Traditional owners consider billion-dollar shot at Fortescue

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A High Court defeat has left Andrew Forrest’s Fortescue Metals Group exposed to a huge compensation claim that traditional owners could link to a percentage of the tens of billions of dollars in revenue the company has earned from iron ore mining in Western Australia.

The High Court denied Fortescue special leave to appeal earlier rulings from six Federal Court judges that effectively mean the company built part of its Solomon iron ore mining hub in Western Australia without permission of traditional owners.

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Members of the Yindjibarndi Aboriginal Corporation celebrate their legal victory over Andrew Forrest's Fortescue Metals Group. 

The traditional owners, represented by the Yindjibarndi Aboriginal Corporation (YAC), are now poised to launch a compensation claim through the Federal Court.

YAC chief executive Michael Woodley said he would recommend the community seek compensation based on 10 per cent of revenue from iron ore production from the Solomon hub since it started operating in 2013.

That figure is estimated to be in the order of $2 billion given the Solomon mines produce about 40 per cent of Fortescue’s iron ore and the company’s total revenue from all operations from 2013 is more than $50 billion.

However, such a claim would fail to account for part of Solomon production coming from non-Yindjibarndi land.

Mr Woodley stressed he didn’t want to pre-empt any decision by the wider Yindjibarndi community on the size of a compensation claim and also left the door open to reaching a settlement with Fortescue.

On Friday, the Roebourne-based YAC and its members celebrated their latest victory in a legal battle with Fortescue that has dragged on for more than 12 years.

The case saw WA’s Labor government line up on the side of the traditional owners against a high-powered Fortescue legal team headed by top silk Bret Walker, SC, who acted for Cardinal George Pell in his successful appeal against historic child sex offence convictions.

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Elizabeth Gaines: Disappointed with the outcome. Trevor Collens

Fortescue chief executive Elizabeth Gaines said the company was disappointed with the outcome after the High Court described its application as “undeserving” of special leave to appeal.

The High Court rebuff is a major blow for Mr Forrest, the Fortescue founder and chairman who used the annual general meeting in October to criticise the Yindjibarndi community and told shareholders “that is not a community I’m going to empower with tens of millions of your cash”.

His comments came soon after the full Federal Court had rejected an appeal against an earlier ruling which gave the YAC exclusive possession in native title terms over 2700 square kilometres in WA’s iron ore-rich Pilbara region.

The ruling recognised the YAC as private owners with a spiritual connection that allowed them to decide who came on to the land.

Mr Woodley said the community would discuss the size of its compensation claim and also seek advice from its accountants, KPMG.

He said the claim would be based on cultural loss – with Fortescue accused of destroying hundreds of sacred and significant sites in the absence of an Indigenous Land Use agreement – pain and suffering, and economic loss.

Another factor will be the social disruption caused in the Yindjibarndi community after Fortescue opted to throw its support behind the breakaway Wirlu-murra Yindjibarndi Aboriginal Corporation.

Mr Woodley said this had turned members of the once-happy community against one another and torn families apart.

“There has been a big wear and tear on the community. It has been a life-changing experience. You go from being a happy community before Fortescue came along,” he said.

“We have done nothing wrong. All we have done is stand up for our rights. In the process we end up being vilified as the bad people, we end having our own family members and part of the Yindjibarndi going against us and being dragged through courts by this particular mining company which had no real reason to do this.”

In a statement to the ASX on Friday, Fortescue repeated its earlier advice that the decision of the full Federal Court in October had no impact on its current or future operations or mining tenure at the Solomon Hub.

The company said it did not anticipate any material financial impact to the business as a result of the Federal Court rulings.

Ms Gaines said Fortescue had a strong history of working with traditional owners and native title partners across the Pilbara and had delivered native title royalties, training and assistance to more than 1600 Aboriginal people and more than $2.5 billion in contracts to Aboriginal businesses.

“We accept, and have always accepted, the Yindjibarndi people’s non-exclusive native title rights and interests over the relevant area,” she said.

“While we are disappointed with the outcome, as we believe this is an important point of law regarding the test for exclusive possession with potential implications for a range of industries, we accept the High Court’s decision.”

Ms Gaines said Fortescue remained open to negotiating a Land Access Agreement “to the benefit of all Yindjibarndi people on similar terms to the agreements Fortescue has in place with other native title groups in the region”.

YAC in-house lawyer George Irving said that at the heart of the Fortescue case rejected by the High Court was the notion that the inability of Indigenous peoples to exclude European “settlers” from their traditional countries demonstrated discontinuity in the acknowledgement and observance of their traditional laws and customs and therefore precluded a determination of exclusive possession native title.

Mr Irving said Fortescue had negotiated agreements with other groups on the basis on non-exclusive rights, something the Yindjibarndi had always rejected.

“They were wrong [in claiming the Yindjibarndi didn’t have exclusive possession under native title] so to come back with the same offer now is as insulting as it was in 2008,” he said.