Setting up a PBC
The commentary contained in this section is general. It is not intended to be legal advice or applied uncritically to your specific circumstances. You should seek specific advice that relates to your particular facts and circumstances or the particular facts and circumstances relating to your claim group or PBC.
This page was authored by:
Principal Legal Officer Queensland South Native Title Services Ltd.
In this section, there are references to ‘common law native title holders’ and ‘native title holders’ those expressions simply mean the people who are found to hold native title. That is, all of the members of the claim group (not only at the time of the determination but into the future) whose native title claim was successful.
It is important to understand that it is unlikely that all of the native title holders will be members of the PBC.
It is also important to understand that:
- Persons identified as a ‘native title holder’ by the Federal Court do not automatically become a member of a PBC. Generally, a person who wants to be a member of the PBC must follow the process the Rule Book for the PBC sets out for applying for membership.
- All members of the PBC must be native title holders. There is an exception to this rule if the native title holders consent to a person who is not a native title holder becoming a member.
- The size of the membership of the PBC needs to be carefully considered as it will affect the financial resources required to meet the compliance (to follow a rule or law) and operational requirements of the PBC.
- The size of the PBC may also influence whether the PBC is categorized as a small, medium or large corporation under the CATSI Act. A larger PBC has increased reporting obligations.
- The number of members needed for a meeting quorum is dependant on the total number of members and the capacity of members to attend meetings.
- Whether it is a Trustee PBC or an Agent PBC, the PBC (and each of its directors) have obligations to all of the native title holders and not just to the members of the PBC (see Trustee and Agent PBCs).
Checklist for new PBCs
The legal requirements in relation to establishing a PBC are primarily found in:
- The Native Title Act 1994 (Cth) (NTA);
- The Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI ACT); and
- The Native Title (Prescribed Bodies Corporate) Regulations 1999 (PBC Regulations).
The steps to set up and register a corporation to be the PBC can be found here - Steps to Register a Corporation with ORIC
Native Title Act and PBC Regulations
The NTA requires a PBC to be established by applicants (native title holders) seeking a determination under the NTA (ss. 55 -60).
The PBC Regulations set out what a PBC is required to do by law and how these functions are performed.
For a PBC to hold or manage native title under the NTA or PBC Regulations it must:
- Be incorporated under the CATSI Act; and
- Fulfil corporate governance obligations in accordance with the CATSI Act.
Under the CATSI Act, the Office of the Registrar for Indigenous Corporations (ORIC) can provide assistance to corporations about matters relating to registration, rules of a corporation, dispute resolution, and undertaking research and policy proposals.
A range of readily accessible and understandable resources are available from the ORIC website.
What does a PBC do?
The NTA outlines the functions PBCs are required to perform. These are to:
- Hold, protect and manage determined native title in accordance with the objectives of the native title holding group; and
- Ensure certainty for governments and other parties interested in accessing or regulating native title lands and waters by providing a legal entity (the PBC) to manage and conduct the affairs of the native title holders.
This means that PBCs can be involved in a range of activities including (but not limited to):
- Mining and resource sector agreements;
- Land and water conservation partnerships;
- Pastoral, agricultural and farming activities;
- Research partnerships;
- Return to country programs;
- Recording and archiving cultural information;
- Cultural tourism;
- Heritage and conservation programs; and
- Economic and business development.
Existing PBC or new PBC
A PBC may be trustee or agent for more than one group of native title holders. So, in nominating a PBC native title holders have a choice between choosing:
- An existing PBC; or
- Establishing a new PBC.
A PBC may only act for more than one native title group holders where:
- All persons determined by the Federal Court to hold native title give their informed consent to the arrangement; and
- The PBC remains the same type in relation to all native title holders (that is, a trustee PBC must be a trustee PBC for all relevant native title determinations).
Section 55 of the NTA states that the Federal Court must:
“… at the same time as, or as soon as practicable after, it makes the [native title] determination, make such determinations as are required by sections 56 (which deals with holding the native title on trust) and 57 (which deals with non-trust functions of prescribed bodies corporate)”.
Native title holders need to decide whether or not to have an agency or trustee PBC soon after a positive native title determination. Ideally, this decision will be made well before the determination.
Several Federal Court determinations have granted a 12-month period for the PBC to be established and nominated due to the ‘as soon as practicable’ requirement (see Carlton v Northern Territory  FCA 576; Button Jones v Northern Territory  FCA 573). Steps to establish the PBC should be taken in a timely manner during this period.
If a new PBC is being established in relation to the native title claim, this issue may be addressed by an applicant:
- Commencing workshopping within the community to reach a decision on the structure of the PBC at the same time (or soon after that time) as the claim is authorised;
- Seeking a ‘part’ hearing from the Court so that the Court makes a determination about the recognition of native title but it is not final until a PBC is nominated by the Court, which may be months later; or
- Seeking a further period to nominate a PBC after the native title determination.
Best practice would be to establish the PBC and have it registered with ORIC and have directors getting governance training before the determination is made so that it can become used to working with the native title holders and its members, have its directors gain necessary skills, and commence managing the native title immediately after the determination.
Membership options for PBCs include:
- A participatory model; or
- A representative model.
Under a participatory model all adult native title holders are allowed to become members of the PBC. This maximises the level of individual participation but can risk becoming difficult to manage in practice. It may be appropriate to have this model for a small, clearly identified group of native title holders who live in close proximity to each other, so they can easily attend, and participate in, members’ meetings.
The representative model of PBC membership only includes a smaller number of individuals who are appointed to represent all native title holders. This model may be appropriate if the number of native title holders is large or they are dispersed over a wide area or move around regularly.
A representative PBC model is likely to be suitable for an agent PBC model where the PBC has a greater obligation to consult with the members. It will likely be suitable for a trustee PBC to have either a participatory or representative membership structure.
Adapted from: Martin, D. 2016. Governance of native title corporations: What does anthropology have to say? The Future of Native Title Anthropology Conference. Brisbane.
Trusts - Charitable and discretionary
A PBC will also be the trustee of a trust for the native title holders. This is a different thing to holding the native title on trust. In this circumstance, ‘trust’ refers to a legal obligation, often set out in a formal document, that explains the way money or other benefits are to be held for the native title holders and how the money or other benefits may be used.
The trustee must administer the trust for the benefit of the native title holders and not for his or her own benefit or the benefit of family and friends. There are commonly two types of trusts associated with PBCs. They are Charitable Trusts and Discretionary Trusts. As suggested by the names, a charitable trust operates for charitable purposes (see Tax requirements) and a discretionary trust allows the trustee some freedoms in the way the money and other assets are dealt with.
Neither are ideal vehicles for the needs of PBCs and Indigenous groups and some work is underway to develop a model better suited to the needs of PBCs and Indigenous groups. PBCs (or other companies associated with or controlled by PBCs) have trusts as a way of accountably holding and dealing with assets and to maximise taxation benefits that may be available.