The Beetaloo Trap - How Force Majeure Can Save the NT from Fiscal Collapse -- Part 2

In Part 1, I shared my personal experience of Cyclone Tracy destroying Darwin in 1974. As the winds dropped, a group of us went across to the cliffs, overlooking Lameroo Beach, on Darwin Harbour.

As we overlooked Darwin Harbour from the Lameroo Cliffs, we saw the crew from HMAS Attack evacuating the ship – just one of many survivor stories from that day.

For 18 years I was part of the rebuilding effort to get Darwin back into operation.

I have connected that physical devastation to the invisible, fiscal cyclone currently flattening the Northern Territory’s economy — a Category 4 Storm driven by foreign gas corporations paying a mere 0.70% tax rate while extracting billions in resources.

But identifying the trap is only the first step.
To escape it, the Northern Territory needs a strong & powerful legal weapon.

Fortunately, this weapon already exists.
It was forged in the fires of recent global geopolitical shocks, and it is now ready to be deployed — to ensure the Fiscal Survival of the NT.

The Global Precedent: The Geopolitical Shock

In early 2026, the escalating conflict between the US, Israel, and Iran resulted in the closure of the Strait of Hormuz—the world’s most critical oil and gas shipping chokepoint.
The immediate result was a catastrophic disruption to global energy supply chains.

But as Australian Economics Professor Steve Keen highlighted in September 2026, the closure of the Strait has severe downstream production effects that go far beyond oil and gas.

It threatens the supply of indispensable industrial products, such as Sulphuric Acid, which is vital for agriculture, manufacturing, and mining.

The critical production of Sulphuric Acid is just one of the many products severely affected from the continuing closure of the Strait of Hormuz.

Faced with this unprecedented macroeconomic shock, nations worldwide invoked “Force Majeure” — a legal clause that frees both parties from liability or obligation when an extraordinary event or circumstances beyond their control prevents them from fulfilling a contract.

Critically, it wasn’t just the nations directly in the path of the conflict that took this step.

China, Singapore, South Korea, and India — thousands of kilometres away from the Middle East — successfully declared Force Majeure [FM] due to indirect economic disruption.

By declaring Force Majeure, they quarantined themselves from breach of contract obligations, protecting their own economies from global supply chain collapse.

Professor Ilias Bantekas of Hamad bin Khalifa University explained the legal weight of this precedent:

“What we could never have foreseen is that the Strait of Hormuz could be closed to shipping altogether... on its own, this could be sufficient to constitute a Force Majeure event.”

The NT’s Legal Pathway: Connecting the Dots

If sovereign nations thousands of miles away can successfully invoke Force Majeure to protect their economies from indirect global shocks, the Northern Territory can absolutely invoke the same legal doctrines to protect its citizens from fiscal collapse.

The 2026 global geopolitical shock, combined with the NT’s ballooning debt crisis and INPEX’s minimal tax contribution, constitutes a “fundamental change of circumstances.”

The original 2012 fiscal assumptions underpinning the Ichthys LNG Project have been destroyed by unforeseeable global events.

The NT Government has two primary legal pathways forward

1. The Doctrine of Frustration – Australian Common Law.

Under Australian law (Codelfa Construction Pty Ltd v State Rail Authority of NSW), a contract is “frustrated” when a supervening event, without default of either party, makes performance “a thing radically different from that which was undertaken by the contract.”
The NT can argue that the current global macroeconomic environment makes the continuation of the 2008 tax-exempt status radically different from what was originally agreed upon.

2. Sovereign Necessity – International Law

Internationally, the principle of “Sovereign Necessity” permits states to suspend contractual obligations when facing existential fiscal threats.
When a contract threatens the very survival of the state’s capacity to provide basic services to its citizens, the state has the right to invoke necessity.

The Data That Proves Hardship

To invoke these doctrines, the NT must prove that the fiscal hardship is real and that the counterparty — INPEX — is benefiting from windfall profits at the Territory’s expense. The data makes this easy to prove.

While the NT struggles to fund hospitals and schools, INPEX reported a $1.5 billion half-year profit from Ichthys LNG in 2026, driven by spot prices spiking to $23.76 per MM Btu — a 121% increase in just seven months.

There are three more corporations underneath the INPEX umbrella – INPEX Holdings Australia – INPEX SAHUL – INPEX TIMOR SEA, with Michael West Media also having tax data reports, for each one of them via the above links.

For context, Australia’s standard corporate tax rate is 30%.

INPEX Australia Pty Ltd pays less than 1% tax rate.

The Solution: Three Demands for Territorians

The road to prosperity requires the NT Government to stop hiding behind the 2008 Project Development Agreement and take immediate, decisive action.

1. Invoke Sovereign Hardship

The NT Government must formally notify INPEX and its joint venture partners that the 2026 fiscal and geopolitical crisis constitutes a fundamental change of circumstances. They must demand immediate renegotiation of fiscal terms under the Doctrine of Frustration — and — Sovereign Necessity.

2. Demand a Royal Commission

The NT must establish a Royal Commission into gas taxation. This commission must examine:

• The total resources extracted from the Beetaloo Basin and Ichthys LNG.

• The total tax and royalty contributions from foreign corporations.

• The compensation risks under Clause 14 (Fiscal Stability Provisions) and necessary amendments.

• Legal pathways to restructure unfavorable contracts.

3. Legislate Transparency

The NT Parliament must pass a Royalty & Resource Rent Transparency Act, requiring the public disclosure of all fiscal agreements, royalty provisions, and the establishment of a Public Register of Force Majeure Declarations.

The Bottom Line

In 1974 - 75 and onwards, Territorians and Australians from across the country came North and helped rebuild Darwin from a vast vista of catastrophic devastation.

We proved the Territory could overcome physical destruction through national assistance, community spirit, and political will.
Today, we face fiscal devastation — but the enemy isn’t cyclonic winds and torrential rain.
It is complex legal clauses buried within 500-page contracts, protecting “loss of profit” while hospitals and schools age and crumble.

However, the legal landscape has shifted.
China, Singapore, and South Korea have successfully declared Force Majeure due to the indirect effects of Middle East conflicts.

This has created an undeniable legal precedent.

It follows that the Northern Territory has a high probability of success in using this same process to protect its citizens from fiscal collapse.
We rebuilt once. We can rebuild again.
This time, our weapons aren’t engineers, tradies, bulldozers, and cranes.
They’re economists, data analysts, legal arguments, and political will.

The Territory & Territorians deserve better - much better than this.

Here is what CAN happen — when Sovereign Resources Extraction Management is Setup under State-owned Enterprises — this graph clearly illustrates a much better success story.

Here is an easy quizz question — which of these Nations has done the best job for their citizens?

Take a closer look and compare: The UK Privatized the extraction of National Resources – revenue flowed to Corporations — Versus — Norway set up National control of Sovereign Resources – owning & managing their Oil & Gas Bonanza.

You dear Reader Choose — which Path should Territorians take?

~ Learn - analyse - adapt - evolve - act - survive - thrive ~