A strengthened Indigenous Procurement Policy: but uncertainties remain

The web of our life is a mingled yarn,

good and ill together.

All's Well That Ends Well, Act four, Scene three.

 

All that glisters is not gold ...

Gilded tombs do worms enfold.

The Merchant of Venice, Act two, Scene seven.

 

From today, 1 July 2026, the Indigenous Procurement Policy operates under tightened eligibility rules. To access Commonwealth contracts, a business must now be 51 per cent or more First Nations owned and controlled or registered as being Indigenous owned by the Office of the Registrar of Indigenous Corporations (ORIC). This raises the threshold for access to the scheme, up from the original 50 per cent ownership threshold that has applied since 2015. A transition year allows firms sitting on the old criteria to adjust. The Commonwealth's purchasing target also steps up, from 3 to 3.25 per cent, on its way to 4 per cent by 2029–30. Minister McCarthy's announcement (link here) leans on a decade of headline numbers: more than 91,000 contracts, over $14.2 billion, some 4,900 First Nations businesses.

On its face, this is the continuation of a policy success story I have followed, on and off, since its early years (link here and link here). The IPP has consistently exceeded its own targets, attracted bipartisan support, and — as I noted when the Indonesia-Australia trade agreement was being negotiated in 2019 (link here)  — proven durable enough that Australian negotiators went out of their way to carve out explicit protection for Indigenous policy measures in an international trade agreement. That is not nothing.

But the reform arrives alongside two bodies of evidence that should temper the optimistic tone of the Minister's release, and that between them go some way to explaining why the ownership threshold, rather than the systemic changes I would argue are necessary, is where this round of incremental policy adjustment has landed.

The first is the ANAO's 2025 follow-up audit of the Mandatory Minimum Requirements, which I wrote about on this blog in some detail last year (link here). I urge interested readers to have a look at that post. The ANAO found that between July 2016 and September 2024, 63 per cent of contracts subject to mandatory minimum requirements (MMR) targets — worth $69.3 billion — were exempted from them, often for reasons NIAA could not adequately explain or assure. NIAA had also quietly cancelled a promised evaluation of whether the MMRs work at all, with no record of who made that decision or why. When the ANAO recommended NIAA assure itself that exemptions were legitimate, NIAA declined, arguing this was a matter for the individual Commonwealth agencies issuing contracts under the devolved procurement framework — an odd position for the agency legislatively tasked with monitoring the effectiveness of Indigenous programs across government, including those delivered by other agencies.

The second is Christian Eva's recent analysis (link here and link here) in the Australian Journal of Public Administration, the first substantial quantitative study of who actually receives IPP contracts. Using FOI data spanning 2015–16 to 2022–23, Eva finds that the policy's aggregate success conceals a striking concentration: half of all contracts over $10,000 went to just 11 firms, and half the dollar value to 18 firms, out of roughly 3,900 businesses cited as beneficiaries. Forty-one per cent of contracts and 30 per cent of value went to firms based in the ACT, where only one per cent of the national Indigenous population reside; firms in the 50–51 per cent Indigenous ownership band — precisely the group the new eligibility rule targets — received the largest single share of contract value, while ownership status for 64 per cent of suppliers could not be verified at all. Eva's broader argument is that the IPP measures itself against volume and value targets that are relatively easy to meet, while leaving largely unexamined whether contracts translate into Indigenous employment, community benefit, or anything resembling Indigenous-defined success.

Read together, these two pieces of evidence point to the same gap: a policy whose headline metrics are exceeded almost by design, sitting on top of compliance and verification infrastructure that neither NIAA nor the available data can currently vouch for. Raising the ownership threshold to 51 per cent addresses the most legible version of "black cladding" — but Eva's own account of the practice describes far more sophisticated arrangements than a bare ownership percentage. Moreover, the announced reform does nothing to address the MMR exemption problem, the absence of an evaluation strategy, or the concentration of contracts among a small, capital-city-based cohort of repeat winners.

There is also a wider governance backdrop worth noting. My recent post on ORIC's regulatory performance (link here) — CATSI corporation reporting compliance has fallen from over 75 per cent to under 30 per cent since 2015–16 — suggests a portfolio-wide pattern of declining regulatory capacity, not something confined to procurement. The NIAA web page describing the current changes (link here) reveals that the NIAA will be outsourcing the verification process, or to use the jargon of bureaucratese:

To implement the strengthened IPP eligibility criteria, the NIAA will soon approach the market to identify a provider to deliver the verification services.

A strengthened eligibility test is only as good as the verification and assurance work sitting behind it, and on current evidence that work is thin.

None of this is an argument against the announced sensible but modest changes, aimed at strengthening the leverage of Indigenous business owners vis a vis potential partners in joint ventures seeking to win government contracts. It is however an argument against mistaking a tighter ownership threshold for a genuine answer to the questions Eva and the ANAO have both now put on the public record: who actually benefits from $14 billion in Indigenous procurement since 2015, and does anyone in government know whether the policy is achieving what it was designed to achieve?

A decade on, with the headline targets rising to 4 per cent, those remain open questions — and the ‘strengthened’ IPP, as currently designed, is not built to answer them. Commenting to the National Indigenous Times last December on the extraordinary expansion of Commonwealth procurement with Indigenous firms, Christian Eva commented (link here):

That's not nothing. But with any Indigenous program at a federal level, we really do need stronger transparency and stronger accountability.

I agree wholeheartedly. But I would sharpen those observations by noting that the announced changes appear to avoid the hard questions such as how to ensure that the Indigenous partners in joint ventures benefitting from the IPP — even when formally in control — are not co-opted or inappropriately induced to participate in business arrangements that allow mainstream businesses to access government contracting opportunities.

Removing these potentialities requires robust and coordinated regulatory oversight that to date has been absent, regular independent evaluations, and an acknowledgment that if the IPP is to be sustained, it must demonstrate that it is benefiting both the interests of First Nations business owners and the public interest more generally. The IPP if well designed and effectively implemented can be win/win; but without rigorous regulatory oversight, it can easily slide into lose/lose.

The record of the development of the IPP is a mingled yarn, good and ill together: the question the Minister’s announcement does not ask, let alone answer, is how much of the gold is real.

 

This post has been developed with the research assistance of Claude Sonnet 5

1 July 2026

 

 

 

Formidable Challenges Part Two: the pervasive conflicted interests permeating the Winchelsea mine development process

  

Oh, I have ta’en too little care of this.

King Lear, Act three, Scene four

The issues discussed here comprise a critique of the adequacy of the approval processes for the proposed Winchelsea mine (which are laid out in Part One of this Formidable Challenges post) and are in many respects merely an extension and reinforcement of the analysis included in my previous posts on this Blog, in particular my November 2025 post The Angels Weep (link here), my January 2026 post ANAO financial audits and the case for ALRA reform (link here), and my February 2026 post, The rough torrent of occasion (link here).

A central issue raised in the documents listed in Part One of Formidable Challenges relates to the potential for conflict-of-interest arising from the fact that the exploration and mining agreements required by Commonwealth and NT legislation involved negotiation between two parties, the ALC and Winchelsea Mining. The Chair of the ALC was Tony Wurramarrba (now deceased) and the ALC CEO was Mark Hewitt (now terminated). Two of the four Directors of Winchelsea Mining were Tony Wurramarrba and Mark Hewitt ostensibly representing the majority shareholder, the Anindilyakwa Advancement Aboriginal Corporation (AAAC). In other words, the Groote based senior officeholders in both the ALC and Winchelsea Mining were identical. The ALC, whose core statutory function under the ALRA is to protect the interests of traditional owners is required to negotiate the terms of any mining on Anindilyakwa Aboriginal land. Thus, in the negotiations between the ALC and Winchelsea Mining, the two senior officeholders on both sides of the metaphorical negotiating table were Tony Wurramarrba and Mark Hewitt. I have referred to this situation in Part One as the ‘dual roles’ of the two office holders.

The attachments to Document B1 (a DPMC brief to Minister Scullion dated 18 September 2018) include the correspondence from the ALC Chair and ALC CEO dated 15 August 2018 to the Minister outlining inter alia their proposed strategy for managing this potential conflict (paragraphs 16 to 18). Documents A4, a submission from the ALC dated 14 September and appended to the ALC correspondence to the Minister of 14 September and attached to the DPMC brief in Document A1 relate to the consultation processes for the exploration licence application agreement. These various documents contain a detailed account of the arrangements put in place by the ALC ostensibly aimed at ensuring that the ALC Chair and CEO played no role in influencing the ALC’s strategy in negotiating the two agreements, and there are formal statements indicating that the ALC Board was explicitly advised that Mr Wurramarrba and Mr Hewitt represented, and should be treated as representing, Winchelsea Mining in all discussions.

The DPMC brief largely describes in a factual manner the proposed disclosure and non-participation arrangements in relation to the mine consultation processes to be followed by the ALC Chair and CEO laid out in the ALC correspondence. It notes that the ALC engaged external legal advice from Arnold Bloch Liebler (ABL), noted that the ALC had reduced the CEO’s remuneration package (to be reviewed in 12 months) and that the ALC Mining and Environment Manager would assume administrative responsibility of ALC matters related to Winchelsea Mining.  It seems probable that ABL were engaged very late in the consultation process, though neither ALC nor PMC made this clear in their advice to the Minister. The Department expressed a minor concern that it appeared that the ALC had not confirmed that they had been advised of the proposed remuneration the Chair and CEO would receive from Winchelsea Mining and provided suggested correspondence seeking clarification. There was no general expression of concern as to the workability nor the wisdom of the conflict mitigation arrangements proposed by the ALC. As noted in Part One, the released documents do not include the signed copy of the brief nor a copy of the signed letter if it exists. The letter attached to the brief was (inappropriately in my view) excluded from the FOI release on the basis that it was a draft. The fact that the final letter has not been identified or released in response to the FOI request, and nor has a version of the ministerial submission with his annotations suggests that the Minister never sent the letter expressing the PMC concern to the ALC. In turn, this decision suggests that the Minister did not wish to ask for advice that he knew would reveal and document (and thus record his knowledge of) the extent of the financial benefits flowing to the two senior ALC officers from their dual roles.

Part of the implicit justification for the existence of these arrangements (see paragraphs 4 to 8 of the PMC brief) was that the AAAC Rule Book provides for the representation of the ALC Chair and CEO on the Winchelsea Board. This glosses over the fact that the ALC (or at least its key officeholders including Mr Hewitt and perhaps Mr Wurramarrba) assisted in the incorporation of AAAC in December 2017 with the specific purpose of taking over the extant exploration licence applications on Winchelsea Island and surrounding areas. Those officers included this provision in the AAAC Rule Book, thus establishing the potential conflict which they then ostensibly sought to mitigate.

Up until the death of the former Chair and the termination of Mr Hewitt in 2024, the two clans who are the traditional owners of Winchelsea Island and provide the entirety of the Directors of AAAC had no representation on the Winchelsea Mining Board of Directors notwithstanding that the AAAC theoretically controls Winchelsea through its 70 percent majority shareholding. This is yet another instance of the ALC exerting potential (and thus effective) control over a local corporation to which it has also provided s64(3) funding at its discretion.

The ALRA provides that once an exploration agreement is approved, the traditional owners cannot refuse to provide their consent to mining. However, it does require a mining agreement be negotiated by a land council and then approved by the Minister, but his/her ability to refuse consent at the mining lease stage is limited to a determination of inconsistency between the terms of the licence and proposed lease, and/or that the national interest requires refusal (refer s47(3) of ALRA). It follows that the consideration of the application for an Exploration License is in many respects much more consequential than the ministerial consideration of the proposed mining lease.

In the Brief to Minister Scullion in relation to the approval of the Exploration Licence agreement (Document A1, para 9) the Department fails to alert Minister Scullion to the implications of section 47 of ALRA. The brief states

The material provided by the ALC supports the assertion it has complied with its statutory obligations in these matters and the Department recommends you give the consent and approval requested.

Note the ambiguity in this sentence revolving around the words ‘supports the assertion’. The ALC supporting material outlines a rather bizarre consultation/negotiation process, outlining extensive meetings over six months or so in 2017 (see para 7.15) culminating in a majority (and perhaps unanimous) vote by a group of traditional owners of Winchelsea Island approving terms of a proposed exploration licence agreement to be negotiated with Winchelsea Mining which was yet to be established (see para 7.10; the nature of the vote has inexplicably been redacted on personal privacy grounds. This redaction may be intended to hide the small number of traditional owners who provided their consent). This was followed by a confirmatory meeting to confirm the decision of traditional owners at a meeting on 14 September 2018 attended by an un-named PMC officer and un-named Winchelsea Mining representatives (para 7.14). Whoever the Winchelsea representative was, there is no record of any constraint operating to prevent them subsequently identifying to the Chair and to Mr Hewitt any traditional owner who argued against the proposal. This is a significant flaw in the process. The ALC formally approved the exploration agreement on 10 September 2018, eleven months later. The extent to which the Winchelsea traditional owners were ‘as a group’ consulted on the final agreement is left unclear. The Chair and CEO absented themselves from the part of the ALC  meeting which considered the mining agreement and did not vote (see para 4.4). There is no indication that they had been absent from the consultations throughout 2017, and no indication that they had not been involved in Winchelsea’s framing the proposed approach to exploration (a matter that in theory may have been of concern to Winchelsea shareholders).

The issue of the addressing the potential conflict of interest of the ALC Chair and CEO by requiring that they not participate in the final meeting of the whole process has all the markings of being an afterthought. What is clear is that Minister Scullion in providing his approval for the exploration agreement implicitly confirms that he accepted the dual roles of the Chair and CEO on both the ALC and Winchelsea Mining. The Department, by virtue of recommending his approval without raising substantive concerns, did the same. The brief was copied to the Secretary and senior echelons of the Department of Prime Minister and Cabinet and to the Prime Minister’s Office. Based on my experience at senior levels of government over 30 years, I find it difficult to comprehend how in these circumstances such a brief could have been prepared and provided to a Minister, and inconceivable that a Minister who took his responsibilities seriously could have approved it.

The approval of the proposed mining agreement by Minister Wyatt was based on two briefs provided by NIAA in June and July 2021. They were based on consultations undertaken by the ALC extending from November 2020 through to March 2021. Documents B2, B3 and A10 refer.

The issue of conflict of interest (in contrast to the Exploration Agreement process discussed above) is dealt with in detail in the equivalent summary of the consultations outlined in Document A10. See the detailed processes put in place presumably on legal advice (see section 5). While those processes were orders of magnitude more comprehensive than what occurred at the Exploration Agreement phase, they did not relate to the provision of consent, and more importantly were to my mind seriously flawed and inadequate for the following reasons. All of these reasons also operate to undermine the legitimacy and probity of the decision processes on the exploration lease agreement.

First, their effective operation is limited to the formal engagements of the Chair and the CEO of the ALC with issues related to the proposed Winchelsea mine. Second, I understand that the then Chair’s spouse was on the Board of the ALC, and privy to all discussions about the agreement. Third, from 2018 through to 2024, the CEO’s spouse Sophie Liu was employed in the ALC Royalty Development Unit as well as Groote Holdings Aboriginal Corporation and Winchelsea Mining (link here) and was likely privy to agreement related information either formally or informally. Fourth, it seems highly likely that up to three AAAC Directors were also Directors of the ALC during the relevant period yet were not required to declare a potential conflict of interest. ALC Directors in March 2021 included Archie Jaragba, Lionel Jaragba, and Silas Bara all of whom had involvement in AAAC as members and Directors and were also potentially conflicted.

Adding some further heft to my critique, it is worth noting that the ANAO in its May 2023 Performance Audit (link here) was critical of some elements of the consultation processes related to the mine (see paras 3.74-3.76), including poor information on risks, poor record keeping and inadequate processes for updating traditional owners on changes subsequent to their approval. Consistent with its narrow focus on its remit, the ANAO did not consider let alone form a conclusion on the matters I have raised above and below.

Like Minister Scullion, Minister Wyatt implicitly acknowledged and accepted the dual roles for both the ALC Chair and CEO. As with Minister Scullion’s decision, it is difficult to conceive how a Minister charged with the responsibility to be satisfied that the land council has complied with its statutory responsibilities to protect the interests of traditional owners could approve a formal agreement infected with so many potential conflicts.

In relation to both Minister Scullion’s and Minister Wyatt’s approval processes the most fundamental potential conflict of interest went unacknowledged. The mitigations proposed in both cases to deal with the dual roles of the two statutory officeholders, inadequate as they were, applied only to the negotiations of the two agreements which required ministerial approvals. Yet the potential conflicts arising from their dual roles extended well beyond those processes, including to the subsequent approval of section 64(3) payments to Aboriginal corporations directed to mine related investments.

Neither Minister Scullion nor Minister Wyatt appeared to have given any consideration to the ongoing risks involved in these processes. It is unclear if the Department/NIAA ever provided advice to the two Ministers about this matter, but to date there has been no document released which suggested that they did. In any case, it was the Ministers who were ultimately responsible, and who failed to take the remedial action that would have prevented the apparent misallocation of those funds.

In my previous post The Angels Weep, I recounted advice to the Estimates Committee that suggests that in excess of $70m may have been misallocated by the ALC in supporting the proposed mine. The ANAO in its May 2023 Performance Audit of the ALC (link here) identified the risks of actual conflicts of interest arising from these dual roles as being high. It documents funding decisions by the ALC which overtly favoured applications sponsored by the CEO on behalf of GHAC and AAAC, corporations in which he was involved either directly or indirectly and which were focussed on supporting the proposed mine. See paras 4.45-4.50. But the ANAO stepped back from overt criticism of the CEO in relation to those risks perhaps in deference to the fact that both ministers had implicitly approved the dual role arrangements. The ANAO also documented the excessive costs and the potential conflicts of the Chair of the ALC Audit and Risk Committee but stepped back from overt criticism of either the accounting firm involved or the ALC CEO who oversaw the appointments and the apparently excessive payments involved. In my view the ANAO was unduly cautious; it identified the dots, but declined to connect them, an approach that allowed the Minister and NIAA to fudge the import of the ANAO report and thus facilitate the persistence of the status quo ante within the ALC for over a year.

Following the ANAO audit, one might have expected Minister Burney to reconsider the approach adopted by her two predecessors and initiate robust action to improve governance oversight of the ALC. Instead, as documented in many of my previous posts, she prevaricated and fudged the issues and so has Minister McCarthy (who was an Assistant Minister in the portfolio during Minister Burney’s tenure). In my recent post ANAO financial audits and the case for ALRA reform, I suggested the existence of

a deeper malaise characterised by ongoing and increasing financial risk, and the possibility of wider social consequences that are not visible through the lenses used by governments and their bureaucracies. In my view, that malaise extends to the absence of effective regulation by successive ministers and their agency, NIAA. 

The documents now released under FOI serve to reinforce these conclusions, and make crystal clear that former Ministers have made egregiously poor policy decisions that appear at best to amount to maladministration and which are at the root of the governance failures which have pervaded the ALC. The evidence embedded in the documents released so far suggest that PMC and NIAA failed dismally in providing Ministers with both forthright and high-quality advice. It was only after a scathing media story based on information from an ALC whistleblower identified an attempt by Mr Hewitt to be granted a substantial equity share in Winchelsea Mining, that the NIAA (presumably instructed by the Minister) referred the matter to the NACC for investigation. Since October 2024 when Mr Hewitt was terminated, there has been a revolving cascade of changes at the senior levels of the ALC.

As I write this, the ALC Annual Report for 2025 due at the end of October 2025 is not yet available, the AAAC financial reports for 2024 and 2025 have not been published as required by the CATSI Act, and there have been no filings to ASIC by Winchelsea Mining Pty Ltd since 2024. ORIC have an investigation underway into GHAC but have not provided any reasons for why they are taking this action. The ALC appear to have stepped away from their commitment to assist these corporations representing traditional owners and which was the rationale they provided to Senate Estimates to justify their intense involvement in the Winchelsea mine proposal. And of course, some two years since complaints were first made to it, the National Anti-Corruption Commission is still considering whether to issue a report in relation to matters related to the operation of the ALC on Groote. Notwithstanding all this, the last two Senate Estimates Hearings have allocated negligible time to ALC issues. 

There are two elephants in the room which no-one with formal oversight responsibilities wishes to acknowledge, let alone discuss. The first is that the problems emanating from the potential conflicts of interest involved not just Mr Hewitt, but the former Chair Mr Wurramarrba, and potentially extended to numerous other individuals beyond those two. Moreover, in terms of their formal decisions, the ALC Board were fully supportive of the strategies being pursued by the Chair and the CEO from the beginning until Mr Hewitt decided, a month before his termination from all roles on the Groote Eylandt, to offer to resign as CEO to allow him to focus on the operations of Winchelsea Mining. In this respect, there are logically two possibilities: that the ALC Board members were effectively manipulated by the architects of the Winchelsea mine proposal to provide the ongoing formal support required; or, the ALC Board was fully committed to the strategy of developing the mine based on their independent and considered assessment, a strategy that they suddenly reversed without explanation at a potential cost in excess of $70m to the traditional owners of Groote. Neither option is attractive to contemplate, but it requires contemplation and consideration if the reforms necessary to ensure the current problems and recent mistakes will not be repeated and the necessary reforms are identified and put in place. My basic point is that the responsibility for whatever adverse findings and adverse outcomes emerge over the next few years cannot be laid solely at the feet of one individual, the former CEO Mr Hewitt. The issues within the ALC extend beyond one individual.

The second, and more significant elephant in the room is that successive Ministers have made egregious policy errors which in my view amount at best to maladministration and which have led to disastrous outcomes for the residents and traditional owners of Groote Eylandt. Again, whether the Ministers were merely incompetent and poorly advised, or were disposed to prioritise political advantage over the public interest is unclear. Without full transparency, concerned citizens and taxpayers cannot form a judgment. Whichever reason applies, citizens and the traditional owners of Groote Eylandt (as well as the wider Australian public) have a right to expect better.

It is significant that it has taken eight years for the documentary evidence of direct ministerial involvement in, and knowledge of, these conflicted roles within a Commonwealth statutory corporation to emerge into the public domain. Remember, this is a statutory corporation with responsibilities for the protection of traditional owner interests and the allocation of millions of dollars in compensatory financial benefits related to existing mining operations. Throughout this period, and continuing to the present day, ministers and governments have deliberately attempted to obfuscate and distract attention. The continuation of efforts to avoid transparency merely serve to raise further questions about what drove the initial decisions and continues to drive the inability to lay myriad unanswered questions to rest.

In my view, the Commonwealth has both an obligation and a long-term incentive to establish a necessarily independent and wide-rangeing investigation process that will allow such a comprehensive consideration to occur. While determining whether corrupt conduct has taken place is important, it is not necessarily the remit of the NACC to expiscate the broader systemic issues that have allowed the significant misallocation of funds appropriated by the Parliament for the benefit of traditional owners, and they may well decide not to do so. If that occurs, at least three years will have been wasted. The establishment and subsequent handling by NIAA of the previous investigation undertaken by Bellchambers Barrett avoided the issues related to the potential misallocation of funds and gave no consideration to the conduct of agencies and ministers; consequently, it was deliberately designed as a diversion, and has undermined the credibility of the recent ministers within the Indigenous Australians portfolio.

In any case, the ongoing failure to address the underlying causes of the myriad policy challenges facing the ALC will mean that the responsibility for the egregious policy errors that have torn the ALC apart and set back the aspirations and life-opportunities available to the Anindilyakwa people will continue to taint the operation of the ALRA, and the legitimacy of governments and their officials.  

The ALC have recently appointed their fourth acting or permanent CEO in less than two years. Without reflecting in any way on the new CEO’s capacity and ability, I believe the structural forces that have been in play, and which likely continue to operate, are such as to make the prospects of him delivering or oversighting sustained reform well-nigh impossible.

For the Commonwealth, and in particular the Minister for Finance who has responsibility for the Public Governance, Performance and Accountability Act 2013 (PGPA), the continuing challenges facing the ALC represent a test case for the robustness and effectiveness of the whole system of Commonwealth public sector administration. If the ALC were a local government in any jurisdiction in Australia, it would be facing the prospect of an Administrator being appointed. In my view, strong grounds exist for the Prime Minister to request the Minister for Finance to step in and make arrangements for the direct oversight the operations of the ALC for the next three years or so to ensure that there is a sustained return to complete compliance with the ALRA and the PGPA. Such a step would have the additional benefit of providing the Government with an independent perspective on desirable systemic reforms to the financial architecture underpinning the ALRA more generally and create the foundations to underpin the reforms that are required to ensure that the ALRA survives another fifty years. Without robust and decisive action by Canberra, the prospects of the ALC avoiding a governance meltdown over the coming five years will be close to zero. If this occurs, the reputation and legitimacy of the Commonwealth public sector will suffer yet a further body blow.

Whichever course is chosen, the challenges ahead for both the people of Groote Eylandt and the Commonwealth public sector will be formidable.

 

29 March 2026

The Missing $41m payment from AMT to ARAC: a trust deficit

 

Round and round the cauldron go;

In the poisoned entrails throw….

Sweltered venom, sleeping got,

Boil thou first i’th’ charmed pot.

Macbeth, Act four, Scene one.

 

In my previous post (link here), I provided commentary on a number of the Questions on Notice asked by Senator David Pocock. I mentioned in that post that I would deal with this question in a separate post. Unfortunately, it involves both a convoluted narrative of events and some accounting issues. The bottom line however is much simpler: a Senator asked a question in good faith based on allegations made in correspondence from residents of Groote Eylandt, and received a dismissive, misleading and probably substantively incorrect response from the NIAA which we must presume had the endorsement of the Minister which raises more questions than answers.

Here is the question and answer provided:

Senator David Pocock’s Question #8

In an article dated 20 July 2024, The Saturday Paper referred to correspondence to your predecessor signed by dozens of Groote residents which alleged that an amount of $41m was paid from the Anindilyakwa Mining Trust (AMT) to the Anindilyakwa Royalties Aboriginal Corporation (ARAC) but which has not been accounted for. A recent review of the relevant publicly available financial statements pertaining to ARAC appears to confirm this. There is also explicit evidence that the ALC effectively controls ARAC and has a direct role in managing ARAC finances. Is the Minister/NIAA aware of the $41m payment and if so has the matter been investigated? If not, will the Minister instruct the NIAA or ORIC to advise her regarding the $41m payment and the circumstances of its payment by the AMT and receipt/utilisation by ARAC?

NIAA Answer #8

The NIAA has made enquiries regarding the recognition of payments made from the Anindilyakwa Mining Trust (AMT) to the Anindilyakwa Royalties Aboriginal Corporation (ARAC) and has been informed that reporting differences arose because of the entities recognising these transactions in different financial years. The NIAA notes that the accounting records of both entities are subject to independent audit. Detailed questions regarding the recognition of financial transactions of the ALC and associated entities should be directed to the ALC.

Below I set out my detailed commentary on the answers to the question and various related issues:

Comment mcd #8

I have previously posted contextual comments on this issue in three posts. The posts were titled Royalties, flawed governance and non-transparency: a potent brew (link here) dated 26 July 2024; The Anindilyakwa Royalties Aboriginal Corporation: micro accountabilities; macro policy implications (link here) dated 3 August 2024; and Annual Reports on Groote: an unconventional assessment (link here) dated 18 January 2025. I strongly recommend that readers keen to understand the context within which the AMT, ARAC and the ALC operate read these posts, especially the first two.

In the light of the NIAA answer provided above I sought to revisit the financial statements for the relevant periods. I was surprised to find that the 2022 Audited Financial statements for ARAC had been removed from the ORIC website without explanation. I find this somewhat strange especially given its relevance to the issues raised by the correspondents form Groote referred to in the Saturday Paper article. I requested a copy and was provided one, but as of 24 February 2025 it has not been published on the website. Financial statements for the previous years which I had obtained from ORIC in 2024 have still not been published on the ORIC website. Given that section 35(2) of the Aboriginal Land Rights (Northern Territory) Act 1976 requires land councils to distribute section 64(3) royalty equivalent payments on to CATSI corporations, there would seem to be substantial merit in the Registrar ensuring that the financial statements of CATSI corporations in receipt of such payments are published on the ORIC website. In any case, should readers wish to read the relevant financial statements I cite below, I suggest you contact ORIC direct.  

The basic facts are as follows.

The 2022 AMT financial report lists under the heading Grants a payment to ARAC of $41,324,957.

The 2022 audited financial statement for ARAC under the heading Revenue 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 income is listed as $23.0m. There is no record of any grant being received from the AMT.

The 2023 audited financial statements for ARAC identify a series of grants and other revenue, including $31.9m in section 64(3) payments from the ALC.  Total income for 2023 is $40.2m. In addition, an amount of $8.1m in investment income is recorded. There is no record of a grant or payment for $41.3m being banked in the 2023 year.

In neither ARAC financial report is there a line item showing a payment of $41,324,957. The explanation provided to the Senate by NIAA that the payment was recognised in a different financial year is thus prima facie incorrect. Moreover, it has the effect of misleading the Senate and the wider community. That is not to say there may not be a perfectly appropriate explanation, but without a forensic audit that identifies the bank account(s) into which the AMT payment was deposited, we will never know.

The comment in the NIAA answer about the financial affairs of the relevant entities being independently audited reeks of either naïveté or an attempt at gaslighting. Auditors can make errors or be provided with incorrect information.

As pointed out in my previous post on ARAC (link here) and extracted in the Appendix below, the ARAC 2022 financial statements identify the cancellation of an infrastructure debt commitment (for $39m) from AMT to ARAC. Whether the auditor was misinformed or failed to follow up the issue, it is clear that the $41m was not deposited in the 2022 year (and not in a later year) and that this is reflected in black and white text in the 2022 financial statement. This reinforces the conclusion that the unidentified person who the NIAA consulted regarding the transaction has misled them; they in turn have misled the Minister and she in turn has misled the Senate (given that Ministers approve or are responsible for answers to Questions on Notice).

Rather than focussing on the independence of auditors while providing incorrect information, NIAA should perhaps focus on the persons who do have the requisite knowledge, namely, the Directors of ARAC. The Directors of AMT and of ARAC were identical and apart from independent Directors were also ALC Board members (see the discussion in my earlier post ‘a potent brew’ (link here). Both the AMT and ARAC Boards considered and formally resolved to approve and certify as true and correct the financial statements for the respective entities in the 2022 year. Prima facie (even on a hypothetical assumption that the NIAA explanation is correct) there appears to have been a failure of the ARAC Board to identify the absence of the $41m grant in ARAC’s revenue for 2022 and 2023. Has the Minister or NIAA requested the Registrar of Aboriginal Corporations to investigate this prima facie error? In this context, see the comments in my recent post on annual reports (link here) related to the ARAC Board’s decision to purchase at considerable cost (sourced from funds notionally provided for the benefits of traditional owners) personal liability insurance for the Directors. Did this decision raise any concerns with the Registrar or the NIAA when it was reported in the ARAC financial statements? And if not, why not?

The assumption that in the face of allegations of a missing $41m, that NIAA, the ALC’s regulator, would ask a person they fail to identify for an explanation and then accept that explanation without being taken through the detailed figures that would allow the allegation to be put to rest, seems at best naïve and incompetent. The fact that this explanation is confidently provided to the Senate as if there is nothing to see here is extraordinary. It reeks in my view of indifference, deliberate disregard, obfuscation and disrespect.

The whole purpose of the Estimates process is to allow Senators to obtain an explanation from the Executive arm of the activities of agencies and corporations within a legislative framework that is entirely the responsibility of the Minister. If the NIAA can’t provide the assurance the Senate seeks, they should themselves take the action necessary to obtain it for Senate. ARAC is not an entity that appears before the Estimates Committee and is incorporated under the CATSI Act that comes within the Minister’s portfolio. The ALC which appears to exercise effective control over ARAC and assists with its bookkeeping and preparation of financial statements is within the Minister’s portfolio. The former CEO oversighting ARAC’s bookkeeping has been dismissed by the ALC at a meeting attended by the NIAA on grounds which the Minister has seen fit not to make public. The former CEO’s spouse (who has not been mentioned in any of the public statements related to the termination the CEO by the ALC and the Minister) was at various times an employee of the ALC working in the Royalty Development Unit that assisted corporations such as ARAC with their finances and operations.

Conclusion

Given the complex web of potential and actual conflicts of interest in play, and the fact that there is a missing $41m also in play, the Minister and the NIAA have an obligation in my view to do much better than they have with this answer and the others discussed in my previous post.

Indeed, given the extraordinary refusal to agree to commission an independent forensic investigation (bearing in mind that not all malfeasance will necessarily be corrupt or criminally illegal), it is difficult to avoid the conclusion that the Minister and NIAA are, through their inaction and deliberate obfuscation, contributing to the social and economic harm that will inevitably emerge once the full ramifications of the maladministration on Groote becomes apparent.

The Minister and her agency are accruing a substantial trust deficit through her unwillingness to be transparent on what has transpired within the ALC and its associated entities. Given the standard of answers provided to the Senate in response to Senator Pocock’s questions, that trust deficit will inevitably continue to grow unless decisive action is taken. My recommendation is that the Minister should immediately request the ANAO to undertake or commission a comprehensive and independent forensic audit of the operations of the ALC and its associated entities over the past seven years.

Without such decisive action, the levels of distrust will at some point reach a tipping point where wider political consequences will take hold and potentially destroy the current institutional framework of land rights as we know it. In the meantime, the fallout will inevitably have adverse impact not just on the constituents of the NT land councils, but on those nominal servants of the public interest who have been prepared to look away while the cauldron of distrust boils over.

 

Appendix

The following text is taken from my previous posts and provides more contextual detail on the information above. It has been lightly edited.

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

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. [mcd comment 24 Feb 2025: it is worth noting that the payment of $6m from AMT to ARAC was transparently listed in ARAC’s revenue for the 2018 FY. A clear contrast with 2022 and 2023.]

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 was previously available on the Registrar of Aboriginal Corporations website. It has been taken down (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 income 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 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. The staff servicing ARAC Board meetings and probably implementing 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).

 

Extract from The Anandilyakwa Royalties Aboriginal Corporation: micro accountabilities; macro policy implications

Each of the six ARAC financial reports from 2017 to 2022 inclusive include a statement, signed by two Directors and resolved by the Board, outlining the corporation’s purpose as follows:

The Corporation's operations purpose [in its first year] has been, to hold assets and manage statutory royalty equivalents and negotiated royalties in such manners as determined by the Anindilyakwa Land Council, consistent with its goals for effective, responsible and sustainable use of such royalty flows [emphasis added].

This statement appears to make plain that the ALC exercises direct control over the operations of ARAC….

… In my previous post I noted that the payment of $41m from the AMT to ARAC did not appear to be accounted for in the ARAC 2022 financial statements. With the availability of the previous year’s reports, it was possible to track the recording of an amount of $39,147,311 as an ‘AMT infrastructure debtor’ in the ARAC 2020 and 2021 financial reports. In 2022, the year that the AMT paid ARAC $41,324,957, there was no record in ARAC’s Financial statements of any such grant being received. However, there was a line item now called Payment in Advance (whereas it was previously termed AMT Infrastructure Debtor) which showed an outstanding debt of $39,147,311 in the previous year, but nil in the current 2022 FY. Rather than resolving the problem, this treatment of the outstanding commitment, whether intentional or not, obscures the recipient of the payment while acknowledging that the commitment no longer applies. [The discrepancy between the amount of $39m and $41m appears to be related to differing CPI treatments of the original commitment by the AMT and the ALC].

 

24 February 2025

The deeper corruption at the heart of the governance issues on Groote Eylandt

 

He draweth out the thread of his verbosity

finer than the staple of his argument.

Love's Labour's Lost, Act 5 scene 1

 

The Minister for Indigenous Australians, Malarndirri McCarthy has released the review into the Anindilyakwa Land Council commissioned by the former Minister in February 2024 (link here).

The Minister’s media release (link here) refers to the review as ‘the Independent Review’, however this is complete spin as the review which was ostensibly prepared by accounting firm Bellchambers Barrett, was clearly undertaken with close oversight by the NIAA (who arguably are not independent given their previous funding of projects associated with the proposed Winchelsea  mine), and in conjunction in many respects with the ALC. The final report is signed and approved by three individuals: Cherelle Wurrawilya, Chair of the ALC, Sean Worth, Group Manager integrity NIAA, and Russell Livermore, Partner Bellchambers Barrett.

The report avoids providing a clear statement of the formal terms of reference provided to BellChambers by NIAA, and provides only general information on the dates from which the review began work. The time frame covered by the review is limited to the date of publication of the ANAO Audit and extends to July 2024. It is apparent from the context that the review is focussed entirely on the progress (or lack thereof) in implementing the ANAO recommendations which as I pointed out in previous posts was itself focussed on process and not outcomes, and limited to the operations of the ALC. The Review was not focussed (except in an indirect manner) on the ways in which the ALC has been utilising the various related entities in receipt of royalty equivalents (which are required to be CATSI corporations) to bypass the legislative constraints on ALC actions and/or to obscure financial flows directed to various commercial projects (such as the proposed Winchelsea mine and perhaps retail activities of various kinds on Groote).

What is missing from the Bellchambers Review is any context. There is no explanation of the role of the Minister and her responsibility for ensuring that statutory entities within her portfolio are complying with both their establishing legislation and various other Commonwealth governance requirements such as those set out in the PGPA legislation. There is no explanation of the role of land councils in the NT, of the way in which the royalty regime operates, of the significance of the ABA, nor of the regulatory frameworks in place in relation to distribution of royalty equivalents and other mining related payments. There is no mention of the substantial dissatisfaction amongst numerous residents on Groote with the ALC’s operations as evidenced by the petition signed by some 200 people and tabled in Parliament earlier this year. There is no mention of the fact that a Commonwealth entity (and I am reliably informed a number of other individuals) have lodged complaints with the National Anti Corruption Commission. I was reminded of the episode of Fawlty Towers ‘Don’t mention the war’ (link here).

Instead, what we have is a technical exercise in bureaucratic pedantry focussed on the extent to which various processes recommended by the ANAO have been implemented.

I am not proposing to undertake a detailed critique of the analysis by Bellchambers related to the ALC’s compliance with process requirements. They conclude that the ALC response to the ANAO recommendations relating to various governance process requirements remains deficient. Focussing on process is useful, but it no substitute for focussing on outcomes. The allegations of outcome deficiencies (potentially involving tens of millions of dollars) demand a regulatory response. It is not good enough to say that this is an issue for the ALC nor to say that the NACC is investigating.

I will make some short comments on the recommendations of the Bellchambers Review set out in section three under the anodyne heading Identified Enhancements to Governance.

Under theme one dealing with conflicts of interest, the Bellchambers Review recommends inter alia:

1. The ALC Board and Management should review all roles for Board members and ALC Management and assess whether: a. It is possible to effectively manage identified conflicts of interest for: i. the dual remuneration CEO positions for ALC and Winchelsea Mining Pty Ltd. ii. related party entities / ORICs that are beneficiaries of funding decisions made by the ALC Board. b. Management strategies for declared conflicts by ALC Board members or Management, including conflicts relating to immediate family members, are appropriate and operating effectively.

My comment: this is extraordinary. Bellchambers and the NIAA appear to believe that an entity whose key members are the subject of multiple allegations involving financial impropriety and are the subject of a current NACC investigation should be trusted to decide how to manage the conflicts of interest identified by the ANAO and more than a year later are still in place. Do Bellchambers and the NIAA believe that the systemic networks of conflicts were put in place by accident or oversight? Get real! Furthermore, the recommendation explicitly accepts that the ALC CEO, who as a statutory office holder is paid a salary determined by the Commonwealth Remuneration Tribunal (based on the fact that the CEO is employed full time), should also be the recipient of a private sector salary, and by implication will not be providing full time services in his role as the CEO.

The ALC response includes, after some anodyne pabulum:

The Board has commenced this review for the ALC CEO position. On 22 August 2024 the Board resolved to give in principle support to the draft NIAA report finding that the ALC CEO no longer also be the CEO of Winchelsea Mining. Specifically, in an ordered way, the ALC Board resolved to give in principle support to the current ALC CEO’s proposal that he cease in the ALC CEO role and commence as a consultant for Winchelsea Mining and Groote Holding Aboriginal Corporation matters, which consultancy is anticipated to include other pressing matters particularly the GEMCO mine closure and Transition Steering Committee. A final decision about the current CEO’s proposal will be made by the incoming ALC Board (ie after current elections) after receiving the NIAA’s final Independent review report.

My comment:

The CEO is proposing to resign as CEO of Winchelsea Mining but remain as a consultant and presumably a Director. Given the small size of Winchelsea, its tight Directorship structure, and its low staff numbers, it beggars belief that Mr Hewitt would exercise any less influence as a consultant than as CEO. Furtehrmore, there are real questions as to why the CEO is on the Board and not any members fo the corporation who actually own the stake in Winchelsea (see below). Moreover it also beggars belief that the Minister and the NIAA are prepared to openly countenance what is in effect double dipping by a statutory office holder employed in a statutory corporation.

ERRATUM: It has come to my attention that I have probably misinterpreted the highlighted text above and that the proposal from the ALC is that the ALC CEO will resign as CEO of the ALC (and not as I had read it as an ALC representative Director on the Winchelsea Board). 

While this would be a signfiicant imporvement on the status quo, to the extent that the current CEO excercises substantial informal influence, it may make no difference whatsoever. It is unclear why Mr Hewitt would need to take up the role of consultant on Winchelsea given that he is already a Director. Presumably the issue of remuneration (potentially funded by the ALC or AAAC (the corporation which owns the Indigenous equity in Winchelsea) provides part of the reason. END ERRATUM

Under theme two, the Belchambers Review recommends:

The ALC should collate information for all remuneration, benefits and related party transactions for ALC Board members, ALC Management, immediate family members and related party entities / ORICs to support enhanced transparency and information for Board members. The remuneration, benefits and related party transactions should be subject to periodic review and update and used to ensure that all remuneration, benefits and relathed party transactions are appropriately authorised and monitored. 

My comment: As the ALC response points out, it is unclear that the ALC has the formal powers to collect this information. Again this is an entirely passive and anodyne. More importantly, where is the critical engagement by the NIAA Integrity Group?

Under theme three, the Bellchambers Review recommends:

3. The ALC should establish an Independent Board Advisor Role with direct responsibilities to the Board including: a. Understanding Board matters, papers and forward workplan agenda b. Governance matters, including monitoring of conflict of interests and associated management strategies c. Governance training d. Supporting attendance / participation by the full Board….

My comment: apart from the logistical and communication challenges, this is precisely the role of the CEO of the ALC. It implicitly accepts that the current CEO has been incapable and unwilling to provide the level of independent advice required by the Board. There is a simple and clear solution to that problem which for some reason entirely evades the Minister and her NIAA advisers.

Under theme four, the Belchambers Review recommends a closure process for the ANAO recommendations.

My comment: this is core business for the ALC Audit Committee which is chaired by the partner in an accounting firm whose services in relation to the Audit Committee the ANAO identified as being the most expensive by far of the four land councils, and which is itself heavily conflicted by virtue of the provision of other services to corporations which are controlled indirectly by the ALC. The ALC response foreshadowed requests for additional funding to cover off a function which is already overfunded and which is clearly compromised and ineffective. None of this appears to be on the radar of the NIAA Integrity Unit!

The Real Story

Minister McCarthy’s media statement identifies only two substantive actions arising from the review:

I have written to the ALC Board to ensure the Board and voters are aware of the review’s findings ahead of the ALC Board elections next week.

I have taken the unusual decision to withhold approval for the ALC’s 2024/25 budget, instead approving an operational budget until 1 December 2024. The full budget will only be considered when ALC has demonstrated to the NIAA that it is sufficiently prioritising and implementing the recommendations of the review and the ANAO audit.

These are worthy steps, create an impression of diligent oversight, and are completely irrelevant to addressing the fundamental governance issues confronting the ALC and impacting the future  financial security of Groote’s 1200 residents (and their descendants).

In my view, the Bellchambers Review was from the start designed as a diversion to avoid addressing the deeper and systemic governance challenges that have emerged on Groote since the current CEO was engaged by the ALC. The previous posts related to Groote on this blog have primarily dealt with the widespread allegations of substantive governance and accountability failure and the concomitant adverse policy implications. I wont link to those posts here. They deal with inter alia the significant diversion of mining related financial payments towards the development of a proposed mine on Winchelsea Island; the financial arrangements related to the ownership of Winchelsea Mining Corporation; discrepancies between the investments being allocated towards Winchelsea and the value of the identified manganese deposits on Winchelsea; the governance and potential financial implications of the ALC’s apparent control of the financial affairs of key corporations in receipt of royalty equivalents; the conflict of interest implications involving the CEO, his spouse, the chair of the ALC Audit committee; and the extraordinary financial benefits made available to former ALC Board members at the discretion of the Board (which raises questions regarding potential for co-option and undue influence). And much else besides. Many of these issues have been raised either directly or indirectly in Senate Estimates Hearings, in a number of substantial investigative reports in the SMH and the Saturday Paper, and have been the subject of correspondence to Ministers from concerned parties.

While the formal response from the ALC has been to reject some (but not all) of the allegations or argue that they are misdirected, the response from Ministers has been to ignore these issues, except insofar as a review of ALC processes, not substantive allegations was commissioned. Until this week, the Bellchambers Review (whose terms of reference have still not been released) in effect served as the foil to avoid having to respond to the substantive issues.

So in addition to the complex and myriad issues related to the ALC and its governance, it seems to me that there is a fundamental questions to be asked and answered: why has the Government not been prepared to address the substantive allegations and issues related to the ALC and its governance?

My initial thought was that this was a case of politics overwhelming good policy. Yet upon reflection, I do not think the facts fit such an explanation.

A better explanation is that the ALC, or elements within it, have in effect captured the Commonwealth and probably the NT Government in relation to issues on Groote Eylandt. How else to explain the ALC’s extraordinary hold over successive Ministers, the extraordinary outcomes that have become normalised (such as the ALC Chair and CEO being on both sides of a mining agreement that requires Ministerial approval; or of the salary double dipping; or of the fact that the Aboriginal Corporation which owns 70 percent of Winchelsea has no Directors on the Winchelsea Board, but the ALC Chair, CEO and CEO’s spouse are represented).

It is unclear to me whether the mechanism of state capture involving extraordinary influence over the political elites in the NT and to a lesser extent Canberra is  driven by the corrupt co-option of those political elites, or gross administrative and political incompetence. I should note that the complicity and co-option extends to the Opposition parties in Darwin and in Canberra. In one of my earliest posts analysing the Estimates questioning following the ANAO report, I commented upon the current Federal Opposition’s apparent disinterest in digging into what was occurring on Groote. In Canberra, the former coalition ministers apparent inability to rein in the ALC was facilitated by the then Labor Opposition’s disinterest in pursuing issues of accountability in the Indigenous policy domain. Whether it is corruption or gross incompetence, the accepted standards of political and administrative accountability would normally demand that the responsible Ministers and perhaps those bureaucratic advisers who knowingly ignore their legal obligations should have their employment terminated.  

Of course, I don’t hold out much hope that the current Prime Minister will be prepared to take action. I am surprised that these issues are not on the radar of the Secretary of Prime Minister and Cabinet. I am certain of two things however: first, this is not going to end well; and second, the longer governments prevaricate, the worse the fallout will be. Unfortunately, as is the way with these things, the most severe impacts will likely fall on the people of Groote Eylandt.

Finally I should note that the ABC provides an informative overview in an article dated 29 August which places the review in a much broader context. Unfortunately it has the rather misleading headline Commonwealth freezes funding to Anindilyakwa Land Council as chief executive Mark Hewitt flags resignation (link here). It is misleading insofar as the minister has not frozen the ALC’s funding (and probably never will) but has merely deferred providing approval for ongoing expenditure beyond 1 December, and the CEO has not resigned from the ALC (as the headline suggests), but is proposing to resign as CEO of Winchelsea Mining but remain as a consultant and presumably a Director (as discussed above). ERRATUM: this last statement is probably incorrect; see the erratum above.