Governance Update: ALC and related corporations

 

… we have done but greenly

In hugger-mugger to inter him.

Hamlet Act four, Scene five.

 

In a recent post updating developments on Groote (link here), I noted that Groote Holdings Aboriginal Corporation GHAC) had inexplicably withdrawn its Little Paradise EIS proposal before the NT EPA (link here). I also commented on the termination of the former CEO, Mr Mark Hewitt, in October 2024 and canvassed the possibility that his termination payment which appeared to have been approved by Minister McCarthy included amounts linked to his executive roles with GHAC and Winchelsea Mining Pty Ltd (which is 70 percent owned by the Anindilyakwa Advancement Aboriginal Corporation (AAAC).

Subsequent governance developments included the resignation of Mr Hewitt from his role on GHAC on 1 November 2024, and from his role as CEO and Director of Winchelsea Mining (date unknown). In April 2025, following a selection process managed by Indigenous owned recruitment agency Pipeline Talent based in Canberra, the ALC announced the appointment of a new CEO, Matthew Bonson (link here). A Gurindji, Jawoyn and Torres Strait Islander man, Mr Bonson is a former ALP member of the NT Legislative Assembly and Minister (link here). According to the National Indigenous Times (link here), he took up the CEO role on 29 April 2025.

In February 2025, the ALC approved an updated set of Ministerially approved Board Rules which lay out the processes which apply to the operation of the ALC Board and its meetings (link here). A new requirement which arose from the recommendations of the Bellchambers Barret review was that the Board appoint an Independent Board Adviser (section 16). The Board appointed Yamagigu Consulting, an Indigenous owned advisory corporation linked to Deloittes to act as the Board Adviser and to develop a new governance framework in consultation with the NIAA (link here).

Eight months on from the termination of Mr Hewitt as CEO of the ALC, there is still a cloak of secrecy around the detailed operations of the ALC and NIAA’s somewhat ambiguous and entwined relationship with the implementation of the post ANAO audit governance reform agenda. As yet, there is no publicly available information on the outcome of the Yamagigu work on a new governance framework; perhaps this will be rolled out once the NACC hands down its report into the investigation of the NIAA referral of Mr Hewitt. Moreover, it is becoming increasingly clear that the operations of the ALC and the associated corporations entrusted with implementing and progressing the ALC’s high level strategic agenda for Groote (including the proposed Winchelsea mine) have begun to stall and falter.

Groote Holdings Aboriginal Corporation (GHAC) is responsible for the Little Paradise development and the Aquaculture projects which have been significant recipients of section 64(3) funding from the ALC. According to GHAC’s submissions to the NT EPA, the Little Paradise project is designed to provide considerable logistical and base camp support for the proposed manganese mine being developed on the adjacent Winchelsea Island by Winchelsea Mining whereas all recent descriptions refer to community training facilities and the like.

For reasons that are unclear, GHAC was unable to lodge its 2024 financial statements and hold its AGM in a timely manner. On 12 March 2025, ORIC granted an extension to the required date of 30 November for the AGM (bizarrely and presumably in error the new date was 31 January, predating the letter). The GHAC Directors Report and the GHAC financial statements for the year to June 2024 were signed off on 16 December 2024 but not uploaded to the ORIC website until March 2025. The financial statements, in a section titled “Events after reporting date’ confirm that the former Managing Director of GHAC Mark Hewitt resigned on 1 November 2024 and the newly appointed Acting Chief Operating Officer, Mr Lino Bruno undertook a review of ongoing projects which led to the role of Chief Operating Officer being made redundant. Mr Bruno is listed on the Winchelsea Mining web site as the manager of Marine Services for Winchelsea Mining. According to GHAC ‘s reports to the NT EPA, the Operations Manager was Xiaoli Liu and thus following the decision to make the position redundant she was presumably entitled to a payout. Ms Liu is Mr Hewitt’s spouse. The timing and focus of these developments suggest that a redundancy payment for Ms Liu may have been part of the termination arrangements for the ALC CEO discussed at the 16 October Board meeting and according ot th Senate Estimates brief released under FOI (link here) apparently approved by the Minister in early 2025.

Anindilyakwa Advancement Aboriginal Corporation (AAC) is the majority owner (70 percent) of Winchelsea Mining. According to the ORIC website, AAAC missed the statutory deadline for both the 2023 and 2024 AGMs. A November 2024 letter from ORIC refused to allow a request for an extension of he 2023 AGM, and a March 2025 letter agreed to an extension of the 2024 AGM (strangely with the same date error as in the GHAC letter discussed above). ORIC have not published the correspondence requesting the extension, so the reasons provided to ORIC by AAAC remain unknown. Nor is it known whether AAAC have in fact held the relevant AGM’s.

Unlike GHAC, AAAC is yet to lodge its 2024 financial statements and thus remains in breach of the requirements of the CATSI Act. It is unclear what action, if any, has been taken by ORIC to address this non-compliance. The AAAC’s 2023 financial statements show that in the 2022 and 2023 financial years, the ALC provided $12.7m to AAAC in section 64(3) payments for the project design, feasibility and environmental studies required in relation to the proposed mine. The Winchelsea Mining web site (link here) includes a series of undated photographs of the completed GHAC workers basecamp at Little Paradise thus providing further confirmation of the centrality of Little Paradise and GHAC to the proposed mine. As I mentioned in a recent post, in July 2024 the NT EPA requested additional information on an extensive list of issues form Winchelsea Mining and has asked for an updated EIS to be submitted within two years.

ALC CEO: status

On 18 July an anonymous comment was added to a recent post on this blog stating: “looks like ALC have lost another CEO. resigning after 3 months is surely a sign of issues”. I endeavoured to confirm this development and have been advised by a reliable source that the newly appointed CEO, Matt Bonson, has resigned after a disagreement with the Board. I have however been unable to formally confirm Mr Bonson’s departure. There is nothing on the ALC web site, nor has the Minister made any announcement. I have messaged the ALC but have not received a response. I spoke to an adviser in the Minister’s Office on 25 July seeking a comment from the Minister but have so far not received one.

Given the silence, it seems highly likely that Mr Bonson has in fact resigned. If correct, this suggests that the instability inside the ALC continues and is likely worsening. The overwhelming silence and lack of transparency from both the ALC and the NIAA in itself is a sign of a deep and ongoing management crisis. It is worth noting that the existence of the Board Adviser appears to have been of little use in resolving whatever disagreements were in play in the lead up to the resignation.  

There seem to me to be two possible generic reasons for the short tenure of the new CEO. First, perhaps the recruitment process was flawed or there was some level of interference in the process. There is no evidence on the public record that this in fact occurred. Alternatively (or perhaps additionally) the expectations of Council members (and their families) for access to resources or financial benefits may have exceeded the preparedness of the new CEO to approve or facilitate. Available information on the public record suggests the previous management regime at the ALC was prepared to facilitate an extraordinarily generous allocation of resources from various sources to ensure the maintenance of broad support for the ALC’s wider agenda. Such an approach would almost certainly have raised expectations amongst Board members regarding what is normal and their due. It is also possible that there were multiple informal arrangements in place that a new incumbent would not have been aware of or would not have been prepared to continue.

While there is no definitive proof in the public domain, the pervasive conflicts of interest which existed and the persistent criticism emerging regarding the way the ALC operated under the former CEO adds weight to the possibility that expectations of generous access to financial and other resources reached high levels within the Council’s membership. The fact that notwithstanding their extremely light regulatory oversight, the NIAA were ultimately prepared to refer the former CEO to the NACC also suggests financial expectations may have been and may continue to be excessive. The fact that the Council publicly supported the former CEO right up until the NIAA attended the Board meeting of 16 October 2024 and likely directly intervened to force the CEO’s resignation (perhaps based on intelligence shared by the NACC or perhaps by the increasing accretion of worrisome media stories alleging various forms of misfeasance against the former CEO) suggests that the Council and its members were deeply conflicted. It is salient that the NIAA appear to have directed their complaint to the NACC only against the former CEO and not against the Council as a whole notwithstanding that the Council signed off on virtually all arrangements that facilitated any potential wrongdoing. In other words, it appears that the NIAA were operating on the assumption that the Council was co-opted by the former CEO.

In these circumstances the fact that the new CEO has decided to resign is of particular concern. It suggests that the ALC is at risk of reverting to modes of operation that predated the CEO’s termination. I argued in a previous post (link here) that the facts as we know them are consistent with the NIAA in effect coercing the ALC into terminating the former CEO. If this was in fact the case, then the risk of reversion to former expectations and modes of operation are even more likely to eventuate.

Of course, my analysis is constrained by the fact that there is a complete lack of transparency on the part of both the NIAA and the ALC. I may not have adequate information, and this in turn may mean that my conclusions are wrong. In my defence, all I can say is that I am doing the best I can in the circumstances and the analysis I have put forward is consistent with the facts as we know them. Moreover, why is it that the Minister, the NIAA and the ALC are so determined to provide zero information about the activities and operations of a Commonwealth agency established by statute to protect the interests of traditional owners on Groote Eylandt? It seems to me that it is just as likely that I am underestimating the risks and damage to the public interest as overestimating the risks in relation to the ALC’s effectiveness and probity.

It is my considered view that the most important issue here is not whether the former CEO engaged in corrupt conduct, or whether he breached his legislative responsibility. The most important issue by far relates to whether the ALC can effectively undertake its statutory remit. I have absolutely no confidence that the ALC as presently constituted, and operating under a management culture developed over a decade by a person the NIAA has referred to the NACC, has this capability. The former CEO of the ALC clearly bears some responsibility, but the primary responsibility must fall on the Minister and her predecessors who have allowed the ALC to operate in ways which are inconsistent with the intent of the legislation governing statutory corporations in this space, the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) and the Public Governance, Performance and Accountability Act 2013 (PGPA). Responsibility also falls on the Parliament and its committees, in particular the relevant Senate Estimates Committee which has since the publication of the ANAO report on Groote in May 2023 failed miserably to interrogate the issues in play despite considerable evidence being presented to them.

The result has been that the ALC has overseen an ongoing process which privileges the high risk ownership and development of a small mine built on the redirection of substantial section 64(3) royalty equivalents to a narrow constituency of beneficiaries (including select traditional owners, consultants and potential employees who may or may not be Indigenous, and the non-Indigenous co-owners of the Winchelsea mining company) over investments in social, educational, cultural and environmental capabilities across the wider Anindilyakwa community. The reality is that this is not just about whether an economic resource should be developed, it is about whether scarce and finite royalty equivalent payments explicitly designed to compensate local Aboriginal people for the impacts of extensive manganese mining on Groote should be allocated away from Anindilyakwa people to benefit the coalition of largely non-Anindilyakwa interests mentioned above.

In Shakespeare’s time, the word ‘hugger-mugger’ meant ‘secretly, stealthily or furtively’. In more modern usage, it has come to mean disorderly or sloppy. Synonyms include ‘chaotic, cluttered, jumbled, and confused’. The ongoing strategy of the Minister, NIAA and the ALC to avoid informed public discussion about the developments on Groote over the past decade are unashamedly and synergistically hugger-mugger in both senses of the term. The losers will inevitably be the wider Anindilyakwa community on Groote, including future generations, and the public interest more generally.

 27 July 2025

A spokesperson for Minister Malarndirri McCarthy has provided the following comment:

The Minister has been informed by the Anindilyakwa Land Council that Mr Bonson has resigned from his position.

28 July 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

Update on the Winchelsea mine.

                                                             Th’ offender’s sorrow lends but weak relief

To him that bears the strong offence’s loss

Sonnet 34, 11-12

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

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

AAAC and its subsidiary.

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

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

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

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

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

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

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

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

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

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

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

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

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

Little Paradise

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

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

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

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

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

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

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

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

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

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

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

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

Winchelsea Mining Pty Ltd

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

That document included the following assertion:

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

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

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

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

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

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

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

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

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

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

Conclusion

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

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

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

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

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

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