance (ESG) considerations. As part of this, there is growing recognition that First Nations peoples should have the opportunity to be actively included in the clean energy transition, not only as beneficiaries of philanthropic outcomes such as energy security, but as partners sharing in the economic benefits of development on their traditional territories.

This transformation is interwoven with the practical reality that, today, around 63% of Australia’s land mass is subject to Native Title claims or determinations, much of which may be needed for energy generation and the establishment of large scale wind and solar farms, which inherently demand vast land areas. Engagement with First Nations peoples is and will therefore be central to many of the proposed clean energy projects. Engagement with First Nations peoples is and will therefore be central to many of the proposed clean energy projects and should be front of mind from the outset of any development, not relegated to tick-a-box consultative processes as part of compliance with Australian laws.

The form of engagement with First Nations peoples is moving beyond merely satisfying legal obligations to obtain access rights to land in exchange for agreed compensation, such as revenue streams. Given the focus on ESG as well as the development of international best practice guidelines (for instance, the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and the Organisation for Economic Cooperation and Development’s Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD Guidelines)), companies are increasingly exploring opportunities to actively engage with First Nations people based on free, prior, and informed consent (FPIC) and wider conceptions of investment returns. Failure to obtain FPIC can result in operational and reputational risks (and in some cases legal risk). Pursuing FPIC from the outset can be an effective mitigation strategy.

In this article, we consider the legislative framework relevant to engagement with First Nations peoples, before turning to look at recent examples of partnerships and commercial arrangements in the context of renewable energy projects and carbon farming, as well as the adoption of similar partnerships in the mining and resources sector.

Key takeaways for developing First Nations partnerships in clean energy, carbon farming and mining projects

• Under the Native Title Act 1993 (Cth) (NTA), rights and interests of Native Title holders are protected and third parties seeking access to land covered by those rights and interests must consult and negotiate with those Native Title holders.
• ESG considerations, aligned with international best practice, require that project proponents move beyond minimum foundations for engagement with First Nations peoples and embrace principles and concepts such as the right to FPIC, equitable benefit sharing, project co-development and co-ownership and First Nations-led decision making.
• Leading approaches in clean energy project development, mining and carbon farming are resulting in innovative partnership approaches being established, with benefits flowing not only to industry but also to First Nations peoples and their communities.

The Australian legislative framework for First Nations engagement in clean energy, carbon farming and mining projects

Engagement with First Nations peoples has traditionally been driven by the requirements of Commonwealth and State legislation. The NTA is Australia’s Federal legislation passed in response to the 1992 Mabo v Queensland (No 2) High Court decision, which revoked the notion of “terra nullius” and found that First Nations peoples had existing Native Title rights. The Act establishes a process for determining those rights and interests, as well as requiring proponents to engage with registered claimants or holders of those rights and interests, such as requiring Native Title parties to be consulted prior to the valid grant of certain interests in land (for instance mining tenure and other grants of tenure for clean energy projects). There is also the ability to enter into Indigenous Land Use Agreements, which typically grant access to land in exchange for agreed compensation, and potentially other commercial or community benefits.

Under the Commonwealth carbon farming legislation, proponents of offset projects seeking to generate Australian Carbon Credit Units (ACCU) must obtain Native Title holder consent as part of project registration but previous practices have allowed ACCU projects to be conditionally registered subject to obtaining such consent over a certain period. This practice has been characterised by the Federal Government in its ACCU Review Discussion Paper (ACCU Review) as “erod[ing] Native Title holders’ self-determination and ability to determine what activities can take place on their land”. The ACCU Review recommended establishing “appropriate consent requirements for Native Title consent to projects” to ensure FPIC principles are met.  Practically, the Federal Government also recognises that more support is needed for First Nations peoples to provide proper consent to carbon farming projects.  For more information on the ACCU Review, see “ACCU Review Discussion Paper released for public consultation”.

Each State also has its own legislative framework for the protection of Aboriginal culture and heritage, although this does not guarantee that sites and objects are protected from harm. In Western Australia, the adequacy of Aboriginal cultural heritage protection has been re-considered following the destruction of Juukan Gorge. However, after years of planning and five weeks into the commencement of the State’s new Aboriginal Cultural Heritage Act 2021 (WA), the State Government introduced a bill to repeal the legislation following opposition from farmers, the mining industry, property developers and residential landowners. For more information about what this means, read our article “The days of future past: WA Aboriginal Cultural Heritage Act to be repealed 5 weeks after commencement“.

These legislative frameworks lay the minimum foundation for engagement with First Nations peoples.

International law and best practice

National and international best practice indicates that project proponents need to move beyond the minimum requirements in Australian law and embrace a higher standard of engagement with First Nations peoples, aligned to international laws and guidelines, including the UNDRIP and the OECD Guidelines.

UNDRIP and the OECD Guidelines set out two key principles for engaging with First Nations peoples, namely “benefit-sharing” and the right to FPIC. These concepts reflect global recognition of the historical injustices experienced by First Nations peoples as a consequence of colonisation and of the inherent rights of First Nations peoples that derive from their “political, economic and social structures and from their cultures, spiritual traditions, histories and philosophies, especially their rights to their lands, territories and resources” (UNDRIP, preamble)  and the imperative to redress them through respectful and equitable collaboration.

Benefit sharing

Benefit-sharing seeks to ensure that projects yield positive outcomes for First Nations people that extend beyond mere consultation. This involves acting in good faith to actively include First Nations peoples in decision-making processes, identify and acknowledge their contributions, and share the economic, social and environmental benefits, fostered by mutual trust as well as a shared desire to care for Country (meaning the lands, waterways and seas to which First Nations peoples are connected) and, in this day-and-age, solve global environmental challenges.

Free, prior and informed consent

FPIC is a consequence of recognising the autonomy and inherent right of First Nations peoples to freely determine their political status, pursue economic, social and cultural development, and maintain their distinct identities. Importantly, it acknowledges that First Nations peoples have unique knowledge about their land from which others can learn. FPIC empowers First Nations peoples with the right to give or withhold their consent without coercion or intimidation.

For business, industry and community as a whole, these principles provide a path toward ethical engagement founded on respect for First Nations peoples. In doing so, companies and project proponents not only meet international standards but also create a more just, equitable and “greener” future, where best practice collaboration leads to sustainable development and true partnerships based on lasting cooperation.

Social licence and FPIC

Given the current emphasis on ESG as the basis for companies’ social licence to operate, as well as the recognition that caring for Country can be integrated with a vision of a cleaner, greener future, we are seeing project proponents working more collaboratively and holistically with First Nations peoples and businesses, including with a view to embedding benefit-sharing and FPIC: gone are the days when making royalty or compensation payments suffice. To illustrate this, we explore below real-world approaches to clean energy, carbon farming and mining projects in the context of Indigenous engagement.

Renewable energy project partnerships

One way in which to undertake best practice engagement with First Nations peoples is to integrate them in the decision-making around project development and implementation. In this section we set out two recent partnership examples, in the context of clean energy projects, that place First Nations peoples at the core of decision-making. We also highlight the potential project benefits to be derived from this approach.

Local partnerships with First Nations corporations

Pollination Group recently partnered with First Nations corporations, the MG Corporation, the Balanggarra Aboriginal Corporation and the Kimberley Land Council, to establish the so-called “Aboriginal Clean Energy Partnership” (ACE Partnership), with each party holding an equal 25% share in the East Kimberley Clean Energy Project (EKCE Project).

According to public information, the EKCE Project is a proposed solar-powered green hydrogen and ammonia project in the East Kimberley, which is in the early feasibility phase. It plans to combine existing hydropower along with building one million solar panels to produce 50,000 tonnes of green hydrogen a year for use in the production of sustainable agriculture fertiliser, with plans to potentially start construction by late 2025.

We understand that hydropower will come from the repurposing of the Ord Hydro Power Station, which was built in 1996 to supply energy to the Argyle Diamond Mine and the towns of Wyndham and Kununurra.  Electrolysis driven by the solar and hydropower will then convert fresh water from Lake Argyle into green hydrogen, which is to be transported via a new 120km pipeline to the existing Port of Wyndham.

The ACE Partnership is a pioneering First Nations-led partnership model of co-development and co-ownership in Western Australia and beyond by appropriately elevating the MG Corporation, the Balanggarra Aboriginal Corporation and the Kimberley Land Council as equal equity partners as they seek to embark on securing all required land tenure, heritage, Native Title and other approvals for the project.

As publicly stated by Pollination Group’s Managing Director, Head of Projects, Robert Grant, all new proponents in the clean energy market need land, the key to which is collaborating with First Nations businesses and Native Title holders:

“Even though the [Native Title] Prescribed Body Corporates might not have large balance sheets, they are asset rich. So, we can combine the pool of cash-rich strategic investors and the assets of the Traditional Owner groups.”

The MG Corporation Executive Chair, Lawford Benning, describes the empowering impact of the ACE Partnership model:

“We’re determining how this project will work on our country. To me, that’s power within itself.”

International partnerships with First Nations corporations

ACEN Renewables, a Philippine listed renewable energy corporation with assets in the Philippines, Australia, Vietnam, Indonesia and India, has partnered with the Yindjibarndi Aboriginal Corporation (YAC) to develop renewable energy projects in Western Australia’s Pilbara region through the Yindjibarndi Energy Corporation, “one of Australia’s largest Indigenous-led renewables initiatives” according to the ACEN website.

According to public sources, the Yindjibarndi Energy Corporation will own, develop and operate several renewable energy projects generating around 3GW based on the following key principles:

• approval is required from YAC for all proposed project sites on Yindjibarndi Country;
• YAC has equity participation of 25% to 50% in projects;
• Yindjibarndi-owned businesses are the preferred contractors; and
• Yindjibarndi People are provided with training and employment opportunities during the project lifecycle.

The partnership is well-placed to create something greater than the sum of its parts, with the ability to fast-track approvals and on-ground studies thanks to YAC, while benefitting from ACEN Renewables’ established presence in the Asia Pacific region.  Equally, the principles underpinning the partnership ensure flow-on benefits for the wider Yindjibarndi community.

Carbon farming and First Nations partnerships

In the context of carbon farming initiatives, we are seeing novel approaches to First Nations engagement based on the recognition that First Nations peoples have a deep connection to, and knowledge of, Country that can be of benefit to project implementation. This is particularly the case in respect of methodologies such as savanna burning, where engagement with First Nations peoples has moved beyond merely acquiring access to their land to develop projects. Rather, First Nations peoples are actively contributing to project development and implementation through leveraging their invaluable cultural knowledge to develop projects that will provide lasting benefits to communities (including through the generation of ACCUs).

The savanna burning method in particular draws on centuries of ancient burning practices, as well as science, to reduce emissions as well as fire hazard. This approved methodology is based on the rich knowledge held by First Nations peoples arising from their experience caring for Country. Savanna burning was and still is an important strategy for First Nations peoples and this strategy has shaped the entire Australian ecosystem over thousands of years. In this context, First Nations peoples can take on the role of project developers and can seek funds from potential third parties such as the government and banks, with improved ESG outcomes attractive to investors and stakeholders.

This builds on the recognition that First Nations peoples stand to gain from inclusion in “Indigenous-led initiatives and enterprises that are aligned with cultural responsibilities to care for Country.” However, in order to facilitate such opportunities, First Nations peoples must navigate a complex landscape of multiple contracts, financial engagements, investors and operational intricacies, which impose high demands on their already limited resources. Nevertheless, First Nations partnership arrangements for carbon farming projects present a unique opportunity to build on and incorporate the cultural insights of First Nations peoples.

Adoption of First Nations partnerships in mining + resources

Since a “new” standard of engaging with First Nations peoples is emerging in the clean energy space, the mining and resources sector is also embracing similar strategies. These efforts are aimed at satisfying external stakeholders and fostering more profound connections with Native Title parties. One example of this is the development of formal joint venture arrangements in the mining and resources sector, aimed at creating long-term economic opportunities for First Nations peoples and the sharing of expertise – building the capacity of First Nations peoples while simultaneously learning from them.

In this regard, Zenith Energy Pty Ltd (Zenith) and Tjiwarl Contracting Services (Tjiwarl) (a wholly-owned entity of the Tjiwarl Aboriginal Corporation) have formed an incorporated joint venture company called Tjiwarl Katu Power Pty Ltd (TKP). TKP will initially provide power and related services to Zenith’s hybrid renewable energy power stations in Western Australia’s goldfields, with a view to expanding those services to provide low carbon power solutions to entities and communities across Tjiwarl Country. It is also hoped the approach will serve as an example to other project proponents of a “culturally-grounded business model”, according to Tjiwarl Aboriginal Corporation Director Kado Muir.

Zenith’s collaboration with Tjiwarl heralds a new era where clients can learn from cultural knowledge and not just “occupy space on country, but appreciate the rich history and background where [their] operations exist”.

Zenith is also working with Carey Group Training (Carey), a company owned by First Nations peoples with significant contracting resources and ambitions to develop culturally inclusive workplaces. Carey will help Zenith employ an Indigenous Australian as an apprentice in its maintenance team. The apprentice will be integrated into Zenith’s operational sites, with the ultimate aspiration of securing a permanent role after the four-year program.

Separately, Tjiwarl and DEVELOP Global Ltd (Develop) have formed an incorporated joint venture to service long-term equipment contracts and to provide services to the Bellevue Gold Mine and potentially other mines on Tjiwarl Country. To facilitate the joint venture, Develop has partnered with WesTrac to acquire equipment and will train Tjiwarl people to manage and maintain that equipment.

The budget forecasting for the new joint venture predicts that it will not only recuperate equipment investments within three years but will also be generating profitable returns, along with having trained First Nations operators for the equipment. The agreement also allows for Develop’s joint venture interest to be transferred to Tjiwarl for no consideration at an appropriate time.

Conclusion: A shift in clean energy, carbon farming and mining projects

Industry engagement with First Nations peoples is changing in the areas of clean energy, carbon farming and even mining. In the clean energy and carbon farming space, this is driven to an extent by Australia’s push to decarbonise, which will only continue to gain momentum given both the scale of the challenge and timeframe in which it must be achieved. The development of such projects will require huge swathes of land, much of which is covered by Native Title determinations or claims. Importantly, however, companies (including in mining) are also responding to the increasing ESG pressures, concerned to protect their social licence, and international best practice developments in actively seeking participation from and with First Nations peoples. This approach recognises the specific knowledge of First Nations peoples, as well as the desire to provide wider project benefits and give back to community.

In this article, we have canvassed some recent examples of First Nations partnerships in the clean energy, carbon farming and mining and resources sectors, which embed concepts of First Nations decision-making, benefit sharing and FPIC. This is a trend we only expect to deepen, as Australian companies take leadership positions and seek to do more and do better.