June 2025 Update on Groote Eylandt Issues

 

'twere a concealment
Worse than a theft, no less than a traducement,
To hide your doings; and to silence that,
Which, to the spire and top of praises vouch'd,
Would seem but modest.

Coriolanus Act one, Scene nine.

 

I have not published any posts on Groote or the Anindilyakwa Land Council (ALC) since February, when I published two posts on the inadequacies of the NIAA’s responses to previous Senate Estimates Questions on Notice (link here and link here) and a more general post explaining why pursuing an understanding of what has transpired on Groote, and how it has been allowed to occur, is important (link here).

Since then, several noteworthy developments have occurred or come to my attention.

Manganese sales. Perhaps of most significance in economic terms has been the resumption of sales of manganese ore by South32 subsidiary GEMCO (link here and link here) following the considerable cyclone damage to the Alyangula wharf last year. That damage disrupted sales and export of manganese ore from the GEMCO mine and led to a temporary halt to the flow of royalty payments to the Groote Eylandt Aboriginals Trust (GEAT), to the Anindilyakwa Mining Trust (AMT) and a halt in section 64(3) royalty equivalent payments from the Aboriginals Benefit Account (ABA) to the ALC for onward distribution to local corporations.

GEMCO legal action. In October 2024, the Supreme Court of the NT published a decision on a largely procedural matter relating to a longstanding dispute between GEAT and the ALC regarding rights to be paid royalties over yet to be developed mineral leases held by GEMCO on Groote Eylandt (link here). As an aside, that decision lays out a very useful account of the history of mining on Groote, including the prescient taking up of exploration permits by the Church Missionary Society which were then used to leverage a royalty payment from BHP and led to the establishment of GEAT and the payments of royalties based on that commercial agreement (and not Indigenous rights per se).

According to GEAT’s website (link here), GEMCO took legal action to clarify the required allocation of royalty payments to GEAT and the ALC derived from the new South and East mineral leases on Groote. The dispute has been ongoing since 2016. The GEAT website reports that following a mediation in February 2025, the parties to the litigation signed a Heads of Agreement, and that subject to the finalisation of some technical legal conditions, the dispute between GEAT and the ALC will be resolved. The terms of the mediation were to remain confidential. I am yet to see any confirmation that the resolution has occurred and on what terms. The GEAT Management Committee notes that the resolution of the dispute will be ‘a big step forward’ for GEAT and its beneficiaries and ‘a great outcome for the community’.

ALC staff changes. Following the termination for unspecified reasons of the former CEO, Mark Hewitt by the ALC in October 2024 (link here), the ALC appointed its Chief Financial Officer, Colin Wakefield, as Acting CEO. In April the ALC announced (link here) the appointment of Matthew Bonson, a former ALP member of the NT Parliament from 2001 to 2008. He served in several ministerial roles during that period (link here).

Winchelsea and Little Paradise EPA updates. The EPA website includes a detailed web page with a chronological listing of the initial application and all subsequent EPA decisions and proponent variations.

 Winchelsea Mining lodged its initial application with the NT Environmental Protection Authority in 2020, signed by Winchelsea CEO Mark Hewitt (link here). The initial proposal was accepted for consideration by the EPA in 2021 (link here and link here) where the EPA advised that an Environmental Impact Statement would be required. The proposal described the mine on Winchelsea Island and the supporting infrastructure:

To develop and operate an open cut manganese mine at Winchelsea Island (Akwamburkba) and Groote Eylandt, East Arnhem, about 600 km southeast of Darwin. Strip mining using free digging and rock breaking would be undertaken to extract ore and overburden. Mine infrastructure would include run-of-mine and ore stockpiling areas, a processing plant, workshops, haul and access roads, a product conveyor from the processing area to the wharf, a jetty and a boat ramp. Product would be direct loaded from the conveyor onto ships for export. Supporting infrastructure would be located at Little Paradise Bay on Groote Eylandt, approximately 6 km southwest of the mine site, and include a barge landing ramp and jetty, access roads, a logistics hub and a 100-person accommodation camp. The disturbance footprint is 659 hectares, and the mine life would be approximately 14 years (emphasis added).

Subsequently there were two significant variations made by the proponents (in 2021 and 2023) and subsequent consultation processes undertaken by the EPA. In October 22023, the EPA issued terms of reference outlining the required content of the necessary EIS. The proponent’s EIS was finalised in December 2023 (link here). It is an extensive document (the Executive Summary runs to 89 pages). Section Two of the Executive Summary titled Project Purpose places the proposed mine within its institutional context. This section makes clear that the proposed mine is seen as part of the ALC’s high level strategic objectives:

In response to the need for a self-sufficient and sustainable local economy following cessation of mining by GEMCO, and the desire for greater self-governance, the Anindilyakwa Land Council (ALC) developed the 15-Year Strategic Plan 2012- 2027 (ALC, 2012). In line with its Strategic Plan, the ALC entered into a series of agreed reforms with the NT Government to take over control of core services and functions for the communities and region. As part of the reforms, the NT Government and ALC established Local Decision-Making Agreements (LDMAs), with the aim of transitioning control for services and decision-making to the Anindilyakwa people, as the Traditional Owners of the Groote Archipelago. A key commitment by the NT Government in the LDMAs was the support and advice to Traditional Owners to conduct exploration and mining in the Groote Archipelago, in accordance with recognised rights of Traditional Owners to utilise their natural resources [page 14].

The Winchelsea Funding structure laid out in Figure E-3 [page16] makes no mention of Little Paradise. In section 8 headed Holistic Impacts, the Little Paradise development being progressed by Groote Holding Aboriginal Corporation (GHAC) is cast as ancillary to the mine and not part of it.

Public consultation on the Draft EIS took place in the first half of 2024. In July 2024, the EPA issued a Direction to include Additional Information in relation to an extensive list of matters (link here) and required that a revised EIS be prepared and submitted within two years. Two issues caught my attention: first, the EPA concluded that the draft EIS did not demonstrate how the claimed transformational residual economic benefits the Groote Archipelago and Indigenous residents and directed the proponents to more specific details [item 25]. Second, the EPA also noted that the EIS did not provide adequate information in relation to the proposed 50-person accommodation camp and other supporting infrastructure to be developed by a separate entity [ie GHAC’s Little Paradise development] and directed that it be included in the EIS.

The EPA website also includes details of an application lodged by GHAC in relation to the Little Paradise marine and logistics hub in August 2024 (link here). According to the proposal (page i), the project is designed to support the long-term economic and social future of all Anindilyakwa clans of the Groote Archipelago, and includes a marina facility, associated biosecurity compounds, logistics camp and aquaculture facility. The development is a key component of GHAC’s plan to secure a sustainable long-term economy for the Anindilyakwa. According to GHAC’s Little Paradise Development Report:

GHAC was formed as a commercial entity to support Traditional Owner commercial activity on their land that accords with the governance requirements in section 23 of the Land Rights Act. GHAC was initiated in the 2012 ALC 15-year Strategic Plan — a plan driven by Community Elders to reverse the decisions made over the last 100 years and reassert control over Anindilyakwa destiny. In line with its Strategic Plan, the ALC in 2018 entered a series of agreed reforms with the NT Government to take over control of core services and functions….

…The mandate of GHAC is to support and progress major projects and hold in-trust major infrastructure and assets as well as provide services for social and economic development of all Traditional Owners. ALC and GHAC are actively working to establish projects that deliver a living cultural economy providing inter-generational opportunities to participate in the learning and delivery of both contemporary pursuits and culturally significant traditional practices

The EPA website indicates that on 25 March 2025, the GHAC proposal for a marine infrastructure development at Little Paradise was withdrawn (link here). No reasons were given.

Senate Estimates Committee Hearings. The most recent Hearings were held on 28 February 2025. The transcript (link here) is rather desultory reading; not helped by the fact that the Committee has no effective process in place to efficiently manage what is an extensive agenda spanning the Indigenous policy domain.

The Chair, Senator Pratt, invited the land councils to make extended opening statements which conveniently serve to limit the time available for serious questions. The ALC Chair, Cherelle Wurrawilya limited her pre-prepared comments (at page 39) to good news:  ‘We have made strong changes and will make more changes to continue what is best for the Anindilyakwa people’. She mentioned that recruitment of the new CEO was underway without commenting in any way on why the Council had terminated the former CEO. She mentioned progress in establishing the Groote Archipelago Regional Council: ‘A local council is what we always wanted for our people to ensure we take back control for our local services’. She reported that construction for the boarding school at Milyakburra will commence this year, with the bilingual school system to begin operating in 2026. Finally, she noted ‘It is a new year and the ALC board is committed to look forward, not backwards, to determine our future. We will be getting on with the important functions of the Anindilyakwa Land Council and delivering for the Anindilyakwa people…’ No mention of an ongoing National Anti-Corruption Committee Investigation into the ALC and/or its former CEO. No mention of the GEMCO litigation and the ALC’s dispute with GEAT. No mention of the progress (or lack of progress) of the Winchelsea Mine which the ALC has allocated tens of millions of dollars in section 64(3) payments (see below). No mention of the progress (or lack of progress) of the Little Paradise infrastructure hub which previously had been touted as central to the ALC’s economic strategy for Groote, and which within a month would seemingly be placed on the backburner (see above). Nothing to see here.

The rather lame Committee members were seemingly oblivious to the extent to which they were being taken for a ride, nor of their Panglossian complicity in gaslighting the public at large that all is now well in this best of all possible worlds on Groote Eylandt.

Senator Nampijinpa Price (at page 41) asked about the ANAO’s audit recommendations, and in particular which recommendations remain outstanding, the action taken to implement the recommendations and a timeline for implementation. The acting CEO’s response was a virtuoso display of technical and process-laden verbosity. Senator Price moved on to ask whether Mr Hewitt had been involved in the selection of the ALC Board [a strange question given that no-one to my knowledge has ever suggested that he had been]. The Acting CEO responded: ‘Not to my knowledge, no. It goes through a process as set out in the ILUA [sic: should read ALRA]. The clans nominate their representatives to represent them, the 14 clans on the board, and that process takes place. If there are more than the number of nominees, it goes through the normal NT election process.

In response to a question from ALP Senator Ghosh, seeking information from each land council on their most promising programs, the Acting CALC CEO stated (page 50):

At ALC, we distribute 64-3 royalty money to many corporations. We receive funding applications to be considered by a finance committee based on how the project will benefit our Anindilyakwa people and how it falls in line with local decision-making and aligns with our ALC strategic plan. So we go through that process. Ultimately, funding decisions are made by the ALC board.

Narrowly factual and succinct. No mention however of how the ALC handles the vexed issues of conflicts of interest. No mention of the millions invested in the ALC backed agenda for a mine on Winchelsea. No mention of the governance changes made since the termination of the former CEO.

All in all, the Estimates Hearing was hardly a forensic tour de force by the Senators present. Labor Senators only wanted to hear the good news; the Opposition spokesperson Senator Price, consistent with her previous approaches to the accountability concerns with the ALC (link here and link here), did enough to allow her to claim in the future that she had not ignored the issues being investigated by the NACC while not pursuing anything of substance. The officials present delivered a sophisticated exercise in ensuring the Parliament, the media and the public at large remain in the dark by proactively avoiding any issues of contention or involving defective accountability.  

NACC status. In early 2024, the National Anti-Corruption Commission (NACC) received several complaints, including from the NIAA in May 2024. At some point thereafter they initiated an investigation into unspecified matters involving the ALC and potentially other corporations based on Groote Eylandt. Multiple media outlets reported that they had visited the ALC’s Offices on 16 October (the same day that the ALC terminated the appointment of the former CEO Mark Hewitt). There have been no subsequent statements from the NACC relating to these investigations. While rational assessment would suggest it is a fool’s errand to predict when the investigation might be finalised, the odds of this occurring over the next six months must be increasing.

Concluding comment

This overview of recent developments, most of which have received little or no coverage in the media nor in the public statements emanating from the ALC and the Minister, provide a partial insight into the complexity of the wheels within wheels that are currently revolving on Groote, in the ALC offices in Groote, Cairns and Darwin, in the Board rooms of South32 and GEMCO, in various agencies of the NT Government in Darwin, and in various agencies of the Federal Government in Canberra. What is easily forgotten is that the lives of some 1500 people on Groote, and the opportunities of their descendants, are impacted for better or worse by the decisions reached as those wheels continue to revolve.

Over the past decade, a series of developments have occurred which raise serious questions regarding the quality of regulatory oversight over the actions of the ALC and its staff. The decision of the ALC to in effect engage directly in commercial activities, and particularly mining has been highly problematic. Its involvement was funded largely by the allocation of royalty equivalents to corporations which it appears to effectively control and was based on a ministerially approved agreement which was fundamentally compromised by the fact that the key individuals involved simultaneously sat on both sides of the negotiation. Where was the regulatory oversight as all this was set in train and continued?

It is my considered assessment that the quality of regulatory oversight by successive ministers for Indigenous Australians and the agency that serves them, NIAA, has been an egregious disaster. The case for greater transparency as a counterbalance to the vested interests in play, and as a guarantee that the Minister will ensure public accountability and the ALC will protect the interests of its constituents (which is its fundamental statutory raison d’etre) is inarguable.

In a forthcoming post, I consider the outcomes of some recent FOI decisions in relation to the operations of the ALC and its rather nebulous relationship with the NIAA.

 

 23 June 2025

 

Royalties, flawed governance and non-transparency: a potent brew

 

Thou monstrous injurer of heaven and earth!

Call not me slanderer; thou and thine usurp

The dominations, royalties and rights

Of this oppressed boy…

King John Act two, Scene one.

 

This post provides a high-level overview of how the institutional structures related to payments to traditional owners related to mining on Groote Eylandt have evolved in recent years.

In 1963, prior to the existence of land rights, the Church Missionary Society which had a presence on Groote presciently had secured mining tenements on Groote as a means of protecting Aboriginal interests. They used their commercial leverage to negotiate a royalty arrangement with BHP to ensure that the local Anindilyakwa people would benefit from mining. As part of that negotiation, royalties began to flow in 1965 and in 1969 the Groote Eylandt Aboriginal Trust (GEAT) was established. While the Trust has had a chequered history, it appears to be operating well and has accumulated a balance of over $200m based on royalty payments from GEMCO and its ongoing investments (link here).

GEAT provides an annual grant program aimed at benefiting the traditional owners of Groote. In the 2022 and 2023 financial years, the grants made were around $$5m. and $7m respectively. The following analysis does not deal with GEAT, which is independent of the ALC, and it is mentioned here for the sake of completeness. As I understand it, the more recent mining agreements on Groote under ALRA in effect net off the benefits directed to Groote GEAT in calculating the payments made to the ALC for on payment to the AMT.

This post focusses on the complex and I suggest problematic financial and governance arrangements between the Anindilyakwa Land Council (ALC), the   Anindilyakwa Mining Trust (AMT) and the Anindilyakwa Royalties Aboriginal Corporation (ARAC). The aim is to identify points of potential concern in terms of good governance, to raise some questions regarding what appear to be some problematic financial transactions, and finally to explore some broader policy reforms that these issues suggest may be required. It is not intended to be a comprehensive analysis.

In 2007 the AMT was established to receive the negotiated payments arising from a revision of the revised agreement between manganese miner GEMCO and the ALC. Under the current mining agreement between GEMCO and the ALC, GEMCO pays a negotiated royalty to the ALC, a portion of which is then transferred to the AMT to be invested and distributed in accordance with the Trust Deed. The original Trust Deed was revised in 2010, and sets out the rules governing the operation of the AMT. The revised Trust Deed is available on the ACNC website (link here).  

As I understand it, the more recent mining agreements on Groote under ALRA which provide for payments to AMT in effect supplement the continuing payments directed to GEAT.

For our purposes, key elements of the AMT Trust Deed include the power of the ALC to approve the appointment of new Trustees, a requirement for there to be at least two ‘responsible persons’ appointed as Trustees (essentially fulfilling roles akin to independent directors), the provision of quite broad powers to allocate royalty funds for community purposes, the inclusion of standard conflict of interest provisions, and of a power for Trustees to delegate their powers to an individual or individuals. Normal provisions for minute taking and annual meetings apply. The current Trustees are listed on the ACNC website (link here) noting however that Mr W, the former Chair of the ALC, is recently deceased.

The most recently available financial statements, for the year to June 2023, indicate that the AMT controls net assets of $274 million, and is in receipt of an annual income of almost $20 million in negotiated royalties and just over $8m in investment income. These income flows clearly vary from year to year.

The ALC is also in receipt of section 64(3) payments, often referred to as ‘royalty equivalents’ because they derive from provisions of the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) which appropriate an equivalent amount from the Commonwealth Consolidated Revenue for all royalties received by the NT Government from mines on Aboriginal land. In turn the ALC is required by section 35 of the ALRA to disburse these funds within six months of receipt to Aboriginal Corporations representing traditional owners. These corporations must be incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) to facilitate more intensive governance support (a legislative constraint that makes good policy sense in my view given that ASIC incorporation is looser and is less intensively regulated).

The ALC distributes its section 35 funds to a range of corporations located on Groote Eylandt, many focussed on clan affiliations. Increasingly however, the ALC appears to have been directing section 35 funding to corporations focussed on social and economic development opportunities linked to the proposed Winchelsea mine; see my earlier post outlining the ALC strategy (link here).

In April 2016, a new corporation was registered with the Office of the Registrar of Aboriginal Corporation (ORIC). Its name is Anindilyakwa Royalties Aboriginal Corporation (ARAC), and it is unique insofar as the members of ARAC must be Aboriginal Trustees of the AMT. While the list of documents related to ARAC on the ORIC web page is incomplete, a revised Rule Book issued in December 2023 (link here) requires that all members of ARAC be members of the AMT. Directors of ARAC must be either members (ie Aboriginal trustees of AMT) or a responsible person (ie a non-Indigenous Trustee of AMT).

Moreover, all the Indigenous members of the AMT, and therefore ARAC, are members of the ALC. ARAC has four independent Directors Adam Simpson, Rodney Tidey, Russell Barnett, and Simon Longstaff. Of these, Adam Simpson and Simon Longstaff All four are also Trustees of AMT. Rodney Tidey is a former staff member of the ALC, and Russell Barnett runs a consulting firm that appears to have done work for the ALC. To be clear, I am not suggesting any wrongdoing on the part of these individuals, merely pointing to the tangled web of connections that has been constructed by the ALC during the term of its CEO Mark Hewitt.

The ALC thus effectively exercises influence over both the AMT and ARAC by virtue of its control of the AMT membership. This aligns with my observations in previous posts that the ALC exercises a degree of influence over corporations receiving s.35 payments that aligns with the definition of ‘effective control’ under the Corporations Act. If the ALC CEO and former Chair exercise disproportionate influence over the ALC Board, as was identified by the ANAO in its May 2023 performance audit, and explicitly alleged by sources consulted by The Saturday Paper for its recent exposé (link here), then that influence will likely permeate the decision-making of both the AMT and ARAC.

Given this background, I wanted to explore two issues that arise from these entwined sets of responsibilities and issues.

The first is a series of financial commitments and subsequent transactions reported in the AMT financial statements from 2016. The second relates to funding by ARAC of ALC employee costs.

The AMT/ARAC financial transactions

The notes to the 2016 Financial statements for the AMT which are available on the on the ACNC website (link here) include the following text:

12 Commitments During the year ended 30 June 2016, Anindilyakwa Mining Trust committed to contributing $3,500,000 to the Economic Development Unit (which has been established by the Anindilyakwa Land Council) on or prior to 30 June 2018. The first instalment of $500,000 was made during the 2016 financial year. 

The notes to the 2017 AMT Financial Statements state that the first instalment of $500,000 was made during the 2016 financial year and the second instalment for the first year of $500,000 and the first instalment for the second year of $750,000 was made during the 2017 year.

The notes to the AMT 2018 financial statements comment:

12 Commitments During the year ended 30 June 2016, Anindilyakwa Mining Trust committed to contributing $3,500,000 to the Economic Development Unit (which had been established by the Anindilyakwa Land Council) of which $1,000,000 was paid during the 2016 financial year and $750,000 was paid during the 2017 financial year. During the 2018 financial year, an instalment was made for $1,250,000. Therefore, as of 30 June 2018, the Trust has a $500,000 outstanding commitment.

During the year ended 30 June 2017, Anindilyakwa Mining Trust committed to contributing $51,122,311 to Anindilyakwa Royalties Aboriginal Corporation (ARAC) for costs associated with the purchase of infrastructure and funding of the operational budget. During the year, $6,000,000 was paid to ARAC. Therefore, as of 30 June 2018, the Trust has a $45,122,311 outstanding commitment.

The 2019 AMT financial report included a note indicating in relation to the 2016 commitment, a further instalment of $500,000 had been paid thus meeting that initial commitment. The note also states that in relation to the 2017 commitment, the AMT had paid an instalment in the 2019 FY of $5,975,000, thus leaving an outstanding balance to be paid of $39,147,311.

The 2020 and 2021`AMT financial reports note that no payments had been made and the outstanding commitment remained at $39,147,311. The Notes to the 2021 AMT financial report note that the outstanding amount was paid in FY 2022; this suggests the payment was made in the first half of the financial year. The 2022 AMT financial report lists under the heading Grants a payment to ARAC of $41,324,957. No rationale is provided for why the amount has increased from $39m to $41m.

There are no further payments reported in the 2023 AMT financial report.

The 2022 financial statement for ARAC is available on the Registrar of Aboriginal Corporations website (link here). Under revenue, it records a s.64(4) grant from the ABA of $9.6million (which would have been approved by the Minister) and a grant of $14.3m in s.35 payments from the ALC (the equivalent amount in 2021 was $34.8m). Total net revenue is listed as $23.0m. There is no record of any grant being received from the AMT. Nor is there any record of such a grant being banked in the following financial year.

That a payment of $41m appears to have disappeared is somewhat strange. It is even stranger when one considers that the AMT has no staff and its administration appears to be undertaken by the ALC Mutual Trust, an established and highly experienced financial services firm; that ARAC has no staff (see the 2022 ARAC General Report) and its office is at 58-62 Macleod Street Cairns, the same address where the Commonwealth transparency portal lists ALC’s Finance and Royalty Development Unit (RDU) employees being located. Thus while the AMT and ARAC have different auditors and accountants, The staff servicing ARAC Board meetings and probably implementing ARAC Board decisions (including managing income and payments) are likely part of the ALC's Royalty Development Unit, a small team in Cairns. Clearly a forensic audit is required to determine the reason for the apparent disappearance of these funds. I should acknowledge that I was alerted to the issues around the missing $41m by the recent story in the Saturday Paper (link here).

 

ARAC funding of ALC employee costs

The ARAC 2023 financial report includes under expenses a line item for ALC employee costs of $7.2m in 2021 and $8.0m in 2022. This strikes me as potentially problematic as it appears to suggest that the ALC is making payments to ARAC which are then used to pay ALC employee costs. In effect, this can be characterised as the ALC using funds that are required to be allocated towards corporations representing Traditional owners diverting the funds to financing its own activities.

The rationale that the ALC will use in its defence is that section 23(ea) of the ALRA allows land councils to assist Aboriginals in the area of the land council to carry out commercial activities. The ALC CEO has relied on this provision on a number of occasions in Estimates Hearings. However, the provision reads as follows (emphasis added):

The functions of a Land Council are (inter alia)

(ea)  to assist Aboriginals in the area of the Land Council to carry out commercial activities (including resource development, the provision of tourist facilities and agricultural activities), in any manner that will not cause the Land Council to incur financial liability or enable it to receive financial benefit;…

It is clear that the engagement of staff by the land council incurs a financial liability, and also that the payment of employee costs by ARAC can be characterised as receiving a financial benefit. While section 33A and B allow a land council to charge fees for services, this likely is limited to services which a land council is allowed to provide. Accordingly, it seems clear to this bush lawyer that the arrangements adopted since 2016 have breached that provision of the legislation. The appropriate way to have provided the assistance envisaged in my views would have been for the Minister to approve estimates of expenditure of the Land Council under section 64(1) of the Act. Why this was not done is unclear.

Similar issues arise in relation to the ALC economic development unit which the AMT funded in 2016, 2017 and 2018.

In relation to the arrangements which were adopted, it seems that there are two possibilities: either the arrangements have been undertaken with the approval and knowledge of the Minister and NIAA, in which case it places an additional onus on them to monitor and mitigate the risks of fraud or misappropriation, or even just poor management. Or alternatively, the arrangement has not been approved in which case it appears to breach the financial management provisions of the ALRA and probably the PGPA Act. Which is it?

 

Policy implications

The two issues outlined above raise numerous policy issues.

In the short term, both issues are serious enough to require a detailed forensic audit. These are both issues that fall within the regulatory oversight responsibility of the Minister and her agency, the NIAA. If they are to handball them off to an alternative ‘appropriate authority’, then they must identify the issues explicitly and directly. Otherwise there is a risk that the issues involved will be overlooked in the tangled web allegations that are currently in play (see my previous post link here).

Beyond the issues involving the ALC, NIAA should in my view undertake an immediate internal review of its approach to the regulatory oversight of portfolio bodies, the extent to which its Audit and Risk processes and fraud control processes are fit for purpose in relation to portfolio bodies for which the NIAA has an oversight responsibility.

In the medium term, these issues raise questions regarding the level of due diligence applied by the Registrar of Aboriginal Corporations when she approves the registration of corporations that are intended or likely to receive section 35 payments from a land council in the NT. The ALRA requires these payments to be directed to CATSI corporations, but this requirement can be undermined if the land council exercises effective control over the corporation. The Registrar should in my view initiate an internal review to identify what actions might be taken to ensure existing and yet to be established corporations likely to receive section 35 payments are properly independent of the land council making the grant.

The issues raise questions regarding the adequacy of the ANAO’s financial audits of statutory corporations, in circumstances where there are subsidiaries (such as with IBA and ILSC) or as in this case, with corporations where there is no formal ownership, but effective control is exercised by other means. Similarly, while the ANAO performance audits of the NT land councils has been perhaps the watershed in allowing greater scrutiny to be undertaken in relation to the ALC, in retrospect, it is clear that they should have adopted a much wider frame of reference once they realised that an intricate web of interconnected financial transactions was involved. In the light of the revelations that have emerged since the ANAO performance audit was published, its recommendations appear increasingly inadequate and short-sighted. In my view, there would be merit in the ANAO undertaking an internal review of its performance in relation to the ALC and associated entities aimed at identifying any shortcomings or ways to improve its effectiveness. Further (and to reiterate a point I have made previously), it is time that the ANAO conducted a detailed performance audit of the implementations of the financial provisions of ALRA.

Finally, the ongoing imbroglio on Groote points to two further general points with broad policy significance.

First, the NIAA apparently has no permanent presence on Groote Eylandt despite the extraordinary complexity of the policy issues that shape and confront the local population. This was not always the case and reflects a much broader pull back by the Commonwealth of on the ground staff across regional and remote Australia. Without eyes and ears on the ground, Ministers cannot hope to obtain the quality information and advice required in a rapidly modernising and changing demographic, social and economic environment. Th incoming minister for Indigenous Australians would be well advised to immediately place staff on the ground in Groote Eylandt, and to commission a review of NIAA staffing aimed at reshaping its staffing profile to better reflect the locus of the major policy challenges it faces.

Second, I cannot resist noting, indeed emphasising, that the Groote imbroglio has only surfaced because of the serendipity of the ANAO audit and the persistent delving of the media. The trend towards ever less transparency by government in general and the Indigenous Australians portfolio in particular, is in my view of deep concern for its implications for democracy, but just as important, because it allows First Nations peoples aspirations and interests to be ignored. So much of what has occurred on Groote can be traced back to failures of Ministers to uphold their responsibilities, failures that are facilitated and arguably encouraged by the endemic lack of transparency across the public sector. How is it that we only learn this year that in 2018 a minister of the Crown approved in principle a mining agreement on Aboriginal land, and the formal agreement was approved by his successor in March 2021 (whose terms have never been made public) where the Chair and CEO of the land council were sitting on both sides of the negotiations leading to the agreement. They had a conflict of interest, but in my view, it is the former Minister who approved the agreement who should be held to account. The consequences of that decision are playing out today and the outcomes are as yet unclear; but may well lead to ongoing economic and social losses for the Aboriginal residents of Groote Eylandt.

 

26 July 2024

Addendum 280724

It has been brought to my attention that the AMT was originally assisted in its administration by the Myer Family Company which in 2017 merged with Mutual Trust (MT) (link here). It may be that MT continues to provide adminstrative assistance to the AMT, and not the ALC Royalty Management Unit in Cairns as was surmised in my original post. I have not been able to confirm this either way. Even so it does not change the broader underlying point that was being made.

Addendum 140125

Strike through and highlighted text represent corrections made on 25 January 2025