A counter-intuitive proposal to expand rooftop solar in the bush

 

The self-same sun that shines upon his court

Hides not his visage from our cottage but

Looks on all alike.

The Winter’s Tale Act four, Scene four.

 

My previous post was essentially a high-level review of an excellent book titled Guide to Housing and Infrastructure Standards in Town Camps (link here). I recommend readers peruse that post before reading this post.

In this post, I delve a bit deeper into just one of the thirty essential services issues addressed by the Guide — the under-reliance on rooftop solar power in remote communities — and make a high-level policy proposal to break the current structural deadlock that contributes to energy insecurity, poor health, and the sheer liveability of remote community housing infrastructure.  

The Guide’s analysis of rooftop solar

The Guide (section 2.28 on pp. 148 – 151) identifies solar energy as one of the thirty issues it deals with. The Problem is identified as energy insecurity. The combination of temperature extremes, poor housing design, associated high demand for electricity, in a context of high reliance on prepayment meters amongst town camp residents leads to high levels of energy insecurity. The Guide references academic research to report on extraordinary rates of multiple power disconnection events affecting 91 percent of prepayment meter households across the NT (link here). Under Regulations, the Guide notes inter alia that the payback term for installed rooftop systems is often less than five years, and suggests that the introduction of rooftop solar systems could be the key to climate proofing homes in Aboriginal Town Camps (link here). Under Solutions, the Guide points out that while the upfront costs of incorporating solar energy systems into community and housing infrastructure has often been used as an excuse for not installing them, it calculates for one town camp that the payback period from installation would be four years, and points to the additional benefit of reduced health costs arising from avoiding the adverse implications of temperature extremes.

The Guide backs up this analysis with an aerial photo of a town camp showing nine houses, with no obvious solar alignment, and with no use of solar panels: the heading is Roof-top Solar Panels are not often used in Town Camps. On the facing page is an aerial photo of 23 houses in Alice Springs, of which 16 appear to be utilising solar panels. Furthermore, it is striking that the houses are all solar aligned to maximise the benefits of solar radiation in winter and minimise costs and radiation in summer. The Heading is Roof-top Solar Panels and Solar Oriented Houses in Alice Springs.

Subsequent sections in the Guide deal with the related issues of Passive Cooling and Heating, and the use of Outdoor Rooms and Courtyards.

In a rapidly warming world, the importance of addressing these issues is inarguable. Yet very few people would be aware or conscious of the fact that there are systemic disparities between the way mainstream and Aboriginal communities are designed and operate in relation to these issues. The consequences for communities are both real and deeply unfair. The degree of unfairness is magnified when it is recognised that over the past decade there have been substantial subsidies available to homeowners designed to encourage the take up of rooftop solar infrastructure, but that social housing ‘owners’ (ie governments) have not seen fit to invest in installation of rooftop solar on public housing in the NT — and I suspect elsewhere. The levels of recognition amongst policymakers and the informed public of the degree of inequity and unfairness in solar provision appears to be close to zero.

Again, as pointed out in my previous post, the policy context is complex, but it is not beyond the technical capacity of governments to address. It does however appear to be beyond their political and policy capacity, even in circumstances where addressing the issues would harvest both financial and social benefits for disadvantaged First Nations communities and for society as a whole.

Given the lack of proactivity from governments on the issue of energy insecurity for remote community residents, it struck me that an alternative approach might pay dividends (so to speak).

A strategic reform proposal

The relatively new NT Aboriginal Investment Corporation (NTAIC) which has adopted the name Aboriginal Investment NT: (link here).  I have opted to use the name used in the legislation that establishes the entity. NTAIC is a Commonwealth statutory corporation established to administer a proportion of ABA funds. I was one of a number of critics of the design of this entity when it was first proposed in late 2021 (link here). While I am yet to be persuaded that I was wrong, the establishment of NTAIC provides a degree of Indigenous agency over the allocation of significant ABA funds which are broadly designated as being for the benefit of Aboriginal people across the Northern Territory.

My proposal (for the NT) is that NTAIC should consider initiating negotiations with the NT Government based on an offer to assist in accelerating the take up of roof top solar across remote community housing in the NT. Almost all remote community housing is social housing managed by the NTG. While arguably the responsibility for rolling out roof-top solar across remote communities belongs to the NTG, it is a responsibility that is patently not being implemented. Moreover, due to the systemic incentives in play which shape the allocation of scarce government funding, the NTG is unlikely to unilaterally initiate the roll out of roof top solar over remote community housing anytime soon.

Given this context, the NTAIC might offer to fund a significant proportion (or even all) of the capital costs of a multi-year roof-top solar installation program on the condition that the NTG commits to the ongoing maintenance of the infrastructure along with the associated repairs and maintenance of the social housing assets. A second and crucial component of any such deal would be a commitment that the financial benefits in terms of lower power costs of the installation of rooftop solar would accrue to the householder and the local community. Such an arrangement would appear to fit squarely within the statutory functions of NTAIC as laid out in section 65BB of the Aboriginal Land Rights (Northern Territory) Act 1976 (link here). While it is not entirely clear to me whether this fits within the NTAIC current Strategic Investment Plan (link here), this need not be an absolute barrier to initiating good and common sense ideas.

The same model might be explored across WA, QLD, SA, and indeed the NT by Indigenous Business Australia (IBA), or in the NT potentially by NTAIC and IBA jointly. I acknowledge that the negotiation of a pure funding transfer with state and territory jurisdictions may not fall directly within the remit of IBA (see sections 147/148 of the Aboriginal and Torres Strait Islander Act 2005: link here). However, if developed along with arrangements for the utilisation of Indigenous firms to install and maintain infrastructure on behalf of these jurisdictions, the proposal could be easily brought within he IBA remit. This constraint would not apply to NTAIC in the NT, but would nevertheless be worth considering in any case.

I understand that this idea is counterintuitive insofar as it lacks a commercial rationale and may also appear to undermine the responsibilities of the relevant governments to provide and pay for social housing. However, when governments are not delivering on their responsibilities, and thus failing in their raison d’etre, and as a consequence Indigenous people are worse off than they should be, it seems to me that there is a case for Indigenous leaders appointed to roles on boards such as NTAIC and IBA to take action. While there is not a commercial return to the potential funders under my proposal (ie NTAIC and/or IBA), there is clearly a strong economic rationale.

The findings of the Guide discussed above that roof-top solar effectively pays for itself within 3 to 5 years (let’s say five years for simplicity) in effect tells us that there is a rate of return on the investment of at least 20 percent. I venture to say that NTAIC and IBA would struggle to identify any other broad scale placed base initiative across remote Australia that could match this return on investment.

The sticking point will be the definition of ‘investment’. It turns upon the difference between a commercial return (where the financial returns accrue to the investor) and an economic return where the financial returns accrue to the householder. Bearing in mind that both NTAIC and IBA are Commonwealth corporations utilising what are effectively public funds to operate, it strikes me that they should decide whether they exist merely  to beef up their own bottom lines, or to address the financial exclusion of a swathe of disadvantaged Indigenous communities. My point is strengthened when we take into account the positive externalities of addressing energy insecurity earlier rather than later, in terms of improved health, improved food security, and poverty mitigation.  

The proposal I have made has the potential to drive tangible increases in real incomes for remote families and thus deliver myriad financial and health benefits for thousands of Aboriginal and Torres Strait Islander residents of the north. Moreover, the adoption of my proposal by NTAIC and/or IBA would mean that action is initiated much sooner on what would necessarily be a multiyear effort and would ensure that governments would eventually accept that they had the responsibility to replace roof top solar infrastructure as it reached its end of life as a normal part of social housing provision.

Of course, a potential argument against my proposal is that it implicitly means that other opportunities will not be funded. If so, I suggest that the responsibility falls to NTAIC and IBA to identify just what those higher priorities are. One way of mitigating this consequence, and simultaneously driving further strategic change aimed at underming structural inequity, would be for the NTAIC and/or IBA to seek to have the NAIF provide concessional finance to assist in financing their contributions. See my recnt post on the NAIF (link here).

Conclusion

We hear a lot about self-determination, and Indigenous leadership as the prerequisite for effective policy outcomes. It strikes me that the opportunity to drive a major upgrade of rooftop solar across remote communities presents the boards of NTAIC and of the IBA with a once in a generation fork in the road: they either take the initiative to drive strategic change or they accept that failing governments should be left to continue to fail remote Indigenous communities.

The evidence of egregious and myriad policy exclusion by governments is inexorably accumulating. It is incontrovertible that remote communities have unequal access to essential services and are at greater risk arising from energy insecurity in a warming world. Governments, and our system of politics and policy development, have failed because they design and implement exclusionary policy frameworks which treat remote community and town camp residents worse than the residents of major urban centres. In these circumstances, the NTAIC and the IBA should step up and use their undoubted financial leverage to drive strategic policy reform.

 

Further reading:

Longden, T., Quilty, S., Riley, B. et al. Energy insecurity during temperature extremes in remote Australia. Nat Energy 7, 43–54 (2022). https://doi.org/10.1038/s41560-021-00942-  (link here).

 

Solar solutions could be the key to climate-proofing homes in Aboriginal town camps By Stephanie Boltje, The Drum  (link here).

 

18 December 2024

 

Infrastructure shortfalls in Alices Springs town camps

Comparisons are odorous

Much Ado About Nothing, Act three, Scene five

 

According to a 2019 NT Government policy document (link here), there are 43 town camps across the NT, of which 18 are within Alice Springs.  ABS census data from 2021 (link here), identifies 1055 residents of 18 town camps in Alice Springs. The population comprised 275 families and 256 families. The median age was 30. The median weekly household income was $756. There is much more demographic information available from the ABS web page linked to above. Anecdotally (and reflected in many NT government publications) there is a large but variable cohort of temporary visitors resident in Alice’s town camps. This cohort reflects the ongoing high mobility of families between surrounding communities and Alice Springs. At peak visitation periods, the population of the town camps may reach around 2000 residents.

I recently came across an extraordinary new book on the infrastructure and essential services needs of Alice Springs town camps (h/t Brad Riley). Authored by five researchers associated with the University of Newcastle and Tangentyere Council,  Chris Tucker, Michael Klerck, Anna Flouris, Vanessa Napaltjarri Davis and Denise Foster, and published by Australian Scholarly Publishing, it is prosaically titled Guide to Housing and Infrastructure Standards in Town Camps (link here). The Guide’s design and presentation is excellent, and its photographs, maps and illustrations ensure it is both extremely accessible and intellectually persuasive. Yet counter-intuitively, it eschews an explicit narrative, leaving readers the task of imagining the underlying narrative. Instead, the Guide is simultaneously a practical and straightforward account categorising the myriad shortfalls in essential services provision within Alice Springs’ town camps, but also a window into the wider systemic challenges facing all town camp and remote community residents across the NT and beyond. I will say a little about both these contributions.

The Guide’s Alice Spring contribution

The Guide has three parts: Part One deals with the mainstream Regulation and Design Standards applicable in Alice Springs. It also includes a short and succinct history of the town camps, and their support organisation Tangentyere Council. Included is a fascinating account from 1993 of Tangentyere’s history and prospects by Geoff Shaw, its then General Manager and one of the key Indigenous leaders responsible for making Tangentyere one of the most respected and longstanding Aboriginal community-controlled organisations in Australia.

Part Two summarises issues raised in Local Decision Making meetings within town camps, identifying a list of essential infrastructure, and describing for each issue in a single page the problem, the relevant regulations, and a specific solution.  Each of these issues is complemented by maps and most powerfully, by dual sets of photographs which illustrate examples of the issue in the town camps and for comparison, photographs illustrating the provision of the same essential service in mainstream Alice Springs. The combined effect of these comparisons spanning thirty separate essential service issues (including kerbs and gutters, stormwater drains, safe play areas, street lighting, road signage and rooftop solar energy provision to name just six) is a devastatingly effective exemplification of unequal service provision. The Guide is arguably more persuasive for its matter-of-fact tone, and while it doesn’t avoid criticism, there is no ideological rhetoric, no blaming and no gratuitous emotion.

Part Three provides both high level aerial and more detailed colour coded maps of the Local Decision Making processes for each town camp. In doing so, the Guide has created in a tangible form one template amongst many potential templates, for a regional atlas.  The innovation of overlaying existing infrastructure based on aerial photographs with colour coded potential additions provides a tangible record of community aspirations at a point in time, and I suspect represents one of the first comprehensive, detailed and technically documented records of Indigenous advocacy for improved essential services provision in the country. While I am not an expert in this area, I feel confident in asserting that this Guide, and the detailed action-research that underpins it, is a pathbreaking initiative that deserves wide distribution, and more importantly, a public and thorough response from the Commonwealth Government as well as the Northen Territory Government and the Alice Springs Town Council.

There is a wealth of detailed technical and regulatory information embedded in this Guide, all referenced to academic standards, and clearly written and presented. I won’t try to summarise it. I will however pick out a couple of policy relevant issues that struck me as significant and which reinforce the implicit message that the challenges facing the residents of these town camps are both considerable and ongoing.

The first general point to be made is that the Guide explodes the commonplace misapprehension that essential services are limited to power, water and sewerage. Essential services include safe playgrounds, community shade provision, and appropriate traffic constraints, controls and crossings. It also demonstrates that housing and essential services (broadly defined) are together part of a single policy system and must be dealt with by policymakers as such.

On page 10, the Guide references almost in passing Tangentyere’s response to a 2016 Government Inquiry into housing repairs and maintenance on town camps which noted that “the Alice Springs Town Council is unprepared to deliver Municipal and Essential Services on any town camp.”

On page 12, the Guide references target 9b under the national Closing the Gap framework which identifies that Aboriginal people who live in town camps must ‘receive essential services that meet or exceed the relevant jurisdictional standard … and meet or exceed the same standard that applies generally within the town’ — in this case Alice Springs. The Guide goes on to make a point that this Blog made two years ago (link here), namely that the Productivity Commission Closing the Gap data dashboard reports that the data does not exist to enable it to monitor progress in meeting target 9b.

On page 14, the Guide refers to the Tripartite Agreement between the individual Alice Springs town camp associations, the Commonwealth and the NT government, and the requirement in that agreement for three yearly independent reviews to assess the essential services needs and the costs of meeting them for the Alice Town camps. The Guide notes that since 2009, there should have been five such reviews, but in fact there has only been one which only partially filled the obligation in the Agreement.

These four points comprise elements of a deeper policy issue which encompasses complex issues related to land tenure, local government funding, and Commonwealth/Territory financial and policy relations. While the challenges are longstanding and undoubtedly complex, they are not insurmountable. The Commonwealth in particular which is a major funder of local government, and of the NTG both through the Grants Commission and through Specific Purpose Funding, clearly has the legislative and political authority to broker or force a solution, but clearly lacks the vision or the political will to do so.

The Guide’s wider policy contribution

Over the past decade, this Blog has spilt much metaphorical ink on the systemic or structural challenges facing remote Australia (link here). They extend beyond essential services and infrastructure, and include issues such as education, economic opportunities, unemployment, policing and justice, food security and digital access to name perhaps the most obvious. Nevertheless, while the data is invariably persuasive it is also abstract, and the comparative evidence relates to remote regions (which by definition have few voters and low political influence) and non-remote regions which are more politically influential and largely oblivious to the realities of remote communities and remote regions. The bottom line is that quantitative analysis, while powerful and revealing to those prepared to devote time and energy to understanding it, is of limited value in building a political constituency for policy reform. Quantitative analysis will continue to be relevant to policy discussions within government and between jurisdictions over the design and specification of policy reforms, but what has been lacking has been the development of a political constituency. It strikes me that this Guide is important not just for what it tells us about the exclusionary treatment of town camp residents in Alice Springs, but for the innovative and pathbreaking approach that it has adopting to making the case for wider essential services reform. The template it has adopted should in my view be used more widely (and perhaps in a more simplified and targeted way) to make the case for increased policy support for remote essential services provision more generally.

Furthermore, the issues raised in the Guide are in large measure replicated not just across the other 25 town camps in the NT, but (to a greater or lesser extent) across all the significant remote communities across the north. While the NT Government, and its local governments and town councils are and have been seriously complacent about the plight of remote community residents, they are not alone. To varying degrees, the state governments of Western Australia, South Australia and Queensland are similarly complacent. So too is the Commonwealth. The Commonwealth used the 2020 revision of the National Agreement on Closing the Gap to effectively step back, leaving the policy responsibility for addressing Indigenous disadvantage and the myriad service delivery shortfalls to the states and territories. The current Government has done nothing to reverse that step.

What is particularly clear from the Guide is how exclusionary institutional complacency emerges in myriad instances of quite prosaic neglect: the absence of footpaths, of surveyed lots, of safe play grounds for children, of street signs, of shade and community shelters; in short, this neglect reflects the longstanding and widespread refusal of mainstream institutions such a local governments to see their roles as universal rather than sectional. The details vary from jurisdiction to jurisdiction, but the impacts are longstanding and have a certain consistency.

What is absent from the Guide (this is not in any way a criticism) is a strategy to ensure the pathway forward that it lays out for essential services policy reform, both in Alice Springs and more broadly will be adopted and implemented. There is no established mechanism, either in Alice Springs, or more broadly, to take these issues forward. Which politician or bureaucrat is likely to read the Guide and commit to pursuing the solutions identified therein, or even just discuss the identified problems, across the thirty issues identified? This is an institutional gap or absence.

In economic theory there is a concept of market failure, where markets do not operate effectively to meet societal demands. In the present case, the conditions appear to exist for an analogous concept, political failure, where our democratic polity is not meeting basic societal needs and expectations. We have been here before in the Indigenous policy domain. For example, on land rights: the political system gridlocked and efforts to address dispossession were stymied. Eventually, this led the High Court to step in and recognise the existence of native title. In the case of essential services reform, the mechanism to break the gridlock remains unclear; one possibility is that the worsening climate crisis might lead to the development of a universal policy response as temperatures rise across the north (see page 34 in the Guide).

While a fully determined strategic pathway to drive action on reform is not able to be mapped out, I see at least three preliminary steps which Indigenous interests might pursue to lay the groundwork for an effective policy reform process:

First, Indigenous interests across remote Australia might ramp up their advocacy for fair and equal essential service provision, including through more robust public advocacy, pushing for parliamentary and other inquiries at both national and jurisdictional levels, and utilising the presentation methods utilised in the Guide more widely.

Second, Indigenous interests might invest more in making the National Agreement on Closing the Gap work for them in relation to essential services provision. The ABS, the AIHW and the Productivity Commission should be pushed to step up and ensure that the data required to assess progress on the target 9b (and others not yet being measured) is both collected, analysed and published.

Third, Indigenous interests could move beyond the failure of the Voice and invest more in keeping the Commonwealth engaged consistent with the constitutional reform agreed in 1967 which gave the power to the Commonwealth to legislate in relation to Indigenous citizens. This is especially important in relation to essential services in remote Australia as in contrast to urban and regional Australia, remote Indigenous communities cannot rely on mainstream interests to ensure essential services are delivered. In remote Australia, where local interests divert scarce financial resources away from Indigenous essential services (as is irrefutably happening in Alice Springs), Indigenous interests must rely on the Commonwealth to step in, or in the event that the Commonwealth continues to remain recalcitrant and complacent, use the legal system to force change.

None of these steps will be easy, but governments respond to pressure. Indigenous interests in remote Australia must devise ways to better advocate for reform if they wish to see progress and not political and social regression.

Of course, it should not fall solely to Indigenous interests to advocate for equality in service provision. All Australians have an interest in this as a principle, and Indigenous interests deserve wider support in advocating for such equality. This must go beyond bland statements of support for reconciliation, or for Closing the Gap; the devil is in the detail and governments will only respond when there is a groundswell of support for detailed change from constituents across the nation.

Conclusion

The authors and publishers of the Guide to Housing and Infrastructure Standards in Town Camps have made an extraordinarily significant contribution to laying the groundwork for better advocacy for remote Indigenous communities on essential services reform both in Alice Springs, but importantly across northern Australia. They deserve wider recognition and indeed acclamation. What is also clear is that without the efforts of Tangentyere and its community leadership over almost 50 years, the progress made to date on the town camps would not have been possible. Their historically significant work is not yet complete; I only hope that it will not be another fifty years before Aboriginal people in town camps in Alice Springs and beyond are included as fully entitled citizens in the provision of essential services.

 

Justice Reinvestment: divert and distract

 

Remember thee?

Ay, thou poor ghost, while memory holds a seat 

In this distracted globe. Remember thee? 

Hamlet Act one, Scene five.

Justice reinvestment is one of those ideas that is thrown around incessantly in the Indigenous policy domain, but never seems to go anywhere.

Justice reinvestment aims to reduce First Nations incarceration and contact at all levels of the justice system. It is this objective which leads to one of its key components, the reinvestment or diversion of funds drawn from correctional budgets towards community-led solutions to over-representation (link here).

This idea gained traction amongst Indigenous interests in Australia after a focus on addressing justice administration issues emerged in Bourke in western NSW around 2012, and went on to have considerable success over the succeeding 12 years  (link here and link here). The Just Reinvest website includes a very useful submission from Maranguka to a NSW Parliamentary Inquiry into Community Safety in Regional and Rural Communities (link here) which identifies that addressing the challenges of justice reinvestment at a community level is not straightforward as it depends on the successful delivery of a series of inter-related services, and the maintenance of community support over the medium and longer term.

While I do not for one moment dismiss the absolute importance of community led initiatives in this space, it is also clear that the success of the Bourke community in limiting interactions with the criminal justice system has not been widely replicated across Australia. Even if we allow that local community led initiatives are necessary preconditions for successful policy reform, they are not sufficient preconditions. They do not have the innate capacity to expand horizontally across the policy domain, and they do not address the deeper systemic issues that drive hyper-incarceration of Indigenous citizens.

In response to the success of the Bourke community, First Nations interests appropriated the ‘Justice Reinvestment’ terminology and incorporated it into their advocacy. Notwithstanding this support, First Nations interests have largely failed to replicate the Bourke community initiatives more widely. One reason for this is that a close look at the Bourke issues reveals that there was an amazing amount of behind the scenes work to engage with numerous stakeholders and potential allies (including many non-Indigenous organisations). Bourke’s success was extraordinary, but beyond the capacity of other communities to replicate on their own.  

Yet the logic of Justice Reinvestment continues to resonate and is difficult to refute. As Fiona Allison notes in her paper prepared for Jumbunna and made available on the Attorney General’s Department website:

Justice reinvestment aims to reduce First Nations incarceration and contact at all levels of the justice system. It is this objective which leads to one of its key components, the reinvestment or diversion of funds drawn from correctional budgets towards community-led solutions to over-representation.

 Justice reinvestment’s focus on incarceration is a pivot around which multiple other outcomes might be enhanced, including in areas like health, education or other ‘social determinants of justice’. More fundamentally, however, justice reinvestment aims to achieve a cultural and political shift in First Nations/government relations.

[Allison, F (2023) Design of the National Justice Reinvestment Program. Jumbunna Institute for Indigenous Education and Research, UTS. (link here).]

Governments responded to the aspirational advocacy in favour of ‘Justice Reinvestment’ with what have become the standard template for managing difficult issues. The Attorney General’s Department established a program focussed on justice reinvestment, which is outlined in some detail on its website (link here). The first paragraph of the web page states:

More than 30 years after the Royal Commission into Aboriginal Deaths in Custody, Aboriginal and Torres Strait Islander peoples remain over-represented at every point in the criminal justice system. In the 2022–2023 Budget, the Australian Government announced a commitment to pursue meaningful change by investing in place-based initiatives, led and implemented by First Nations communities and organisations, to help turn the tide on incarceration and deaths in custody (emphasis added).

The subsequent paragraphs list the detail of an allocation totalling $80m over four years, along with a commitment to ongoing funding of $20m per annum. Also included are sections dealing with place-based projects, a list of projects funded under the program, and a section on the purpose of funding states:

The National Justice Reinvestment Program is a long-term, community-led approach to shifting people’s interactions away from the justice system by investing in preventative and rehabilitation measures, informed by local stories, evidence and data.

A section on the establishment of a co-designed national justice reinvestment unit explains its purpose as

 ‘to coordinate and support justice reinvestment initiatives at a national level, as recommended by the Australian Law Reform Commission (ALRC) Pathways to Justice report.’ 

It is not clear whether this means the coordination will be at a national level, or the justice reinvestment initiatives will be national.

The 2017 Pathways to Justice Report by the ALRC made the following recommendation in relation to Justice Reinvestment:

Recommendation 4–1 Commonwealth, state and territory governments should provide support for the establishment of an independent justice reinvestment body. The purpose of the body should be to promote the reinvestment of resources from the criminal justice system to community-led, place-based initiatives that address the drivers of crime and incarceration, and to provide expertise on the implementation of justice reinvestment. Its functions should include: providing technical expertise in relation to justice reinvestment; assisting in developing justice reinvestment plans in local sites; and maintaining a database of evidence-based justice reinvestment strategies. The justice reinvestment body should be overseen by a board with Aboriginal and Torres Strait Islander leadership. (emphasis added)

A close reading of this recommendation suggests that its intention was the establishment of something akin to a national peak body for justice reinvestment, not a unit established within the A-G’s portfolio. The website claims there has been extensive consultation on the proposal and has spent the best part of $12m in working towards its establishment. Consultations were outsourced t the Jumbunna Institute, and a report on the national consultations in relation to the program was published by Jumbunna in June 2023. The website continues:

The National Justice Reinvestment Unit is being designed by a working group of the Justice Policy Partnership, and informed by the recommendation of the ALRC, written submissions from the public consultation process, and the views of First Nations communities through the national design consultations.

The Justice Policy Partnership is a mechanism established as part of the policy architecture for Closing the Gap. It has a web page on the Attorney General’s Department site (link here), which outlines the purpose of the Justice Policy Partnership as follows:

Focused on providing a national joined up approach to improving Outcomes 10 (Adults are not overrepresented in the criminal justice system) and 11 (Young people are not overrepresented in the criminal justice system) of the National Agreement, the Justice Policy Partnership is co-chaired by the Attorney-General’s Department and the National Aboriginal and Torres Strait Island Legal Services.

Its membership comprises 10 First Nationals representatives nominated by the Coalition of Peaks and nine senior officials from the Commonwealth and all states and territories (see the terms of reference for a list of all members). The Partnership meets four times a year. The web page for the JPP lists a summary of discussions from all meetings over the past few years, though I haven’t had a chance to review the content of those discussions.

It will be interesting to see what emerges from the working group in relation to the Justice Reinvestment Unit. I will be amazed if it aligns with the vision implicit in the ALRC recommendation.

Returning to the Justice Reinvestment web page, it also includes the following paragraph:

Grant opportunities to apply for funding under the National Justice Reinvestment Program were closed in November 2024 as the program was close to being fully subscribed (emphasis added).

I am aware that this has caused significant dismay amongst groups who were in the process of preparing funding submissions.

What then can we make of this rather convoluted policy architecture?

The first point to make is that it is broadly consistent with First Nations’ consistent advocacy seeking greater involvement and consultation in policy formulation. It is consistent with the process requirements embedded within the National Agreement on Closing the Gap. My personal view (which of course counts for nothing) is that it is a highly over-engineered policy architecture which prioritises process over outcomes.

Second, as an experienced former public servant, it strikes me that it might be described as management by committee, which essentially means everything becomes a negotiation, delays abound, and there are multiple veto points available for any stakeholder who seeks to avoid a specific outcome. This might be described as a co-designed policy framework, but I would describe it as a poorly designed policy framework, one that virtually guarantees gridlock and policy stasis. Of course, a cynic might conclude that this is exactly what governments have intended.

Third, and most importantly, it strikes me that this whole policy framework edifice is not fit for purpose because it is fundamentally lacking in ambition and has lost sight of the underlying levels of over-representation of First Nations citizens in the justice system. The costs of Australia’s prison systems are enormous, so the potential savings from reducing incarceration levels are similarly large.

The IPA Research note dated June 2024 titled The Cost of Australia’s Prisons (link here) is an essential read for all those interested in understanding the misallocation of expenses involved in hyper incarceration of citizens, particularly Indigenous citizens.

Its key findings include:

State and federal governments are now spending $6.4 billion each year on the construction and operation of prisons, with spending having almost doubled in just 10 years. • Incarceration costs Australian taxpayers $422 per prisoner per day, or $153,895 per prisoner per year. • The adult incarceration rate is now 205.7 per 100,000 of the adult population, an increase of 12 per cent over the last 10 years. • Of the 43,305 prisoners in Australia, 62 per cent have been incarcerated for a violent offence, 23 per cent for a non-violent victimless offence and 15 per cent for a non-violent property offence. • In 2023 governments spent $2.4 billion on imprisoning non-violent offenders posing minimal risk to community safety. (emphasis added).

According to the most recent June 2024 ABS data (link here), there were 44,051 (average daily number) prisoners in Australia. Of these, there were 15,424 Aboriginal and Torres Strait Islander prisoners. Indigenous prisoners thus comprise a third of the total prison population. Notionally, we might attribute $2.1bn of the annual costs of the carceral state to the imprisonment of Indigenous people. The Attorney General’s Department Justice Reinvestment program of $20m is thus less than one percent of the total costs allocated to incarceration of Indigenous citizens.

Whatever the merits of the place-based initiatives being pursued by the Commonwealth, they are not at a scale which will have an impact on in reversing the negative trends on incarceration of First Nations people. Moreover, recent research from the Australian Institute of Criminology, which sits in the Attorney General’s portfolio, points unequivocally to the role of much wider policy issues in driving arrest rates and imprisonment rates for Indigenous citizens (link here). As I noted in my previous blog post on that research, this report represents the most important policy relevant research paper published in relation to Indigenous Australia in recent memory (link here).

In the recently released Northern Australia Action Plan (link here) the Commonwealth authors state at page 61:

The Australian Government is committed to working in partnership with Aboriginal and Torres Strait Islander organisations and communities to improve justice outcomes….

…. While criminal justice, policing and corrections are primarily the responsibility of state and territory governments, the Australian Government acknowledges it has a leadership role to work in partnership with Aboriginal and Torres Strait Islander peoples, the Coalition of Peaks and states and territories to achieve justice targets (emphasis added).

Given the consistently regressive trends in Indigenous incarceration even against the artificially constructed closing the gap targets (as discussed in my previous post link here), it is difficult to discern substantive leadership either from the Attorney General, the Minister for Indigenous Australians and their respective agencies. They ignore their own policy relevant research. Instead, we have the tried-and-true approach of seeking to manage the issue by creating reams of process and allocating just enough funding to be able to claim that something is being done. And for good measure, seeking to divert responsibility to the states and territories who are directly responsible for criminal justice matters. The overarching strategy in relation to First Nations policy might be summed up in two words: ‘divert’ and ‘distract’.

This begs the question, what would an effective response to hyper-incarceration look like?

One approach which has some attractions, but which I consider to be inadequate, is to amend the criminal law to remove the use of incarceration for certain offenses. The Institute of Public Affairs research note referred to above suggests doing so for non-violent offenses. The recent NT Coroners report (link here) suggests doing so for domestic violence offenses (see recommendation 20). Such approaches will have difficulty in achieving broad political support, and raise the unanswered question, what then is the appropriate punishment for these offences? While I would be prepared to change my mind if presented with a persuasive argument, on its face these approaches appear to address the policy problem by addressing the incarceration metric, but not the underlying criminal behaviour, thus shifting the problem elsewhere.

Clearly, finding an effective response to hyper-incarceration is complicated, and thus the response will necessarily be complex. But it is possible to identify some essential core features.

An effective response must be substantive, not intangible. It must be systemic in its reach, addressing underlying drivers of incarceration, not just the immediate causes (that is it must lead to less criminal behaviour). It must involve policy change, not merely setting an aspirations target (without policy change) as is the case with the Closing the Gap framework. In turn, this suggests that there must be a program logic: if we aim to achieve A, we will do B, we will allocate Y funding or amend law Z. An effective response must be national in its operation, whether by obtaining the agreement of all states and territories, or through national policy action. Importantly, it must be sustained over time, evaluated for effectiveness, and amended if necessary. Ideally, it should have wide political support; if this is not possible, there must at least be a public explanation of the policy and its aims. In short, it must become a national project and a national priority. This will require political leadership and commitment.

Readers will note that I have not proposed specific policy actions. The reason is that there will be a need for a suite or portfolio of integrated policy responses at jurisdiction wide levels and ideally nationally. Key policy areas would include, at a minimum, alcohol controls, employment creation, better housing and infrastructure, better education services, continued access to effective health services, food security, improved policing, and effective support services. Solutions for remote regions (where social disadvantage is more deep-seated) will not be the same as those required in urban and regional contexts.

None of the elements laid out in the preceding paragraphs are impossible or unthinkable. Yet it is immediately clear that in relation to such a policy strategy, our existing political institutions are unlikely to find the motivation to go down this path. The incentives for those involved in managing our national political life do not align with addressing the issue of hyper-incarceration. In John Dryzek’s formulation, the problem of hyper-incarceration is not seen as a ‘core state imperative.’

Importantly, while the costs of Indigenous hyper-incarceration are overwhelmingly borne by First Nations individuals, families and communities, there are wider societal costs that provide a potential platform for future advocacy. I am not referring to the financial costs of our prisons, substantial as they are, but to the less tangible costs that degrade the moral and ethical foundations of our society. How can informed citizens live in a society where the preconditions for social dysfunction have been allowed to develop, largely through neglect rather than deliberate intent, to the point where in some parts of the nation, domestic violence is endemic, employment opportunities are minimal, (government owned) housing is in extraordinary states of overcrowding and disrepair, and where young people are less literate and numerate than their parents. As the NT Coroner Elizabeth Armitage noted in her concluding comments to the recently released Inquest into the deaths of four Indigenous women (link here), ‘94% of the very youngest children in detention (10-13 year olds) have been exposed to family violence’.

My point in emphasising the societal costs is to point to the necessity for engaged citizens to build on this platform to advocate for the substantive policy reform that is both essential if non-Indigenous Australians are to live side by side with Indigenous Australians, but also if we Australians are to take our place in global society as nation built on social justice. We may be blind to the necessity of engaging with hyper-incarceration of First Nations citizens, but the rest of the world is not similarly blind.

If we were to find a way to successfully implement the systemic and broad-scale reforms required, then there would be a ‘justice reinvestment’ dividend. But talking up Justice Reinvestment while tinkering with the substantive policy challenge by allocating $20m per annum nationally should be seen for what it is: a hypocritically distraction with no discernible policy impact.

Finally, for those interested in delving deeper into these issues, below I provide links to three of my previous posts on Indigenous incarceration going back to 2017. Over those seven years, the underlying analysis has not changed much, which tells us something about the powerlessness of Indigenous Australians, and the challenges the nation faces in driving substantive reform.

ALRC Discussion Paper on Indigenous incarceration (link here)

Indigenous incarceration reform (link here)

The drivers of stratospheric rates of Indigenous incarceration (link here)

 

 

28 November 2024

 

 

 

 

 

 

 

Youth detention, incarceration, closing the gap, and who we are

 

Your dishonour

Mangles true judgement, and bereaves the state

Of that integrity which should become it.

Coriolanus Act three, Scene one.

 

According to ABS census data from 2021 (link here), one-third (33.1%) of Aboriginal and Torres Strait Islander Australians were aged under 15 years compared with 17.9% of non-Indigenous people in the same age group.  The median age nationally of the Aboriginal and Torres Strait Islander population was 24 years. While remote and very remote Indigenous populations comprise only 15 percent of the national Indigenous population, and two less than one percent of the Australian population, they are amongst the most disadvantaged citizens across virtually every social indicator.

In recent months, there have been several articles focussed on the plight of remote communities; places where the demographic profile is heavily slanted toward those under 24.

In October, Daniel James, a Yorta Yorta man wrote a searing indictment of government policy in Central Australia in The Monthly titled Children of the intervention (link here). More recently in The Saturday Paper (link here), Ben Abbatangelo, a Gunaikurnai and Wotjobaluk writer wrote a searing — yet hopeful —  indictment of the situation in Wadeye titled  Yidiyi Festival returns hope to Wadeye. I have quibbles with both articles related to their focus on particular places thus de-emphasising the wider structural drivers of disadvantage across remote Australia generally, and their implicit choice of temporal perspectives. Both articles are nevertheless extremely powerful critiques of Government policy neglect and ineptitude, while not ignoring the complexity and nuance which bedevils any close analysis of these issues.

It was within this overarching policy context that the Joint Council on Closing the Gap met last week. The Joint Council includes every Minister for Indigenous Affairs in the federation plus representatives of the Coalition of Peaks. Their communique (link here) mentioned a number of issues, but focussed particular attention on one specific issue:

Joint Council discussed critical matters regarding youth justice and agreed that Target 11 of the National Agreement on Closing the Gap (the National Agreement) is an urgent priority that requires collective action across multiple government portfolios and jurisdictions to deliver on the ground results. Target 11, to reduce the rate of Aboriginal and Torres Strait Islander young people (10 – 17 years) in detention by at least 30 per cent by 2031 is not on track to be met. Joint Council agreed to escalate this urgent priority and progress work that will achieve improved accountability, coordinated jurisdictional actions and outcomes. It was agreed that Joint Council Co-Chairs write to First Ministers to seek details of how their governments are currently taking steps to meet Target 11, including consideration of remand, alternative accommodation and health and disability care and education in youth justice facilities.(emphasis added).

According to the Productivity Commission Closing the Gap dashboard (link here):  

Nationally in 2022-23, the rate of Aboriginal and Torres Strait Islander young people aged 10–⁠17 years in detention on an average day was 29.8 per 10,000 young people in the population (figure CtG11.1). The 2022‑23 rate is above the previous three years (from a low of 23.6 per 10,000 young people in 2020‑21) but it is a decrease from 32.1 per 10,000 young people in 2018‑19 (the baseline year). Nationally, the trend for the target shows no change from the baseline. This assessment is provided with a low level of confidence.

So while current levels of youth detention are less than the baseline, they have been rising in the last year.

The Joint Council response is entirely bureaucratic in nature, and reeks of going through the motions. It is unclear why they focus on youth detention and not also on incarceration more generally. Writing to First Ministers for information that should be in the Implementation Plans required by the National Agreement will take months, and as it turns out, if you dig deep enough in the Productivity Commission dashboard, half of the jurisdictions will be able to point to recent improvements and those that can’t will find some other bureaucratic formulation to describe their efforts as deeply committed and focussed on improving accountability and coordinated consultation to prioritise urgent action….or some such …

The real problem, which goes to the heart of the renegotiated targets under the 2020 National Agreement is that nationally, detention rates for First Nations youth are currently 28.8 per 10,000 compared to mainstream youth detention rates of 1.1 per 10,000. In Queensland, detention rates for First Nations youth are 46 per 10,000. Of particular interest is the fact that in Western Australia in 2010, youth detention rates were 79.7 per 10,000 and have dropped to 34.6 in 2022-23, a halving of the rates over twelve years (although still at levels above the national rate for Indigenous youth detention). I don’t know how WA have achieved that outcome, but that would be a question worth asking. It demonstrates that progress can be made. But the bottom line is that nationally, First Nations youth are 28 times more likely to be in detention than non-Indigenous youth. That is the real issue and the real tragedy. It should be cause for a national strategy to fully (not partially) close the gap, to bring Indigenous youth detention rates down to 1.1 per 10,000. It is worth remembering that these are point-in-time statistics; the levels of Indigenous youth that are placed in detention in any one year will be considerably higher. The current levels of Indigenous youth detention should be a national scandal. And it should be a focus for governments to commission detailed and independent analysis from criminologists, sociologists and anthropologists as well as their policy advisers.

Instead, governments have squibbed the issue by inventing an arbitrary target, with the aim of lowering the detention rate from 32.1 in the baseline year to 22.5 in 2031. Not only did they invent an arbitrary target, they have failed to articulate a coherent national strategy (and coherent state and territory strategies) to meet this arbitrary and inherently unambitious target. By their inaction, they are continuing to squib this issue day in and day out.

This is bad enough. But target 11 under the Closing the Gap process is just one of numerous targets which replicate the same strategy. Invent an arbitrary target that is reasonably achievable; shift the responsibility from the Commonwealth to nine separate jurisdictions each with their own policies and approaches, thus making real accountability impossible. Avoid developing coherent and realistic policy implementation plans by loading them up with hundreds of pages of bureaucratic flim flam, thus avoiding real political accountability.  And whenever an issue arises that emerges into the public consciousness, claim to be concerned and throw a few dollars at it.

So for example, there was no mention by the Joint Council of the challenges related to Target 10 which is framed as follows: By 2031, reduce the rate of Aboriginal and Torres Strait Islander adults held in incarceration by at least 15%. The baseline adopted in the National Agreement was from 2019 a convenient and almost surreptitious way of diminishing the magnitude of the trends that point to not only an extraordinary level of hyper-incarceration of First Nations citizens, but a substantial increase in indigenous incarceration rates vis a vis mainstream population rates over the past fifteen years.

Interrogating the dashboard reveals the following key data points:

• Nationally the level of mainstream incarceration in 2023 is 149 per 100,000. It has barely changed from 2009, when the national rate was 137 per 100,000.
• For Indigenous citizens, the national level of incarceration is 2235 per 100,000 in 2023, up from 1539 per 100,000 in 2009.
• In WA, the Indigenous incarceration rate is 3469 per 100,000 in 2023, up from 2817 per 100,000 in 2009.
• In the NT, the Indigenous incarceration rate is 3029 per 100, 000, up from 1700 per 100,000 in 2009.

The national indigenous incarceration rate in 2023 is thus 15 times higher than the mainstream rate. In 2009, it was 11.2 times higher.

While it is difficult to visualise the impact of these statistics, Ben Abbatangelo’s article includes a description of the internal community violence that sporadically breaks out, its consequences for the whole community, and notes, almost in passing, the extraordinary statistic that that today, around 5 percent of the Wadeye’s population is incarcerated.

What I find particularly frustrating is that the blatant hypocrisy of governments, laid out in plain view, fails to resonate in the public domain. Political Oppositions across the federation (whether progressive or conservative) find it easier to look away or pretend that the issue is being dealt with appropriately; after all they hope to be in government at some future date and don’t wish to have made commitments they don’t intend to make meet.

The media (with honourable exceptions mentioned above) largely doesn’t look beyond the scandals or antics of the previous week.

Indigenous citizens become inured to the normalisation of violence in their lives, much of it is lateral violence and fuelled by poorly regulated and controlled alcohol and drugs.

The Indigenous members of the Coalition of Peaks on the Joint Council appear to be unable to see a way to go back to basics and call governments out for their inaction. They fear (probably correctly) that if they were to criticise government too openly, and too directly, they would first be defunded, and ultimately the whole edifice of the National Agreement would be dismantled as it would not be serving its purpose. The risks however are that they will ultimately be tainted by their perceived complicity (link here). And eventually a future, more punitive government will just decide to dismantle the whole edifice wile blaming the victims for the ongoing catastrophe.

Notwithstanding the irony of my reliance on their data in this post, the Productivity Commission blithely compiles and updates a plethora of data and statistics, apparently oblivious to its role in diverting attention from the extent and depth of the real-world crises and challenges confronting First Nations citizens. The Commission’s appears focussed on compiling a profusion of data and statistics which have limited relevance to the lived reality of many First Nations citizens, and no relationship to either policy or the concerns of governments.

For our political class and elites, the whole edifice has become an elaborate exercise in convincing mainstream Australia that our democratically elected governments really do care about First Nations when the reality is that they do not give a fig about closing the gap. In their mistaken and fundamentally narcissistic view, it is just too hard.  

Closing the gap is as much about mainstream Australia as First Nations; it is about changing the way mainstream Australia operates and shares this continent. I don’t claim that there are simple solutions to these issues. They require hard policy work, substantive political commitment, visionary political leadership, an ability to see beyond simplistic ideological humbug, and a sense of empathy and understanding that is exemplified in Australian notions of mateship, concern for the underdog and for a fair go for all. What fundamentally concerns me, to the point of disconsolation, is the deepening realisation that we live in a nation where these ideas no longer reflect who we really are.

 

Addendum: for those who might be interested in a more academic critique of closing the gap that reflects the ideas outlined here, I refer you to a couple of Discussion Papers I wrote in 2021 (link here and link here).

 

 

20 November 2024

amended to corrrect two minor typos (original struck through) 24 November 2024.

 

Update on the Winchelsea mine.

                                                             Th’ offender’s sorrow lends but weak relief

To him that bears the strong offence’s loss

Sonnet 34, 11-12

This post examines the current state of play in relation to the Winchelsea mine on Groote Eylandt.

I have previously discussed the mine and its ownership structure in a number of posts. I don’t propose to canvass in this post all the details previously discussed; instead I refer interested readers to those posts (link here, link here and link here).

AAAC and its subsidiary.

In summary, Winchelsea Mining is 70 percent owned by Anindilyakwa Advancement Aboriginal Corporation (AAAC) with the remaining thirty percent owned by Aus China International Mining Pty. Ltd. (AusChina). In their 2023 Financial Report dated 16 October 2023 (link here), the AAAC Directors stated:

The Subsidiary was established in 2018 and the mining project is part of a comprehensive economic strategy to enhance Groote’s Future Fund to maintain important economic, cultural and community programs for the island’s people permanently into the future. Winchelsea will be an Aboriginal owned and operated mining venture. The core vision of the project is to raise enough revenue to permanently support the economic and social future of all Anindilyakwa speaking clans of the Groote Archipelago.

The Subsidiary holds an Exploration License on ‘Akwamburrkba' (Winchelsea Island). The Subsidiary also holds a Mineral Lease on this site for a period of 30 years which was granted on 25 March 2022.

The Subsidiary is currently completing a Business Feasibility Study and progressing through various regulatory approval processes which is expected to be completed in 2024. Mine development should occur in 2024 targeting an operational start-up and manganese ore sales by 2025….

…. The Mining Project will see a large scale of infrastructure built on Winchelsea Island and the Little Paradise site on Groote Eylandt. Where possible, the buildings will be repurposed for future projects, such as multi use facilities and relocatable buildings. Beyond the life of the mine, it is intended there will be other various projects, including an aquaculture business, as well as other businesses such as tourism, timber mills and restaurants. There is a final project feasibility study being conducted which will detail a closure plan and mine rehabilitation including associated estimated costs for the specific site restoration costs [emphasis added] ….

…. Key management personnel of the Subsidiary [ie Winchelsea] during the year were as follows: Mark Hewitt (Director and Secretary, appointed: 18 June 2018); Dongfang Yu (Director, appointed: 1 September 2018);  Hui Yu (Director, appointed: 1 September 2018); Tony Wurramarrba (Director, appointed: 1 September 2018); Xiaoli Liu (Executive Assistant, appointed: 10 September 2018).

… The total remuneration paid to key management personnel of Winchelsea Mining Pty Limited during the year ended 30 June 2023 was $398,763 (30 June 2022: $485,885).

…. As reported in the 30 June 2020 financial statements, if the Subsidiary applies for a Mineral Lease, arising from the Groote Eylandt Tenements, the Subsidiary agrees it is obliged to pay a mineral lease payment of $10 million (plus GST if applicable) to Yukida Resources Pty Ltd as part of the consideration for the transfer to the company for the tenements. On 3 March 2021, the Subsidiary entered into a variation agreement with Yukida Resources Pty Ltd to revise the mineral lease payment from $10 million to $2.5 million. As part of this revision, an additional $6.25 million is payable upon achieving the first milestone, being the first shipment of product.

As I have previously noted both Mr Wurramarrba (now deceased) and Mr Hewitt were in receipt of full-time salaries from the ALC, a Commonwealth statutory body. Thus, any salary payments to them from Winchelsea would be in addition to those Commonwealth salaries (which are determined by the Commonwealth Remuneration Tribunal on the basis that the recipients are working full time). Ms Xiaoli Liu (also referred to as Ms Sophie Liu below) is Mr Hewitt’s spouse. She has at various times been involved in managing the ALC Royalty Management Unit, as well as her role as Operations Officer within GHAC and as Executive Officer within Winchelsea Mining.

This matrix of overlapping and parallel roles clearly creates a complex array of potential conflicts of interest. Further, as I have previously noted, it is somewhat strange that none of the Directors of AAAC are appointed as Directors of Winchelsea. In my view this reflects the fact that the ALC in effect controls AAAC by virtue of its control over virtually the entirety of its revenue, as well as the allocations for direct payments to unspecified ‘traditional owners’ that are made by AAAC. Finally, it is unclear at present whether Mr Wurramarrba has been replaced on the Board of Winchelsea and whether Mr Hewitt remains on the Board of Winchelsea following his dismissal by the ALC.

The 2022 financial statements report a correction to previous reports with the following effect: in 2019 the AAAC received $10 million from Aus China for the issue of 4000 shares (with AAAC holding 6000 shares). This ownership structure was further adjusted in April 2023 by the issue of a further 3,333 shares to AAAC at nominal cost. The current ownership structure is thus 70 percent AAAC and 30 percent AusChina.

The financial reports for AAAC for 2022 and 2023 and the ALC Annual Report for 2024 indicate that ALC has provided AAAC with $5 million in mine related s.64(3) payments in 2022 (and a further $1.35 million in TO payments); $5.38 million in mine related payments in 2023; and in 2024 just over $2 million (not broken down). ALC funding to AAAC over the past three years, primarily for the development of the Winchelsea mine, thus totals at least $12.3 million (in addition to the AusChina initial contribution of $10 million.

There is no publicly available information on the arrangements between AAAC and AusChina for contributions to mine development, though one might speculate that Aus China are not required to pay any further contributions given the quantum of their initial investment. The fact that the April 2023 increase in AAAC equity (from 60 to 70 percent of Winchelsea) appears to have involved no additional investment from AAAC beyond a $60 payment raises the question: why did Aud China agree to it? What did they get in return for their consent?  In this context it is worth remembering that this transfer occurred after the ALC had a draft copy of the ANAO Audit report.

Little Paradise

As noted above, the Winchelsea mine will involve infrastructure development at the Little Paradise site. Investment in infrastructure for Little Paradise has been primarily channelled through Groote Holdings Aboriginal Corporation (GHAC). As noted in the 2022 GHAC Financial statements (link here)

Groote Holdings Aboriginal Corporation was established to primarily focus on delivering the foundation assets and business – skill development programs necessary to support development of the Winchelsea Mining project in the short-term and the Aquaculture export- industry in the longer – term.

The financial statements for GHAC identify the following ALC investments in GHAC. In FY 2021, $4.6 million; in FY 2022, just over $27 million; in FY 2023, just over $16.6 million; and in FY 2024, $15.4m. The vast bulk of these funds, which total $63.6 million, relate to potential Winchelsea project related infrastructure and/or payments to TOs. Given that Little Paradise is described as multi-purpose, and in the absence of any detailed accounting for mine expenditure, let’s assume the Winchelsea related expenditure amounts to around $50 million. When we add in the AAAC expenditure, we have an investment to date of around $60m (compared to AusChina’s initial $10 million). To date, it appears that the TO’s on Groote have provided over 80 percent of the funds expended on developing the Winchelsea mine, yet only own 70 percent of the equity in the company. It is difficult to reconcile this apparent outcome with the ALC’s role in protecting TO interests on Groote. Unfortunately, the situation gets worse.

Both the Winchelsea Mini Development and the Little Paradise Development have been subject to assessment by the NT Environmental Protection Authority.

In a report to the NTEPA prepared for GHAC dated July 2024 (link here), consultants CDM Smith Australia state (inter alia)

1.2 Proponent Details. …. GHAC is moving quickly but diligently to realise the vision of achieving a perpetual Future Groote Cultural Economy and controlling the destiny via strategic investments and partnerships. The initial investments in infrastructure are targeted towards assets that will facilitate the ongoing economic development activities on Groote Eylandt.  With income streams from the Winchelsea Mining Pty Ltd, a joint venture (JV) between Anindilyakwa Advancement Aboriginal Corporation “AAAC” (Bara/Jaragba Clan owned) and AusChina International Mining Pty Ltd.  Seed capital can be invested into developing Little Paradise enterprises.  (page 3).

Figure 1-3 on page 23 provides the GHAC Organisation Structure. It shows that the Executive Director is Mark Hewitt, and that amongst the seven Direct reports are ‘Governance and CFO’ provided by ENMARK and the Operations Officer is Sophie Liu who has responsibility for Operations and Development, Traditional Owner Clan Business Support, Marketing and Procurement, Winchelsea JV partner liaison, and human relations.

Beyond the Traditional Owners, consultation with various Government, community and industry stakeholders has been completed. A partial summary of the consultation is as follows: ….

Commonwealth Government (Minister for Indigenous Australian) – On 11 March 2022 the ALC submitted a request for consent regarding Section 19(4A) and 27(3) of the Land Rights Act. As part of that submission, ALC provided a comprehensive overview of the Little Paradise Project in documentation attached to the consent request letter.

The report confirms that the initial function of the Logistics and Base Camp will be to provide logistics support for the Winchelsea mine, and that this is to be developed in year one of the five-year implementation schedule for Little Paradise (see section 2.3.3 and table 2.7).  

According to the NTEPA website (link here) in June 2023, the EPA suspended assessment of the Little Paradise development at the request of GHAC. In November 2023 the GHAC Little Paradise referral was withdrawn from the environmental assessment process by the proponent. This is likely linked to the EPA decision on Winchelsea (see below).

The information outlined above documents the scale of the investments to date in developing the Winchelsea project, the vast majority of which have been sourced from section 64(3) payments which under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) , a land council is required to pay to Aboriginal Corporations for the benefit of residents and TOs. It also confirms the potential influence and likely control exercised by the ALC over GHAC by virtue of the ALC CEO being a GHAC Director and the GHAC CEO (Executive Director). This is apparently an unremunerated role, and adds complexity to the overlapping links between the ALC and Winchelsea Mining. And finally, the information confirms that the former Minister, Mr Wyatt, and NIAA were apprised of the ongoing developments at Little Paradise (and presumably of their relationship to the Winchelsea mine project) in March 2022.

Winchelsea Mining Pty Ltd

In May 2023, Winchelsea Mining CEO Mark Hewitt notified the EPA of a variation in the Winchelsea development project and submitted a Notice of Significant Variation (NOSV) of proposed action under s51(1) of the Environmental Protection Act 2019 (link here) to the EPA.

That document included the following assertion:

  With Winchelsea Mining being a private company registered by the Anindilyakwa Advancement Aboriginal Corporation, which is managed by the Anindilyakwa Land Council (ALC), the ALC board is constantly informed of the Project and status of the proposed revision. The board consults more broadly on the Project changes with a broader group of up to 240 Traditional Owners representing Anindilyakwa’s two clan groups. As such the revised mine plan is authorised by the Traditional Owners of Winchelsea Island. [emphasis added].

The variation submission also confirms that the Winchelsea project is based on mining a resource of around 11.8 million tonnes of ore. I previously attempted to assess the value of this resource and concluded that the projected revenue would not be adequate to cover the cost of the projected infrastructure being developed for the mine. In reviewing this assessment, I have now concluded that my previous post (link here) substantially underestimated the value of the Winchelsea resource. This was due to an error in my calculations, in particular, my failure to take into account the concentration rate in the Winchelsea ore. I apologise to readers and have added a correction to my previous post. My previous post stated:

According to the sampling undertaken by Xenith, the total proved and probable ore reserves (as at October 2020) were 11.8 million tonnes with an average manganese concentration of 26%. Xenith estimated the costs of extraction and processing (Table 8.1) and this led to the estimation of net ore prices for the various categories of ore (Table 8.2 at Appendix E). Estimated FOB prices varied between A$5.68 and A$1.74 dmtu (dry metric tonne unit). 

The price of manganese ore has risen over the past year, and it is currently in the region of A$6 per metric tonne. It is unclear what Xenith’s estimated net FOB prices would be today. However, if we assume a resource of 11.8 million tonnes and an average ore price of A$6 per tonne times 26 (to take into account the average concentration of 26%) then the gross value of the Winchelsea Resource would be A$1.8 billion. Crucial to mine profitability would be the costs of extraction and transport to market and of course the future price of manganese ore. Notwithstanding my earlier calculation error, it remains unclear in my view whether Winchelsea Mining, which has no previous experience in bringing a major project into operation, has the commercial capability to raise the capital required to develop the resource, and if so whether it can overcome the numerous financial risks (such as exchange rate risk and an uncertain trade policy environment) and the increasingly uncertain environmental and climate challenges in a cost-effective manner. The ultimate profitability of the project and the financial benefits for the traditional owners of Winchelsea Island and the Groote archipelago generally are in my view far from certain.

Moreover, and importantly, there is no transparency over the structure of the Joint Venture arrangements between AAAC and AusChina. The risk here is that the TO’s who have effectively given up access to alternative and less risky uses for the s.64(3) payments in favour of investments in the development of the mine will not not receive an equitable share of profits and/or financial transfers as the mine’s development and operation progresses. Another important issue is that it is far from clear that the social and environmental costs of the mine on the broader Groote population (including Groote’s Aboriginal residents) are adequately understood in the wider community and will be adequately factored into the calculus underpinning mine development. The major concern in my view is that the role of the Land Council in protecting traditional owner interests has been compromised by the complex array of systemic conflicts of interest that have been established, the impact of which continues to this day.

One obvious and in my view concerning issue is the disjunction between the rhetoric promulgated by the ALC that the development of the mine will be in the interest of all traditional owners on Groote, and the legal ownership structure which vests 70 percent of mine ownership in AAAC owned by the representatives of just two clans. In the event that the mine is successfully developed, this disjunction will likely become a source of serious conflict. It represents in my view a failure by the ALC in its core statutory function, a failure which can be directly traced to the conflicts of interest built into its governance.

In July 2024, the NT EPA responded to the Winchelsea’s Notice of Variation with a document titled Direction to include additional information in the supplement and form and manner to publish the supplement  (link here). The Direction listed 30 areas which required more information or analysis. Apart from a range of environment and cultural heritage related information, the EPA made the following comment/request:

Comment: The draft EIS states that as the proposed 50-person accommodation camp and other supporting infrastructure will be located on Groote Eylandt and developed by a separate entity, and it is not considered in the EIS. Due to the dependency of the proposed action on this supporting infrastructure, consideration of this development is required in the EIS. Limited information is provided in the referral regarding the usage of Bartalumba Bay wharf in the construction phase of the project. This activity may cause an indirect impact to stakeholders / other users of the wharf.

Information required in the supplement: Provide an assessment of the potential social and economic impacts on the Groote Eylandt community from the development of supporting infrastructure (including accommodation camp) and from the use of Bartalumba Bay wharf [emphasis added].

The alternative ‘separate entity’ referred to in the supplementary direction from the EPA is clearly GHAC and its Little Paradise project.

Conclusion

A media article dated 1 January 2021 which is still up on the ALC website is headed ‘Mine nearly ready to go: Traditional owners on Groote Eylandt hope to start mining manganese on their own land by mid-2022’ (link here and link here). The article lays out the strategic vision for the mine and mentions in particular that Winchelsea is working with the Northern Australian Infrastructure Facility (NAIF) to lend it $100 million to develop the mine. Clearly the discussions with NAIF have so far come to nought (no public explanation has been provided by the ALC or Winchelsea), and the optimistic timelines have clearly blown out. The recent EPA decision suggests that there could be a further two years wait just to obtain the relevant environmental approvals.

The recent dismissal of Mr Hewitt from the ALC for reasons that have not been made public raises the fundamental questions: where to now for the Winchelsea mine proposal? The fundamental question in my view is for the land council on behalf of all Groote Traditional owners to independently reassess the project’s commercial viability and the fairness of the mining agreement that the land council presumably agreed to while its CEO (and key proselytizer for the project) was simultaneously the Executive Director of Winchelsea Mining. Yet the capacity of the land council to undertake this task while the myriad compromised and conflicted structures identified in the ANAO report are still in place, and while the National Anti-Corruption Commission is continuing its investigations, is clearly doubtful.

In my view, the case for the minister to step in and ensure that the ALC (and the GHAC and AAAC Boards) have access to independent and commercially astute financial advice in relation to the future of the Winchelsea project appears incontrovertible. Ongoing delay will only serve to further complicate the issues in play.

Apart from the possibility of commercial failure, a failure to act will increase the risk that AusChina, the minority interests in the Winchelsea Joint Venture, will decide that its interests will be best served by conjuring up a proposal to sell their equity in the putative mine to Indigenous interests on Groote for a price beyond its real worth.

 While I don’t rule out the possibility that the mine should ultimately proceed, such a possibility is only feasible if its ownership structure, its prospective commercial viability, and the economic, social and cultural viability of the pathway to development of the resource is thoroughly investigated by an independent and commercially experienced person.

We need look no further than the Ayers Rock Resort to find an example of a ‘good idea’ that has served as a sponge soaking up millions of dollars that might have been spent more wisely to benefit Indigenous Australians across the whole country (link here). In that case, the proponents were commercially experienced members of the board of the Indigenous Land Corporation, a Commonwealth statutory corporation, who pursued a course of action which led to financial disaster. The ILSC is still seeking to escape the millstone around its neck, and the losers have been the myriad Indigenous corporations that might have been supported by the ILSC and have not been. The resonances with Winchelsea are crystal clear. If the worst comes to pass, the sorrow of Ministers who were complicit or failed to act when they might have will be ‘but weak relief’.