"Appropriate, fair and just": understanding compensation for cultural loss in the context of compulsory acquisition

Under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act), the NSW Valuer General is tasked with determining the amount of compensation payable to affected landholders upon the compulsory acquisition of their land, or an interest in that land.

While, ordinarily, this is a process that follows the long-established principles of land valuation, special circumstances arise where the affected interest is a registered native title interest under the Native Title Act 1993 (Cth). The assessment of compensation for non-economic, cultural loss in the context of compulsory acquisition requires a specialised and nuanced approach that is both culturally appropriate and trauma-aware.

To this end, the NSW Valuer General has published a guidance note, providing some clarity as to how it – and other specialist valuers – ought to approach this complex valuation exercise.

What is cultural loss?

In the context of the compulsory acquisition of land, cultural loss is a form of non-economic loss arising from a change in the use of – or access to – land as a result of the acquisition. This is a deliberately broad definition, and the Valuer General provides a non-exhaustive list of the forms of loss in its guidance note, including cultural loss associated with:

• access, such as travelling over, moving about, and having access to the land;
• residence, such as living on the land, camping, erecting shelters & structures;
• activities, such as hunting, gathering, fishing and foraging on the land;
• cultural practices, such as those related to birth and death, including burial rights;
• ecology, such as impacts on cultural responsibility to care for country;
• sites, such as restrictions on physical access to sites and areas of significance;
• trauma, such as distress and anxiety arising from a loss of part of country and sites of significance; and
• progressive impairment, such as the incremental and cumulative loss of connection to country.

Importantly, compensation for cultural loss is assessed as a whole, rather than on the basis of each individual form. In any case, however, the cultural loss stemming from a compulsory acquisition of native title – if any – is incredibly case-specific, and will vary depending on the land affected, the interest to be acquired and, most significantly, the particular practices and experiences of the native title holder(s).

Principles for Valuation Methodology

In the face of such a site- and claimant-specific valuation exercise, the Valuer General has prepared a suite of "Principles for Valuation Methodology". These principles go some way towards characterising cultural loss, and clarifying its boundaries. On the basis of the principles, cultural loss can be understood as being:

1. compensated under the "market value" head of compensation, (section 55(a)), and not as "special value" (section 55(b)) or compensation for relocation (section 55(e)).
   
   This is derived from decisions handed down in the context of claims for compensation payable under the Native Title Act, where compensation for cultural loss has been calculated by reference to the market value of the freehold interest in the land, less a varying percentage discount;

2. loss in perpetuity, compensable by the payment of a single sum for all generations;

3. assessed and compensable as a single whole, and incapable of being delineated as between forms of loss or parcels of land;

4. assessed having regard to:

1. 1. the extent to which “related areas” have been impacted;

1. 2. other determinations for cultural loss made by the Valuer General, the Courts, or by Valuers General of other States and Territories;

5. assessed disregarding:

1. 1. any change in size of the claimant group over time;

1. 2. the size of the acquired land;

1. 3. any compensation awarded for economic loss; and

6. compensable by an amount “determined intuitively” and that would be considered “appropriate, fair and just in the Australian community”.

These principles further reinforce the characterisation of compensation for cultural loss as being highly circumstantial, and leave open a number of queries relevant to acquiring authorities and native title holders, alike.

For example, what is a “related area”, and what kinds of “impacts” will be taken into account? Do these “impacts” need to be in connection with the same public purpose, or is it sufficient that a “related area” has been in any way impacted, irrespective of the source of that impact?

Likewise, what does it mean for compensation to be “determined intuitively”? What are the confines of an amount that is “appropriate, fair and just in the Australian community”?

These questions, and others not yet contemplated, may be the subject of future judicial consideration, noting that, to date, the limited available caselaw has been decided in the context of compensation payable under the Native Title Act.

To our knowledge, there has been no litigation arising from claims for compensation for cultural loss payable under the Just Terms Act.

Process for assessing cultural loss claims

According to the guidance note, and with one exception, the process for assessing claims for compensation for cultural loss follows the ordinary course, commencing with the inclusion of such a claim in the specified form (ie., the Section 39 "Claim for Compensation" form).

That exception from the ordinary process permits the Valuer General to hold a conference with the claimant – on country, if possible – to understand the nature and extent of the claimed cultural loss. While it is not clear whether the acquiring authority is invited to participate in this conference, principles of procedural fairness would suggest that it should be able to, if it so desires.

The claimant native title holder(s) may provide evidence in support of their claim, either accompanying the "Claim for Compensation" form or in the course of the conference. This evidence may include:

• affidavits;
• videos, including on-country interview materials; and
• artworks, cultural mapping and other historical documents relevant to the traditional use or significance of the affected land.