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Saturday, 18 December 1993
Page: 5166

Senator ELLISON (5.58 p.m.) —I take the minister's point about the validity of the act, but the problem is that if people think they are out of the woods and it was safe to go back into the water, so to speak, and a claim comes along—

Senator Gareth Evans —That's a psychological problem; it is not an economic problem.

Senator ELLISON —Financiers are quite sensitive people and they can have quite a few psychological problems in relation to financing projects.

Senator Gareth Evans —You are just going to have to get a bit better educated as to what the process is.

Senator ELLISON —There was a case put to us during the Senate committee of how one developer in a project was having to report weekly to his financiers as to the state of play in relation to this whole affair of native title. The financier was so nervous because hundreds of millions of dollars were involved and, of course, he did not want to see the investment go askew.

  I will not go into the McArthur River project or things of that matter; I will leave that to others. But what about the situation where there is still the possibility of a compensation claim? That is the point that I am getting at. If there is an adverse ruling and then a claimant comes along at a later stage, the person who sets out to finance the project wants to take into account the possibility of compensation. What that person would like to do is say at the outset, `I have to raise X million for that, Y million for that and then a certain amount for compensation'. The person would do that at the outset and let the financier know what the story was. It strikes me that in this process the developer could be lulled into a false sense of security thinking that it is all clear and okay, when really it is not. One might then find the venture failing, which really would not be of much use to anyone.

  It was also put in the course of the Senate inquiry that, if there is to be compensation payable, one wants to make sure that the compensation is there to be paid. If there is no certainty or assurances about the compensation payable, the developer cannot raise that money. The developer does not know how much is involved; there is that uncertainty.