Nothing to See Here: NIAA’s answers to recent Senate Questions related to Groote

Let’s talk of graves, of worms, and epitaphs,

Make dust our paper, and with rainy eyes

Write sorrow on the bosom of the earth.

Richard II, Act three, Scene two.

The NIAA has provided answers to a series of Questions on Notice lodged By Senator David Pocock following the last Estimates Hearings in November 2024 (link here). The questions related to the ongoing situation on Groote Eylandt, the status of various issues within the Anindilyakwa Land Council and the NIAA’s actions throughout this rather sorry and complex saga.

Given that there appears to be few external parties taking an interest in these issues (apart of course from the ongoing NACC investigation which may not report for months), I feel it is incumbent upon me to provide some commentary if only for the record. For the larger context, I recommend readers look at my previous post and in particular, the article I co-authored with Bill Gray in the Mandarin (link here).

In this post, I have focussed on those answers which I consider to be inadequate. In a subsequent post, I will address the issues raised by the answer to Question #8.

I have italicised the questions and the NIAA answers and indented my comments in relation to each answer.

 

Senator Pocock Question #1

Will the Minister initiate an independent, comprehensive, forensic audit into the administration and operations of the ALC and of those Aboriginal Corporations that received funding determined by the ALC, so that the new Board of the ALC can move ahead in confidence to regain the trust of the Anindilyakwa community and other key stakeholders, and achieve the standard of governance that will ensure the ALC can properly represent its people and achieve its mission? If not, why not?

NIAA Answer #1

The former Minister for Indigenous Australians, the Hon Linda Burney MP referred concerns regarding Anindilyakwa Land Council (ALC) governance and operations to the National Indigenous Australians Agency (NIAA) for review and action as required. In response, the NIAA commissioned an independent review of the ALC’s responses to the Australian National Audit Office (ANAO) governance audit and has subsequently been overseeing the ALC’s actions to improve its governance, transparency and accountability.

The NIAA has and will continue to refer all relevant matters to law enforcement and other agencies as required. 

Comment mcd #1

A preliminary and more general point: The NIAA is under the direct control of the Minister. Both she and her agency have regulatory responsibility for the ALC (and for the Registrar of Aboriginal Corporations who is the regulator for CATSI Corporations who are the beneficiaries of section 64(3) payments). Any shortcomings of the NIAA are ultimately the responsibility of the Minister. Any failure to answer questions asked are a failure of the Minister as well as her agency.

The Minister/NIAA have not answered the question regarding the forensic audit. The so-called ‘independent’ review commissioned from BellchambersBarrett was constrained in its terms of reference and focussed only on the formal ANAO recommendations and not on the wider issues which were identified by the ANAO in its fine-grained analysis. The NIAA and the ALC were involved in finalising the BellchambersBarrett Report, and for this reason it was clearly not independent. The answer refuses to contemplate an independent forensic review and fails to provide any assurance that this is covered off in some other way. The deeper question this raises is why? Why won’t the Minister initiate the action required to get to the bottom of what has transpired on Groote? Why doesn’t she want to the public to know?

Senator Pocock Question #3

Can the Minister confirm that the conflicts of interest identified by the ANAO in May 2023 and again more recently in the BellchambersBarrett review of August 2024, have now been addressed to the satisfaction of the Minister and NIAA?  If not, what are the issues still outstanding?

NIAA Answer #3

The ALC has developed a schedule of activity to address the ANAO and Bellchambers Barrett recommendations, including those associated with conflicts of interest management. The NIAA has been overseeing the ALC’s performance of those activities and is satisfied that implementation of acceptable arrangements for conflict of interest management will be progressive over the forthcoming months. The conflicts of interest noted in relation to the former ALC Chief Executive Officer (CEO) have been resolved following the termination of Mr Hewitt and his removal from positions in all associated entities. The current ALC Board Chair does not hold any of the positions that gave rise to the conflict of interest concerns in relation to the former Board Chair.

Comment mcd #3

The question has not been answered. The answer makes clear that the Minister is not yet in a position to be satisfied (“acceptable arrangements for conflict-of-interest management will be progressive…”), yet they have not gone on to identify the issues that remain in progress.

The unqualified assertion that the termination of Mr Hewitt and the election of a new Chair addresses the conflicts of the past is problematic. It ignores the complex web of influence previously exercised by the former CEO and his spouse, and the inevitable expectations on Groote that the benefits flowing form those prior arrangements will continue. The current status and oversight of the various positions and financial interests previously held by Mr Hewitt’s spouse remain completely obscure.

One important but unintentional revelation of this answer is the reference to Mr Hewitt’s ‘removal from positions in all associated entities.’ How was this achieved? Did the Minister and NIAA give Mr Hewitt and his spouse some kind of ultimatum to resign (and if so what was the quid pro quo) or did the ALC direct the ‘associated entities’ to dismiss him, thus confirming that they in fact exercise control over these entities? The public interest requires that clarification and answers to these questions be provided.

Senator Pocock Question #4

Has the Minister/NIAA approved any arrangements for the management of the conflicts of interest that were identified in the ANAO and Bellchambers Barrett reports? If so, will the Minister please table those arrangements.

NIAA Answer #4

Formal approval of the ALC’s conflict of interest arrangements is the responsibility of the ALC Board in consultation with the ALC Audit Committee and ALC management.

Comment mcd #4

The implication is that the Minister and NIAA have not approved any arrangements for the management of conflicts of interest. The ALC has been riven with actual and potential conflicts of interest for at least six years; this Blog has previously identified and discussed many of them. Without ministerial engagement and approval of the actions being put in place, there is no guiderail in place to prevent the re-emergence of conflicted influence over decision-making in the future. Moreover, without a forensic audit, it is unclear whether the pre-existing conflicts of interest led to misallocation of funding and resources (with detrimental impacts on individuals and corporations on Groote), and whether there is remedial action required to rectify such misallocations. The laissez-faire approach of the Minister and NIAA is patently inadequate and represents in my view a serious lapse of ministerial responsibility. The minister has numerous and far-reaching powers under ALRA to play a direct role in the ALC’s administration for however long it takes to establish a new set of watertight operational procedures.

Senator Pocock Question #5

Can the Minister confirm that the Aboriginal residents of Groote Eylandt have not been subject to predatory commercial behaviour and financial losses arising from the actions of the former CEO, his spouse and the former Chairman of the ALC? If not, what action is she taking to ascertain the extent of the potential losses to the community?

NIAA Answer #5

As previously noted, the former Minister referred concerns regarding ALC to the NIAA for review and action as required. The NIAA has and will continue to refer all relevant matters to law enforcement and other agencies as required.

Comment mcd #5

One obvious problem with this answer is that not all commercially predatory behaviour will be illegal or corrupt. If it is the case that legal and non-corrupt predatory behaviour has occurred, the question becomes: is the Minister prepared to allow the officers and staff of agencies within her portfolio to engage in such behaviour, and more directly, why was she not prepared to take action within her regulatory powers when she became aware of such activities rather than hiding behind the convoluted and time-consuming processes of law enforcement agencies?

Given the deliberate policy of minimising the disclosure of relevant information, we do not know if the issue of potential predatory commercial behaviour was even of concern to the Minister or her predecessors, nor whether it is of concern to her today.

What were the concerns that she referred to the NIAA and onwards to law enforcement? When were those concerns formally referred to the various agencies? Which agencies received referral? How long transpired between the Minister and her agency becoming aware of the concerns and referrals being made? Why won’t she indicate the general nature of those concerns? I am sure the people who are the subject of any investigations understand that investigations are underway. Why keep the public in the dark? What has the Government got to hide?

The bottom line is that the answer to this question is deliberately designed to hide crucial accountability information. This is not in the public interest.

Senator Pocock Question #6

According to the ALC website, in the period 2019 – 2023, the ALC distributed $361m of s64(3) monies to various corporations and organisations on Groote Eylandt. Can the Minister/NIAA confirm that these distributions were determined by the ALC in compliance with the provisions of the ALRA, including s23(3) & s23 AA of the Act?

NIAA Answer #6

Distributions were determined by the ALC in compliance with the provisions of the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA).

Comment mcd #6

This answer exudes unwarranted confidence. In my view it is both misleading and wrong. Section 23AA requires the ALC to undertake its functions inter alia, in a fair manner. The ANAO identified a series of payments to corporations where the ALC CEO played a major role in the application and/or was on the Board or had a conflict. The obverse of this favouritism is unfairness to the traditional owners who might otherwise have been beneficiaries.

The ALC’s effective control of associated corporations (in my view implicitly acknowledged in the actions taken by the NIAA to have Mr Hewitt vacate all his positions on associated entities) is itself an effective breach of the legislative requirement that land councils pay 64(3) payments to (independent) corporations and not to an entity it controls.

The provision (s.23(1)(ea)) that allows land councils to assist local corporations has a rider that such assistance must not cause the land council ‘to incur financial liability or enable it to receive financial benefit’. The ANAO found instances where the ALC could not demonstrate that this was the case. More substantively, where a land council effectively controls a corporation, then the liabilities of the corporation are those of the land council. This inevitably leads to a breach of section 23(1)(ea).

In a grave error of judgment, the NIAA and Minister appear to have lost sight of both the first and second Laws of Holes (link here). They should stop digging, and the Aboriginal citizens on Groote are still in a deep hole.

Conclusion

The answers to the questions above are in my view deliberately obfuscatory, are incomplete and by failing to provide the full story have the effect of misleading the Senate. In some cases, they are just wrong. This is a continuation of the approach adopted from the first day the ANAO tabled its performance audit in May 2023, which is best described as a policy of ‘nothing to see here!’ At best, this involves putting the political interests of the Government above the public interest. At its worst, it is much more serious than that. It erodes trust in Government and diminishes the quality of our democracy.

The failure to get to the bottom of what has transpired on Groote (not all of which will necessarily meet the definition of corruption, or criminal behaviour) will lead to ongoing and deep-seated disadvantage to the Aboriginal population of Groote Eylandt and may have wider implications for the viability of the core institutions established by the Commonwealth’s NT land rights legislation. These disadvantages will certainly be political, and financial, but most importantly they will also have social consequences for the fabric of community life on Groote. This is the tragedy that is unfolding.

 

21 February 2025

 

 

 

 

Why understanding what has happened at the ALC is important

To fear the worst oft cures the worse

Troilus & Cressida Act three, Scene two

 

Along with my co-author Bill Gray, a former senior Commonwealth public servant with extraordinary experience across the Northern Australia and Canberra, I recently penned a short article focussed on the importance of regulatory oversight of the Anindilyakwa Land Council in particular, and by implication, all statutory entities in general.

Published in The Mandarin, with the title  Minister McCarthy and oversight of the Anindilyakwa Land Council  (link here), the article is available for open access once readers create an account.

I wont try to summarise the article here, but instead will make a couple of more general points.

First, robust and proactive regulation is important in establishing and maintaining high quality organisations, whether in the public or private sectors. The ongoing quality of statutory corporations is particularly important because they are invariably established for public purposes and thus are intended to pursue and contribute to the public interest.

Second, over recent decades there has been a general trend towards the overt politicisation of the public service. I do not mean partisan politicisation but instead refer to the co-option of the public service to supporting the Executive arm of government in its ongoing efforts to dominate the legislative arm, that is, the Parliament. Ministers are theoretically responsible to Parliament, but in fact in recent decades it has become apparent that the tables have turned, and in practice it is Parliament that is in most respects subservient to the Executive.

This leads to a situation where Ministers no longer feel obliged to maintain standards of accountability and deference to the law that constitutional theory requires. In these circumstances, regulatory oversight is made subservient to politics, and over time the quality of institutions degrades.

Third, I suspect that in the Indigenous policy domain, there is a reluctance by many public servants to be seen to be critical of Indigenous organisations or officeholders. Such reluctance may be exacerbated when the Minister that public servants are reporting to and supporting happens to be Indigenous. My own view is that it remains important for office holders in statutory corporations to be held to high and rigorous standards of accountability whatever their background. Not only is it paternalistic to adopt lesser standards, but for the reasons outlined above, high quality regulation creates the preconditions for high quality service delivery.

I have focussed on these issues to explain why it is that I have spent so much time and effort in analysing and understanding what has been happening on Groote in this Blog and elsewhere. The issues involved are of much wider significance than the possible shortcomings of a single statutory corporation on a remote Island off the northern Australian coast. The fact that the mainstream institutions designed to hold public sector institutions to account are not working effectively is the real issue.

The reforms required to reverse these developments are structural and systemic. Without close and detailed analysis of public sector developments in locations such as Groote Eylandt, (or in policy realms such as Robodebt), the task of devising the necessary reform agendas, and finding the political coalitions necessary to advance those reform agendas becomes impossible.

This is why the issues on Groote Eylandt are so important. It is also why it is essential that there be a comprehensive and independent forensic audit of the activities of the ALC and its associated CATSI corporations in receipt of royalty equivalent payments. I recommend readers have a look at the Mandarin article with these more general points in mind.

 

12 February 2025

Indigenous hyper-incarceration: a remote problem?

 

Were such things here as we do speak about? Or have we eaten on the insane root that takes the reason prisoner?

Macbeth, Act one, Scene three.

 

Yesterday, I read an important and I suggest ‘must-read’ assessment of the state of carceral policy in Australia. Published in The Conversation (link here), and titled Prisons don’t create safer communities, so why is Australia spending billions on building them? The article is co-authored by a disciplinary diverse team of academics headed by Emma Russell from La Trobe University. The article summarises available data by jurisdiction and while the focus is on the mainstream, it refers in passing to Indigenous incarceration rates which have been skyrocketing across the nation.

One data point quoted stood out:

As of January, the Northern Territory hit a grim milestone. More than 1% of the territory’s total population is now incarcerated in adult prison.

This was supplemented with an extraordinary graph titled Percentage of the Population in Adult Prison, showing the incarceration rates for each Australian jurisdiction since 1860. What jumps off the page is the stratospheric growth in incarceration rates in the NT, rising from 0.22 % in 1980 to 0.66 % in 2020, and then to 1.03% in 2025. No other jurisdiction records any such increase, though virtually all jurisdictions have recorded close to a doubling in their incarceration rates off a low base over the same period.

The ABS released data on incarceration rates on 19 December 2025 (link here). The report a national prison population of 44,403 persons on 30 June 2024. Of these, 15,871 were Indigenous. The Indigenous prison population increased by an extraordinary 2019 persons or 15% over the previous year.

The remote angle

While The Conversation article is extraordinarily valuable, it strikes me that it underplays the role that the hyper-incarceration of remote Indigenous people is playing in driving the rise in incarceration rates. The article points to changes to policy for these trends (longer prison sentences and less access to bail) and cites Andrew Leigh’s 2020 article The Second Convict Age: Explaining the Return of Mass Imprisonment in Australia in the Economic Record (link here). The abstract to Leigh’s article states, inter alia:

Fully 2.5 per cent of Indigenous adults are incarcerated (2,481 prisoners per 100,000 adults), a higher share than among African-Americans. The recent increase in the Australian prison population does not seem to be due to crime rates, which have mostly declined over the past generation. Instead, higher reporting rates, stricter policing practices, tougher sentencing laws, and more stringent bail laws appear to be the main drivers of Australia's growing prison population.

These reasons are fine as far as they go, but where are these stricter policies being applied, and why? The answers to these questions are required to find the appropriate policy responses.

My hypothesis is that the accelerating growth in incarceration rates is associated with more punitive approaches by governments to criminal behaviours in remote regions, which are themselves a response to increasing dysfunction associated with alcohol and drug abuse, and longstanding lack of investment by governments in finding substantive policy solutions. To be clear, social dysfunction is an institutional affliction impacting Indigenous communities, but its causes can be traced to the long-standing failure of governments of all persuasions to establish and maintain the institutional and economic frameworks required to ensure social cohesion is guaranteed. Intuitively, it seems clear that the causal relationship between social dysfunction and alcohol and drug abuse goes in both directions; that it they are mutually reinforcing.

In the NT, according to an NT Treasury paper (link here), in 2021, 74.6% of the NT Aboriginal population resided in remote or very remote locations. The Aboriginal population of the NT comprises around 30 % of the NT total population of just over 250,000.

Unfortunately, while the Productivity Commission Closing the Gap Information Repository / data dashboard includes a number of disaggregations in its reporting on Target 10 related to over-representation in the criminal justice system (link here), the dashboard does not record the geographical status of prisoners and/or arrests leading to imprisonment. Nor does it record any information related to the association or role of alcohol or drugs in the crimes leading to incarceration. Nor does the ABS publish this data. We are left to extrapolate pending some detailed demographic research by academic criminologists or geographers…

In an earlier post titled The drivers of stratospheric rates of Indigenous incarceration (link here), I spent some time discussing the recent research report by Don Weatherburn, Michael Doyle, Tegan Weatherall and Joanna Wang titled Towards a theory of Indigenous contact with the criminal justice system (link here).

The following paragraph from the Executive summary of the Weatherburn et al paper supports my hypothesis:

The strongest risk factor is having used illicit drugs and alcohol over the preceding 12 months, which increases the marginal risk of arrest by 14 percentage points…The strongest protective factor is school completion, which reduces the risk of arrest by 7.9 percentage points….

According to the ABS (link here) the total NT prison population on 30 June 2024 was 2284. Of these, 2023, or 88.5%, were Indigenous. The extraordinary increase in NT incarceration rates is almost entirely Indigenous, and three quarter of the NT Aboriginal population reside in remote or very remote locations. It seems clear that Indigenous hyper-incarceration is predominantly a remote issue in the NT. Based on my experience of some decades, and the anecdotal media reports on social dysfunction in remote communities in WA, SA, and Qld, it seems likely that similar trends will be found to exist in these jurisdictions. The only reason they are not apparent is that the Indigenous populations of these states is proportionately much lower than in the NT.

The other gap in The Conversation article (which flows perhaps from the line of argument above) is that role of alcohol or drug abuse in driving criminal behaviour particularly in remote regions. There have been longstanding calls by Western Australian police for alcohol controls in remote regions of WA (link here), and the debate over alcohol controls in the NT has been in play for decades. I don’t propose to recapitulate the case on the damaging impacts of alcohol and the case for stronger policy action on the availability of alcohol in remote regions, but will merely point readers to some previous posts on this blog (link here; link here; link here; link here; link here; link here; link here; link here; and link here).

Policy Solutions

While there is undoubtedly a case for much greater investment in developing alternatives to incarceration both in mainstream contexts and in relation to Indigenous incarceration across the whole nation as advocated by the extraordinary and energetic work of the Justice Reform Initiative (link here), reversing the dire state of social dysfunction across remote Australia is in my view the only way to address the extreme hyper-incarceration of Aboriginal people.

I am under no illusions that the political vibe nationally has taken a more punitive turn and like the authors of the Conversation article, I see this as deeply counterproductive. Reversing the cataclysm confronting remote communities will require sustained political vision and commitment, and a substantive focus on expanding and accelerating some clear policy priorities.

The policy solutions outlined by Don Weatherburn and his co-authors in their Institute of Criminology research paper referenced above were framed as follows:

Measures to reduce illicit drug and alcohol use, improve school retention and improve economic outcomes for Indigenous Australians are essential if Australia is to achieve any long term reduction in the scale of Indigenous over-representation in prison.

I wholeheartedly agree.

Yet each of these three identified actions, are themselves comprised of assemblages of complex policy measures involving legislative and/or regulatory changes, access to adequate and increased funding, and most importantly, an institutional structure that can operate at scale, and is guaranteed to be sustained over at least a decade. To take an example of a recent national priority, AUKUS, each of these elements have been provided for. Unfortunately, the operation of our day-to-day political system, especially in relation to an issue that is invariably defined as the responsibility of the states, does not normally guarantee that these essential elements are provided for. I will repeat this point: our democratic politics as usual is not working to fix this issue.

Below I set out one potential model designed to ensure progress is made in reversing the worsening crisis of Indigenous hyper-incarceration. The details are less important that its description of the level and intensity of action that would in my view be required to drive real change.

As the issue of hyper-incarceration has bedevilled the nation for decades, it is clear that new approaches and ways of operating are required. The first, and most obvious, is that the issue of Indigenous over-representation in our prisons should be made, substantively and not merely rhetorically, a national priority. To this end, the Commonwealth should step up and exercise its constitutional powers granted in the 1967 referendum to develop and drive a truly national policy framework on Indigenous incarceration.

Second, for the purposes of delivering the necessary policy and program reform initiatives to underpin the incarceration reform agenda, the Commonwealth should carve out notional jurisdiction across remote northern and remote Australia and drive a comprehensive and coordinated reconceptualisation of core service delivery across remote communities and their associated service.

A core element would be the establishment of a legislated ten-year policy framework providing for ministerial regulations to implement key reforms, and the establishment of a small five-person Commission comprised of both Indigenous and non-Indigenous members to develop policy and program recommendations to apply across remote Australia. The Commission should aim to work cooperatively with existing bodies (state and local governments, Commonwealth agencies, community organisations, landowners) to drive innovative reforms and to recommend policy and program changes to governments at all levels. Its recommendations should be public and would need to be agreed and implemented by governments. The Commission’s legislated powers and functions would be such as to ensure that Commonwealth agencies and states and territories alike would be required to cooperate and to respond to recommendations within three months.

Such a Commission would not be required to delve into each and every policy issue but should be statutorily required to decide which issues are most relevant to the continuation of dysfunction and to focus on identifying reform strategies for the Commonwealth to implement, hopefully in conjunction with existing service delivery institutions. Obvious areas for attention would include controls on the availability of alcohol across remote Australia; upgrades to educations systems and infrastructure, and the necessity or significant expansion of subsidised remote employment focussed on community needs such as land care, ranger programs, appropriate policing models, disability support, and community maintenance.  A key assumption of this model is that the Commonwealth should be responsible for outcomes, and for bringing the states and territories to the table.

Third, a parallel structure to the remote Commission, perhaps relying more on the National Coalition of Indigenous Peaks, should be developed for addressing the challenges of reversing Indigenous incarceration rates in regional and urban areas of the nation.

Conclusion

The extraordinary levels of Indigenous hyper-incarceration are a national disgrace and are causing untold and ongoing harm to myriad Indigenous families across the nation. There are no short-term solutions, but it is clear that the punitive approaches being pursued by jurisdictions right across the nation will not be successful in preventing recidivism and repeat offending, will be extraordinarily expensive for taxpayers, will likely weaken social cohesion, and are causing permanent emotional and psychological damage to hundreds of thousands of Indigenous family members.

It is the case that the process of colonisation turned the world upside down for Indigenous people across the nation, and the people of remote Australia are generations closer to that social cataclysm.

Mainstream Australia cannot undo those social processes, and the world has moved on for all Australians. However, given the clear evidence of deep dysfunction arising from those social processes that were neither chosen nor desired by Indigenous people, and the impacts those changes inevitably imposed and continues to impose, the nation and its policy elites must be prepared to consider policy options that turn established modes of policy formulation upside down. Not to do so would amount to an extraordinary admission of national policy failure. Indigenous incarceration is just one of the impacts that arise from widespread social and economic dysfunction across remote Australia and woven through pockets of urban and regional Australia.

To allow this level of dysfunction to emerge, to grow and develop, and to persist as if it is somehow outside the nation’s field of vision is both a political failure and an indictment on the moral underpinnings of our nation.

 

24 January 2025

 

Annual Reports on Groote: an unconventional assessment

Why! all delights are vain, but that most vain
Which, with pain purchas'd, doth inherit pain:
As, painfully to pore upon a book
To seek the light of truth, while truth the while
Doth falsely blind the eyesight of his look.

Love’s Labor’s Lost, Act one, Scene one.

 

The 2023/2024 annual reports across the Indigenous Australians Portfolio were mostly finalised by November or December 2024. It struck me that there might be merit to consider a selection of those reports through the lens of the developments on Groote Eylandt over 2023/24. Given the almost complete absence of any attempt by Minister McCarthy and her portfolio to keep the Parliament and the public informed, it seemed worth considering the more formal reporting in relation to Groote to see what might be gleaned not only for the insights into developments on Groote, but as a window into the wider approach of the Minister and her portfolio to transparency and accountability.

The extracts and commentary below are not presented in any particular order, nor do they focus in every instance on important policy issues. They inevitably reflect a personal perspective that has limited profile in current policy discussions. I would argue however that this in itself is a strength insofar as it opens up a window into the deeper values that guide the Government’s approach to transparency and accountability. Apart from presenting an alternative framing and perspective, my hope in compiling commentary on extracts from disparate reports into a single post is to demonstrate how the minimalist and simplistic narrative in relation to Groote and the ALC promulgated by the Minister and her agency is entirely inadequate.

 

National Indigenous Australians Agency

The NIAA Annual Report (link here) was  signed off by the CEO on 15 October 2024. Itis an impressively designed document, great photographs of country, concise, clear and well written. It spans 234 pages and seeks to address the numerous requirements for annual reports set down in the PGPA legislation and Finance Department regulations (see the list of requirements at pp 226-234).

The CEO in her Year in Review assessment mentions that the agency has offices in 50 locations across Australia, but the report does not appear to indicate where those offices are located, nor the numbers and seniority of their staffing. For example, I understand that the agency has an office on Groote, but as far as I know, it is visited intermittently by an officer from East Arnhem. The underlying issues here is that a regional presence was once the backbone of the Aboriginal Affairs portfolio, but this has been significantly degraded over the past decade.

The Anindilyakwa Land Council (ALC) is one of five statutory corporations established under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA). The Minister and her agency, the NIAA, are the regulators of these corporate entities (along with the Department of Finance in respect of compliance with the PGPA legislation). The NIAA Annual Report acknowledges in an appendix discussing the Aboriginals Benefit Account (ABA) which allocates funding to the land councils and other smaller entities such as NAIC and EDTL that ‘The NIAA is responsible for advising the Minister on the overall policy and financial management of the ABA’.

The ALC was the subject of an adverse ANAO performance audit published in May 2023, as well as a series of robust media reports and ongoing discussions in Senate Estimates during 2023 and right through calendar year 2024. A petition critical of the ALC’s operations and signed by 235 residents of Groote Eylandt was tabled in Parliament in February 2024. During the 2023/24 financial year, Minister Burney requested the agency’s Integrity Unit to initiate a review of the implementation status of the ANAO performance audit’s formal recommendations — but not the detailed findings, nor broader issues raised in various allegations — which was undertaken by consulting firm BellchambersBarrett. The Bellchambers report was not finalised until August 2024. At some unknown date during 2024, the NIAA (presumably with the Minister’s consent) referred unspecified matters related to the ALC to the National Anti-Corruption Commission.

None of these developments rated a mention in the NIAA Annual Report for 2023/24.

According to the index, the NIAA Annual Report mentioned the ALC only four times, in passing on page 24, and on pages 200, 203 and 206, the last three in the appendixes dealing with the Aboriginals Benefit Account. The most interesting information was on page 206, which reported that the ALC received royalty equivalent payments of $59.1m in 2022/23 and $35.7m in 2023/24 for on-payment to Aboriginal corporations on Groote Eylandt in accordance with sections 64(3) and 35 of ALRA. The Annual Report did list, at page 62, the receipt by the Barrett Family Trust No 2 & Others of $305k in consultancy payments during the financial year, although it is not clear if any of this related to BellchambersBarrett, nor whether it related to the ALC review.

I did examine the Annual Report’s explanation of the various audit and risk, and integrity functions. My takeout is that while they are designed to focus on the “appropriateness of the NIAA’s financial and performance reporting responsibilities, risk oversight and management, and system of internal controls”, they do not extend to oversight of the implementation of the NIAA’s regulatory responsibilities for statutory and other Commonwealth controlled entities within the portfolio. This in my view is a serious and significant gap. 

What is striking about the NIAA Annual Report then is not so much what it includes and discusses, but what is missing and absent. An assiduous reader interested in finding our what is happening in relation to the NIAA’s oversight responsibilities in relation to the ALC is effectively guided to an unequivocal conclusion: nothing to see here!

Executive Director of Township Leasing (EDTL)

The EDTL normally presents a stand-alone annual report. Unfortunately, the 2023/24 EDTL Annual Report has not yet been published. Its staff are public servants within NIAA, yet the NIAA Annual report barely mentions the Office of the EDTL. There is a mention on page 206 that the Office receives administrative funding of $4.9m.

The 2022/23 EDTL Annual Report (link here) is concise and clear, and well presented. In relation to the Groote Eylandt, a Statement by the Executive Director reports on the transition of the Groote Eylandt Township Lease to the community controlled Anindilyakwa Royalties Aboriginal Corporation (ARAC):

… This is the first time a Township Lease held in partnership by the Executive Director (on behalf of the Commonwealth) has been transferred to Traditional Owners, and represents an important achievement for all involved. .… Importantly, our partnership with the Warnindilyakwa Traditional Owners has not ended despite this transfer of responsibilities. The Office continues to partner with and support ARAC as required. This is largely technical support in the form of access to our specialised land tenure management system, to assist in the consistent, accurate and transparent management of documentation and decision making on land tenure matters.

The 2022/23 Annual Report also noted that on 1 October 2023 [unusually reporting on events outside the time frame of the report], the Groote Eylandt Township Lease transitioned to ‘a community controlled entity’ and gave an account of the handover event attended by both the Minister Linda Burney and Assistant Minister Malarndirri McCarthy.

The takeout from this report in my view is three-fold: First, NIAA have had a detailed involvement with the intricacies of land tenure and leasing on Groote over the past decade and have been happy to sign off on the transfer of the township lease to an entity that comprised five ALC Board members and five external Directors. Second, the technical support being provided to ARAC is in fact being provided to the ALC (see the discussion below on the ALC Annual Report). Third, the independence of the five external Directors thus becomes an important factor (see the discussion below on ARAC). It is uncertain whether the ALC is driving ARAC’s priorities, or ARAC is acting independently.  Either way, given the formal legal responsibility of the ARAC Directors, it raises the question whether it is accurate to describe ARAC, and its decisions on the grant of leases within the township, as ‘community controlled’. In other words, one cannot merely assume that the leasing decisions of ARAC in relation to the granting of s.19A leases will in every instance be in the wider Groote community’s interest; instead the facts of each sub-lease transaction require assessment. However, there appears to be no public reporting of these lease granting decisions.

ALC Annual Report

The ALC 2023/24 Annual Report was finalised on 14 October 2024 and tabled soon after (link here). As usual, it is a comprehensive and well produced document with a clear narrative running through it laying out a vision of the future of Groote and the ALC’s role in achieving that. There is little in that narrative vision that I would disagree with per se. Nevertheless, I have serious concerns regarding the governance of the ALC, and the complex web of overlapping roles, responsibilities and activities which emanate form the ALC. While the stated aspirations are largely commendable, whether the reality aligns with those aspirations is in my view questionable. The extracts I have selected to highlight below are in large measure direct or indirect reflections of, or contributors to, that scepticism.

The (former) CEO’s report notes, inter alia:

Significant progress has been achieved in the past year in the development of the Winchelsea Island (Akwamburrkba) resource… A key industry standard report indicating the size of the resource was achieved…  The environmental approvals process for the Winchelsea resource development is now at an advanced stage.

This reflects the rhetoric that the development of the mine is central to Groote’s future and in addition makes clear that the proposed mine is considered to be one of the ALC’s core priorities.

In relation to the ANAO issues, he noted, inter alia:

The ALC has welcomed the NIAA commissioning an independent review on ALC’s implementation of the ANAO report recommendations, which was nearing completion at the end of this reporting period. The ALC will be receptive to the insights provided by the independent review on our efforts to date and on further improvement opportunities.

On page 19, a section outlining the experience of the (former) CEO Mark Hewitt notes:

 During the reporting period Mark held positions as the Co-CEO of Winchelsea Mining and as the Executive Director of Groote Holdings Aboriginal Corporation. Mark is a Director of Aboriginal Sea Company.

In a section on organisational structure (page 29), there is an extremely important description of the ALC’s modus operandi:

Funding and Program Arrangements

The ALC receives its operational funding under ALRA section 64(1) in line with the approved budget estimates submitted to the NIAA for the respective financial years. The ALC also receives grants to run programs, carry out research, purchase equipment and employ people. A major funding source, for the ALC’s Land and Sea Department, comes from the NIAA Indigenous Advancement Strategy Jobs, Land and Economy program. The employees in the Land and Sea Department referred to in the ALC’s Organisation Chart on page 25 are predominantly funded by the NIAA grants.

The ALC has entered into general service deeds with Aboriginal Corporations on the Groote Archipelago to provide operational support services in line with ALRA section 27(1A). These services include human resources, payroll and accounting services, and support to Aboriginal Corporations to meet their compliance obligations such as annual returns to the Office of the Registrar of Indigenous Corporations. During the reporting period the ALC provided services to 13 Aboriginal controlled entities. One of the 13 Aboriginal entities is ARAC, to which the ALC provides human resources, payroll and accounting services, and program delivery. Employee costs are charged to ARAC in accordance with the general service deed between ALC and ARAC.

As part of the ARAC general service deed, the ALC provides administrative and other assistance which includes the employment of staff to deliver programs that include Community Support, Preserving Culture, Infrastructure Development and the Royalty Development Unit. The employees in the respective Departments referred to in the ALC’s Organisation Charts on pages 23-28 are predominantly funded by ARAC. [emphasis added].

In relation to the NIAA grant funding of staff of the ALC Land and Sea Department, one might ask how that is consistent with the NIAA’s regulatory responsibilities, and what actions have been taken to ensure that there are no perceived or actual conflicts.

In relation to the ALC’s services agreements with Aboriginal Corporations, ALRA section 27(1A) states:

A Land Council may, on the request of an Aboriginal and Torres Strait Islander corporation that has received an amount of money from the Council under this Act, provide administrative or other assistance to the corporation.

Of course, the meaning of this provision must be read within the context of the legislation as a whole, and in particular in relation to provisions such as s.23(1)(ea) and section 23AA(3), section 35, and section 35C. These provisions require the land council to act in the interests of traditional owners and not just in its own interest.

The limits of such assistance are to my knowledge untested at law; however it seems fair to suggest that the ‘assistance’ would not extend to controlling the activities of the entity. Issues raised by these arrangements (for example in relation to ARAC) include the extent of the roles and responsibilities of the ARAC Directors, whether individuals within the ALC are operating as shadow Directors of the assisted corporations, and whether the ALC’s financial statements are in fact a true and complete reflection of the ALC’s activities in the event that these corporations are ‘controlled entities’. The ALC has used the existence of these provisions to expand the footprint of ALC activities well beyond its formal remit. A key contributing factor in doing so is the ALC’s role in selecting the Directors of the key corporations which it is both funding and assisting. Indeed, in the case of Groote Holdings Aboriginal Corporation (GHAC), the former ALC CEO was appointed as one of the Directors. Following his termination by the ALC, he no longer remains in that role.

The ALC appears to have discovered a magic pudding which allows it to access s64(3) royalty equivalent payments to fund its organisational empire and priorities well beyond what the Minister has approved under section 64(1) and to establish a framework which would allow the ALC to avoid the normal oversight provisions that apply to the ALC. Whether this expanded remit has led to problematic outcomes would require a forensic audit; neither the minister, the NIAA nor the public has any way of knowing if this is indeed the case. Of course, the corollary of switching s.64(3) funds to s.64(1) uses is that there is less funding available to assist the legitimate aspirations of local corporations.

A crucial protection against the sorts of outcomes described above would be for the assisted corporations to have Directors who are independent of the ALC. In fact, this is not the case. Many ALC Directors are also assisted corporation directors. Even the independent directors of some assisted corporations appear to have potential conflicts.

The consultants list on pages 84/85 includes several engagements of interest. Rod Tidey Consulting was engaged to review and assess ALRA s.64(3) distributions, while Australian Venture Consultants [principal Russell Barnett] was engaged to review the AMT. Rod Tidey is a former employee of the ALC. Tidey and Barnett have received consultancy payments over the past four and two years (Tidey to review section 64(3) payments; Barnett to review the AMT) and both are Directors of ARAC and AMT. Finally, ARAC has itself been engaged as a consultant to the ALC to provide ‘operational services’ and most recently ‘governance and data unit services’ at a total cost of $564k over the past three years. This is intriguing as ARAC’s operations are conducted by the ALC, and it does not appear to have the capabilities to deliver consulting services. It is conceivable that ARAC might sub-contract the engagement, but this begs the question: why avoid a direct engagement?

Anindilyakwa Mining Trust (AMT)

The AMT was established as a charitable trust to receive negotiated royalties paid to the ALC for the benefit of the traditional owners of Groote. The Australian Charities and Not-for-profits National Commission (ACNC) is the regulator of charities. The AMT 2024 Financial Statement, available on the ACNC website, indicates that it holds net assets totalling $311 million. It distributes comparatively small amounts of its annual revenue to the Anindilyakwa Royalties Aboriginal Corporation (ARAC). Its Trust Deed limits its capacity to distribute payments to corporations representing particular clans. The members of the Trust are James Durilla, Lionel Jaragba, Elma Yantarnagga, Simone Yantarnagga, [all of whom were on the ALC Board], Simon Longstaff, Russell Barnett, Adam Simpson, and Rodney Tidey.

Anindilyakwa Royalties Aboriginal Corporation (ARAC)

ARAC does not prepare a comprehensive Annual Report, but as a CATSI Corporation (and registered charity with Public Benevolent Institution status with FBT exemption ) it uploads regular corporate reports to the website of the Office of the Registrar of Aboriginal Corporations (ORIC).

ARAC Directors in 2023/24 were Tony Wurramarrba (ceased 30 June 2024) James Durilla, Lionel Jaragba, Elma Yantarnagga, Simone Yantarnagga, [all of whom were on the ALC Board], John Cunningham (resigned November 2023), Simon Longstaff, Russell Barnett, Adam Simpson, and Rodney Tidey. Apart from Tony Wurramarrba and John Cunningham, these Directors are also Directors of the AMT.

In the Directors’ Report provided in its 2024 Financial Statements, the Directors report that during the 2023/24 financial year, the corporation paid a premium in respect of a contract insuring the Directors against a liability ‘incurred by such Director, secretary of executive officer to the extent permitted by the Act. The contract of insurance prohibits disclosure of the nature of the liability to be insured and the amount of the premium’.

Note 6 to the financial report indicates that the insurance costs for the corporation grew from $70,751 in FY 2023 to $169, 273 in FY 2024, an amount of almost $100k.

The statement regarding insurance is somewhat intriguing as it suggests that the insurance company at least may consider that there is a vulnerability to claims against the Directors.  Apart from the normal risks that apply to a charitable corporation, I see two potential possibilities that may have been exercising the minds of the Directors.

The first is the 2022 transfer of responsibility for the township leases on Groote Eylandt arising from the notional reform to the Commonwealth township leasing scheme (I say notional because I do not see the change as an unmitigated positive). If this is the reason for the additional insurance, it represents an additional cost of the recent transfer of responsibility by the Office of Township Leasing to ARAC. (see above), which by rights ought to be sourced from the ABA and not s64(3).

The second potential issue of concern for Directors may be the allegations first raised in the Saturday Paper and which I discussed in two  earlier posts (link here and link here) regarding a 2022 payment of $41m from AMT to ARAC which does not appear to have been deposited into an ARAC bank account. A related concern may be any ramifications arising from the (yet to be specified) referral of certain unknown ALC individuals to the National Anti-Corruption Commission (NACC) (link here).

Groote Holding Aboriginal Corporation (GHAC)

Anindilyakwa Advancement Aboriginal Corporation (AAAC)

Finally, I sought to examine the financial statements for both GHAC and AAAC. GHAC is a key funder of the infrastructure which will support the proposed Winchelsea mine. AAAC is the owner of 70% of the Winchelsea Mine Joint Venture, although as I have pointed out previously, no AAAC Directors are on the Winchelsea Mining Board.

Both GHAC and AAAC failed to hold their AGMs within five months of the end of the financial year as required by the CATSI legislation and have not lodged their 2024 financial statements. They each applied to the Office of the Registrar of Indigenous Corporations for an extension of time, citing the fact that their financial statements were not yet finalised (it is unclear what the reasons for this might be). The Registrar refused each request, pointing out that the rule book for each corporation did not require the audited financial statements to be available for the AGM.

Conclusion

This overview of the 2023/24 annual reports related to Commonwealth regulated corporations involved in ongoing developments on Groote is a useful lens into the complex array of entities engaged in managing, allocating, receiving and utilising the financial payments derived from South32’s GEMCO manganese mine on Groote Eylandt, and intended to benefit the traditional owners. In 2023/24, the ALC had revenue of around $24m to fund its operations and distributed just under $36m in mining agreement payments, a total of around $60m. In 2022/23, the equivalent figure was around $75m.

While much of this expenditure underpins the Groote economy, a significant portion is being allocated to a commercial investment in the proposed Winchelsea manganese mine with significant commercial and other risks. There have clearly been accountability and governance issues arise as evidenced by the May 2023 ANAO report, and a plethora of allegations that neither the Minister, the NIAA, nor the ALC have seen fit to even try to answer. The failure of the AAAC and GHAC (whose accounts are kept by the ALC Royalty Development Unit) to lodge audited financial statements on time suggests governance challenges are ongoing.

My conclusion is that the Minister and her agency have a responsibility to step up and proactively manage the financial and social issues within the ALC and the associated corporations it is assisting. After all, they are the regulator. Their failure to do so to date has increased the risk that the social and economic stability on Groote will begin to unravel, and once that occurs, it will be disastrous for Groote’s population.

I should note for completeness that I have not examined the linkages between the ALC and the NT Government. I expect that similar systemic issues to those identified here would be found to be in play.

In relation to the systemic issues identified here, I have three high level recommendations for the Minister:

·       Undertake a forensic audit across the span of the ALC and its associated entities.

·       Appoint an independent administrator to dig the ALC out of the hole it finds itself in.

·       Initiate an independent review of the administration of the ABA and ALRA, encompassing both the NIAA and the land councils, and focussing on potential legislative reforms to strengthen regulatory oversight and financial governance.

Taken together such a three-pronged strategy would ensure that the regulatory responsibilities of the Commonwealth are fulfilled, and that the NT land councils are fit for purpose in their primary roles of protecting the interests of traditional owners of Aboriginal lands across the NT.

In relation to annual reports, I recommend less gloss and more substance; in particular, in addition to ticking of the checklist of annual report requirements, they should include a succinct and coherent narrative outlining what each entity is seeking to achieve and their assessment of their performance. There is just too much flim-flam in these reports at present, and they have an insidious and counter-productive impact of seeking to distort reality. If citizens are to trust governments, then governments must come clean and be truly transparent.

 

18 January 2025