Oh, I have ta’en too little
care of this.
King Lear, Act three, Scene
four
The issues discussed here comprise a critique of the adequacy
of the approval processes for the proposed Winchelsea mine (which are laid out
in Part One of this Formidable Challenges post) and are in many respects
merely an extension and reinforcement of the analysis included in my previous
posts on this Blog, in particular my November 2025 post The Angels Weep
(link
here), my January 2026 post ANAO financial audits and the case for ALRA
reform (link
here), and my February 2026 post, The rough torrent of occasion (link
here).
A central issue raised in the documents listed in Part
One of Formidable Challenges relates to the potential for conflict-of-interest
arising from the fact that the exploration and mining agreements required by Commonwealth
and NT legislation involved negotiation between two parties, the ALC and Winchelsea
Mining. The Chair of the ALC was Tony Wurramarrba (now deceased) and the ALC CEO
was Mark Hewitt (now terminated). Two of the four Directors of Winchelsea
Mining were Tony Wurramarrba and Mark Hewitt ostensibly representing the
majority shareholder, the Anindilyakwa Advancement Aboriginal Corporation (AAAC).
In other words, the Groote based senior officeholders in both the ALC and
Winchelsea Mining were identical. The ALC, whose core statutory function under
the ALRA is to protect the interests of traditional owners is required to negotiate
the terms of any mining on Anindilyakwa Aboriginal land. Thus, in the
negotiations between the ALC and Winchelsea Mining, the two senior
officeholders on both sides of the metaphorical negotiating table were Tony
Wurramarrba and Mark Hewitt. I have referred to this situation in Part One
as the ‘dual roles’ of the two office holders.
The attachments to Document B1 (a DPMC brief to
Minister Scullion dated 18 September 2018) include the correspondence from
the ALC Chair and ALC CEO dated 15 August 2018 to the Minister outlining inter
alia their proposed strategy for managing this potential conflict
(paragraphs 16 to 18). Documents A4, a submission from the ALC dated
14 September and appended to the ALC correspondence to the Minister of 14
September and attached to the DPMC brief in Document A1 relate to the
consultation processes for the exploration licence application agreement. These
various documents contain a detailed account of the arrangements put in place
by the ALC ostensibly aimed at ensuring that the ALC Chair and CEO played no
role in influencing the ALC’s strategy in negotiating the two agreements, and
there are formal statements indicating that the ALC Board was explicitly
advised that Mr Wurramarrba and Mr Hewitt represented, and should be treated as
representing, Winchelsea Mining in all discussions.
The DPMC brief largely describes in a factual manner the
proposed disclosure and non-participation arrangements in relation to the mine
consultation processes to be followed by the ALC Chair and CEO laid out in the
ALC correspondence. It notes that the ALC engaged external legal advice from
Arnold Bloch Liebler (ABL), noted that the ALC had reduced the CEO’s
remuneration package (to be reviewed in 12 months) and that the ALC Mining and
Environment Manager would assume administrative responsibility of ALC matters
related to Winchelsea Mining. It seems
probable that ABL were engaged very late in the consultation process, though neither
ALC nor PMC made this clear in their advice to the Minister. The Department
expressed a minor concern that it appeared that the ALC had not confirmed that
they had been advised of the proposed remuneration the Chair and CEO would
receive from Winchelsea Mining and provided suggested correspondence seeking
clarification. There was no general expression of concern as to the
workability nor the wisdom of the conflict mitigation arrangements proposed by
the ALC. As noted in Part One, the released documents do not include the
signed copy of the brief nor a copy of the signed letter if it exists. The
letter attached to the brief was (inappropriately in my view) excluded from the
FOI release on the basis that it was a draft. The fact that the final letter
has not been identified or released in response to the FOI request, and nor has
a version of the ministerial submission with his annotations suggests that the
Minister never sent the letter expressing the PMC concern to the ALC. In turn,
this decision suggests that the Minister did not wish to ask for advice that he
knew would reveal and document (and thus record his knowledge of) the extent of
the financial benefits flowing to the two senior ALC officers from their dual
roles.
Part of the implicit justification for the existence of
these arrangements (see paragraphs 4 to 8 of the PMC brief) was that the AAAC
Rule Book provides for the representation of the ALC Chair and CEO on the Winchelsea
Board. This glosses over the fact that the ALC (or at least its key
officeholders including Mr Hewitt and perhaps Mr Wurramarrba) assisted in the
incorporation of AAAC in December 2017 with the specific purpose of taking over
the extant exploration licence applications on Winchelsea Island and
surrounding areas. Those officers included this provision in the AAAC Rule
Book, thus establishing the potential conflict which they then ostensibly sought
to mitigate.
Up until the death of the former Chair and the termination
of Mr Hewitt in 2024, the two clans who are the traditional owners of
Winchelsea Island and provide the entirety of the Directors of AAAC had no
representation on the Winchelsea Mining Board of Directors notwithstanding that
the AAAC theoretically controls Winchelsea through its 70 percent majority shareholding.
This is yet another instance of the ALC exerting potential (and thus effective)
control over a local corporation to which it has also provided s64(3) funding
at its discretion.
The ALRA provides that once an exploration agreement is
approved, the traditional owners cannot refuse to provide their consent to
mining. However, it does require a mining agreement be negotiated by a land
council and then approved by the Minister, but his/her ability to refuse
consent at the mining lease stage is limited to a determination of
inconsistency between the terms of the licence and proposed lease, and/or that
the national interest requires refusal (refer s47(3) of ALRA). It follows that the
consideration of the application for an Exploration License is in many respects
much more consequential than the ministerial consideration of the proposed
mining lease.
In the Brief to Minister Scullion in relation to the
approval of the Exploration Licence agreement (Document A1, para 9) the
Department fails to alert Minister Scullion to the implications of section 47
of ALRA. The brief states
The material provided by the
ALC supports the assertion it has complied with its statutory obligations in
these matters and the Department recommends you give the consent and
approval requested.
Note the ambiguity in this sentence revolving around the
words ‘supports the assertion’. The ALC supporting material outlines a rather
bizarre consultation/negotiation process, outlining extensive meetings over six
months or so in 2017 (see para 7.15) culminating in a majority (and perhaps
unanimous) vote by a group of traditional owners of Winchelsea Island approving
terms of a proposed exploration licence agreement to be negotiated with
Winchelsea Mining which was yet to be established (see para 7.10; the nature of
the vote has inexplicably been redacted on personal privacy grounds. This
redaction may be intended to hide the small number of traditional owners who
provided their consent). This was followed by a confirmatory meeting to confirm
the decision of traditional owners at a meeting on 14 September 2018 attended
by an un-named PMC officer and un-named Winchelsea Mining representatives (para
7.14). Whoever the Winchelsea representative was, there is no record of any
constraint operating to prevent them subsequently identifying to the Chair and to
Mr Hewitt any traditional owner who argued against the proposal. This is a
significant flaw in the process. The ALC formally approved the exploration
agreement on 10 September 2018, eleven months later. The extent to which the
Winchelsea traditional owners were ‘as a group’ consulted on the final
agreement is left unclear. The Chair and CEO absented themselves from the part
of the ALC meeting which considered the
mining agreement and did not vote (see para 4.4). There is no indication that
they had been absent from the consultations throughout 2017, and no indication
that they had not been involved in Winchelsea’s framing the proposed approach
to exploration (a matter that in theory may have been of concern to Winchelsea
shareholders).
The issue of the addressing the potential conflict of
interest of the ALC Chair and CEO by requiring that they not participate in the
final meeting of the whole process has all the markings of being an
afterthought. What is clear is that Minister Scullion in providing his approval
for the exploration agreement implicitly confirms that he accepted the dual
roles of the Chair and CEO on both the ALC and Winchelsea Mining. The
Department, by virtue of recommending his approval without raising substantive concerns,
did the same. The brief was copied to the Secretary and senior echelons of the
Department of Prime Minister and Cabinet and to the Prime Minister’s Office. Based
on my experience at senior levels of government over 30 years, I find it
difficult to comprehend how in these circumstances such a brief could have been
prepared and provided to a Minister, and inconceivable that a Minister who took
his responsibilities seriously could have approved it.
The approval of the proposed mining agreement by Minister
Wyatt was based on two briefs provided by NIAA in June and July 2021. They were
based on consultations undertaken by the ALC extending from November 2020
through to March 2021. Documents B2, B3 and A10 refer.
The issue of conflict of interest (in contrast to the
Exploration Agreement process discussed above) is dealt with in detail in the
equivalent summary of the consultations outlined in Document A10. See
the detailed processes put in place presumably on legal advice (see section
5). While those processes were orders of magnitude more comprehensive than
what occurred at the Exploration Agreement phase, they did not relate to the
provision of consent, and more importantly were to my mind seriously flawed and
inadequate for the following reasons. All of these reasons also operate to
undermine the legitimacy and probity of the decision processes on the
exploration lease agreement.
First, their effective operation is
limited to the formal engagements of the Chair and the CEO of the ALC
with issues related to the proposed Winchelsea mine. Second, I
understand that the then Chair’s spouse was on the Board of the ALC, and privy
to all discussions about the agreement. Third, from 2018 through to 2024,
the CEO’s spouse Sophie Liu was employed in the ALC Royalty Development Unit as
well as Groote Holdings Aboriginal Corporation and Winchelsea Mining (link
here) and was likely privy to agreement related information either formally
or informally. Fourth, it seems highly likely that up to three AAAC Directors
were also Directors of the ALC during the relevant period yet were not required
to declare a potential conflict of interest. ALC Directors in March 2021
included Archie Jaragba, Lionel Jaragba, and Silas Bara all of whom had
involvement in AAAC as members and Directors and were also potentially
conflicted.
Adding some further heft to my critique, it is worth noting
that the ANAO in its May 2023 Performance Audit (link
here) was critical of some elements of the consultation processes related
to the mine (see paras 3.74-3.76), including poor information on risks, poor
record keeping and inadequate processes for updating traditional owners on
changes subsequent to their approval. Consistent with its narrow focus on its
remit, the ANAO did not consider let alone form a conclusion on the matters I
have raised above and below.
Like Minister Scullion, Minister Wyatt implicitly
acknowledged and accepted the dual roles for both the ALC Chair and CEO. As
with Minister Scullion’s decision, it is difficult to conceive how a Minister
charged with the responsibility to be satisfied that the land council has
complied with its statutory responsibilities to protect the interests of
traditional owners could approve a formal agreement infected with so many
potential conflicts.
In relation to both Minister Scullion’s and
Minister Wyatt’s approval processes the most fundamental potential conflict of
interest went unacknowledged. The mitigations proposed in
both cases to deal with the dual roles of the two statutory officeholders,
inadequate as they were, applied only to the negotiations of the two agreements
which required ministerial approvals. Yet the potential conflicts arising from
their dual roles extended well beyond those processes, including to the
subsequent approval of section 64(3) payments to Aboriginal corporations directed
to mine related investments.
Neither Minister Scullion nor Minister Wyatt appeared to
have given any consideration to the ongoing risks involved in these processes.
It is unclear if the Department/NIAA ever provided advice to the two Ministers
about this matter, but to date there has been no document released which
suggested that they did. In any case, it was the Ministers who were ultimately
responsible, and who failed to take the remedial action that would have
prevented the apparent misallocation of those funds.
In my previous post The Angels Weep, I recounted
advice to the Estimates Committee that suggests that in excess of $70m may have
been misallocated by the ALC in supporting the proposed mine. The ANAO in its
May 2023 Performance Audit of the ALC (link
here) identified the risks of actual conflicts of interest arising from
these dual roles as being high. It documents funding decisions by the ALC which
overtly favoured applications sponsored by the CEO on behalf of GHAC and AAAC,
corporations in which he was involved either directly or indirectly and which
were focussed on supporting the proposed mine. See paras 4.45-4.50. But the
ANAO stepped back from overt criticism of the CEO in relation to those risks
perhaps in deference to the fact that both ministers had implicitly approved
the dual role arrangements. The ANAO also documented the excessive costs and
the potential conflicts of the Chair of the ALC Audit and Risk Committee but
stepped back from overt criticism of either the accounting firm involved or the
ALC CEO who oversaw the appointments and the apparently excessive payments
involved. In my view the ANAO was unduly cautious; it identified the dots, but
declined to connect them, an approach that allowed the Minister and NIAA to
fudge the import of the ANAO report and thus facilitate the persistence of the status
quo ante within the ALC for over a year.
Following the ANAO audit, one might have expected Minister Burney
to reconsider the approach adopted by her two predecessors and initiate robust
action to improve governance oversight of the ALC. Instead, as documented in
many of my previous posts, she prevaricated and fudged the issues and so has
Minister McCarthy (who was an Assistant Minister in the portfolio during
Minister Burney’s tenure). In my recent post ANAO financial audits and the
case for ALRA reform, I suggested the existence of
a deeper malaise characterised
by ongoing and increasing financial risk, and the possibility of wider social
consequences that are not visible through the lenses used by governments and
their bureaucracies. In my view, that malaise extends to the absence of
effective regulation by successive ministers and their agency, NIAA.
The documents now released under FOI serve to reinforce
these conclusions, and make crystal clear that former Ministers have made
egregiously poor policy decisions that appear at best to amount to
maladministration and which are at the root of the governance failures which
have pervaded the ALC. The evidence embedded in the documents released so far
suggest that PMC and NIAA failed dismally in providing Ministers with both
forthright and high-quality advice. It was only after a scathing media story
based on information from an ALC whistleblower identified an attempt by Mr
Hewitt to be granted a substantial equity share in Winchelsea Mining, that the
NIAA (presumably instructed by the Minister) referred the matter to the NACC
for investigation. Since October 2024 when Mr Hewitt was terminated, there has
been a revolving cascade of changes at the senior levels of the ALC.
As I write this, the ALC Annual Report for 2025 due at the
end of October 2025 is not yet available, the AAAC financial reports for 2024
and 2025 have not been published as required by the CATSI Act, and there have
been no filings to ASIC by Winchelsea Mining Pty Ltd since 2024. ORIC have an
investigation underway into GHAC but have not provided any reasons for why they
are taking this action. The ALC appear to have stepped away from their
commitment to assist these corporations representing traditional owners and
which was the rationale they provided to Senate Estimates to justify their
intense involvement in the Winchelsea mine proposal. And of course, some two
years since complaints were first made to it, the National Anti-Corruption
Commission is still considering whether to issue a report in relation to matters
related to the operation of the ALC on Groote. Notwithstanding all this, the
last two Senate Estimates Hearings have allocated negligible time to ALC
issues.
There are two elephants in the room which no-one with
formal oversight responsibilities wishes to acknowledge, let alone discuss. The
first is that the problems emanating from the potential conflicts of
interest involved not just Mr Hewitt, but the former Chair Mr Wurramarrba, and
potentially extended to numerous other individuals beyond those two. Moreover, in
terms of their formal decisions, the ALC Board were fully supportive of the
strategies being pursued by the Chair and the CEO from the beginning until Mr
Hewitt decided, a month before his termination from all roles on the Groote Eylandt,
to offer to resign as CEO to allow him to focus on the operations of Winchelsea
Mining. In this respect, there are logically two possibilities: that the ALC
Board members were effectively manipulated by the architects of the Winchelsea
mine proposal to provide the ongoing formal support required; or, the ALC Board
was fully committed to the strategy of developing the mine based on their
independent and considered assessment, a strategy that they suddenly reversed without
explanation at a potential cost in excess of $70m to the traditional owners of
Groote. Neither option is attractive to contemplate, but it requires
contemplation and consideration if the reforms necessary to ensure the current
problems and recent mistakes will not be repeated and the necessary reforms are
identified and put in place. My basic point is that the responsibility for
whatever adverse findings and adverse outcomes emerge over the next few years
cannot be laid solely at the feet of one individual, the former CEO Mr Hewitt. The
issues within the ALC extend beyond one individual.
The second, and more significant elephant in
the room is that successive Ministers have made egregious policy
errors which in my view amount at best to maladministration and which have led to disastrous outcomes for the residents and
traditional owners of Groote Eylandt. Again, whether the Ministers were merely
incompetent and poorly advised, or were disposed to prioritise political advantage over the public interest is unclear. Without full
transparency, concerned citizens and taxpayers cannot form a judgment. Whichever
reason applies, citizens and the traditional owners of Groote Eylandt (as well
as the wider Australian public) have a right to expect better.
It is significant that it has taken eight years for the
documentary evidence of direct ministerial involvement in, and knowledge of, these
conflicted roles within a Commonwealth statutory corporation to emerge into the
public domain. Remember, this is a statutory corporation with responsibilities
for the protection of traditional owner interests and the allocation of
millions of dollars in compensatory financial benefits related to existing
mining operations. Throughout this period, and continuing to the present day, ministers
and governments have deliberately attempted to obfuscate and distract attention.
The continuation of efforts to avoid transparency merely serve to raise further
questions about what drove the initial decisions and continues to drive the
inability to lay myriad unanswered questions to rest.
In my view, the Commonwealth has both an obligation and a long-term
incentive to establish a necessarily independent and wide-rangeing investigation
process that will allow such a comprehensive consideration to occur. While
determining whether corrupt conduct has taken place is important, it is not
necessarily the remit of the NACC to expiscate the broader systemic issues that
have allowed the significant misallocation of funds appropriated by the
Parliament for the benefit of traditional owners, and they may well decide not
to do so. If that occurs, at least three years will have been wasted. The establishment
and subsequent handling by NIAA of the previous investigation undertaken by
Bellchambers Barrett avoided the issues related to the potential misallocation
of funds and gave no consideration to the conduct of agencies and ministers;
consequently, it was deliberately designed as a diversion, and has undermined
the credibility of the recent ministers within the Indigenous Australians
portfolio.
In any case, the ongoing failure to address the underlying
causes of the myriad policy challenges facing the ALC will mean that the responsibility
for the egregious policy errors that have torn the ALC apart and set back the aspirations
and life-opportunities available to the Anindilyakwa people will continue to
taint the operation of the ALRA, and the legitimacy of governments and their
officials.
The ALC have recently appointed their fourth acting or
permanent CEO in less than two years. Without reflecting in any way on the new
CEO’s capacity and ability, I believe the structural forces that have been in play,
and which likely continue to operate, are such as to make the prospects of him delivering
or oversighting sustained reform well-nigh impossible.
For the Commonwealth, and in particular the Minister for
Finance who has responsibility for the Public Governance, Performance and
Accountability Act 2013 (PGPA), the continuing challenges facing the ALC
represent a test case for the robustness and effectiveness of the whole system
of Commonwealth public sector administration. If the ALC were a local
government in any jurisdiction in Australia, it would be facing the prospect of
an Administrator being appointed. In my view, strong grounds exist for the Prime
Minister to request the Minister for Finance to step in and make arrangements
for the direct oversight the operations of the ALC for the next three years or
so to ensure that there is a sustained return to complete compliance with the
ALRA and the PGPA. Such a step would have the additional benefit of providing
the Government with an independent perspective on desirable systemic reforms to
the financial architecture underpinning the ALRA more generally and create the
foundations to underpin the reforms that are required to ensure that the ALRA
survives another fifty years. Without robust and decisive action by Canberra,
the prospects of the ALC avoiding a governance meltdown over the coming five
years will be close to zero. If this occurs, the reputation and legitimacy of
the Commonwealth public sector will suffer yet a further body blow.
Whichever course is chosen, the challenges ahead for both
the people of Groote Eylandt and the Commonwealth public sector will be
formidable.
29 March 2026
