Ministerial appointments in the Indigenous Australians portfolio: time for reform

 

There is a law in each well-order'd nation
To curb those raging appetites that are
Most disobedient and refractory.

Troilus and Cressida Act 2, scene 2

 

This post is assesses the recent Ministerial appointments in the Indigenous affairs portfolio, and makes a series of reform recommendations.

 

Appointments to Board positions in the Indigenous Australians portfolio generally fly under the radar. Yet, they involve the management and oversight of billions of dollars in Indigenous-directed assets, and bestow considerable power and influence, not least the power to appoint Individuals to the Boards of myriad subsidiaries of statutory corporations, which themselves control substantial financial resources. These appointments, and the actions of Boards, receive far less media attention than Ministers and senior bureaucrats. Accordingly, the appointments of Directors to government owned corporations, and the actions of those corporations, deserve far more attention than they normally receive both by the media and (dare I say) academia.

 

Perhaps the most consequential recent appointment was that of Ms Jodi Broun as CEO of the NIAA. She has a term of five years, which took effect on 14 February. The Minister’s 12 January 2022 media release provides some biographical background (link here). Broun is an experienced public servant and I expect her to make a positive and well informed contribution to the administration of NIAA and the Indigenous Australians portfolio.

 

In relation to the Indigenous Land and Sea Corporation (ILSC), the Minister has made a number of new appointments (link here, link here). Following the expiry of the term of the former Chair, Mr Eddie Fry, Mr Ian Hamm has been appointed. A Yorta Yorta man and experienced public servant, Mr Hamm’s three year term began on 1 December 2021. Also appointed were Ms Gail Reynolds-Adamson, Ms Kate Healy and Mr Nigel Browne. On 15 February, the Minister announced that Ms Kristy Masella would join the ILSC board for a three year term beginning 16 March 2022. On 7 April 2022, the Minister announced the reappointment of Mr Roy Ah-See, but did not mention the term.

 

In relation to Indigenous Business Australia (IBA), the Minister announced on 21 December 2021 the appointment of Mr Richard Callaghan from South Australia, and the reappointment of three Directors, Mr Eddie Fry (chair), Mr Rick Allert, and Ms Shirley Macpherson. The Ministers media release made no mention of the terms of appointment (link here).

 

Shortly after the Minister’s December announcement, on 21 December 2021, I published a post regarding these reappointments (link here) based on the absence of any information regarding the terms of the reappointments. Information in the Government Business Directory at the time indicated that the reappointments would expire in February 2022. In that post I focussed on a number of unanswered questions regarding serious governance issues within the ILSC Board and the Minister’s own acknowledgement of his loss of confidence in Mr Fry as Chair. It now transpires that the Government Directory entry for the IBA Board has been updated to show that the terms of appointment for the reappointed IBA Directors are not three months, but three years, ending on 17 December 2024 (link here). With regard to that eventuality, my previous post made this comment:

A more worrying possibility is that the Ministers recent announcement applies to the post February terms of the three Directors. If so, this would lock in a serious failure of good governance principles.

For the full context of this comment, I recommend readers consult my earlier post (link here) and the links included there.

 

More recently, the Minister announced the appointment of Mr Joshua Gilbert to the IBA Board (link here). While the media release makes no mention of the term, the Government Directory indicates it is a three year term.

 

The Minister has also made a number of other recent statutory appointments. Ms Vonda Malone has been appointed as CEO of the Torres Strait Regional Authority (link here), Ms Tricia Stroud has been appointed as Registrar of Indigenous Corporations (link here), perhaps the key regulatory appointment in the Indigenous Australians portfolio. The Minister also announced the appointment of Mrs Suzanne Hullick and Mr Justin Ryan to the Interim Board of the Northern Territory Aboriginal Investment Corporation on 6 April 2022 (link here). For a discussion of some of the risks facing this new corporations, see my earlier November 2021 post (link here).

 

Other recent non-statutory appointments made include Ms Fiona Cornforth and Ms Catherine Liddle as co-chairs of the Indigenous Expert Group guiding the implementation of Supporting Healing for Families (link here) and the reappointment of Mr Daniel Bourchier to the Board of Outback Stores (link here).  The Government also announced the appointments of Ms Gina Castelaine and Ms Cara Peek, two new members of the revamped Indigenous Reference Group on Northern Australia, on 24 December 2021 (link here). This body has recently been renewed by Minister Littleproud after it was effectively sidelined by Minister Pitt. To date, there has been no critical assessment of the success or otherwise of the IRG in advancing the interests of Indigenous Australians within the Government’s Northern Australia policies. The processes for the appointment of members of the IRG are particularly opaque, it not even being clear which Minister makes the appointments, and which portfolio is responsible for taking any policy recommendations forward.

 

Discussion

 

Given the number of Ministerial appointments, the significance of the bodies they are charged with managing, and the powers bestowed on Boards to appoint Directors to subsidiaries of Commonwealth corporations, the information provided by governments should be much more extensive and accessible than it is.

 

There is no requirement for a Minister to announce appointments, and as is apparent from a close reading of Minister Wyatt’s announcements, there is no requirement for the Minister to identify the term of the appointments, nor the basis of appointments (merit based selection process or ministerial selection). Nor is there any requirement for the Minister (or appointees) to publicly identify potential conflicts of interest nor to explain how they are to be managed. The quality of transparency in relation to the management of portfolio bodies is underwhelming, and contributes to the creation of an environment where the public interest can be set aside in favour of political agendas and machinations.

 

Issues that I would point to as potential or actual issues of concern in the Indigenous Australians portfolio include:

·         attempts to co-opt Boards to ensure that they will give favourable consideration to Ministers’ views and wishes;

·         attempts to stymie future governments’ capacity to bring new expertise or skills onto Boards; or to build in a level of internal conflict beyond a Ministers term of office to ensure a continuity of policy;

·         the use of appointments as rewards; and

·         making appointments that assist in moderating the capacity of key intermediary organisations to exercise truly independent judgment on issues that may come before the intermediary in the future. 

 

I have necessarily articulated these issues at an abstract level, and note that they often involve what might be termed preparatory moves by a minister akin to a general positioning troops on high ground in advance of a possible battle. In other words, they involve strategic political management and do not necessarily involve inappropriate action. Nonetheless, to the extent that they occur, they are highly likely to be inconsistent with the public interest.

 

A particular issue of more serious concern is the reappointment of Mr Fry to the IBA without any explanation from the Minister in regard to his previous loss of confidence in him at the ILSC, and without any formal response being published to the recommendations of the Thom report. This report commissioned by the Minister only came to light as a result of an FOI request. The previous ILSC Board had also lost confidence in Mr Fry (expressing a formal lack of confidence in his leadership on a number of occasions). Adding to the aberrant sense of distorted reality around the Minister’s decisions regarding the ILSC and Mr Fry was the Minister’s decision to reappoint Mr Ah See, — one of those ILSC Board members who had expressed deep concern with Mr Fry’s governance approach — to the ILSC Board. Mr Ah-See is widely respected in Government circles and was a former co-chair of the Prime Minister’s Advisory Council under the current Government (link here). Rather than setting a benchmark for standards of governance in the portfolio, the Minister seems to be having a bet each way. The real issue here is this: is the Minister focussing on the wider public interest, or has he cobbled together a shabby compromise due to pressure from deeper political forces in play protecting Mr Fry? My money is on the latter. 

 

Other issues raised by these appointments include the overlap between government activities in general and the appointments of some individuals. For example, Mr Bourchier is an ABC journalist, and Ms Kate Healy is a partner in PwC’s Indigenous consulting arm. Both of these organisations can be expected to have dealings of one sort or another with the Minister and his portfolio. While both individuals appear eminently qualified for their appointed roles and it seems unlikely that either individual would place themselves in a position of actual or potential conflict of interest, there is a risk that the Government is attempting to exercise a more nuanced form of influence directed to subtly encouraging a pro-government attitude in matters of a general nature within both the ABC and PwC Indigenous Consulting.

 

At a more systemic level, the lack of diversity in appointments suggests the risk of governance failures is built into the present selection processes.  The current Government appears to have made many appointment decisions that suggest a process of churn has been underway from within a small group of appointees, By 2025, Mr Fry and Mr Allert will each have had in excess of ten years as remunerated appointees on the IBA, ILSC, and various Commonwealth subsidiaries such as Voyages Pty Ltd. Ms Reynolds-Adamson was previously a Director of IBA for eight years from 2006 to 2014. Mr Joseph Elu who (understandably in my view) resigned from the ILSC in the middle of its governance issues (clear evidence of the cost of the dysfunction) had previously been Chair of the IBA for 11 years. Mr Ah-See had been a Director on the IBA before being appointed to the ILSC. Ms Shirley Macpherson was previously a longstanding Chair of the Aboriginal Development Commission (forerunner of IBA), a longstanding Chair of the ILC (forerunner of the ILSC), and is now a member of the IBA Board. By 2025, she will likely have accumulated around thirty years on key Boards in the Indigenous portfolio. Taken together, this accumulation of repeated appointments suggests an extremely serious level of insularity and resistance to bringing in fresh talent. It is no wonder that the ILSC experienced the internal crisis of governance discussed above.

 

To be clear, I am not suggesting that the individuals appointed are necessarily unqualified, nor that this is an issue limited to the present Government. Lax selection processes have an inbuilt tendency to encourage Ministers to re-appoint from within a small select group of potential appointees. I am suggesting, however, that this is a real issue, and that it is unacknowledged and under-recognised. To the extent that poor governance is the result, Indigenous Australians are the losers.

 

So what are the solutions?

 

Listed below are some high level ideas that would in my view improve the systemic quality of corporate governance within the portfolio bodies across the Indigenous Australians portfolio. While I am under no illusions that governments of any stripe will be attracted to reforms of this kind, I do consider that these are issues that the Coalition of Peaks, and the yet to be established Indigenous Voice might take up and prosecute.

 

First, there is a need for the establishment of a legislated multi-partisan/independent selection committees that proposes a merit based short list to the minister for each vacancy on the Board of a portfolio body. The process used for the ABC (link here), and largely ignored by recent Prime Ministers, is one potential model.

 

Second, I would go further and propose that any legislation should provide that where Ministers ignore an independent selection committee shortlist in making an appointment, the nominee should be required to stand down with a change of government.

 

Third, there should be a legislated requirement in the First Nations portfolio for the NIAA to maintain a current, comprehensive and publicly available register in one location on its web site of all Ministerial appointments and re-appointments to portfolio bodies over the previous twenty years. Further, when Directors are listed, a footnote should list all prior appointments within the portfolio (and in related portfolios e.g. Indigenous health). A separate register of short Director biographies should be linked to the main register.

 

Fourth, there is an urgent need for much greater transparency over the appointments of Directors to subsidiaries of Commonwealth statutory corporations, their terms and remuneration, and any identified potential conflicts of interest. Indeed, these appointees should be included within the register recommended above. Further, there is a need for much greater financial transparency over these entities. To mention just one example, they are Commonwealth owned bodies, yet access to their accounts is only available from ASIC upon the payment of a fee. Indigenous Australians in particular deserve to have full access to this information without a fee. This could be achieved by a requirement that all documents with ASIC should also be made available on the relevant websites.

 

Fifth, an independent body such as the Law Reform Commission should be tasked to undertake a short and sharp inquiry with public submissions to draw out any other reforms that might be required to appointments processes for portfolio bodies in the Indigenous Australians portfolio.

 

Finally, I would note that one of the reasons for improving the quality of governance in key portfolio bodies such as the ILSC and IBA in particular is that it is clear to me that their shelf life as statutory corporations within the Australian government system is within one or two decades of coming to an end. In a chapter in a recent book on Self Determination (link here), I argued the case for transitioning these bodies into a form of First Nations ownership and control. Amongst the key preconditions for such a process is to ensure that they have been governed effectively in the periods leading up to such a transition, and that their Boards are truly governing these corporations in the interests of First Nations rather than facilitating the political machinations of Governments. Any such transition will be complex and will require careful planning from within the existing corporations. In turn, this will require Boards that are prepared to think long term, and undertake the hard work of persuading governments of the potential benefits of giving up control of these key institutions.

 

Unfortunately, I have very little confidence that Australian governments, present and future, or the current Boards in the Indigenous Australians portfolio would bring the level of vision required to even start this process, let alone bring it to a constructive conclusion. This is why Board selection processes are strategically important for First Nations interests, and why the Coalition of Peaks and the future Voice should work together to persuade the Australian Government to change these processes for the better.