A look at Santos NSW Pty Ltd and Another v Gomeroi People and Another [2022] - a harsh reminder that parties must negotiate in good faith.

In brief

On 19 December 2022, the National Native Title Tribunal (NNTT) handed down its judgement on a future act determination application. Santos NSW Pty Ltd and Santos NSW (Narrabi Gas) (Santos) lodged four petroleum production lease applications covering an area of about 92,400ha as part of a gas extraction operation known as the 'Narrabi Gas Project'. The native title party for the project was the Gomeroi people (Gomeroi People).

The project was proposed on Gomeroi Country in the Pilliga, as well as its surrounding areas. The four leases for the Narrabi Gas Project were granted by the NSW Government. The Gomeroi People applied to the NNTT. The NNTT found in favour of Santos and upheld the approval of the leases.

Under the Native Title Act 1993 (Clth)

Under the Native Title Act 1993 (Cth) (the Act), negotiations for future acts are to be conducted in ‘good faith’, and this judgment sheds light on what the NNTT considers to be negotiations in good faith under the Act. The Gomeroi People submitted to NNTT that Santos did not fulfil their obligations as required by s 32 of the Act, alleging that there were four ‘negotiation periods’ from 6 May 2011 to the time of the hearing in 2021 where Santos did not negotiate in good faith. Further, Gomeroi People alleged that Santos had failed their obligations by falsely representing matters, conducting meetings with the Gomeroi People without its legal advisors, and encouraging the Gomeroi People to act contrary to its legal advice.

It is also alleged that Santos offered compensation “significantly below market value”, failed to properly engage with an expert, and withheld information. If the Gomeroi People were successful in establishing that negotiations had not occurred in good faith, then the NNTT could either overturn the granting of the petroleum lease applications or determine an appropriate amount due to the Gomeroi People.

The NNTT found some of the conduct alleged by the Gomeroi People did demonstrate that Santos failed to act in good faith but that the obligation to negotiate in good faith commences upon the notification day identified in the s 29 Notice under the Act. Therefore, the conduct of Santos prior to the s 29 Notice, was not relevant. The only conduct that is relevant for the assessment of whether conduct has occurred in good faith is from the date of the s 29 Notice.

In these proceedings, the s 29 Notice was dated 28 May 2014, accordingly, only the conduct of Santos from 28 May 2014 could be considered in assessing whether negotiations had occurred in good faith.

Ultimately, the NNTT held that the evidence that the Gomeroi People provided in support of their claim did not substantiate the allegation that Santos failed to negotiate in good faith from 28 May 2014.

Key takeaways

This ruling serves as an important reminder that if a native title party asserts that a grantee has not negotiated in good faith, they must provide compelling evidence to the NTTT from the notification day contained in the s 29 Notice. Also, the only conduct that is relevant for the assessment of whether conduct has occurred in good faith is from the date of the s 29 Notice.

However, this case is not ever yet. On 13 January 2023, the Gomeroi People lodged an appeal in the Federal Court of Australia, seeking to overturn the decision by the NNTT.