5.1.1  Risk allocation

(a)  Government will generally be responsible for dealing with any application or claim made under any Law relating to native title and for payment of compensation to native title holders (and in respect of which, it will Compensate the private party). However, in some jurisdictions, government may require private party cooperation and involvement.

(b)  It is generally both more effective and less costly for government to assume the greater part of native title risk. This is because native title potentially subsists only over Crown Land, and the government is ordinarily better able than the private party to communicate with indigenous representatives for the purpose of meeting notification and consultation requirements under the Native Title Act 1993 (Cth) and relevant State and Territory Aboriginal Land Rights legislation.17

(c)  If there is a native title application or claim, the private party must continue to perform its obligations under the project agreement, except to the extent prevented by the native title application (due to a government direction, legal requirement or court or tribunal order to suspend execution of the project activities) and provide all reasonable assistance in connection with dealing with such an application or claim (subject to any Relief and Compensation referred to in paragraph (d) where government assumes this risk).

(d)  The private party will not have any claim against government for Loss or damage suffered as a result of any native title application or claim. However, where government assumes this risk, the private party may be entitled to Relief or Compensation18 where delays arise or additional costs are reasonably incurred (by the private party), as a direct result of any government direction, legal requirement, court or tribunal order to suspend or cease all or any part of the project activities because of a native title application or claim.19

 (e)  If as a consequence of such government direction, legal requirement, court or tribunal order the private party is prevented from carrying out the project for a period exceeding 6 months the government may terminate the project agreement and pay the private party Compensation in accordance with the principles set out in Chapter 25 (Termination Payments).

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17  It should be noted that where land title rights exist under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth), the Northern Territory government has no right of compulsory acquisition (unlike Commonwealth authorities) and is therefore in no more an advantageous position than the private party. On this basis, the Northern Territory government could expect the private party to accept this risk. A further issue is Aboriginal sacred sites, in respect of which the Northern Territory government has historically expected the private party to accept land title risk, again on the basis that that the Northern Territory government is in no more advantageous a position than the private party and the private party is better placed to manage such issues as part of the project/site development.

18 See Chapters 15 (Relief for Possible Key Risk Events) and 16 (Compensation Events)

19 In some jurisdictions government may require the private party to bear this risk for a specified period of time before being entitled to any relief or Compensation. In other jurisdictions the private party will only be entitled to Compensation for delay costs where they are delayed from achieving Completion by the date anticipated for Completion.