… but man, proud man,
Drest in a little brief authority,
Most ignorant of what he's most assured,
…
Plays such fantastic tricks before high heaven
As make the angels weep
Measure for Measure, Act two,
Scene two
I previously provided an update on matters related to
Groote Eylandt, the ALC and related corporations over three months ago on 27
July 2025 (link
here). With the end of the year and the next Estimates Hearings fast
approaching, it is worth highlighting developments that have come to light (or
not!) over recent months and revisiting some older answers to Questions on
Notice. This update post complements in certain respects my previous post on
the ALC Corporate Plan 2025-26 (link
here) which identified the apparent recent shift in the ALC strategic
directions away from their previous ‘all in’ support for the development of the
proposed Winchelsea mine.
Answers to Questions on Notice
Senator David Pocock placed several ALC related questions
on notice last year. I don’t propose to deal with all of the questions and
their answers, only those that appear to me to be particularly salient for the
ongoing and unaddressed issues within the ALC.
Question NIAA 0020 (link here). Senator
Pocock asked:
In relation to the ALC meeting
of 16 October 2024, will the ALC provide the Committee with copies of any
briefing papers it received from the Minister, NIAA Integrity Group or other
government official prior to the meeting, along with the minutes of the meeting
and other relevant papers considered at or following the 16 October
meeting [emphasis added].
The answer provided by the ALC states:
The ALC reads this question as
requesting the ALC Board meeting agenda item that dealt with the employment
termination of Mr. Hewitt. The relevant sections of the ALC Board meeting
minutes is provided at attachment 1. There were no briefing papers received
from the Minister, NIAA Integrity Group or other government official relating
to the employment termination of Mr. Hewitt. Attachment 1: Extract from ALC
Board meeting minutes dated 16 and 17 October 2024. The attached extract reads
as follows:
9. CEO Proposal Letter.
Sean Worth NIAA
The ALC Board considered the
options outlined by the NIAA attendee for the CEO’s position. The Board
reviewed the risks associated with each option. The Board discussed that the
option with the fastest outcome, with the lowest risk, was termination on notice
and noted that this would incur a substantial payout. The payout was estimated
at $500,000.00.
Board Resolution: The
Board unanimously resolved to terminate, on notice, Mark Hewitts employment in
line with his employment contract.
Comment: It appears from the heading
to the agenda item that there was correspondence of some kind from Mr Hewitt
proposing terms for his departure. While this appears to be the case, we do not
know whether the proposal was made of his own volition, or because of prior
communications with the Minister or her agent. The ALC has not provided that
communication notwithstanding it was clearly a relevant paper and thus fell
within the terms of the question. The ALC Board Minutes (which I haven’t
quoted) make clear that no ALC staff including their in-house legal adviser
were present for the Board discussion, yet a senior NIAA officer was given
access to that discussion. More strangely still, there is no record in the
meeting minutes of the reasons for the termination nor any record of discussion
around why the ALC should terminate Mr Hewitt’s employment. This parallels the
absence of any reason for the termination from either the ALC Board or the
Minister in their subsequent media statements. It goes without saying that
within the Commonwealth, a voluntary separation would not normally be
accompanied by a payout estimated to total $500k.
A suggestion in the NIAA briefing notes for Estimates made
public in response to an earlier FOI request noted that the Minister may be
required to approve additional section 64(1) payments in relation to the CEO’s
termination (notwithstanding that land councils have the ability to expend up
to 20 percent above approved estimates). This suggests that the Minister or
NIAA may have initiated or supported the proposal to terminate Mr Hewitt since if
the termination was done at the request of the Minister, the ALC Board may have
requested that any termination costs would be additional to current budget
approvals. The rationale provided in the Board minute regarding speed of execution
and minimising risk make no sense in the absence of any reasons being provided.
Of course, the Minister has considerable leverage over land
councils by virtue of her responsibilities under the legislation and had
already provided only partial approval for the ALC 2024-25 budget. If the real
reason for the termination was that the Minister wanted the CEO to be terminated
before the National Anti-Corruption Commission (NACC) finalises the as yet
unreleased report into its ALC related investigation (this is only my surmise),
then the ALC Board may have felt that they had no option but to accede to the
request. This would be a problematic scenario for many reasons, not least
because it would almost certainly have required the provision of separate
incentives or assurances to Mr Hewitt. It may also be relevant to note that
released ALC Board papers also confirm that Mr Hewitt’s performance was rated
as excellent at the end of 2023, and there were expressions of full support by
the Board in early 2024. It is unclear what transpired to change that assessment
by the ALC Board.To be clear, there is no evidence that the Minister did
initiate the termination, merely evidence that doesn’t rule it out.
Question NIAA 0026 (link
here)
In this question, Senator Pocock asked about the total
amounts of section 64(3) royalty equivalents distributed by the ALC over the
past 5 years, and the amounts directed to supporting the Winchelsea mine.
The answer identified total distributions by the ALC to
associated corporations between 2020-21 and 2024-25 of $204 million. Of this
$19.34 million was allocated to the Anindilyakwa Advancement Aboriginal
Corporation (AAAC) for the development of the mine, while $39.94 million was
allocated to Groote Holdings Aboriginal Corporation (GHAC) for infrastructure
that benefitted the proposed mine. Total payments over the five years linked to
the development of the Winchelsea mine thus totalled $59.28 million.
Question NIAA222 (link
here)
This question asks a slightly different question: in
essence for a breakdown of all funds and the value of in-kind support provided
by the ALC for direct or indirect assistance to the Winchelsea mine.
The answers provided (which unhelpfully are not summed) go from
2018 through to June 2024 and include amounts totalling $6,985,093 sourced from
NT Economic Stimulus Package funding (which was provided via NIAA). The amounts
provided are split between direct support through AAAC totalling $27,532,850
and indirect support through GHAC totalling $43,737,577. The combined total
is $71,270,427 in assistance to the Winchelsea mine from 2014 to June 2024.
Comment: The ALC answer fails to
include any contributions from the Anindilyakwa Royalites Aboriginal
Corporation (ARAC) (which early on provided a loan for the mine development itself
sourced from 64(3) funds). This loan remains unpaid by Winchelsea and is listed
in ARAC’s 2024 financial statements as a $4.2m asset (see note 13). Nor does it
include the indirect in-kind support provided by the land council which
admittedly would be difficult to estimate but should be acknowledged as it was
likely considerable. The Aboriginal community on Groote has thus contributed at
least $75 million to the development of the mine as all the payments directed to
the mine would otherwise have been required to be directed to other beneficial purposes
on Groote. It is unclear whether AUS China International Mining Pty Ltd
(AusChina), the owners of 30 percent of the mine have contributed a pro-rata
amount to the mines development (though it seems unlikely). In February 2024, Mr
Hewitt advised the Senate Estimates Committee that AusChina had contributed
$11m to the establishment of the mine.
If this hypothesis is in fact the case, then
the following analysis applies: A core function of the Land Council is to
protect traditional owner interests, and thus the internal commercial
arrangements between AAAC and AusChina become highly relevant. The Land Council
had considerable leverage to obtain information from AAAC by virtue of its processes
for determining payments of s.64(3) funding to AAAC in support of the mine. In
practice, the mining agreement negotiated by the ALC was entirely and
fundamentally conflicted. The mining agreement was negotiated between the
Land Council and Winchelsea in circumstances where the ALC Chair and CEO were
also senior officers in Winchelsea Mining. In these extraordinary circumstances,
the ministerial consent required under the ALRA, and provided by a former
Minister, will prima facie have struggled to ensure that the Land
Council exercised its powers in a way consistent with protecting traditional
owner interests. In approving this commercial agreement, the Commonwealth has ventured
chest deep into a quagmire of its own making.
However, we do not need to consider hypothetical scenarios
to confirm that the Land Council was not protecting traditional owner
interests. Even if AusChina made pro-rata contributions alongside AAAC, the
funds provided to GHAC for logistical and infrastructure support related to the
mine were not matched by AusChina. Such investments are normally made by the
resource developers. Instead, the ALC established a separate entity (GHAC)
which was provided funding by the ALC to undertake this work thus in effect
subsidising the development of the mine infrastructure. Neither AAAC nor
AusChina were required to contribute. This represents a clear transfer of
funds allocated for the benefit of traditional owners to the owners of AusChina.
It is difficult to see this as being consistent with the statutory function of
the land council in section 23 of the ALRA to ‘protect the interests of
traditional Aboriginal owners of, and other Aboriginals interested in,
Aboriginal land in the area of the Land Council’. Section 23AA (3) makes clear
that protecting traditional owner interests must be a priority for the land
council. In my view, the section 64(3) payments to GHAC in support of the
proposed mine are likely ultra vires and inconsistent with the
legislation. In turn, this raises the question: where was the regulator while
this was occurring?
Question NIAA221 (link
here)
In this question, Senator Pocock requested a list of the
remunerated roles of Mr Hewitt and Ms Sophie Liu (his spouse) at the ALC and
associated entities over the terms of their engagement.
The answer provides three tables identifying the roles and
remuneration of these two individuals at the ALC going back to 2012-13 in the
case of Mr Hewitt and then two separate tables identifying respective roles for
each of them in associated entities. For Hewitt, these included GHAC and Winchelsea
Mining. For Liu, she worked with several entities from 2014 onwards. For
simplicity, I analysed the figures for both individuals from 2018-19 when the
Winchelsea mine proposal began to obtain traction. In that period Liu worked
for GHAC and Winchelsea Mining (simultaneously) as well as in the ALC Royalty
Development Unit full time till 2022 and part time till 2024. Hewitt worked for the ALC, for GHAC (pro bono)
and as a Director of Winchelsea Mining simultaneously.
While the answers provided are not summed, I have
calculated the total remuneration for each of them over the six-year period to
June 2024.
For Mr Hewitt, his ALC remuneration over the six-year period
from 2018 to 2024 was $2,721,553 and from Winchelsea Mining was $1,522,224. His
total remuneration over the period was thus $4,243,777. This equates to an
average annual total remuneration of $707,297 over the period.
For Sophie Liu, her ALC remuneration over the period was
$587,006. Her GHAC remuneration was $494, 826 and her Winchelsea remuneration
was $543,189. Her total remuneration over the period was $1,625,021.
This equates to an annual average of $270,837.
Over the six years, Mr Hewitt and his spouse together earned
$5,868,798.
Comment: there are numerous issues
raised by these arrangements that require deeper investigation than I can bring
to bear. Issues that occur to me include the following:
·
While clearly the ALC CEO had much wider
responsibilities than the implementation of the Winchelsea mine, it is also
clear that a substantial element of the joint remuneration of Hewitt and Liu
was tied up in the mine proposal proceeding. It is unclear to me whether the
ALC Board were apprised of the extent of these payments and in effect gave
informed consent.
·
Nor is it clear whether the NIAA and Ministers
had a line of sight to these issues (ie the doubling up of remunerated
employment, and the potential facilitation of conflicts of interest). However, the
link between the quite significant joint incomes of Hewitt and Liu (and indeed
several of the ALC Board members) and their reliance on the mine proposal
progressing whether or not it was commercially viable created a deeper and
wider systemic conflict of interest that went beyond particular decisions. It
strikes me that the NIAA and perhaps Ministers had a blind spot in relation to
this level of systemic conflict and given their regulatory and ministerial
responsibilities should not have allowed it to occur let alone continue for six
years.
·
Whether the assistance envisaged by section
23(ea) of the ALRA which has been used to justify the CEO working for GHAC (pro
bono) and Winchelsea Mining (a subsidiary of AAAC) is legally justified when
that assistance involves remunerated work that involves a systemic conflict of
interest that undermines the ALC core function that is the rationale for the assistance.
After all, a core ALC function is to protect the interest of traditional
owners, yet if the ALC assistance is the mechanism that facilitates a conflict
of interest that undermines that protection, then it seems unlikely that such
assistance can be a valid exercise of land council power. Of course, if I am
correct, where was the NIAA regulator as this occurred?
It also seems possible that there may have been other
sources of income for Lui related to the Anindilyakwa Shoppa Warehouse (ASW) retail
outlet on Groote. In the past, there were reports that ASW sourced whitegoods from
China. As I have previously written about (link
here), the royalty distribution arrangements on Groote injected a bias
towards the use of the royalty shoppa card at selected retail outlets on the
Island and elsewhere. I strongly recommend readers look at that post. I have no
information on the ownership and financial arrangements of the various retail
outlets on Groote, but this is an issue that deserves closer regulatory scrutiny.
Finally, the answer to the question reveals that Ms Lui was
employed within the ALC Royalty Development Unit (RDU) from 2016-17 to 2024,
with her last two years part time. This is significant as this position would
have been crucial in managing the allocation, distribution and bookkeeping
associated with the distribution of section 64(3) payments for funded
corporations. I have long argued that there appears to be elements of the
exercise of effective control by the ALC over key funded corporations (see the
Royalty Shoppa post referred to above). The RDU would be a crucial cog in the
wheel were such control being exercised by the ALC. The answer also confirms
that Ms Lui was in a key position which will have overseen the accounting
arrangements that managed the ARAC finances. Readers may recall an earlier post
(link
here) which analysed the payment of $41m from the Anindilyakwa Mining Trust
to ARAC, and which does not appear to have been recorded as received in the
ARAC financial statements. A convincing explanation as to the treatment or
whereabouts of those funds has never been provided. Again, I recommend
interested readers re-read that post.
To be clear I am not making any allegations against Ms Lui in
relation to either the Royalty Shoppa arrangements or the AMT payment to ARAC as
there is no evidence of impropriety on her part; my point is merely to identifying
potential mechanisms that could skew the allocation of financial resources at the
margins of the ALC. In my view, these risks underpin the need for a detailed
and public forensic audit of the ALC and its associated entities over the past
decade. The Commonwealth reluctance to initiate such a forensic audit is to my
mind both inexplicable and irresponsible.
AAAC financial reporting
In my previous ALC update post I noted that Anindilyakwa
Advancement Aboriginal Corporation (AAAC) which owns 70 percent of
Winchelsea Mining had not published its financial statements for 2024 and due
to the delay appeared to be in breach of CATSI Act requirements. This remains
the case. Of course, the deadline for publishing the 2025 financial statements
is also fast approaching. It is still unclear whether the Registrar of
Aboriginal Corporations has taken any action.
Concluding comment
The value of this update post is not so much in new
revelations as in the documentation of the ongoing and synergistic accretion of
multiple issues of concern. If the Winchelsea mine does not proceed in the manner
previously planned, the investment of over $75m in funds appropriated by the Commonwealth
(s.64(3) royalty equivalents and NIAA economic stimulus funding) will likely turn
out to have been substantially wasted. The continued failure to identify what
transpired in relation to the payment of $41m paid by the Anindilyakwa Mining
Trust (AMT) to ARAC is inexplicable. Together these represent well over $100m
in potential losses arising essentially from systemic conflicts of interest that
successive ministers and the NIAA have known about since the ANAO report in
2023, and probably before, and yet appear incapable of addressing.
One might reasonably ask: how many tens of millions of
dollars intended to benefit Aboriginal people on Groote can in effect go
missing or be negligently misallocated over an extended period before the
probity of those formally responsible for regulating the safeguarding of those
funds is called into question? Over this period, there may well have been transgressions
by individuals on the ALC Board, or in the employ of the ALC, and if so, they
should be held to account through due process. Without an independent forensic audit
of the ALC and its associated entities this will never be possible in any
comprehensive form.
Ultimately however, it will be the wider Aboriginal
community on Groote who bear the cost. Not only the financial costs,
but the opportunity cost of forsaken policy initiatives that might have (inter
alia) improved life opportunities for children, contributed to strengthening
education and health services, and strengthened cultural resilience. Given the prima
facie existence of serious and ongoing regulatory failure, the appropriate remedy
for the ongoing imposition of these
costs will not be found by pursuing individuals who are alleged to have
transgressed, but requires ministers and the bureaucracy to take responsibility
and find ways to ensure that their regulatory failures are reversed, that the
funds that have been misallocated on their watch are reinstated, and that
reforms are made to ensure what has transpired and developed on Groote cannot re-occur.
A first step would be to review the ALRA legislation in the
light of contemporary policy needs, identify necessary legislative reforms, and
to put in place an independent and robust regulatory mechanism at arm’s length from
ministerial interference to oversight the key ALRA institutions including the ABA,
the land councils, and the recently established Aboriginal Investment NT(AINT).
If some version of this roadmap for the future is not
implemented, the likelihood of future litigation against the Commonwealth either
at Groote Eylandt, or elsewhere, built around some version of fiduciary duty
will be virtually inevitable. In the meantime, the angels will continue to
weep.
14 November 2025
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