Informe de Corrupcion

Select Committee into the Political Influence of Donations
Submission 17 - Attachment 1
CORRUPTION RISKS:
MINING APPROVALS IN AUSTRALIA
Mining for Sustainable Development Programme
OCTOBER 2017
TABLE OF CONTENTS
07 26
EXECUTIVE SUMMARY QUEENSLAND
Description of activity - p7 Mining Leases Queensland - p26
Summary of risk assessment Coordinated projects - p29
outcomes - p8
11 37
NATIVE TITLE
INTRODUCTION
Determination of native title - p37
Transparency International Mining for
Sustainable Development Programme The expedited process – exploration
- p11 licences, Western Australia - p38
The M4SD Programme study - p11 Right to negotiate and ILUAs, Mining
Glossary - p12 Leases – Western Australia - p38
Acronyms and abbreviations - p13

Background - p14
Methodology - p15
46
CROSS CUTTING ISSUES
Industry influence - p46
16 Whistle blowing - p50
WESTERN AUSTRALIA Due Diligence - p50
Exploration Licence and Mining Lease

Approvals Process Western Australia
- p16
State Agreements Western Australia
- p22
2
54
DISCUSSION OF RESULTS
Distribution of results - p54
Risks distributed across approvals
processes - p56
Large mining infrastructure projects -
p56
Native Title - p57
Aggregated risks - p57
Other minor risks - p57
Limitations of results - p57
58
CONCLUSION
60
BIBLIOGRAPHY
68
APPENDIX A
3
FOREWORD
For the past 15 years, I have been working in corporate Without adequate due diligence—even basic research into
accountability, good governance, and business and human the track record of mining applicants—there is a risk that
rights. This has included the mining sector, with a focus permits will be awarded to companies with a history of non-
on the policy and practice of Australian mining companies compliance or corruption, including in their operations in
operating abroad – often in corruption and conflict-prone other countries.
countries.
The risk assessment also identified a high potential for
Understanding corruption risks in the mining approvals industry influence and state and policy capture in the
process is vital to ensuring mining contributes to sustainable awarding of mining approvals. Greater regulation of political
development, and shared benefits. donations, lobbyists and the movement of staff between
government and industry, would help reduce risks that could
If corruption risks are identified, and acted upon, before enable corruption to occur.
mining activities get underway, better outcomes for impacted
communities, the natural environment and all citizens, can be While Australia has systems of transparency and
achieved. accountability in place, more needs to be done to address
transparency of negotiation processes and agreements,
This important research, Corruption Risks: Mining Approvals including native title parties.
in Australia, documents the existing system of checks and
balances that require transparency and accountability in the This report is an essential resource for government,
exploration license, and mining lease, approvals regime in industry, civil society, and the public – those with an interest
Australia. in ensuring mining contributes to economic, social, and
environmental prosperity.
The report identifies vulnerabilities in both the Western
Australia and Queensland approvals process that could It shines a light on the corruption vulnerabilities in the mining
enable corruption to occur. approvals process, and provides a roadmap for better policy
and practice.
Corruption risks are not just a developing country paradigm.
This research confirms even mature mining jurisdictions,
such as Australia, have vulnerabilities in the mining approvals
process that could result in corruption and compromised
decision-making.
A key risk identified for large scale mining and coordinated

projects (associated infrastructure), is inadequate due
diligence investigation into the character and integrity of
applicants for mining approvals. This includes a lack of
investigation of beneficial ownership.
Chief Executive Officer

Transparency International Australia
4
ABOUT THIS REPORT
This Report Disclaimer

Transparency International’s Mining for Sustainable The research, language, views, conclusions and
Development Programme (M4SD) seeks to enhance strategies outlined in this document have been created
transparency and accountability in the awarding of by the Transparency International National Chapter
mining-related permits, licences and contracts. in Australia and are not [necessarily] endorsed by
Transparency International, Transparency International
This report documents findings of research into the Australia or BHP Billiton Foundation.
mining approvals process in Australia.
The material set out in this publication is intended for
general information only. To the extent permitted by
Acknowledgements local laws, Transparency International, Transparency
International Australia and BHP Billiton Foundation
exclude liability for and are not liable to any person
The BHP Billiton Foundation supports the participation
with respect to the accuracy or completeness of the
of Transparency International Australia in Phase I of the
information set out in the publication.
M4SD Programme. Globally, the M4SD Programme is
also funded by the Australian Department of Foreign
Affairs and Trade.
Get in contact
The Australian M4SD research was undertaken by
Helen Langley on behalf of Transparency International For enquiries regarding the Australian research into
Australia. Helen Langley is the author of this report. mining approvlas or other Transparnecy International
Layout and design by Leapfrog International. Australia programmes please contact:
info@transparency.org.au
A summary report was prepared by Tim Grice on behalf
of Transparency International Australia. The summary +61 3 9877 0369
report is available at www.transparency.org.au
www.transparency.org.au
Title Picture: Panorama of Coober Pedy, South Australia.
Source: By edella/Shutterstock
Report Information:
Title: Corruption Risks: Mining Approvals in Australia

Publication date: October 2017
ISBN: 0 9752439 1 8
5
Helen Langley
Author
6
EXECUTIVE SUMMARY
Description of activity
The Australian research for the Transparency International
Mining for Sustainable Development Programme investigated
mining approvals in Western Australia and Queensland using
the Mining Awards Corruption Risk Assessment (MACRA)
risk assessment tool. In Western Australia, the research
focussed on the investigation of exploration licences, mining
leases, State Agreement Acts and Native Title mining
agreements (expedited process and right to negotiate);
and in Queensland, it focussed on mining leases and
environmental approvals for large infrastructure mines under
State and Commonwealth law.
The research involved an investigation

into the context of mining in Australia and
the process for approving the grant of
mining leases or licences and associated
approvals required before mining
activities can commence.
The purpose of the research was to note where there are
risks that could enable corruption to occur. Vulnerabilities
identified in the mining approvals process led to a
comprehensive analysis and assessment of risk. A number
of risks ranging from low, through medium, high to very
high risks were identified that could create an enabling
environment for corruption to occur.
Geologists Sampling Rocks in the Pilbara, Australia

Source: By Adwo/Shutterstock.
7
Summary of risk assessment 4. The inadequate protection of whistle blowers

was assessed as a weakness in the broader
outcomes State and Commonwealth regulatory framework
for mining approvals. The research identified that
comprehensive law reform is required to facilitate
disclosure and protect whistle blowers in the mining
The risk assessment identified seven industry.
risks for mining approvals in Western 5. Large mining infrastructure project approvals
Australia and Queensland, and two risks in each state were assessed as having lower
for Native Title mining agreement making. levels of transparency and accountability than
The analysis showed risks that were mining lease approvals. The research revealed that
distributed across approvals processes, Ministers or senior government representatives
have considerable discretionary powers to make
and that the aggregation of risks can be approvals and recommendations. This raises
a compounding factor and lead to an considerable concern as when there is also
increase in the potential for corruption to a risk of industry influence, and opportunities
occur. for companies and their directors with a poor
business record to operate in each state the risk of
1. The research found that the approvals systems corruption is significantly increased.
for exploration licences and mining leases in
Western Australia, and for mining leases in 6. The approvals process for large infrastructure
Queensland, have a high level of transparency projects evaluated and approved through the
and accountability that can act as a corruption Coordinated projects process in Queensland was
deterrent for many of the vulnerabilities identified in assessed as having elements of transparency and
the approval processes. Ministerial discretion was accountability for the assessment and evaluation
identified as a weakness in the exploration licences of Environmental Impact Statements for State and
and mining lease approval process in Western Federal environmental approvals. Yet, the level of
Australia, which led to the assessment of the risk, discretion available to the Coordinator-General, and
external influence in the awarding of approvals. the limited independent reviewing of the scientific
The risk was assessed as a low level risk as the modelling used in an EIS led to two risks being
assessment demonstrated that the checks and assessed as medium level risks: risk of external
balances in the approvals system mitigate against influence in the awarding of approvals, and of
the injudicious application of Ministerial discretion. inadequate verification of the accuracy of
environmental impact statements. The weakness
2. However, a high scoring risk was identified that of discretionary decision-making in combination
applied for mining leases in each state and with the risk of state and policy capture
also relates across the other mining approvals compounded the risks and has the potential to
assessed in each state for large mining projects, increase the capacity for influence, or corruption.
- State Agreement Acts and coordinated projects,
inadequate due diligence investigation of 7. Large mining infrastructure projects approved in
the character and integrity of applicants for Western Australia under State Agreement Acts
mining approvals. Inadequate due diligence, were assessed with a high level of risk due to the
including the lack of investigation of beneficial lack of transparency of the negotiation process.
ownership is a significant risk that has the The lack of transparency of the negotiation process
potential for adverse impacts on government, combined with the application of Ministerial
the environment and communities if companies discretion and state and policy capture can
with a record of non-compliance or corruption are enable industry to influence the approval process.
permitted to mine for resources. However, the limited contemporary use of State
Agreement Acts for mining projects minimises the
3. The results of the risk assessment indicated a likelihood of the risk occurring.
high potential for industry influence and state
and policy capture in the awarding of approvals 8. The results also demonstrated that the limited
for large mining infrastructure projects in Western transparency of agreements between native title
Australia and Queensland – State Agreements, parties and mining companies is a very high risk
and coordinated projects. The research noted that and the risk that representatives negotiating with
the inadequate regulation of political donations a mining company on behalf of a native title
and lobbyists, the movement of staff between party will not represent community members’
government and industry, and the culture of interests is a high risk. Yet, the research noted
mateship are significant factors that could enable that the context of Native Title agreement making
influence to occur in the approval of State is complex and the risk assessment may not be
Agreements in Western Australia, and coordinated able to encapsulate all of the factors involved. It
projects in Queensland. was further observed that the lack of transparency
8
in the agreement making process is compounded increase the severity of the impacts of state and
by the imbalance of power and resources between policy capture, external influence in the approvals
mining companies and native title parties, and by process, and the lack of independent review of
the risk of poor representation of native title parties an EIS. It can also increase the likelihood of the
in the agreement making process. The impact occurrence of state and policy capture and external
of these risks can have adverse outcomes for influence in the approvals process. Further,
Indigenous communities who may not be able to inadequate due diligence into a company when
achieve the benefits that mining agreements can it is applying for a mining lease has the potential
bring. to increase negative impacts on native title
parties; compound the risk of low transparency in
9. Significant risks were assessed that had a
agreement making and could lead to manipulation
distribution across approvals processes and
of native title groups, and have severe effects for
both jurisdictions. This distribution suggests
Indigenous communities and their land.
that there is an underlying regulatory, contextual
and cultural risk for mining approvals in Western 11. The research revealed that the level of public
Australia and Queensland. The significant risks interest in the approvals process for large mining
that were distributed across both jurisdictions were projects, an active civil society, a robust media, and
inadequate due diligence investigation of the a competitive and entrepreneurial mining industry
character and integrity of applicants for mining are powerful agents that work to expose and deter
approvals (all mining approvals); and state and corruption, and increase the accountability of the
policy capture (large infrastructure projects). approvals processes in Western Australia and
Queensland.
10. The aggregation of significant risks was found
to compound cumulative impact and the likelihood In conclusion, whilst the mining approvals processes in
of a risk occurring. For example, when inadequate Western Australia and Queensland have elements of
due diligence is undertaken into mining companies transparency and accountability, significant risks were
and their principals, it can allow companies and identified in the approvals systems that can lead to adverse
directors with a corrupt record to mine for resources impacts and enable corruption. Large infrastructure project
in Australia. This has the potential to increase the approvals were assessed as having a high number of
severity of the impact of the other risks assessed aggregated and compounded risks, which heightens the
capacity for corruption to occur. And finally, the corruption risk
and increase the likelihood of corruption. For
of inadequate due diligence into mining companies, identified
example, in the case of coordinated project across both states and all of the mining approvals processes,
approvals in Queensland, allowing companies with has major implications for government, the environment and
a poor business record to operate in the State can communities.
Iron ore Mining Operations Pilbara Region, Western Australia

Source: By STRINGER Image/Shutterstock.
9
10
INTRODUCTION
Transparency International Mining
for Sustainable Development
Programme
Transparency International Australia is one of 20 national
chapters participating in the Transparency International
(TI) global Mining for Sustainable Development (M4SD)
Programme. The programme is coordinated by TI Australia.
The M4SD Programme complements existing efforts to
improve transparency and accountability in the extractive
industries by focussing on the start of the mining decision
chain: the point at which governments grant mining leases
and licences, make assessments for approvals, negotiate
contracts, and make agreements.
Phase I of the programme (2016-2017) involves the

identification and assessment of corruption risks in the
process and practice of awarding mining leases, licences
and contracts. This report presents the main findings from the
corruption risk assessment in Australia.
With an understanding of the nature and causes of corruption

risk in the approvals chain, national chapters will develop
and implement solutions to tackle priority corruption risks in
Phase II (2018-2020). They will work with key stakeholders
from government, the mining industry, civil society and
affected communities to improve transparency, accountability
and integrity in the decision-making process for approving
mining projects.
The BHP Billiton Foundation supports the participation

of Transparency International Australia in Phase I of the
programme. Globally, the M4SD Programme is also funded
by the Australian Department of Foreign Affairs and Trade.
The M4SD Programme study
The aim of the M4SD Programme study is to identify the

systemic, regulatory and institutional vulnerabilities to
corruption in awarding mining licences, leases and contracts
and to assess the specific corruption risks created by these
vulnerabilities. This report presents the main findings from
the study and the results of the corruption risk assessment.
Super Pit Kalgoorlie, Western Australia

Source: By imagevixen/Shutterstock.
11
Glossary
A project ‘declared’ by the Coordinator-General, Queensland that meets the

criteria for a coordinated project: complex approval requirements, significant
Coordinated project
environmental effects; strategic significance; and significant infrastructure
requirements.
An action that is deemed to be significant by the Department of Environment,

Controlled action
Commonwealth, and that affects matters of national environmental significance.
Acts that attract the expedited process are defined as acts that are not likely to
interfere with the native title holders’ community or social activities, and areas
Expedited process
or sites of significance in accordance with tradition; and do not involve major
disturbance to any land or waters.
An act that affects native title in relation to the land and water to any extent. A
Future act future act may involve the granting of a right to conduct a proposed activity or
development that affects native title rights.
A prospecting licence, exploration licence, retention licence, mining lease, general

purpose lease or, a miscellaneous licence granted under the Mining Act 1978
Mining tenement
(WA) including the specified piece of land in respect of which the mining tenement
is granted.
A prospecting permit, mining claim, exploration permit, mineral development

Resource authority licence, or water monitoring authority, granted under the Mineral Resources Act
1989 (Qld).
The right to negotiate allows the native title party and the proponent to negotiate
with a view to reaching an agreement. Parties to the mining lease negotiations
Right to negotiate
must negotiate in good faith to obtain an agreement that may be subject to
conditions.
12
Acronyms and abbreviations
AEC Australian Electoral Commission
Cth Commonwealth
CCC Corruption and Crime Commission (WA)
DEHP Department of Environment and Heritage Protection (Qld)
DMP Department of Mines and Petroleum (WA)
DNRM Department of Natural Resources and Mines (Qld)
DSD Department of State Development (WA or Qld)
EIS Environmental Impact Statement
FIRB Foreign Investment Review Board
ILUA Indigenous Land Use Agreement
M4SD Mining for Sustainable Development Programme
MACRA Mining Awards Corruption Risk Assessment
MNES Matters of national environmental significance
NNTT National Native Title Tribunal
NTRB Native Title Representative Body
NTRBC Native Title Registered Body Corporate
NTSP Native Title Service Provider
PBC Prescribed Body Corporate
Qld Queensland
SDPWO State Development and Public Works Organisation Act 1971 (Qld)
WA Western Australia
13
Background either under Native Title or available to be claimed, so

the state administration of the Commonwealth Native
Australian state and territory jurisdictions administer and Title process was examined. In Queensland, the state
regulate mining. Commonwealth government legislation that and Commonwealth environmental approvals process
applies to mining, and which state legislation cannot override, was examined for large infrastructure mines due to the
is the Native Title Act 1993 (Cth) and the Environment controversy and public interest in environmental approvals for
Protection and Biodiversity Conservation Act 1999 (Cth). coal mining managed by the Coordinator-General through the
coordinated project process.
Because of the multiple jurisdictions regulating mining in
Australia the research focussed on two key states: Western The research scope
Australia and Queensland. These states were chosen for the
focus of the research due to the significance of the resource • Western Australia: exploration licences, mining leases,
sector in each state. Western Australia and Queensland are State Agreement Acts and Native Title
the largest mining states by revenue generated, the number • Queensland: mining leases, Commonwealth and state
of operating mines, and the state economies are closely environmental approvals for large mines (coordinated
linked to the resources sector. The states cover a broad projects).
spectrum of minerals and coal, and both have large amounts
of land either under Native Title or undergoing Native Title The structure of the report
determination.
The body of the report is divided into four sections: Western
Mining is complex and there are many different approvals Australia, Queensland, Native Title, and Cross cutting issues.
processes determined by the type and scale of the mining Each state section and the section on Native Title briefly
activity. There are also other approvals, licences, permits and describes the approvals processes examined by the study,
agreements that have to be obtained before mining activities and provides an analysis of the vulnerabilities and risk for
can commence, for example environmental approvals and the processes. The section on Cross cutting issues provides
native title agreements. a description and analysis of vulnerabilities and risks that
have a broad scope across jurisdictions. These sections are
The key focus of the research for both states was the followed by a discussion of results and the conclusions.
approvals process for mining leases and for large
infrastructure projects. In Western Australia, the research also Appendix A contains detailed process maps for each type
examined the approvals process for exploration licences due of approval examined and Appendix B contains the risk
to the significant amount of land under exploration. Western assessment worksheets as provided for in the MACRA Tool.
Australia has the largest tract of lands in Australia
Terraces in open cast mine in New South Wales, Australia. Barrick Cowal Gold Mine.
Source: By Jason Benz Bennee/Shutterstock.
14
Methodology Data collection and research methods

Data was collected for the risk analysis by conducting
MACRA Tool interviews with experts and by undertaking extensive desktop
research.
The analysis in this report uses the research method
contained in the Mining Awards Corruption Risk Assessment
Interviews
(MACRA) Tool. The MACRA Tool was created by an
independent expert1 engaged by Transparency International
Forty-seven interviews were conducted with experts from
to provide a methodology for identifying and assessing
government (13), industry (13), civil society (5), academics
corruption risks in the twenty countries participating in the
(6), Indigenous traditional owners (6), and consultants (4)
M4SD Programme. The MACRA Tool built on Transparency
in Perth, regional Western Australia and Brisbane who had
International’s experience with corruption risk assessment
specific information about the mining approvals process.
in other fields such as National Integrity Systems and
Interviews were semi-structured and used to gather specific
other mining and extractive sector instruments, indices
information or to obtain information regarding sources or
and resources. Experts from multilateral institutions, major
areas for further research. Interviews were confidential and
international non-governmental organisations and industry
the names of interviewees are not identified in the report.
bodies provided valuable feedback in the development of the
Where reference is made to information provided in an
MACRA Tool.
interview, the information is attributed to ‘expert interview’ and
the place and month of the interview is provided.
The first part of the risk assessment involves data collection
and analysis. The MACRA Tool guided users to create a map
Desktop research
of the approval process; collect information regarding how
the process works in practice, and the context of the mining
awards process. Users then analysed these three aspects of Desktop research involved the collection of data from relevant
mining approvals ̶ the process, practice and context ̶ to Acts and regulations, published government guidelines
identify vulnerabilities to corruption. and policies to map the awards processes and collect
information on integrity frameworks; Hansard, court cases,
journal articles, books and other published research to
Vulnerabilities are systemic, regulatory, institutional or other
understand the context of mining approvals, and to analyse
weaknesses that create risks of corruption. These risks
risk; and news articles for evidence of risk. Comprehensive
create opportunities for corrupt conduct to occur or to pass
research was undertaken into the technical process of mining
undetected and thus undermine the lawful, compliant and
approvals but this research is noted but not documented in
ethical awarding of licences, leases, and contracts.
the report.
The second part of the tool enables users to identify and
Validation of risks
assess the specific corruption risks created by these
vulnerabilities. The tool contains a list of 89 common risks
relating to five different corruption risk factor categories: 1) The risks were scored according to a scale of whether or
process design; 2) process practice, 3) contextual factors not a risk could or had occurred, the mechanisms in place to
4) accountability mechanisms; and 5) legal and judicial prevent the risk happening and the evidence available of the
responses to corruption. impact of the risk. Representatives of civil society, industry
and academia, who were not involved in the interview
process, validated the risks assessments, maps and specific
The Tool allows users to adopt or modify the common
sections of the reports. Government officials were involved in
risks, or identify a new risk that is more appropriate for the
reviewing the process maps wherever possible.
context. Users then assess each corruption risk by analysing
evidence of the likelihood of it occurring and of its
potential impact.
The MACRA tool contains a list of 89 common risks for

mining approvals. The assessment revealed that nine of
these corruption risks are present in the examined mining
and mining-related awards processes. This report assesses
these risks and the underlying vulnerabilities/sources using

the MACRA Tool. Participating chapters were not required to
assess all 89 risks. The analysis of the approvals processes
revealed vulnerabilities for which corresponding risks were
assessed.
1 Michael Nest 2016
15
This section provides the context for Fraser Institute categories. Since 2012, Western Australia has
annually ranked in the global top six, coming in at number
mining approvals in Western Australia one in 2015 and number two in 2013.
and describes the strengths and
vulnerabilities of the approvals process The Government of Western Australia regulates mining
in relation to corruption risk, and analyses and the ownership of minerals resides with the Crown. The
Minister for Mines and Petroleum administers the Mining Act
the risk for exploration licences and 1978 (WA) and the Mining Regulations 1981 (WA).
mining leases and the negotiation
process for State Agreements.
Exploration Licence and Mining
Lease Approvals Process Western
WESTERN AUSTRALIA Australia
The Department of Mines and Petroleum (DMP) is the
administrative and regulatory body for the extractive
industries. It manages the titles systems, provides
Western Australia is a resource rich state. It is the world’s geoscientific information, collects royalties, and ensures that
largest producer and exporter of iron ore.2 In the year 2015 safety, health and environmental standards are consistent
– 2016 the value of minerals mined in Western Australia with relevant State and Commonwealth legislation, regulation
was $69.5 billion3 and the royalty revenue paid into the and policies.
state’s Consolidated Revenue Fund was $4 billion.4 Iron
ore is the state’s highest value commodity and accounts Rights conferred by a mining lease and an exploration
for 71% (more than 48 billion) of total mineral sales.5 Gold, licence
alumina and bauxite, and nickel are the next highest value
commodities. Other commodities mined in the State are base A mining lease confers title to all minerals unless otherwise
metals (copper, lead, and zinc), coal, construction materials, specified by the Minister. A Minister may grant a mining
diamonds, gems and semi precious stones, manganese, lease for only one or more minerals because of the locality
mineral sands (garnet, ilmenite, leucoxene, zircon), rare of the mine, government policy, and in matters of the public
earths, salt, silver, spongolite, and vanadium.6 interest.10 A mining lease authorises the lessee and their
employees and contractors to work and mine the land;
In the 2015 – 2016 year, 37.6 million hectares, slightly less remove minerals; take and divert water, sink a bore and take
than 15% of Western Australia’s land area was covered the water for domestic and mining purposes, subject to the
by mining tenements, the majority, 83%, being exploration Rights in Water and Irrigation Act 1914 (WA); and undertake
licences.7 The total number of mineral tenements in 2015 – acts necessary to carry out mining operations. The lessee
2016 was 19,276.8 is entitled to use, occupy and enjoy the land for mining
purposes; and owns the minerals mined.11
The 2017 Fraser Institute Annual Survey of Mining
Companies ranks Western Australia number three out of 104 An exploration licence authorises the holder to enter the
countries for investment attractiveness.9 Western Australia land with contractors, employees, vehicles, machinery and
is consistently the top ranked state in Australia in all three equipment; to explore and carry out operations including the
digging of pits, trenches and holes, the sinking of bores and
tunnels; to excavate, and remove earth, soil, rock, stone, fluid
2 Department of State Development, Government of Western
or mineral bearing substances not exceeding 1000 tonnes;
Australia, Iron ore profile www.dsd.wa.gov.au/about-the-state/major- and to take and divert water, sink a bore and take the water
resource-producer/iron-ore-profile for domestic and exploration purposes subject to the Rights
in Water and Irrigation Act 1914.12
3 Department of Mines and Petroleum, 2105 – 2016 Major
commodities resources data www.dmp.wa.gov.au/About-Us-
Careers/Latest-Statistics-Release-4081.aspx For further information on the approvals process for
exploration licences and mining leases refer to the Western
4 Department of Mines and Petroleum, 2105 – 2016 Economic Australian flow charts: Exploration licence, Mining lease with
indicators resources data www.dmp.wa.gov.au/About-Us-Careers/
Latest-Statistics-Release-4081.aspx
mineralisation report or resource report, and Mining lease
with mining proposal in Appendix A.
5 Department of Mines and Petroleum Statistics Digest 2015 – 2016
(2016) www.dmp.wa.gov.au/Documents/About-Us-Careers/Stats_
Digest_2015-16.pdf
6 Department of Mines and Petroleum, Major commodities resource
data, above n 2.
7 Department of Mines and Petroleum, Statistics Digest 2015 –
2016, above n 4, 9.
8 Department of Mines and Petroleum, 2105 – 2016 Spatial and
regional data www.dmp.wa.gov.au/About-Us-Careers/Latest-
Statistics-Release-4081.aspx 10 Mining Act 1978 (WA) s 110.
9 Fraser Institute, Annual Survey of Mining Companies 2016 (28 11 Ibid s 85
February 2017) www.fraserinstitute.org/studies/annual-survey-of-
mining-companies-2016. 12 Mining Act 1978 s 66; Mining Regulations 1981 (WA) reg 20
16
Strengths of the approvals process – DMP also has integrity strategies and policies to prevent
corruption and promote transparency and engagement:
Exploration Licences and Mining Leases,
Western Australia Fraud and Corruption Control plan, Transparency Policy,
Stakeholder and Community Engagement Policy.21
The Department of Mines and Petroleum has robust systems
in place, which promote transparency and accountability
Further, the Government of Western Australia has put in
create a level playing field, and mitigate the risk of corruption
place integrity systems and Offices and/or Commissioners
including:
for oversight, education and corruption prevention for public
• Comprehensive information on the department’s website authorities and Ministers and Members of Parliament:
regarding the approvals’ process
• Corruption and Crime Commission (CCC), Public Sector
• Online application system13 Commission, Ombudsman, Information Commissioner,
and the Auditor General.22
• Public access in real time to applications being lodged 14
• Ministerial Code of Conduct and Code of Conduct for
• Publicly available information on mining tenements15
Members of the Legislative Assembly; Lobbyist Code
• Comprehensive information on Western Australian of Conduct and Register; Register of Members of the
geology, geophysics, and geochemistry available to the Legislative Assembly financial interests available online.23
public16
The competitive and entrepreneurial nature of the mining
• First in time system17 industry also mitigates against risk.24 Industry expects
• Timelines tracked on Minerals Titles Online consistency and a level playing field, and will litigate or lodge
objections in the Warden’s Court if they view decisions made
• Applications assessed by Mining Registrar and by as being inconsistent or creating an unfair advantage or
departmental officer disadvantage for a party.25
• The Warden’s court will hear objections from any party,
and decisions are published
• Criteria for assessments by Mining Registrars and
departmental officials clearly defined18
• Public access to statistics on resources and approvals
performance reports19
In addition, DMP has integrity systems in place and inducts,

trains and mentors staff in the Code of Conduct. All staff
that have a decision-making role are required to sign a
declaration stipulating that resource shares or interests are
not held.20 DMP does not have a public register of financial
interests though staff are required to register all gifts,
hospitality and conflicts of interest with the department.
21 Department of Mines and Petroleum, Government of Western
Australia, Fraud and Corruption Plan, (6 July 2015), www.dmp.
wa.gov.au/Documents/About-Us-Careers/Fraud_and_Corruption_
13 Department of Mines and Petroleum, Minerals Titles Online www. Report.pdf; Transparency Policy, www.dmp.wa.gov.au/Documents/
dmp.wa.gov.au/Mineral-Titles-online-MTO-1464.aspx About-Us-Careers/Transparency-Policy.pdf; Stakeholder Engagement
Activities Report, (January 2017), www.dmp.wa.gov.au/Documents/
14 Ibid; it is a possible to get an RSS feed for applications lodged; About-Us-Careers/DMP-StakeholderEngagement_ReportQ4_2016.
applications are also lodged on Mining Notices pdf; Consultation, www.dmp.wa.gov.au/Consultation-16497.aspx
15 Department of Mines and Petroleum, Government of 22 The Corruption and Crime Commission, Government of Western
Western Australia, Online Systems, www.dmp.wa.gov.au/Online- Australia www.ccc.wa.gov.au/; Public Sector Commission www.
Systems-1527.aspx; see Mineral Titles Online, Tenegraph Online, and publicsector.wa.gov.au/; Ombudsman Western Australia, Government
Minedex. of Western Australia www.ombudsman.wa.gov.au/index.html; Office
16 Ibid see GeoVIEW.WA and Data and Software Centre of the Information Commission, Government of Western Australia,
www.foi.wa.gov.au/en-us/; Office of the Auditor General www.audit.
17 The system is a first in time system except in the case of wa.gov.au/.
competing applications for a tenement. The Minerals Titles Division,
DMP, deems that all applications for the same tenement received 23 Department of Premier and Cabinet, Government of Western
between 4:30pm and 8:30am are submitted at the same time. A Australia, Ministerial Code of Conduct www.dpc.wa.gov.au/
ballot will then be held at the Regional Mining Registrar’s office, and RoleOfGovernment/Documents/Ministerial_Code_of_Conduct_
the first, second and third balloted applications will be prioritised. April2013.pdf; Department of Premier and Cabinet, Code of
Mining Regulations 1981 reg 59B(3); Mining Act 1978 s 105A. Conduct for Members of the Legislative Assembly www.parliament.
wa.gov.au/webcms/webcms.nsf/resources/file-code-of-conduct-for-
18 Mining Act 1978 ss 59(3), 73(3), 74A, 75(3); Mining Regulations members/$file/Code+of+Conduct+for+Members.pdf; Public Sector
1981 reg 89C; Expert interviews (Perth, December 2016). Commission, Register of Lobbyists, Code of Conduct www.lobbyists.
wa.gov.au/code-conduc; Members of Parliament (Financial Interests)
19 Department of Mines and Petroleum, Latest Statistic Release Act 1992 (WA).
www.dmp.wa.gov.au/About-Us-Careers/Latest-Statistics-
Release-4081.aspx; DMP approval performance www.dmp.wa.gov. 24 Expert interviews (Perth, December 2016, January, March 2017).
au/Investors/Approvals-14055.aspx.
25 See Warden’s Court Listings and Warden’s Court decisions at
20 Department of Mines and Petroleum, Code of Conduct Department of Mines and Petroleum, Warden’s Court www.dmp.
www.dmp.wa.gov.au/Documents/DMP_Code_of_conduct_2014.pdf. wa.gov.au/Minerals/Warden-s-Court-1533.aspx.
17
Vulnerabilities and risk – Exploration investment.27 The Warden also has the discretion to make
a recommendation to the Minister based on public interest
Licences and Mining Leases, Western considerations.28
Australia
There is no appeal to a Minister’s decision to grant or
Three areas have been identified where there are
refuse a mining lease except for a judicial review of the
vulnerabilities in the approvals process – Ministerial
administrative procedures.29
discretion; leaking of confidential information; and
inadequate due diligence undertaken by DMP of an
The application of ministerial discretion, and the vulnerability
applicant’s company and principals, and of its beneficial
in the approvals process, is illustrated in the two case studies
ownership. These areas are described in detail below and
described below.
the risk in the process is analysed.
1. Ministerial discretion
The discretion of the Minister to grant or refuse an CASE STUDY: CAZALY IRON30
exploration licence or mining lease has been identified as a
vulnerability in the approvals process. The Minister may grant
The Rhodes Ridge Joint Venture, a Rio Tinto JV, was
or refuse an application irrespective of the recommendation
granted an exploration licence over the Shovelanna
of the Warden after a hearing in the Warden’s Court.
iron ore deposit on 27 August 1989. The licence was
due to expire at midnight, 26 August 2005. Rio Tinto
Ministerial discretion in the Mining Act 1978
(Rio) had been granted exemptions to surrender twice,
partial exemptions from expenditure on ten occasions,
Section 76(6) of the Mining Act 1978 states in regard to the
and had been granted 11 extensions for a period of
recommendations that the Warden makes in a report to the
one year. Rio dispatched forms to apply for another
Minister:
extension but the Marble Bar Mining Registrar did not
receive the documentation before the deadline, and the
On receipt of a report under subsection (2) or (5), the licence expired. Cazaly Iron applied for an exploration
Minister may, subject to subsection (7), grant or refuse the licence on 29 August 2005. Rio subsequently lodged
mining lease as the Minister thinks fit, and irrespective three mining lease applications over the Shovelanna
of whether deposit. Cazaly objected to the grants arguing that their
a. the report recommends the grant or refusal of the application for an exploration licence was first in time.
mining lease; and Rio wrote to the Minister requesting that he exercise the
b. the applicant has or has not complied in all respects power to refuse the grant of Cazaly’s application. The
Minister terminated the Cazaly application in the public
with the provisions of this Act.
interest. Whilst not obliged under the Act to publish
In practice the noncompliance of the applicant with his decision the Minister did so citing his reasons:
provisions of the Act as described in section 75(6)(b) the State’s iron ore policy, fairness, and promoting
does not contribute significantly to a process vulnerability. investment. Cazaly appealed to the Supreme Court
Noncompliance refers to irregularities in the application or who refused to overturn the Minister’s decision arguing
proceedings. For example, a grant of tenement remedies that the Minister is entitled to take into account matters
any deficiencies in the marking out of the tenement, or in the of policy and principle.31 The decision was viewed as a
application documents. This precludes against challenges judgment in favour of big business, and the Association
in the courts after grant regarding the legality of the grant of Mining and Exploration Companies commented that
on administrative details and stops other mining companies there were different sets of rules for different players.32
appealing the awarding of a licence or lease on minor
administrative procedural grounds.
The stipulation in the Act is similar in section 59(6) regarding

the recommendation of the Warden to grant or refuse an
27 Michael Hunt, Hunt on mining law of Western Australia, (The
exploration licence. The Minister has the discretion to grant or
Federation Press 5th ed, 2015), 233-234.
refuse the exploration licence as the Minister thinks fit.
28 Angela Petros, ‘Challenging the Exercise of the Warden’s
The Minister may terminate an application before the Discretion in Western Australia’ (1998) 164 Australian Mining and
Petroleum Law Journal.
Mining Registrar or Warden has made a determination or
recommendation in respect of the application, or refuse an 29 LexisNexis, Halsbury’s Laws of Australia, (12 April 2017) 70
application for a mining tenement if the Minister is satisfied Energy and Resources Law, ‘I Minerals/(4) Mining Titles/(H) Mining
on reasonable grounds in the public interest that the Titles in Western Australia’ [170-2405].
ground should not be disturbed or the application granted.26 30 Re Minister for Resources Ex parte Cazaly Iron Pty Ltd (2007)
‘Public interest’ is not defined in the Mining Act, but the WASCA 175.
judiciary has made comments in the courts to define public 31 Hunt, above n 27, 233; Kylie Boston, Ministerial Discretion and
interest. As defined by the courts public interest can include the Mining Act 1978 (WA) (LLM Hons, The University of Western
environmental considerations, and matters of government Australia, 2006).
policy and principle, which could include the promotion of
32 Julie-Anne Sprague, ‘Cazaly loses Shovelanna, considers
High Court Action’, Business News (online), 28 August 2007
www.businessnews.com.au/article/Cazaly-loses-Shovelanna-
26 Mining Act 1978 s 111A. considers-High-Court-action
18
discussed above, but subsequent safeguards were put

in place to prevent the ability of lobbyists to influence the
decision-making process. Whilst the interpretation of public
CASE STUDY: ELLENDALE DIAMOND interest provisions in the Mining Act falls to the Minister,
MINE there are checks and balances in the system to prevent self-
interested decision-making.
Another example of ministerial discretion is the recent These checks and balances include:
Ellendale diamond mine closure. The Kimberley
Diamond Company who held the tenements entered • The opportunity to challenge decisions on procedural
into administration in July 2015. By disclaiming the grounds in the Supreme Court
tenements as onerous property under the Corporations • Mining Registrars and departmental officers assessing
Act 2001 the liquidators managed to shift the lease applications class systems would take note of any
and the responsibilities for care, maintenance, security, perceived or actual corrupt decision
and rehabilitation back to the government instead of
selling the lease. The Minister refused all subsequent • Comprehensive integrity systems have a role in the
applications for an exploration licence for the tenement, education of staff and the prevention of corruption
as it would have meant the licence holders weren’t • Mining companies are competitive, entrepreneurial, and
responsible for the rehabilitation costs of the mine expect a level playing field
site. As such only applicants for a mining lease are
able to successfully apply for the tenement.33 This • A robust media reports on inconsistencies in resource
case illustrates the importance of the application of sector decisions
Ministerial discretion in the public interest. • Civil society monitors the sector and will protest against
decisions that it perceives are unjust.
Where there are potential problems is the culture of

Ministerial discretion also applied in a case that the mateship that can exist in political parties and the pressure
Corruption and Crime Commission (CCC) published in 2009, that mateship and friendship can bring on a Minister.
A Ministerial Decision in Relation to Applications for a Mining Revolving doors can lead to ex politicians working as
Tenement at Yeelirrie which involved the influence of lobbyists lobbyists, and in the resources industry. These issues are
on the Minister’s decision.34 This investigation coupled with discussed in more detail in the section Cross cutting issues.
other investigations led to the Premier asking the Minister to
resign from Cabinet and the Labor Party. The Minister was The vulnerability in the approvals process of Ministerial
suspended from Parliament for seven weeks, and apologised discretion can lead to a process design risk categorised in
to Parliament.35 the MACRA Tool as What is the risk of external interference
in the cadastre agency’s awarding of licences and leases?
Analysis of vulnerability and risk The risk was scored as a minor risk due to the accountability
in the system and the integrity systems in place to prevent
The vulnerability in the approval process of Ministerial corruption.
discretion could lead to external interference in the awarding
of licences and leases. This did occur in the Yeelirrie case Summary
In summary, the power of the Minister to grant or not grant

33 Ben Collins, ‘Minister moves to reopen Ellendale diamond mine
and avoid environmental costs,’ ABC News (online), 27 January a mining tenement has the potential to lead to corrupt
2017 www.abc.net.au/news/2017-01-27/minister-moves-to-reopen- behaviour and undue direct influence by lobbyists and the
ellendale-diamond-mine-and-avoid-costs/8217874; Nick Evans, ‘In a mining industry. However, the level of scrutiny of decisions
Kimberley Diamond Daze,’ The West Australian 26 November 2015 by public officials, other mining companies, the media, and
www.thewest.com.au/business/finance/in-a-kimberley-diamond- the presence of integrity bodies, and public reporting, acts as
daze-ng-ya-133058; Department of Mines and Petroleum, Ellendale both a deterrent and a safeguard.
Information Sheet 1, (December 2015) www.dmp.wa.gov.au/
Documents/Environment/Ellendale_Information_Sheet.pdf.
2. Leaking of confidential information by Ministers and
34 Corruption and Crime Commission, Government of Western departmental officials
Australia, Report on the Investigation of Alleged Public Sector
Misconduct in Connection with the Activities of Lobbyists and Other
Persons, A Ministerial Decision in Relation to Applications for a
The possibility that information could be leaked is another
Mining Tenement at Yeelirrie (14 September 2009) www.ccc.wa.gov. vulnerability in the practice of the mining approvals practice.
au/reports/2009. Most of the information regarding a mining tenement
application is available online to the public. However, there
35 Procedures and Privileges Committee, Parliament of
Western Australia, Inquiry into the Member for Murchison-Eyre’s
is certain confidential information that is open only to the
Unauthorised Release of Committee Documents and Related applicant for reasons of commercial confidentiality and
Matters (2007) 26); Parliamentary Library, Parliament of Western because the effect that information in a mineralisation report
Australia, Western Australian Government Ministerial and Cabinet relating to unconfirmed data, could have on the market.36
Resignations, Retirements and Lost Cabinet Positions 1901 –
2016 (August 2016) www.parliament.wa.gov.au/intranet/libpages.
nsf/WebFiles/Publications+Ministerial+Resignations/$FILE/
Ministerial+Resignation+and+Sackings+2016.pdf. Sacked Bowler
Farewells Parliament, ABC News (online) 28 February 2007 36 Expert interview (March, 2017); Robyn Phillips, Liability of
www.abc.net.au/news/2007-02-28/sacked-bowler-farewells- Company Directors and Competent Persons for Resource/Reserve
parliament/2205538. Disclosure (2000) JORC Library www.jorc.org/library.asp.
19
Leaking of information about other applicants and about can empower mining companies and lobbyists, and could
impending decisions could give an advantage to a mining affect a company’s share price. However, the likelihood of
company. However, because of the checks and balances in it occurring is low. It should be noted that this risk has only
the approvals process, leaking of information does not have been documented for mining leases in Western Australia, but
the potential to significantly affect the approvals process, but that the risk could apply across other processes in Western
it could have an impact for companies and shareholders. Australia and Queensland, especially as the risk applies to
human behaviour and its management.
The CCC reports a rise in the number of reports of unlawful
use of computer in public authorities in WA, which is partly Summary
attributable to a rise in audit activity.37 28% of allegations
in 2016-2017 Q1, and Q2 were for unlawful computer use. The leaking of confidential information can allow interested
Section 440A, of the Criminal Code Act Compilation Act parties to have access to information regarding the approvals
1913 (WA) states that it is a criminal act to use a restricted- process, which they could use to put pressure on Ministers.
access computer system for a benefit. Of 2,474 overall Leaked information may have an impact on a company’s
reports and notifications to the CCC, there were no listed share price and could lead to financial gain for an individual
allegations against the DMP.38 Whilst the reports and or company. The culture of the Department of Mines and
notifications weren’t for DMP, it does show the general risk Petroleum and the practices it has put in place mitigate
for accessing confidential online information and in a sense against the disclosure of confidential information and the
the inherent risk in human behaviour. A culture of probity affect that it can have on the approvals process. However,
and honesty in a department and office can go some way to the number of reports of unlawful computer use to the CCC
preventing the risk. DMP’s Code of Conduct and induction suggests the importance of monitoring and of continued
and training provide guidance on confidentiality and release awareness by senior management in the DMP of the
of official information, and document management.39 possibility that it could occur in the future.
There is a risk that a Minister and his advisor, or a 3. Inadequate due diligence undertaken by DMP into the
government official can leak information to lobbyists applicant’s company and principals and of its beneficial
and companies, and this did occur in some of the cases ownership
investigated by the CCC, and in one case subsequently
prosecuted in the courts.40 Due diligence is the investigation of a company, which can
take many forms depending on the context the investigation
Analysis of vulnerability and risk is applied in. Government mining departments commonly
undertake investigations to confirm the resource to be mined,
The vulnerability in the approvals process to leaking and the company’s technical capacity to mine. However, they
confidential information is a process practice risk in the do not perform adequate due diligence into the character
MACRA Tool, What is the risk that confidential information and integrity of a company and its principals creating
regarding applications for mining leases and exploration financial, legal, environmental and social integrity risks. Due
licences will be leaked? The risk has been scored as a diligence into character and integrity can cover civil litigation
low risk due to the transparency of information lodged with and criminal history, financial history, regulatory records, and
DMP, and the particular culture of DMP to provide publicly corporate affiliations, and it can also cover an investigation
accessible information.41 There have been no reported cases into the social record of a company.
of leaking of confidential information by the department or
the Minister in the last thirteen years. The OECD Due Diligence Guideline for Meaningful
Stakeholder Engagement in the Extractives Sector describes
The impact of leaking of information has the potential to responsible business conduct for community engagement.42
create an unequal and inconsistent application process, The United Nations Guiding Principles on Business
and Human Rights sets out the obligations of states and
businesses to respect, protect and fulfil human rights and
37 Corruption and Crime Commission, Overview of Serious fundamental freedoms.43 These guidelines provide the
Misconduct, (April 2017) www.ccc.wa.gov.au/news/408 3.
framework for government due diligence into a company’s
38 Ibid 2 stakeholder engagement and human rights record.
39 Department of Mines and Petroleum, Code of Conduct www.
dmp.wa.gov.au/Documents/DMP_Code_of_conduct_2014.pdf Whilst it is common for mining companies to investigate the
background of partners, contractors and agents to minimise
40 ‘State loses appeal over public servant Gary Stokes’ spent
risk, DMP undertakes limited due diligence investigation of
conviction’ ABC News (online) 31 July 2013 www.abc.net.au/
news/2013-07-31/state-loses-appeal-over-public-servant27s-spent-
applicants for mining leases. This can leave the government
conviction/4856048. Corruption and Crime Commission, Report on exposed to future liabilities, if the company fails or does not
the Investigation of Alleged Misconduct Concerning Rezoning of fulfil its obligations for compliance with the terms of its lease.
Land at Whitby (3 October 2008) www.ccc.wa.gov.au/reports/2008; It can also create a risk that companies or principles with a
Corruption and Crime Commission, Government of Western
Australia, Report on the Investigation of Alleged Public Sector
Misconduct in Connection with the Activities of Lobbyists and Other
Persons, Fortescue Metals Group LTD (14 September 2009) www. 42 OECD, OECD Due Diligence Guideline for Meaningful
ccc.wa.gov.au/reports/2009; Stakeholder Engagement in the Extractives Sector, (2017) www.
oecd.org/daf/inv/mne/stakeholder-engagement-extractive-industries.
41 On the department’s website it states ‘DMP’s guiding principle htm.
is that if there is no legal reason to protect information, it should be
open to public access’ Department of Mines and Petroleum, About 43 United Nations, Guiding Principles on Business and
DMP, www.dmp.wa.gov.au/About-Us-Careers/About-DMP-1422. Human Rights www.ohchr.org/Documents/Publications/
aspx. GuidingPrinciplesBusinessHR_EN.pdf.
20
history of noncompliance, criminal or corrupt behaviour will

try and bring corrupt behaviour and ‘work arounds’’ to the
resource sector in WA.
Mining companies will also, when working in high risk

environments, undertake an investigation into partners and
agents to determine the ultimate beneficial ownership of a
company. DMP does not investigate the beneficial ownership
of companies leaving it exposed to the risk of not knowing
who controls a company applying for a mining lease.
Whilst previously the ownership of companies investing in

mining in Western Australia were predominately Australian,
American, and Japanese with BHP and Rio Tinto being
the largest players in iron ore, the landscape has changed
with the entry of companies from China and other countries
that have low scores on the Transparency International
Corruption Perceptions Index.44 This may create an
opportunity for companies with a record of corruption or
noncompliance to mine for resources in Australia.
Summary
Inadequate due diligence into the character and integrity

of an applicant company and its principles can leave DMP
exposed to liabilities if an applicant does not comply with the
terms of its lease. Non-compliance could include failure to
pay royalties, meet environmental obligations, manage the
land, and comply with the requirements for mine closure,
leaving DMP with care and maintenance, rehabilitation and
mine closure liabilities. It also has the potential to impact
Native Title parties if a company does not comply with
terms of its agreement to provide compensation, and other
benefits.
A further discussion of the vulnerability and the risk can be Exploration Drilling
found in the section Cross cutting issues. Source: By Adwo/Shutterstock.
Vulnerabilities and risks Exploration Licences Western

Australia
Vulnerability Risk Score
Minister has discretion to grant or refuse an

What is the risk of external interference in the
exploration licence or mining lease application
cadastre agency’s awarding of licences and Low
and may override the recommendation of the
leases?
Warden’s Court
Department officials have access to confidential What is the risk that confidential information in
information in online systems not available to applications for mining leases and exploration Low
the public licences will be leaked?
What is the risk that there is inadequate due

Inadequate due diligence into character of
diligence on applicants’ integrity such as past High
company and principals
lawful conduct and compliance?
44 Expert interview (Perth, December 2016); Transparency

International, Corruption Perceptions Index 2016 (25 January
2017) www.transparency.org/news/feature/corruption_perceptions_
index_2016.
21
This section discusses the use of State the relevant Minister will approve the project and present
to Cabinet for approval. Cabinet also approves the final
Agreement Acts in Western Australian agreement between the state and the proponent before the
and analyses the approvals process for Premier and the proponent sign the agreement. Parliament
vulnerability and risk. A flow chart for the ratifies the agreement once it is signed.
approvals process for State Agreements
Proponents are still required to obtain a mining lease,
is available in Appendix A. environmental approvals, native title agreements, heritage
agreements, planning permits and any other approvals or
permits required for the project.
State Agreements Western
Australia Relationship with other legislation
Definition of a State Agreement Act State Agreements can override any other inconsistent
legislation or Act except for the Environment Protection Act
1986 (WA), the Environment Protection and Biodiversity
A State Agreement Act is a contract between the State
Conservation Act 1999 (Cth), and the Native Title Act 1993
and a developer that is ratified by a statute of the Western
(Cth).47 For example, they can modify provisions in the
Australian Parliament. State agreements set out the rights
Mining Act 1978 (WA) relating to relinquishment, expenditure,
and obligations of the State and the proponent, and can only
expiration periods for exploration licences, contribution to
be changed by mutual consent.
the mining rehabilitation fund, concessional rates of rent for
mining leases and override the farmers veto.48
The agreements set out the obligations of the company and
of the State in relation to the provision of infrastructure and
The use of State Agreements and State Development
services. A State Agreement can contain provisions on the
Agreements in Western Australia
nature, size and timing of projects; finance, tax, incentives,
and royalties; provision of infrastructure such as transport,
electricity, water, housing and social facilities; obligations Over 60 State Agreements have been ratified. The most
of the state and the miner; termination rights, and dispute recent mining related State Agreements are the Iron Ore
resolution procedures.45 Processing (Mineralogy Pty Ltd) Agreement Act 2002,
Railway and Port (The Pilbara Infrastructure Pty Ltd)
Agreement Act 2004, Iron Ore (FMG Chichester Pty Ltd)
Background
Agreement Act 2006, Railway (Roy Hill Infrastructure Pty Ltd)
Agreement Act 2010, and in January 2017 a State Agreement
Up until 2000, many major mining projects in Western
was signed for Balla Balla Infrastructure, an integrated iron
Australia for minerals other than gold were established under
ore development.49 Of these five agreements, two relate
State Agreements Acts. Mining projects in the Goldfields
to the development of a mine and three are specifically for
regions did not operate under ratified agreements because
mining transport infrastructure – rail and port.
there was already established infrastructure and towns. Iron
ore projects were developed in remote regions in the north
By contrast, State Development Agreements are a
of the state, where there was no infrastructure.46 Ports,
commercial contract between the State and the proponent.
roads, railways, towns, facilities for water, electricity and the
They are not ratified by parliament and the agreements
community had to be built from scratch. State Agreements
are not available to public scrutiny. In the last 15 years, the
were a powerful mechanism that enabled the State and
State has used State Development Agreements to facilitate
mining companies to develop remote regions. In the Pilbara,
approvals for some large LNG projects – and Ashburton Nth
railways had to be built for the transport of iron ore. Under
(Wheatstone and Macedon). There is the potential for State
Western Australia law, the tenure and authority to build a
Development Agreements to be used to facilitate approvals
railway can only be obtained under a special act (i.e. State
for mining projects.
Agreement) as specified in the Public Works Act 1902 (WA).
State Agreements raise significant issues relating to
Administration and approval of State Agreements
accountability and transparency. However, given that State
Agreements are now rarely used for mining projects except
State Agreements are currently negotiated, administered and
where a railway is being built, the issues are not as pertinent
facilitated by the Department of State Development (DSD).
as they once were. Yet, State Agreements and State
The department acts as a facilitator and coordinates the
Development Agreements are still an available mechanism
approvals and consultations required for a large infrastructure
that the government can utilise to further development goals,
project.
and as such have been analysed in this risk assessment.
Before negotiations for a State Agreement commence
47 Hunt above n 27 12, 13.
45 Malcolm Hollick, ‘ Industry agreement acts and environmental 48 Private landowner using their property for agricultural purposes
management in Australia’ (1983) 7 (3) Environmental Management, can withhold consent.
253, 256; Robin Chambers, An overview of the Australian legal
framework for mining projects in Australia www.chamberslawyers. 49 Department of State Development, Government of Western
com/wp-content/uploads/downloads/2013/10/060518-Presentation- Australia, List of State Agreements www.dsd.wa.gov.au/what-
Eng.pdf. we-do/manage-state-agreements/list-of-state-agreements; Ben
Creagh, ‘Balla Balla iron ore project moves to next stage with
46 Natalie Brown, ‘Still waters run deep; the 1963-64 Pilbara iron state agreement’ Australian Mining 24 January 2017 www.
ore state agreements and rights to mine dewatering’ (2016) 35(1) australianmining.com.au/news/balla-balla-iron-ore-project-moves-to-
Australian Resources and Energy Law Journal. next-stage-with-state-agreement/.
22
It should also be noted that a State Agreement was transparency, and the ability of industry to negotiate directly
implemented for a recent oil and gas project, Natural Gas with politicians regarding projects, considerable risk is
(Canning Basin Joint Venture) Agreement Act 2013. created of state and policy capture, and the potential for
corruption is increased.
Vulnerabilities and risk – State Agreements Analysis of vulnerability and risk
Two vulnerabilities have been identified in the State The lack of transparency and the secrecy of the process
Agreement Act approval process: lack of transparency in is a process design risk equating to the risk, What is the
the negotiation and approval process; and the capacity risk that the negotiation process and the components of
for industry influence, which is discussed in more detail in the negotiations, including what is negotiable and non-
the section Cross cutting issues. negotiable, will not be publicly knowable? The likelihood of
the risk occurring is high due to the lack of transparency of
1. Lack of transparency in the agreement making process the negotiating process. The impact is medium only because
of the lack of evidence of corruption occurring, and the
A significant vulnerability identified in the negotiation process historical nature of mining agreements precluding against
for State Agreements is that there is no public notification the availability of evidence. The overall score for the risk
of the terms of the negotiation or transparency of the registered as a high risk.
negotiation prior to signing of the agreement. The agreement
is only publicly available once Parliament has ratified it and A lack of evidence, given the historical nature of the use
the State Law Publisher has published it. Once Premier of State Agreements, made it difficult to assess risk as
and the mining company sign an agreement, it is a binding academic articles, court cases, and news articles were not
agreement that operates for the life of the projects.50 There contemporary. The Auditor General’s recommendations
is no opportunity for public interest groups to have input in 2004 that criteria and guidelines for State Agreements
into the terms of reference or negotiations or challenge the be developed55, may have brought about changes, but as
agreement in the courts. information is not available on the DSD website it is difficult to
assess what changes have occurred.
Parliament can ratify agreements in a relatively short time,
which provides little opportunity for parliamentary debate. Summary
Richard Hillman notes that controversy ‘arises concerning the
role of Parliament and the perception that it can be a ‘rubber The lack of transparency of State Agreement negotiations
stamp’ for the executive’s will.51 can lead to preferential treatment of mining companies
and the perception of undue influence of industry on the
The lack of transparency of the process can lead to approvals. It can create public unease and allows for
accusations that preferential treatment has occurred, as in ministerial discretion to be exercised without mechanisms of
the case ‘following the expedited negotiation and ratification accountability. Whilst there have been no reported cases of
of the [FMG] Railway and Port Agreement together with the corruption, lack of transparency can enable corrupt decision
significantly positive impact on the FMG share price’.52 making to occur. The secretive nature of State Agreements
and State Development Agreements can raise concern if they
Hillman also notes that the lack of transparency can create are used by the Western Australian government for future
considerable public unease.53 The lack of transparency large mining infrastructure development.
creates the potential for government to be unduly influenced
by a mining company, and can allow Ministerial discretion to 2. Industry influence and policy capture
be exercised without public oversight.
The capacity for industry influence in the negotiations for
The culture of secrecy extends to the DSD website. The a State Agreement has been identified as a vulnerability in
website contains a list of agreements but no links to the the negotiation process. The rationale for the negotiation
agreement, and no guidelines to State Agreements or of a State Agreement can be driven by the expediencies of
process charts. In 2004, the Auditor General recommended State policy. The decision to negotiate a State Agreement is
that procedural guidelines should be developed for State made by the Minister and then approved by Cabinet. Both
Agreements. If they were developed they have not been Labor and Liberal administrations have enthusiastically
made available to the public.54 embraced State Agreements as a means to drive economic
development. Proponents can negotiate directly with the
The State Agreement process also involves considerable government understanding that the government’s policy
Ministerial discretion. When combined with a lack of is to seek investment, encourage development of natural
resources, maximise economic rent, and also that the terms
50 Richard Hillman ’The Future Role for State Agreements in agreed to in a State Agreement are not rigorously enforced.56
Western Australia,’ (2006) Australian Resources & Energy Law
Journal, 293, 318. The case study below illustrates some of the issues that can
51 Ibid 308.
arise with State Agreements, the influence of industry, the
culture of government and the difficulties that government
52 Ibid 307. can have enforcing the terms of State Agreements.
53 Ibid.
54 Auditor General for Western Australia, Developing the State: The
Management of State Agreement Acts, Report 5 June 2004 www. 55 Ibid.
audit.wa.gov.au/reports-and-publications/reports/developing-the-
-the-management-of-state-agreement-acts-52004/ 20. 56 Hillman above n 50 295.
23
CASE STUDY: THE PILBARA

INFRASTRUCTURE AGREEMENT
Cabinet gave approval to the State Government to
FMG sold the government a vision of a multi access negotiate the State Agreement and the agreement was
railway that would promote investment opportunities signed in record time in November 2004.61 During the
for iron ore in the Pilbara, boost exports and create second reading of The Pilbara Infrastructure Agreement
employment.57 Parliament quickly ratified the agreement (TPI) Bill in Parliament the Hon Robin Chapple stated:
and then FMG reneged on its agreement to provide
multi access infrastructure through the use of crippling The agreement will require the company to actively
application provisions for other companies.58 promote access and to attract new customers. That is
again another provision that has not been contained
The 1960s Iron Ore State Agreements with BHP and in past agreements. That is another reason that this
Rio Tinto contained clauses stipulating that third parties agreement will be very good for the State.62
could apply to access the rail. During the mining boom
in the Pilbara, mining companies looking to develop iron In 2013 Brockman Mining applied to FMG to run trains
ore mines in the Pilbara sought access to BHP’s and on the TPI rail and FMG refused. Court decisions ruled
Rio Tinto’s lines. Commencing in 2004 Fortescue Metals in favour of Brockman; FMG subsequently appealed to
Group (FMG) applied to access part or whole of these the Federal Court and lost. FMG argued that Brockman
rail lines. The government supported the application did not have the financial and management capability to
as it wanted to open up the Pilbara to further mining conduct rail operations and had refused its application
development.59 Rulings by the Australian Competition for third party access on those grounds.63 The High
Tribunal allowed FMG access to some of the rail but Court rejected an application by FMG for special
not the busier networks. Rio Tinto and BHP opposed leave to appeal in September 2016. Brockman will still
the decision in the courts. At this date subsequent have to demonstrate in an application to FMG that its
challenges in the courts by Rio Tinto, BHP and FMG management and staff have the required experience
have led to access been denied to FMG. and that Brockman has the financial resources to carry
out the operation. FMG’s CEO commented in regards to
In 2004, FMG frustrated at not being able to have Brockman capacity to demonstrate financial capability,
third party access to rail in the Pilbara entered into ‘we consider it highly unlikely they will be able to do so’.64
negotiations with the State Government of Western
Australia for a State Agreement and sold a vision of a FMG after negotiating an agreement with the
multi access railway to transport iron ore in the Pilbara.60 government for a multiuser railway has effectively
managed to operate a single user railway.
Summary
The application of Ministerial discretion, the ability for

proponents to negotiate directly with the government, the lack
of transparency and public accountability in the negotiation
57 Expert interview (Perth, January 2017); Western Australia, of State Agreement Acts can enable industry to influence the
Parliamentary Debates, Council, 26 November 2004, 8575-8579 approval process.
(Robin Chapple); Geoff Gallop, ‘State Agreement to facilitate new
multi-user rail and port infrastructure in Pilbara’ (Media Statement
11 November 2014) www.mediastatements.wa.gov.au/Pages/ For an analysis of the vulnerability and risk of large mining
Gallop/2004/11/State-Agreement-to-facilitate-new-multi-user-rail-and- infrastructure projects being exposed to industry influence,
port-infrastructure-in-Pilbara.aspx. see the section Cross cutting issues.
58 Brockman Mining in new bid to railroad Fortescue’ The Australian
(online) 1 August 2016 www.theaustralian.com.au/business/mining- 61 Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement
energy/brockman-mining-in-new-bid-to-railroad-fortescue-metals- Act 2004 (WA).
group/news-story/aab2eb2282a6cfbb599a7711c4d1103d; Tess
Ingham, Fortescue Metals Group loses bid to block Brockman from 62 Western Australia, Parliamentary Debates, Council, 26 November
rail’ The Financial Review 2 September 2016 www.afr.com/business/ 2004, 8575-8579 (Robin Chapple)
mining/iron-ore/fortescue-metals-group-loses-bid-to-block-brockman-
from-rail-20160902-gr7lnl. 63 ‘Brockman Mining in new bid to railroad Fortescue’ The Australian
(online) 1 August 2016 www.theaustralian.com.au/business/mining-
59 Eric Ripper to National Competition Council, The Pilbara energy/brockman-mining-in-new-bid-to-railroad-fortescue-metals-
Infrastructures application for declaration of Pilbara iron ore railways group/news-story/aab2eb2282a6cfbb599a7711c4d1103d.
60 Expert interview (January 2017). 64 Ibid.
24
Vulnerabilities and risks State Agreements Western

Australia
What is the risk that the negotiation process and

the components of the negotiations, including
Lack of transparency of negotiation process High
what is negotiable and non-negotiable, will not be
publicly knowable?
What is the risk of policy capture, and state

Industry influence High
capture by mining companies?

Inadequate due diligence diligence on applicants’ integrity such as past High
Colorful Minerals Around Queenstown in Tasmania, Australia.

Source: By Benny Marty/Shutterstock.
25
This section describes the context of and the Great Barrier Reef. There have been a number
of court challenges to both Commonwealth and State
mining in Queensland and the approvals environmental approvals.70 In response, the previous State
processes and analyses the risks in the administration legislated to take away community objection
approvals process for mining leases, and rights to coordinated projects in the Land Court. However, the
the assessment process for coordinated current administration has reinstated the community right to
object.71
projects in Queensland.
The Fraser Institute Annual Survey of Mining Companies
ranks Queensland number 10 out of 104 countries for
QUEENSLAND
investment attractiveness.72 Since 2012, Queensland has
annually ranked in the top 22 countries.
The Crown in Queensland has property in gold above or

below the surface of the land; coal above or below the
Queensland is rich in coal. It produces an eighth of global surface except where alienated by fee simple before 1
metallurgical coal for steel production. Thermal coal used in March 1910; and all other minerals (including dissolved or
power generation accounts for 15% of internationally traded suspended in water) on or below the surface of the land
coal, and is also used for domestic power generation.65 The except where alienated by fee simple pursuant to various
majority of coal produced is exported to Asia and growth in stipulated Acts in the mid 1800’s.73
demand from China has underpinned a rise in Queensland
coal exports. However, a recent slump in coal prices has
led to coal mines operating at a loss, mine closures, and Mining Leases Queensland
mothballing of mines.66
The Department of Natural Resources and Mines (DNRM)
The State is also Australia’s top producer of silver, lead, zinc manages Queensland’s natural resources – water, land,
and copper. Other minerals mined include bauxite, copper, minerals and energy, and administers systems and
gold, zinc, magnetite, titanium, tin, tungsten, nickel, apatite, procedures for land and property, water management, mining
ceramic and structural clays, bentonite, kaolin, diatomite, and exploration, and mapping and data. The Department of
dimension stone, gemstones, gypsum, limestone, dolomite, Environment and Heritage Protection (DEHP) manages the
magnesite, peat, perlite, phosphate rock, salt, silica and process for the issuing of environmental authorities required
zircon.67 for a mining lease.
The Queensland coal and minerals sector produced 286 The Minster for Natural Resources and Mines administers the
million tonnes at a value of $28 billion, and accounted for Mineral Resources Act 1989 (Qld), the Mineral and Energy
1.4% of the workforce and 6.4% of GSP in 2015-2016.68 The Resources (Common Provisions) Act 2014 (Qld), the Mineral
coal and minerals sector contribution to State exports was Resources Regulation 2013 (Qld), and the Mineral and
59% in 2014-2015.69 Energy Resources (Common Provisions) Regulation 2016
(Qld).
New coal mines approved or going through the approvals
process, namely the Adani Carmichael Coal Mine and the Rights conferred by a mining lease
New Hope New Acland Coal Mine, have recently been the
focus of significant attention by community and environmental A mining lease confers the right to mine the mineral(s)
groups. Protest groups are concerned with the adverse specified in the lease, to undertake mining, and other
impacts of proposed coal mine developments on climate purposes specified in the lease; the holder of the lease and
change, groundwater, threatened species, Indigenous rights, any contractor or employee for the purpose of mining may
enter the area of the lease, and may do all things permitted
or required under the lease.74 Coal seam gas cannot be
specified in the lease. The holder is entitled to take or
65 Department of Natural Resources and Mines, Queensland
interfere with underground water if it occurs as a result of, or
Government, Queensland mining and petroleum industry
overview (July 2016) www.dnrm.qld.gov.au/__data/assets/pdf_
during authorised mining activities.75
file/0004/238072/queensland-mining-petroleum-overview.pdf.
66 John Durie, The Australian (online), Coal price slump dents
Treasury 11 January 2017 www.theaustralian.com.au/business/
opinion/john-durie/coal-price-slump-dents-treasury-wesfarmers-
hopes/news-story/1e8cf7166a1afb5f2b94c2f160f170c6; Sky News 70 Adani Mining Pty Ltd v Land Services of Coast and Country
(online), Mining slump may last until 2020 9 February 2016 www. [2015] QLC 48.
skynews.com.au/business/business/market/2016/02/09/mining- 71 Darren Fooks, ‘Reinstatement of community objection rights for
slump-may-last-until-2020.html. coordinated projects, (2015) 34(3) Australian Resources and Energy
67 Above n 65 5. Law Journal 181
68 Queensland Government Data, Queensland Government, 72 Fraser Institute, Annual Survey of Mining Companies 2016 (28
Quantity and value of minerals produced 2015-2016 www.data. February 2017) www.fraserinstitute.org/studies/annual-survey-of-
qld.gov.au/dataset/annual-mineral-metal-and-petroleum-statistics; mining-companies-2016.
Queensland Resources Council, Economic Impact of the Minerals 73 Mineral Resources Act 1989 (Qld) ss 8(1)(2)(3).
and Energy Sector on the Queensland Economy 2015/2016 www.
qrc.org.au/wp-content/uploads/2016/10/FinalReport_compressed.pdf. 74 Ibid ss 234, 235.
69 Above n 65 5. 75 Ibid s 334ZP
26
A mining lease application can be for coal, minerals, and/ There is limited ministerial discretion in the Act. The Minister
or infrastructure for mining or coal. Between April 2016 to has discretion to refuse grant in the public interest but does
April 2017, 40 mining leases were granted in Queensland for not have discretion to grant in public interest.86
minerals, coal, or mining infrastructure.76
Further, the Government of Queensland has put in place
Further information on the approvals process for mining integrity systems and Offices and/or Commissioners for
leases can be found in Appendix A. oversight, education and corruption prevention for public
authorities and Ministers and Members of Parliament:
Strengths in the approvals process – • Code of Conduct for the Queensland Public Service,
declaration of interests register for chief executives, and a
Mining leases Queensland gifts and benefits register87
The DNRM has some systems in place to promote • Crime and Corruption Commission, Integrity
transparency and accountability and that could mitigate Commissioner, Information Commissioner, Ombudsman,
against corruption as described below: and Audit Office88
• Information on the department’s website about the • Code of Conduct for Ministerial Staff Members, Ministerial
approvals process Code of Conduct, Code of Ethical Standards for Members
of Parliament, Lobbyist Register, and a Register of
• Online application system77 Member’s Interests.89
• Public access to applications lodged once a mining notice
is issued78
• Publicly available information on mining tenements and
resource authorities79 However, conditions attached to
resource authorities are not publicly available.
• Comprehensive information on Queensland geoscience
available to the public80
• First in time system81
• The Land Court will hear objections from any party
unless it is outside the jurisdiction of the court or frivolous
or vexatious82
• Criteria for assessment clearly defined83
• More than one department officer assesses the
applications84
• Criteria for recommendations by the Land Court and
grant by Minister clearly defined85
86 Ibid s 267(b).
87 Public Service Commission, Queensland Government, Code
of Conduct for the Queensland Public Service (1 January 2011)
www.forgov.qld.gov.au/code-conduct-queensland-public-service;
76 Business Queensland, Recently granted resource authorities Declarations of interest register (2017) www.qld.gov.au/about/how-
(monthly reports) www.business.qld.gov.au/industries/mining-energy- government-works/government-structure/public-service-commission/
water/resources/public-notices-tenders/recent. declarations-of-interest-register/index.html; Gifts and benefits
register (2016) www.qld.gov.au/about/how-government-works/
77 See MyMinesOnline at Business Queensland, Mining online
government-structure/public-service-commission/information/index.
services www.business.qld.gov.au/industries/mining-energy-water/
html.
resources/online-services; Business Queensland, Mining lease
application notices www.business.qld.gov.au/industries/mining- 88 The Crime and Corruption Commission Queensland www.ccc.
energy-water/resources/public-notices-tenders/mining-lease- qld.gov.au/about-the-ccc/accountability-and-leadership; Queensland
application. Integrity Commissioner, What we do www.integrity.qld.gov.au/about-
us/what-we-do.aspx; Office of the Information Commissioner www.
78 See Mining Lease Notices and Public Notices and Tenders, and
oic.qld.gov.au/; Queensland Ombudsman, Role of the Ombudsman
Mines Online Maps at ibid.
www.ombudsman.qld.gov.au/what-we-do/role-of-the-ombudsman;
79 See Public Search for Resource Authorities, Mines Online Maps Queensland Audit Office www.qao.qld.gov.au/.
at ibid.
89 Department of Premier and Cabinet, Queensland Government,
80 QSpatial, QDex Data, Geoscience Portal at ibid. Code of Conduct Ministerial Staff Members www.premiers.qld.gov.
au/right-to-info/published-info/assets/code-of-conduct-ministerial-
81 Expert interviews (Brisbane, March 2017); Mineral Resources staff.pdf; Ministerial Code of Conduct www.premiers.qld.gov.au/
Act 1989 s 251. publications/categories/policies-and-codes/handbooks/ministerial-
82 Mineral Resources Act 1989 s 267A; Queensland Courts, Land handbook/ethics/min-code.aspx; Queensland Parliament, Code of
Court Objecting to mining projects www.courts.qld.gov.au/courts/ Ethical Standards, Legislative Assembly of Queensland (11 May
land-court/land-disputes/objecting-to-mining-projects. 2009) www.parliament.qld.gov.au/documents/assembly/procedures/
CodeOfEthicalStandards.pdf; Queensland Integrity Commissioner
83 Mineral Resources Act 1989 ss 245, 250, 252(1), 266. , Who is on the register? www.lobbyists.integrity.qld.gov.au/who-is-
84 Expert interviews (Brisbane, March 2017). on-the-register.aspx; Queensland Parliament, Register of Members’
Interests www.parliament.qld.gov.au/members/current/register-
85 Mineral Resources Act 1989 ss 269(4), 271, 271A. members-interests.
27
Vulnerabilities and risk – Mining Leases Whilst these vulnerabilities were noted as factors that could
enable corruption a full risk assessment was not undertaken
Queensland due to the amount of time available for this study. The
Some minor vulnerabilities have been identified in the decision was taken to assess those vulnerabilities where
approvals process: the difficulty of accessing information, there was evidence of significant impact.
the absence of localised departmental integrity
frameworks, and the lack of community engagement. Due diligence and beneficial ownership
A vulnerability with greater impact was also identified
inadequate due diligence investigation. A vulnerability associated with the process is the inadequate
due diligence investigation of mining companies applying
Accessing information for a mining lease including the lack of investigation into the
beneficial owners of a company operating in the resources
Information can be difficult to find on the DNRM department sector in Queensland by DNRM and DEHP.90
website due to the fact that the department’s scope of
responsibilities is broad. When searching for mining or DNRM investigates applicant’s past resource authority
department specific information the search is often directed performance in Queensland. However, they do not
to other websites: Business Queensland and Queensland investigate the applicant’s past performance in other
Government data. Whilst there is a large amount of Australian states or offshore.91 Applicants for a mining lease
information available, the difficulty navigating the site and the with less than five year’s history in Queensland of a good
information does reduce transparency and the capacity to compliance record must provide supporting evidence with
access comprehensive information. their financial capability statement.
Absence of localised integrity frameworks Applicants for a mining lease, who are not already registered
as suitable operators with the DEHP, will need to apply for
Integrity frameworks and policies are not localised. Whilst registration. Applicants are asked to declare any convictions
the Queensland government has comprehensive integrity for environmental offences, cancellation or suspension of
frameworks, these frameworks are not listed as department environmental authorities, licences or permits, and any
specific policies on the DNRM website. DNRM has a link to a cancellation or suspension of suitable operator or similar
departmental gifts and benefits register and a page detailing registration under the Environmental Protection Act 1994
information rights, but there are no departmental specific or a corresponding law in Queensland, the Commonwealth
codes of conduct, transparency, fraud or corruption policies or another state. The applicant will also be asked if they
listed on the DNRM website. Localised departmental integrity have been issued any environmental notices or orders.92
policies, mentoring and induction contribute to corruption If the applicant answers ‘yes’ to any of the questions they
deterrence in a department. must self-report provide full details of the event. The chief
executive may disclose that information to an administering
Lack of community engagement authority in another state, or to the commissioner of
the police service to obtain a suitability report.93 Further
Community engagement is not specified as a component research for the purposes would have to be undertaken to
to be addressed in mining proposals nor is it mentioned discover how much investigation the government does into
in the department’s policies. This can raise concern that an applicant’s history, or if self-reporting is deemed to be
the department is not meeting internationally recognised sufficient evidence.
stakeholder engagement and human rights obligations.
As discussed in the section on Mining Leases Western
Australia, due diligence should cover the financial, legal,
environmental and social aspects of an applicants record
and the ultimate beneficial ownership of a company.
Summary
The lack of investigation into mining lease applicant’s past

resource authority performance in jurisdictions outside
Queensland; and the lack of self-reporting of environmental
offences in jurisdictions outside Australia for suitable operator
registration for an environmental authority creates a risk that
mining leases will be granted to operators with a history of
non compliance.
Further discussion of this vulnerability and an analysis of the

risk, can be found in the section Cross cutting issues.
90 Expert interviews (Brisbane, March, May 2017).

91 Ibid.
92 Ibid s 318F; Department of Environment and Heritage Protection,
Application for Suitable Operator Registration www.ehp.qld.gov.au/
licences-permits/suitable-operators.
View of Gold Mining Processing
93 Ibid 2.
Plant in the Desert of Australia
Source: By Steve Lovegrove/Shutterstock.
28
Vulnerabilities and risks mining leases Queensland

Inadequate due diligence into character of
company and principals
The conditions of approval in the Coordinator-General’s

This section describes the environmental report only have legal effect when they are attached to an
assessment process in Queensland for approval given under other State legislation, for example, a
mining lease or an environmental authority.
large infrastructure projects. It provides
an overview of the how both the State Matters of national environmental significance (MNES)
and Commonwealth processes are
managed by the Coordinator-General. In A proponent will have to obtain Commonwealth approval for
projects that may have an impact on matters of national
addition, the processes are analysed for environmental significance (MNES). Matters of national
vulnerability and risk. environmental significance protected under the Environment
Protection and Biodiversity Conservation Act 1999 (Cth) are
world heritage properties; national heritage places; wetlands
Coordinated projects of international importance; listed threatened species and
ecological communities; migratory species protected under
The Coordinator-General’s office, in the Department of State
international agreements; Commonwealth marine areas; the
Development, coordinates the environmental assessment
Great Barrier Reef Marine Park; nuclear actions; and a water
process, referrals to other agencies, and reporting for large
resource in relation to coal seam gas development and large
mining infrastructure projects. Proponents are still required to
coal mining development.96
obtain a mining lease, environmental authority and any other
approvals or permits required.
Coordinated projects
Environmental assessments and
approvals under the Bilateral Agreement
The Coordinator-General administers the State Development between the Commonwealth and the State
and Public Works Organisation Act 1971 (Qld), which sets of Queensland
out the responsibilities of the Coordinator-General and the
requirements for coordinated projects. The Commonwealth and the State of Queensland have a
bilateral agreement relating to environmental assessment for
The Coordinator-General may declare a project to be a MNES.97 Mining projects that will have a significant potential
coordinated project for which an Environmental Impact impact on a MNES may be declared a controlled action by
Statement (EIS) is required.94 An EIS is required for high risk the Commonwealth Department of Environment. Projects
and/or large-scale projects that have the potential to cause declared controlled actions by the Commonwealth Minister
environmental, social or economic impacts. An EIS includes for the Environment may be assessed by the Queensland
an environmental impact assessment, an economic impact government EIS process under the terms of the Agreement
assessment, and a social impact assessment.95 between the Commonwealth and the State of Queensland
for Environmental Assessment under section 45 of the
The coordinated projects assessment process involves four Environment Protection and Biodiversity Conservation Act
stages: 1999 (Bilateral Agreement).
• Declaration of a coordinated project by the Coordinator- The Bilateral Agreement between the Commonwealth
General and the State minimises duplication in the environmental
• Project terms of reference assessment and approvals process by Commonwealth
accreditation of the State of Queensland’s environmental
• Environmental Impact Statement (EIS) management processes. The State of Queensland is
• Coordinator-General’s report, which imposes conditions accredited to conduct the assessment and reporting
and makes recommendations.
96 Environment Protection and Biodiversity Conservation Act 1999

(Cth) ss 12-24E
94 State Development and Public Works Organisation Act 1971
(Qld) s 26(1). 97 Department of Environment and Energy, Government of
Australia, Agreement between the Commonwealth and the State of
95 An Impact Assessment Report is required for well-defined and Queensland relating to Environmental Assessment (18 December
low-to-medium risk projects. 2014)
29
phases of the environmental approval process for declared Vulnerabilities and risk – coordinated
coordinated projects that impact on MNES.
projects
The Coordinator-General consults with the Commonwealth Three vulnerabilities have been identified in the coordinated
Department of Environment regarding the sections of the projects assessment process: inadequate due diligence;
terms of reference, environmental impact statement (EIS), the discretion of the Coordinator-General to make
and the final report where there is likely to be a significant evaluations and recommendations; and limited independent
impact on a MNES. The Commonwealth Minister for the review of modelling systems used in the environmental
Environment after reviewing the final report, and consulting impact statement.
with other Commonwealth Ministers has the power to
approve the controlled action with conditions. 1. Due diligence
Flow charts detailing the approvals process for coordinated The level of due diligence investigation into the character and
projects and for bilateral agreements are available in integrity of proponents by the Coordinator-General’s office
Appendix A. has been identified as a vulnerability in the process that
could enable proponents with a record of non compliance to
mine for resources in Australia.
Strengths of the assessment process –
coordinated projects The State Development and Public Works Organisation
Regulations 2010 stipulates that the proponent must provide
The Coordinator-General’s coordinated projects assessment in the EIS details of any proceedings under a law of the
process and the process under the bilateral agreement have Commonwealth or State.104 This reporting requirement does
some elements that promote transparency and accountability, not extend to proceedings in jurisdictions outside Australia.
and mitigate the risk of corruption occurring as described
below: Under the Environment Protection and Biodiversity
Conservation Act 1999, in making referral and approval
Coordinated Projects decisions, the Minister must have regard to a person’s
environmental record. This can include regard to the
• Comprehensive information publicly available information executive officers of a body corporate. The Commonwealth
on the Coordinator-General’s website regarding the Department checks the accuracy of any information provided
assessment process and project documentation98 against publicly available sources.105 Schedule 4 of the
• Public notification and invitation to comment on draft EIS Environment Protection and Biodiversity Conservation
and revised EIS, and the terms of reference for large Regulations 2000 states that a person must provide details
projects.99 of any proceedings under a Commonwealth, State or
Territory Law, but like the SDPWO Act does not require
Projects managed under the Bilateral Agreement reporting of proceedings outside Australia. Proponents also
require registration as a ‘suitable operator’ when they apply
• Comprehensive information on approvals on for an environmental authority for a mining lease under the
Commonwealth EPBC Notice portal100 Environmental Protection Act 1994 and must declare their
• Public notification and invitation to comment on referral, environmental record in Australia, as discussed in the section
terms of reference, and draft EIS and revised EIS.101 Mining Leases Queensland.
• Clearly defined decision-making and assessment criteria

under the EPBC Act.102
• Ministerial decisions are open to judicial review.103
Vulnerabilities identified in the process that have the

potential to create an enabling environment for corruption are
described below.
98 Coordinator-General, Current Projects www.statedevelopment.

qld.gov.au/assessments-and-approvals/current-eis-projects.html.
99 State Development and Public Works Organisation Act
1971(Qld) s 33; Expert interview (Brisbane, June 2016).
100 Department of Environment and Energy, EPBC Act Public
Notices www.epbcnotices.environment.gov.au.
101 Environment Protection and Biodiversity Conservation Act 1999
ss 74(3); Agreement between the Commonwealth and the State 104 State Development and Public Works Organisation Regulation
of Queensland under section 45 of the Environment Protection 2010 reg 35, sch 1 item 6.
and Biodiversity Conservation Act 1999 relating to environmental 105 Department of Environment and Energy, Australian
assessment sch 1 cl 2 cls 4. Government, Policy Statement – Consideration of a Person’s
102 State Development and Public Works Organisation Act Environmental History when making Decisions under the EPBC
1971(Qld) s 33 ss 67-105. Act www.environment.gov.au/resource/epbc-act-policy-statement-
consideration-persons-environmental-history-when-making-
103 Ibid s 487. decisions.
30
CASE STUDY: ADANI MINING

Adani obtained its first environmental authority in
Australia in 2010.110 The EPA Act 1994 (Qld) was
The gap in both State and Commonwealth law amended to require a proponent to be a registered
regarding the investigation of the record of proponents operator in 2013, but existing holders of environmental
in jurisdictions outside Australia is potentially significant authorities were automatically awarded ‘suitable
as the case of Adani Mining shows. In the EIS for the operator’ status.111 Environmental Justice Australia
Carmichael Coal Mine, February 2013, the proponent reports that Adani failed to disclose that one of its
Adani Mining, an Indian multinational corporation, stated directors and the CEO of the Adani Group’s operation
that it ‘has not been subject to any proceedings under a in Australia was previously an executive officer of a
Commonwealth, State or Territory law for the protection company that pleaded guilty to criminal charges of
of the environment or the conservation and sustainable serious water pollution of the Kafue River, Zambia and
use of natural resources’.106 Yet there is evidence that of failure to report environmental pollution.112
Adani has failed to comply with laws and environmental
permits in India.107 An investigation in December 2010
by officials from the Indian Ministry of Environment
Protection and Forests into the Mundra Port and
Special Economic Zone (Mundra SEZ) operated by Summary
Adani Ports found destruction of mangroves, creek
systems and natural seawater flow by reclamation, and Lack of investigation of a proponent’s environmental record
development of a township, airport and hospital without by the Commonwealth and by the State in jurisdictions
the proper environmental approvals.108 In April 2013, outside Australia can lead to proponents with a record of
an independent committee established by the Indian environmental offences operating large mining projects in
Ministry found ‘incontrovertible evidence’ of Adani’s Australia. This can be of significant concern when large
violations of its environmental approvals in the Mundra mining projects are operating in areas where there are risks
SEZ including failure to protect mangroves, allowing of impacts to ecology, biodiversity or water resource.
changes to water courses, attempting to bypass statuary
procedures; allowing construction of an airstrip without Further discussion of the vulnerability and risk of inadequate
environmental approval, failing to use lining in storage due diligence and an analysis of risk can be found in the
ponds and intake/outlet channel to protect groundwater section Cross cutting issues.
against salinity intrusion; and failing to comply with its
environmental approval requirements for monitoring and 2. Coordinator-General’s discretion
auditing.109
Discretion under the Act
The level of discretion available to the Coordinator-General

has been identified as a vulnerability in the assessment
process for environmental approvals for large mines. The
State Development and Public Works Organisation Act
1971 confers on the Coordinator-General discretion to make
declarations, evaluations, recommendations and impose
conditions. It does not stipulate the criteria for decision-
making, except in relation to what the Coordinator-General
must have regard to:
• The Coordinator-General may declare a project to be a

106 Coordinator General, Carmichael Coal Mine and Rail Project, coordinated project for which an EIS is required s 26
Environmental Impact Statement, Introduction (15 December 2012)
www.statedevelopment.qld.gov.au/assessments-and-approvals/
• In considering whether to declare a project to be a
carmichael-coal-environmental-impact-statement.html 1-1. coordinated project, the Coordinator-General must have
regard, and may give the weight the Coordinator-General
107 Environmental Justice Australia, A review of the Adani group
considers appropriate s 27(1)
environmental history in the context of the Carmichael coal mine
approval (27 January 2015) www.envirojustice.org.au/major-reports/ • The Coordinator-General may publicly notify that an EIS
a-review-of-the-adani-group%E2%80%99s-environmental-history-in- is required for the project s 29(1)(a)
the-context-of-the-carmichael 5.
• The Coordinator-General may seek information to assist
108 Ministry of Environment and Forests, Government of India,
Show Cause Notice under Section 5 of Environment (Protection) Act, in the preparation of EIS (s 31)
1986 for violation of the provisions of the Coastal Regulation Zone
Notification, 1991 by M/s Mundra Port & SEZ Limite’ (15 December 110 Environmental Justice Australia above n 107, 3.
2010) www.moef.nic.in/downloads/public-information/show-cause-
mundra-opg.pdf. para 1 – 19. 111 Environmental Protection Act 1994 (Qld) s 705.
109 Centre for Science and Environment, Report of the Committee 112 Environmental Justice Australia, The Adani Brief (15
for Inspection of M/s Adani Port & SEZ LTD, Mundra, Gujarat (April February 2017) www.envirojustice.org.au/sites/default/files/
2013) www.moef.nic.in/sites/default/files/adani-report-290413.pdf 76 files/Submissions%20and%20reports/The_Adani_Brief_by_
-81. Environmental_Justice_Australia.pdf 29.
31
• The draft EIS prepared by the proponent must address, process, and bespoke solutions to be applied.115 It allows the
for the whole project, the terms of reference to the positive benefits of a project to mitigate and offset negative
satisfaction of the Coordinator-General s 32(2) effects.
• After the end of the submission period for a draft EIS, the
An expert indicated that the discretion is ‘jealously guarded’
Coordinator-General must consider the following— (i)
by the Coordinator-General’s Office as a powerful mechanism
the draft EIS; (ii) any properly made submissions for the
for project facilitation.116 The expert further suggested that if
draft EIS; (iii) any other material the Coordinator-General
the discretion was applied inappropriately that there would
considers is relevant to the project s 34A
be political consequences and the discretion could be taken
• In evaluating the EIS, the Coordinator-General may — from the Coordinator-General by the political administration.
evaluate the environmental effects of the project and any In this sense, it is in the interest of the Coordinator-General to
other related matters s 34D(3)(a). apply the discretion judiciously.
McGrath observes: It should be noted that there have been no investigations of

the Coordinator-General or of the staff for corruption to date.
From a legal perspective the striking feature of the
SPDWO Act is there is effectively no enforceable Public concern and coordinated projects
deliberative obligation under it (i.e. there is no legal
framework within which the decision must be made such Ministerial discretion has been flagged for coordinated
as a stated object of the legislation and the factors that the projects in this risk assessment because of the broad
decision-maker must consider).113 swell of public disquiet regarding coal mining approvals in
Queensland. Whilst public comment and action has been
The Coordinator-General facilitates and manages approvals characterised by some as the purview of the left green fringe,
and assessments for large mining projects, which can bring recent objections in the Queensland Land Court indicates
economic development to the state and create jobs. Yet that the objections in the courts are driven by landholders,
the central and critical part of the Coordinator-General’s and rural communities who are effected by mining in
assessment process for coordinated projects and projects Queensland. Lawyers, academics, and the media across
assessed under the bilateral agreement is the assessment the eastern states are also rallying to oppose coal mining in
of environmental impact and the recommendations and Queensland. The interests of groups opposing coal mines,
the imposition of conditions to protect the environment. covers objecting to environmental effects relating to climate
Given the Department of State Development’s key strategic change, future Australian energy requirements, ecological
objectives are all related to economic development, and water resource protection, protection of biodiversity,
investment promotion, growth, and job creation, a conflict and the financial probity of companies operating in Australia
of interest can be perceived as inherent in the role of the – effectively issues of national interest and concern. It
Coordinator-General to manage environmental approvals. seems there is a war going on in Queensland between
However, it should be noted that the Coordinator-General the entrenched interests of ‘business as usual’ economic
is an independent statutory officer under section 8 of the development, and the interests of communities, concerned
SPDWO Act. individuals, and environmentalists. Coal mining companies
working in Queensland have been the focus of significant
Other factors for consideration media attention. However, mining companies are applying
for approvals and being approved to mine under existing
In order to understand the Coordinator-General’s discretion policy and law. Whilst the application of policy is not a focus
in the Act, it has to be put into context and also assessed of this study, the broad provisions in the SDPWO Act for
as to how the discretion works in practice. Significant the Coordinator-General’s discretion and the vulnerability
projects (as coordinated projects were then known) were an it creates for a corruption risk is the focus of the study. The
important driver for economic development in Queensland. Coordinator-General is a senior public servant who applies
They facilitated the development of coal mining projects in the policy directives of the political administration, and
the Bowen Basin in the 1960s, bauxite mining at Weipa and thus the discretion applied can be interpreted as political
established Gladstone as an industrial hub.114 discretion.
The discretion of the Coordinator-General allows for the Analysis of vulnerability and risk
facilitation of complex projects, which have elements both
on and off lease, and particular and at times, contradictory The vulnerability, Coordinator-General’s discretion, indicated
economic, social and environmental effects. If projects were the propensity for the occurrence of the process design risk
approved only under the other available Acts, it could allow What is the risk of external interference in the Coordinator-
for perverse consequences. Discretion allows for competing General’s recommendations, evaluations and imposition of
interests, and diverse impacts to be taken into account and conditions?
managed through the project assessment and evaluation
Successive State administrations in Queensland have
supported mining projects in Queensland to promote
economic development despite challenges in the courts, and
widespread vocal public opposition to the environmental and
113 Chris McGrath, The Queensland Bilateral’ 2002/2003 8((33)
Queensland environmental reporter 145, 150.
114 Expert interview (Brisbane, June 2017); Geoffrey Blainey, The 115 Expert interview (June, 2017).
Rush That Never Ended (Melbourne University Press 5th ed 2003)
277. 116 bid.
32
community effects of specific mining projects. The severity EIS runs to six volumes and the supplementary EIS is two
of the impact and likelihood of the risk of external influence volumes, with each volume comprising up to 20 files.118 The
is potentially lessened by the role that other State agencies amount and complexity of information provided makes it
have in the process through the advice and consultation difficult for the public to access and assess the information
phase; the elements of transparency of the process; the provided in order to make a public submission.119 As Finanzio
capacity for subsequent project approvals to be objected to notes, ‘the volume of material that needs to be analysed
in the Land Court of Queensland; a vibrant and active civil before constructive criticism can be made is such that a
society, and a robust media. Where a project is a controlled meaningful contribution to the decision maker’s assessment
action the requirement for the Commonwealth Minister’s is impeded.’120
approval under the EPBC Act also acts as a safeguard.
The economic and scientific modelling methods used in an
The vulnerability of the Coordinator-General’s discretion can EIS have been criticised by experts, and the results of the
potentially lead to industry influence in the approvals process modelling methods utilised for large coal mining projects
and the risk What is the risk of policy capture, and state have been disputed in the courts.
capture by mining companies? This risk is discussed in the
section on Cross cutting issues. Economic modelling
Summary There has been some criticism of input-output analysis as

an effective economic modelling method to demonstrate
Whilst the Coordinator-General does have considerable anticipated benefits as it can lead to the overstating of
discretion, the application of the discretion has an specific regional economic activities. The Productivity
important role to play in the project assessment process. Commission states:
The injudicious application of the discretion is mitigated by
the public accountability of the process and the political It is likely that if all such analyses were to be aggregated,
oversight of the office. Even though there are mitigating they would sum to much more than the total for the
factors, the discretionary power of the Coordinator-General Australian economy. Claims that jobs ‘gained’ directly from
is still identified as a vulnerability because of the capacity the cause being promoted will lead to cascading gains in
for discretionary decision-making and that there can be a the wider economy often fail to give any consideration to
‘perception’ of bias. the restrictive nature of the assumptions required for input-
output multiplier exercises to be valid. In particular, these
3. Environmental Impact Statement review applications fail to consider the opportunity cost of both
spending measures and alternate uses of resources, and
The research has indicated a vulnerability, in the EIS may misinform policy-makers.121
assessment process, of limited independent review of the
scientific modelling used to make assessments. Economic modelling for the Adani Carmichael Coal Mine
in North Queensland was disputed in the Land Court, with
The EIS contains complex modelling and data in order economists challenging the assumptions made regarding
to assess the environmental, economic, social and the number of jobs that would be created by the mine and
cumulative impacts of a mining project. The decision-making the company itself acknowledging that the modelling was
department, State or Commonwealth, makes decisions, optimistic.122 The Land Court made the conclusion that the
recommendations and imposes conditions based on the input output analysis in the EIS:
information contained in the EIS and relies on the expertise
of government departments to assess the information estimated the number of jobs to be over 10,000 fte (sic)
provided. Whilst proposals for large coal mines are referred jobs per annum from 2024. Dr Fahrer’s evidence, which
to the Independent Expert Scientific Committee (IESC) for I have accepted, was that the Carmichael Coal and Rail
advice, there is limited independent review of the modelling Project will increase average annual employment by 1,206
systems unless requested by the Commonwealth Minister fte jobs in Queensland and 1446 fte jobs in Australia.123
or undertaken by, and funded by, civil society or community
members. Regional impact assessments have also been criticised
Public review of the EIS 118 GVK Hancock Coal, Alpha, EIS, Supplementary EIS www.
gvkhancockcoal.com/our-assets/alpha.
Civil society organisations and landowners depend on 119 Expert interview (Brisbane, February 2017).
community legal organisations such as the Environmental 120 Adrian Finanzio, ‘Public participation, transparency and
Defender’s Office (EDO) to provide review of the EIS to accountability – Essential ingredients for good decision making’
support objections in the Land Court or appeals to the (2015) Australian Environmental Law Digest.
courts. However, the Commonwealth funding cut to EDO in
121 Paul Gretton, Productivity Commission, Australian Government,
2014 constrains the ability of the EDO to review, advise and On input output tables uses and abuses (September 2013) www.
provide legal support.117 pc.gov.au/research/supporting/input-output-tables/input-output-
tables.pdf 1.
The comprehensive size of the EIS can constrain public 122 Rod Campbell ‘Fact check: Will Adani’s coal mine really boost
access to the documentation. For example, the Alpha Coal employment by 10,000 jobs’ The Australian Business Review (online)
31 August 2015 www.theaustralian.com.au/business/business-
spectator/fact-check-will-adanis-coal-mine-really-boost-employment-
117 ‘Funding cuts to Environmental Defender’s Offices described by-10000-jobs/news-story/903c1932738b1d1a1763c74e45f4d7c7.
as barbaric’ ABC News (online) 18 December 2015 www.abc.
net.au/news/2013-12-18/funding-cut-to-environmental-defenders- 123 Adani Mining Pty Ltd v Land Services of Coast and Country
offices/5164934. (2015) QLC 48 at [575].
33
because of the difficulties of placing a monetary value on technical and scientific issues identified in the committee’s
environmental goods and services and the inappropriateness advice prior to project approval’.130
of discounting to present the future value of environmental
goods and services.124 Though expert interviews have indicated the valuable advice
provided by the IESC, a recent ruling by the Land Court
Modelling of impacts on water resources noted that the evidence provided by experts and laymen in
the court superseded the advice provided by the IESC.131 The
Academics and other experts have also criticised the ruling also made reference to the reliance of the Coordinator-
modelling used to analyse groundwater impacts for large General on modelling and data that contained errors.
coal mines.125 There can be significant uncertainty in
scientific models especially in regard to the future impacts of
development of a project on water resources.
Conditions are attached to approvals relating to the adaptive

management of future impacts. The conditions imposed on
CASE STUDY: NEW ACLAND COAL
approvals can have the role of providing key performance
indicators for monitoring, and reporting when an impact The Oakley Coal Action Alliance Group, a group of 60
occurs. However, due to resourcing issues, monitoring landowners and townspeople, were represented by
and compliance may not be rigorous.126 In the Journal of the Environmental Defenders’ Office in an objection
Hydrology, Currell recommends: to a coal mining lease application by New Hope for
the New Acland Coal Mine in the Land Court.132 The
Monitoring criteria and proposed mitigation strategies project was initially assessed under the Bilateral
should be available for public review and scrutiny Agreement between the Commonwealth and the State
prior to project approval, rather than being deferred to of Queensland and in December 2014 the Coordinator-
a post-approval process (Lee, 2014; Slattery, 2016). General published an evaluation report for the project.133
After approval, monitoring and management plans The recommendation of the Land Court pointed to
are generally overseen by mining companies and the deficiencies in the advice provided by the IESC and in
relevant government department(s), but need not involve the Coordinator-General’s evaluation.
public consultation. Monitoring the compliance with
environmental conditions in jurisdictions such as the On the 31 May 2017, in New Acland Coal Pty Ltd v
State of Queensland, Australia is hampered by a lack of Ashman (No 4) [2017] QLC 24 the Court recommended
resources and expertise (e.g. Queensland Audit Office, that the New Acland Coal mining lease application not
2014), and this is likely true in other jurisdictions also. A be granted citing the inadequacies in the modelling in
greater degree of transparency and upfront effort in the the EIS and the advice provided by the IESC.
design of monitoring criteria and proposed mitigation
plans would thus allow the public and technical experts to As regarding groundwater, a huge amount of
provide input, helping to ensure environmental objectives evidence was before the Court. In key areas NAC’s
will be effectively monitored and met.127 [New Acland Coal’s] own experts agreed with
major shortcomings of the current model. I was
Independent Expert Scientific Committee (IESC) also highly concerned regarding the modelling
of faulting and other aspects of the groundwater
Mining proposals for large coal mines that are likely to studies undertaken to date. These issues have
have a significant impact on water resources are referred not been answered by the 2016 IESC Advice for
to the Independent Expert Scientific Committee (IESC) for reasons including the unfortunate fact that the
advice.128 The IESC operates under the National Partnership IESC did not have the advantage of the material
Agreement on Coal Seam Gas and Large Coal Mining. The before the Court on groundwater. Groundwater
EIS must include a section addressing the requirements considerations are such that the revised Stage 3
contained in the IESC guidelines.129 However, Matthew project should not proceed given the risks to the
Currell points out that the advice of the IESC is not binding surrounding landholders and the poor state of the
and that proponents ‘are not strictly required to resolve all current model.134
124 Expert interview (May 2017)

125 Matthew Currell, ‘Problems with the application of
hydrogeological science to regulation of Australian mining projects:
Carmichael Mine and Doongmabulla Spring’ (2017) 548 Journal of
Hydrology 674; Expert interviews (Brisbane, March 2017).
126 Expert interviews (Brisbane, April, June 2017). 130 Currell above n 125, 674, 681.
127 Currell above n 125, 681. 131 New Acland Coal Pty Ltd v Ashman (No 4) [2017] QLC 24.
128 Environment Protection Biodiversity and Conservation Act 1999 132 EDO Qld, Case summary: New Acland Coal Mine Stage 3
s 131AB. objections www.edoqld.org.au/case-update-acland/.
129 Independent Expert Scientific Committee on Coal Seam Gas 133 Coordinator-General, New Acland Coal Mine Stage 3 Project
and Large Coal Mining Development, Information Guidelines for the www.statedevelopment.qld.gov.au/assessments-and-approvals/new-
Independent Expert Scientific Committee advice on coal seam gas acland-coal-mine-stage-3-expansion.html.
and large coal mining development proposals (2015) www.iesc.
environment.gov.au/publications/information-guidelines-independent- 134 New Acland Coal Pty Ltd v Ashman (No 4) [2017] QLC 24 at
expert-scientific-committee-advice-coal-seam-gas. [16].
34
There are some mechanisms for review that are built into
the EIS process: the IESC provides advice on the impact
An observation was made by the Court on the on water resources by coal mines, the public can review the
thoroughness of the Coordinator-General’s evaluation EIS and make submissions, and the Commonwealth Minister
of the EIS and the reliance of Coordinator-General on may order an independent review when it affects an MNES.
incorrect modeling. However, these mechanisms can have limited effectiveness
to ensure that there is adequate independent scientific
CG evaluation of the EIS and AEIS was no verification of the accuracy of an EIS.
doubt thorough but it was not as thorough as
the evaluation of those documents in the court The legal system can provide opportunities to test scientific
proceedings before me. Nor did the CG have data. Whilst the Coordinator-General’s decisions are not
the assistance of expert opinion tested by cross- judicially reviewable, nor subject to a merits review137, the
examination. Consequently what I find to be errors subsequent application for a mining lease and environmental
in expert reports and modelling in many vital authority in the Land Court can be challenged on merit and
areas such as water, noise and dust were only any party can apply for judicial review.138 Commonwealth
ascertained as part of the Land Court proceedings decisions under the Environment Protection and Biodiversity
and not discovered by the CG in his evaluation Conservation Act 1999 are open to judicial review, with
process. broad provisions relating to what must be demonstrated in
order to have standing to seek judicial review.139 Whilst these
The inconsistency requirement has an unwelcome opportunities for merit decisions and judicial review can
hindering effect on the court in circumstances provide further opportunities for independent examination
where the CG has relied upon incorrect modelling of technical and scientific evidence, the costs involved are
and the court is unable to correct conditions made prohibitive.
by the CG in reliance on that incorrect modelling.135
Summary
The court also made observations regarding the impact
of economic input output modelling to overestimate Independent verification of the EIS and the modelling
economic benefits.136 systems used would lead to greater accuracy and better
decision making, and would restore public faith in the
The findings in the New Acland Coal case in the process.140 Whilst independent review and verification would
Land Court demonstrate that modelling used for an add to the cost of the approvals process, it may also lead
EIS may not be correct. However, the case also to greater efficiencies, as objections in the Land Court over
illustrates the decisions that the proponent and the the adequacy of the scientific information presented in the
Coordinator-General have to take into regard to the EIS can significantly extend costs and approval timelines.141
extent and type of modelling they will do. Modelling Lack of independent verification of the EIS can create
can comprehensive, time consuming and costly opportunities for mining companies to present data in a
and a comprehensive approach may not be always manner that minimises negative impacts, and improves the
warranted if the impacts are low. possibility of the project being expediently approved.
Analysis of vulnerability and risks
The vulnerability Limited independent review of modelling

systems for environmental impact statements, pointed to a
process practice risk What is the risk there is inadequate
verification of the accuracy or truthfulness of environmental
impact statements?
Inadequate review and verification of modelling systems,

theories and data can lead to inaccuracies in the EIS, and
subsequently have significant environmental effects. Whilst
the transparency and accountability of the process does 137 Ibid s 27AD.
to some extent allow the public to review environmental
assessments, independent scientific review and input 138 Mineral Resources Act 1989 s 370
built into the process would allow for greater integrity of 139 Environment Protection and Biodiversity Conservation Act 1999
the information, surety and scientific rigour, and would s 487.
mitigate against proponents and their consultants providing 140 Expert interviews (March, May, Brisbane 2017); Currell, above n
information that does not adequately address negative effects 125, 681; Finanzio above n 120.
and information that can exaggerate economic outcomes.
141 President of the Land Court, Queensland Courts, Review of
the Mining Objections and Related Jurisdiction of the Land Court of
135 Ibid at [190]. Queensland (1 March 2017) www.courts.qld.gov.au/__data/assets/
pdf_file/0007/511558/lc-rpt-review-of-mining-objections-and-related-
136 Ibid at [899, 900]. jurisdiction.pdf 2.
35
Vulnerabilities and risks – Coordinated projects

Queensland

Inadequate due diligence investigations into
character of company and principals
What is the risk of external interference in

the Coordinator-General’s recommendations,
Coordinator General’s discretion in declaration, evaluations and imposition of conditions?
Medium
assessment and evaluation for EIS process
What is the risk there is no verification of the

Limited independent review of modelling
accuracy or truthfulness of environmental impact Medium
systems for environmental impact statement.
statements

The silhouette of the Gove Operations Bauxite Mine Alumina

Refinery in Gove peninsula in the Northern Territory, Australia.
Source: By Boyloso/Shutterstock.
36
This section describes the Native Title unallocated Crown land and areas that were previously held
or owned by Indigenous people. Non-exclusive possession
process and its intersection with is where native title holders have the right to coexist and
applications for exploration licences and exercise their rights alongside non-indigenous property
mining leases in Western Australia and rights such as pastoral leases. Non-exclusive native title
analyses the process for vulnerabilities does not involve a right to control access and use of the
area.
and risk. Flow charts documenting the
approvals process for Native Title and Between 1994 and June 2017, the National Native Title
exploration licences and mining leases Tribunal has filed 2,227 Native Title claims with 292 claims
still active. Native Title has been recognised in 318 cases,
can be found in Appendix A. either over the whole of the determination area or part of
the area.145
NATIVE TITLE
Western Australia has the most land under native title with
1,149,603 sq km being determined as exclusive or non-
exclusive possession.146 Approximately 92% of the Western
Australian land mass is claimable under native title.147
In the 1992 Mabo decision, the High Court of Australia

recognised that the Merriam People of the Torres Strait held Future acts
native title over part of their traditional lands and rejected the
notion of terra nullius.142 The Native Title Act 1993 (Cth) was A future act is an act that affects native title in relation to
the legislative response following the Mabo decision. The Act the land and water in any extent.148 A future act may involve
established the Native Title Tribunal, set out the processes for the granting of a right to conduct a proposed activity or
determination of Native Title, and allowed for the recognition development that affects native title rights. Native title holders
of Aboriginal and Torres Strait rights and interest in land and or registered claimants have procedural rights to be informed
water according to traditional law. and consulted if a proposed activity is likely to impact on
their native title rights. The grant of exploration licences and
The Act defines native title as the communal, group or mining leases over areas where native title may exist, are
individual rights and interests of Aboriginal people or Torres considered to be future acts. The expedited process, the right
Strait Islanders in relation to land and water under traditional to negotiate process and Indigenous Land Use Agreements
(ILUAs) are the agreement-making processes under the
law and custom.143
Native Title Act 1993 whereby native title parties negotiate
with mining companies regarding the impact of mining
activities on their rights and interests.
Determination of native title
The Federal Court hears Native title claims. The Court will Whilst state governments administer the application for a
determine that the Indigenous claimants have maintained mining tenement and ensures that the Native Title process
a traditional connection with the land and have a right proceeds, the National Native Title Tribunal (NNTT) hears
to Native Title, or conversely that Native Title has been objections, manages negotiations, facilitates mediation, and
extinguished by the state granting title or interest in land makes determinations.
such as freehold or leasehold title.144
The Native Title Act 1993 specifies that state governments
A determination of Native Title recognises either exclusive are party to Native Title future act negotiations. However,
or non-exclusive possession. Exclusive possession involves in practice the Western Australian government views their
the right to possess and occupy an area to the exclusion of role as administrative and is generally not involved in the
all others but does not preclude the grant of mineral rights substance of negotiations between mining companies and
in an area. It can only be recognised across areas such as native title parties.149
145 National Native Title Tribunal, Search Native Title Applications,

Registration Decisions and Determinations www.nntt.gov.au/
searchRegApps/NativeTitleClaims/Pages/default.aspx.
146 Ibid, Maps www.nntt.gov.au/assistance/Geospatial/Pages/
Maps.aspx.
147 Ibid, 25 years of Native Title Recognition www.nativetitle25.gov.
au/home/states-and-territories/western-australia/.
142 Mabo v Queensland (No 2) (1992) 175 CLR.
148 Native Title Act 1993 s 233.
143 Native Title Act 1993 (Cth) ss 223(1)(2).
149 Expert interviews (Perth, December 2016, February, March,
144 Ibid ss 23B 2017) (Brisbane, March 2017).
37
The expedited process – Negotiate in good faith

exploration licences, Western The right to negotiate does not give native title parties the
Australia right to veto a mining lease but allows the native title party
and the proponent to negotiate with a view to reaching
The expedited process is governed by the Native Title Act an agreement. Parties to mining lease negotiations must
1993 (Cth), and the process intersects with provisions under negotiate in good faith to obtain an agreement that may be
the Aboriginal Heritage Act 1972 (WA) and the Mining Act subject to conditions.153
1978 (WA).
The second reading of the Native Title Bill discusses the right
Acts that attract the expedited process are defined as acts to negotiate in relation to the Act.
that are not likely to interfere with the native title holders’
Where native title has been established, or where
community or social activities, and areas or sites of
there is a registered claimant in the federal or state
significance in accordance with tradition; and do not involve
systems, the bill provides a process of negotiation
major disturbance to any land or waters.150 Exploration is
and, if necessary, determination by the tribunal on
considered to be an act that arguably does not involve major
whether a proposed grant should proceed. This
disturbance to the land and will attract the expedited process.
emphasis on Aboriginal people having a right to be
Native title parties may object to the expedited process and if
asked about actions affecting their land accords with
it is determined by the Native Title Tribunal that the expedited
their deeply felt attachment to land. But it is also
process does not apply, the full right to negotiate process will
squarely in line with any principle of fair play. It is not
commence.
a veto.154
The expedited process is a fast track process that does not
The Native Title Act 1993 in section 31(1)(b) specifically
provide for negotiation rights, but does include the obligations
states that ‘the negotiation parties must negotiate in good
of the proponent to conduct a heritage survey under the
faith with a view to obtaining the agreement of each of the
Aboriginal Heritage Act 1972. Aboriginal heritage surveys are
native title parties to: i) the doing of the act; or ii) the doing
conducted to ‘identify places in the landscape which contain
of the act subject to conditions to be complied with by any of
or embody Aboriginal heritage values, not just sites’.151
the parties.’
Indigenous people are the primary sources of information
and are engaged in the identification, assessment and
The Native Title Tribunal categorises the considerations that
management of Aboriginal heritage. Site surveys can be
it will take into account when assessing if a negotiation has
archaeological, ethnographic or anthropological.
been conducted in good faith. Parties are obliged to:
After an application for an exploration licence has gone • Communicate and respond with other parties within a
through the assessment and referral stage and the reasonable time
department recommends grant, the delegated officer in the
Department of Mines and Petroleum will assert, where native • Make proposals to other parties and respond to those
title is not extinguished, that the expedited process under propositions (by making counter-proposals or by way of
section 237 of the Native Title Act 1993 applies and, section comment or suggestion about the original proposal) with
29 of the Act will be triggered. a view to achieving agreement
• Make inquiry of other parties if there is insufficient
information to proceed in negotiations and a reciprocal
Right to negotiate and ILUAs, expectation that relevant information be provided by
those parties within a reasonable time
Mining Leases – Western Australia
• Seek from other parties appropriate commitments to the
The native title process for a mining lease allows for the process of negotiation or subject matter of negotiation,
parties to commence the right to negotiate process; or and a reciprocal obligation to make either commitments,
establish, sign into, or create a variation of an Indigenous or concessions
Land Use Agreement (ILUA). In Western Australia the right
to negotiate process is more commonly used for mining • Act honestly and reasonably in the circumstances with a
agreements than ILUAs. As of 29 June 2017, for Western view to reaching agreement.155
Australia 31 ILUAs relating to mining were registered with the
NNTT compared to 89 in Queensland.152 Once an application for a mining lease has gone through
the assessment stage and a recommendation to grant is
made, DMP will make public notification of intention to grant
a mining lease and section 29 of the Native Title Act 1993 is
triggered – the notification of native title parties.
150 Native Title Act 1993 s 237.

151 Yamatji Marpla Aboriginal Corporation, Aboriginal Heritage
Management Guidelines April 2015 www.ymac.org.au/wp-content/
uploads/2013/07/YMAC-Heritage-Guidelines-Apr-15-2.pdf 6. 153 Native Title Act 1993 s 31(1)(b).
152 National Native Title Tribunal, Search register of Indigenous 154 Commonwealth, Parliamentary Debates, House of
Land Use Agreements www.nntt.gov.au/searchRegApps/ Representatives, 16 November 1993, 2880 Paul Keating.
NativeTitleRegisters/Pages/Search-Register-of-Indigenous-Land-
Use-Agreements.aspx. 155 Western Australia v Dimer [2000] 290 NNTT 31.
38
Negotiating an agreement There is no authorised process for negotiating an ILUA,

and the state is usually not a party to an ILUA between a
The parties have six months from notification that the right to mining company and a native title party.163 An ILUA can
negotiate process applies to come to an agreement before cover compensation, protection of significant sites, future and
they can apply to the NNTT for a future act determination.156 previous acts, and native title rights and interests.164
When the parties come to an agreement it is lodged with the ILUAs are placed on the NNTT Register of Indigenous Land
NNTT and the mining lease will be authorised. If agreement Use Agreements.165 The content of ILUAs between mining
cannot be reached, any party can request that the NNTT companies and native title parties are generally not made
assist by mediating an outcome.157 A Tribunal Member or a public. However the State has made some of the content
staff member will conduct mediation conferences to attempt of ILUAs it has signed with native title parties publicly
to resolve disputes and assist with obtaining an agreement.158 available.166
If negotiations have failed, either party can make an Vulnerabilities and risk – Native Title
application to the NNTT for a future act determination, and
the NNTT is required to establish that negotiations have Three vulnerabilities have been identified for future act
occurred in good faith.159 negotiations: the representation of native title parties
in negotiations, the low level of transparency of the
In Australia the principle of free, prior and informed consent agreement making process and the imbalance of
does not apply to mining agreements with Indigenous people. resources between parties.
Native title parties have no right of veto or consent, only the
right to be consulted regarding a mining agreement. If the 1. Representation of native title parties in negotiations
parties cannot come to an agreement and the native title
party cannot prove that the mining company did not negotiate The negotiation of agreements with mining companies
in good faith, the NNTT will determine under the provisions involves the mining company and their consultants,
of the Native Title Act 1993 that the future act may proceed. representatives of the native title parties, and the native
Article 32.2 of the United Nations Declaration of the Rights of title party. Native title representatives can be Native
Indigenous People states: Title Representative Bodies (NTRBS), Prescribed Body
Corporates (PBCs), other Aboriginal Corporations, service
States shall consult and cooperate in good faith with providers, or private agents. A vulnerability has been
indigenous peoples concerned through their own identified where Native title parties appoint a negotiator who
representative institution in order to obtain their free and then fails to represent their interests.
informed consent prior to the approval of any project
affecting their lands or territories and other resources, The Report to Government by the Taxation of Native Title
particularly in connection with the development, utilization and Traditional Owner Benefits and Governance Working
or exploitation of mineral, water or other resources.160 Group noted that it ‘is aware of instances where individuals
have diverted for their own benefit the proceeds (or
significant portions of them) from native title-related ‘future
Indigenous Land Use Agreements (ILUA) act’ agreements that were intended by the Native Title Act
or the terms of an agreement to be enjoyed by an entire
Native Title parties can choose to either commence the
community’.167
expedited process or the right to negotiate process or
negotiate an ILUA with a mining company. ILUAs have the
The Working Group also raised two issues of concern in
advantage of being a more flexible agreement and can cover
relation to governance and protecting Indigenous community
a range of activities including both exploration and mining. An
benefits. One issue relates to the distribution of funds, and
ILUA is a binding agreement for all future acts.161 A recent
the other issue relates to the representation of native title
court case has ruled that an ILUA is only valid if all the native
parties:
title claimants who are named applicants in the area are
signatories.162
156 Native Title Act 1993 s 35(1)(a).

157 Native Title Act 1993 s 31(3). 163 Department of Premier and Cabinet, Government of Western
Australia, Guide for Third Party Indigenous Land Use Agreements
158 National Native Title Tribunal, Future Act Mediation www.nntt. (10 March 2015) www.dpc.wa.gov.au/lantu/MediaPublications/Pages/
gov.au/futureacts/Pages/Future-act-mediation.aspx. Publications.aspx 2.
159 Native Title Act 1993 s 31(1)(b). 164 Native Title Act 1993 ss 24BB, 24CB, 24DB.
160 United Nations, United Nations Declaration on the Rights 165 Ibid ss 24BI, 24CK, 24CL 24DL.
of Indigenous People www.iwgia.org/publications/search-
pubs?publication_id=27. 166 Land approvals and Native Title unit, Government of Western
Australia, Agreements www.dpc.wa.gov.au/lantu/Agreements/Pages/
161 Hunt above n 27, 345. Default.aspx
162 McGlade v Native Title Registrar [2017] FCAFC 10. The 167 Treasury, Australian Government, Taxation of Native Title and
Commonwealth Government may change the law so that other Traditional Owner Benefits and Governance Working Group, Report
ILUAs signed for resource projects are not invalidated. to Government 2013, 1 July 2013, 17.
39
First, is the uncertain status of funds generated by native parties, creating a risk that NTRBs may be self interested
title agreements. Second, is the uncertainty regarding whilst representing native title parties during negotiations
a named applicant’s duties to the native title group with mining companies.173
(comprising both the native title claim group and the
determined native title holders) and the representation Prescribed body corporates
of some, but not all, members of a native title group, by
private agents who have dubious authorisation to act on Prescribed Body Corporates (PBCs) hold the rights and
behalf of all members of the native title group. It might be interest of the common law holders (i.e. the native title
thought that, under the Act, the proceeds of native title claim group). After a native title determination, PBCs are
agreements would belong to the native title group and that nominated by the native title group to manage or hold in
the named applicant is in a fiduciary relationship with the trust native title.174 Once PBCs are entered into the National
group.168 Native Title Register they become a Registered Native Title
Body Corporate (RNTBC). Tensions can arise relating to the
While there are many reports of benefits accruing to competing interests of different family or sub groups, and
native title parties from mining agreements, and the the PBCs distribution of benefits to the wider claim group.175
responsible administration of native title parties’ interests Poor governance and oversight of aboriginal corporations
by representatives and service providers, the issue has has led to some publicised cases of corruption.176
been raised that native title parties’ interests may not be
represented in the agreement making process. Some of Other agents and service providers
the different groups that can represent native title bodies to
negotiate agreements are described below. Private agents commonly provide consultant legal services,
anthropological services, mediation and negotiation skills
Native Title Representative Bodies and Service Providers and commercial advice to NRTBs, PBCs and other Aboriginal
Corporations for the purpose of future act agreements. In
The Department of Prime Minister and Cabinet funds recent reports to government, concerns have been raised
fourteen Native Title Representative Bodies (NTRBs) or regarding private agents representation of native title parties
Native Title Service Providers (NTSPs) in Australia:169 NTRBs and provision of services to the parties, and the absence
provide facilitation and assistance functions to research and of mechanisms in the Native Title Act 1993 to regulate the
prepare native title applications; and to assist, on request, sector.177 Whilst the vast majority of private agents and
native title bodies corporate, and holders in consultation, service providers provide essential and professional services
mediations, negotiations and proceedings for native title to native title parties, it has also been reported that service
applications, future acts, ILUAS and rights of access.170 providers and private agents can, in certain instances, be self
NTRBs are funded by the government to facilitate native interested, and negotiate a mining agreement according to
title claims but are not funded for assistance with future act their own pecuniary or ideological goals.178
negotiations. O’Faircheallaigh notes that NTRBs are under
resourced to carry out their obligations under the Native Title Mick Gooda, Aboriginal and Torres Strait Islander Social
Act 1993.171 Justice Commissioner, reports that he has received reports
that consultants are acting unprofessionally in future act
NTRBs administer native title claims through the courts. negotiations:
Once native title is determined, NTRBs assist native title
holders to set up Prescribed Bodies Corporates (PBCs)
under the Corporations (Aboriginal and Torres Strait Islander) 173 Ibid.
Act 2006 (Cth). It is expected that after a PBC has been set
174 Native Title Act 1993 ss 55 - 57
up, the role of the NTRB in managing native title holders’
affairs will be diminished, especially when the PBC has 175 Toni Bauman ‘Navigating Complexity,’ in Living with Native Title
funding from future act agreements, and can fund its own (AIATSIS Research Publications, 2013) 10.
representation and administration. 176 Paul Cleary, ‘Dreamtime turns to dust’ The Australian (online),
28 May 2015 www.theaustralian.com.au/national-affairs/indigenous/
It has been reported that there can be a conflict of interest dreamtime-turns-to-dust/news-story/0dab329d6bb57bac15730e
between the NTRB’s role in assisting native title claims and bb7f1c0f1e; The sorry tale of Lake Disappointment ,the missing
mining millions’, The Sydney Morning Herald (online) 27 July 2015
the devolving of responsibilities to bodies corporate once www.smh.com.au/national/the-sorry-tale-of-lake-disappointment-
the determination has been made.172 A conflict of interest the-missing-mining-millions-20150724-gijv8h.html; Robert Burton-
can also arise between the NTRB’s aim to generate funding Bradley, ‘Mining giant suspends negotiations with land council amid
to support its activities, and its role in assisting native title corruption probe’ NITV News 9 July 2015 www.sbs.com.au/nitv/
article/2015/07/09/mining-giant-suspends-negotiations-land-council-
amid-corruption-probe.
168 Ibid.
177 Deloitte Access Economics, Review of the Roles and Functions
169 Department of Prime Minister and Cabinet, Australian of Native Title Organisations Department of Prime Minister and
Government, Native Title Representative Bodies and Service Cabinet (March 2014) 27; Treasury, Australian Government, Taxation
Providers www.dpmc.gov.au/indigenous-affairs/land/native-title- of Native Title and Traditional Owner Benefits and Governance
representative-bodies-and-service-providers. Working Group, Report to Government 2013, 1 July 2013, 17.
170 Native Title Act 1993 s 203BB(1)(2). 178 Expert interviews (Perth, December 2016, January, February,
171 Ciaran O’Faricheallaigh, ‘Aborigines, mining companies and the April 2017) (Brisbane, March 2017); Yamatji Marlpa, Submission
state in contemporary Australia: A new political economy or ‘business to Deloitte Access Economics, Review of the Roles and Functions
as usual’?’ 41(1) Australian Journal of Political Science (2006) 1, 5. of Native Title Organisations, 27 September 2013, 2; Native Title
Services Victoria, Submission No 4 to Senate Standing Committee
172 Expert Interviews (Perth, February, March, April 2017) (Regional on Legal and Constitutional Affairs, Native Title Amendment Bill 2012,
Western Australia, January 2017) (Brisbane, March 2017). 29 January 2013, 15 –19;
40
I have been advised that these consultants are taking

advantage of native title groups by promising quick and
financially rewarding future act negotiations with mining
companies, and charging exorbitant fees for their services.
It appears these individuals are also exacerbating lateral
violence in our communities by assuming a ‘divide and
conquer’ approach to native title groups.179
Pre determination applicants and future act negotiations
Predetermination of native title, the ‘applicant’ is authorised

to make a native title claim with the authority of the group.180
The applicant can be a group of traditional owners elected by
the native title claim group, and represented by an Aboriginal
Corporation of which they are members.
The Native Title Act 1993 gives the applicant powers to

receive funds for the native title group to the native title
claim but does not regulate how that funding is managed or
regulated. The uncertainty regarding a named applicant’s
representation of the native title group and the low level
of transparency of agreements can create a risk that the
applicant may not discharge their fiduciary obligation to the
wider group.181
Native title parties can apply to the Federal court to replace

the applicant for a native title claim if an applicant is no
longer authorised by the claim group, incapacitated or dead,
or the applicant has exceeded their authority.182 There is a
risk that because of tensions within a native title group one
native title sub group will attempt to replace the applicant
to native title with another sub group for political reasons.183
The stakes can be high as the applicant can represent the
native title claim group in future act agreements and manage
the compensation received.
There is also a risk that mining companies will actively

support replacing the applicant for a native title claim that
they have been unable to reach a negotiated agreement
with, as occurred with the Yindjibarndi and FMG.184 The case
study below illustrates the tensions that can exist between
sub groups in a native title claim group, and the capacity for
mining companies to interfere in Indigenous politics with the
aim of creating a beneficial outcome for the company.
179 Australian Human Rights Commission, Native Title Report

2012, (26 October 2012) www.humanrights.gov.au/sites/default/files/
document/publication/native_title_report_2012.pdf 46;
180 Native Title Act 1993 s 62A.
181 Annie Guest, ‘Traditional owners locked in bitter stoush over
Cape York mining royalty deal’ ABC News 14 December 2015 www.
abc.net.au/news/2015-12-14/traditional-owners-bitter-stoush-cape-
york-mining-royalty/7025110.
182 Native Title Act 1993 s 66B.
183 Burragubba v State of Queensland [2017] FCA 373; TJ v
State of Western Australian [2015] FCA 818; Weribone v State of
Queensland (2013) FCA 255; Marcus Priest, ‘Court raises native
title rort concerns’ Australian Financial Review (online) 27 May 2013
www.afr.com/business/energy/gas/court-raises-aboriginal-native-title- Hamersley Gorge
rort-concerns-20130326-j5xyv. Source: By Tim Pryce/Shutterstock.
184 TJ v State of Western Australian [2015] FCA 818, 10, 93, 115,
116, 122.
41
to change the applicant to the Yindjibarndi #1 Claim.

CASE STUDY: YINDJIBARNDI The Court found that none of the Yindjibarndi elders
ABORIGINAL CORPORATION ‘had any understanding whatsoever of the nature of the
authorisation and direction that resolution 5 would have
required her to carry out’.190 And further ‘it is a matter of
The Yindjibarndi Aboriginal Corporation (YAC) is the very serious concern that these three trusting elders were
authorised applicant for the Yindjibarndi native title claim asked to affirm, in affidavits, that they would support the
in the Pilbara region being determined by the Federal Court making a consent determination that would deprive
Court. The native title claim is for exclusive possession the claim group, in whose interests they thought they
of the land in the Yindjibarndi # 1 Claim Area. YAC and were acting, of the critical right to control access’.191
the Ngarluma Aboriginal Corporation are the registered
PBCs that manage the native title rights from an earlier The compensation that native title parties can negotiate
determination for non-exclusive possession of the with mining companies is significantly reduced where
Ngarluma Yindjibarndi Native Title Area.185 there is non-exclusive native title. A determination of
non-exclusive possession for the Yindjibarndi #1 Claim
FMG entered into negotiations with YAC for the Solomon Area would have been of benefit to FMG.
Hub iron ore project, which covers both the # 1 Claim
Area and the Native Title Area. YAC did not accept
FMG’s offer of capped compensation, a signing fee, and
employment and training, arguing the compensation paid
should match the royalty percentages paid by BHP and
Rio Tinto.186 A breakaway group of elders set up the Wirlu-
Murra Yindjibarndi Aboriginal Corporation (WMYAC) and Analysis of risk
entered into an agreement with FMG. WMYAC were also
contracted by FMG to undertake Aboriginal Heritage The vulnerability in the representation of native title parties
Surveys, and entered into lucrative joint ventures with lead to the risk What is the risk that those negotiating with
FMG contractors for provision of services to the Solomon a mining company on behalf of a Native Title Party will not
Hub.187 represent community members interests?
In June 2015 WMYAC held an authorisation meeting Research has shown that in the agreement-making space
in Roebourne in June 2015 for which FMG provided there are representatives who act professionally and make
considerable support including assistance with agreements with mining companies that can bring benefits
promotion, convening and conducting the meeting, to Indigenous people and that many negotiations have been
and arranging the voting procedure.188 Resolution 5 conducted to the satisfaction of native title parties. However,
of the meeting asked the attendees to vote to apply to there are reports of incidences where this has not occurred.
change the applicant to the native title claim; and to
consent to a determination of native title like the Native title parties’ interests may not be represented in
Ngarluma Yindjibarndi determination, which meant negotiations with mining companies because of poor
they would be voting to consent to non exclusive native representation or because of the politics of representation
title.189 The Federal Court dismissed the application within different groups. Poor representation may occur due
to unprofessional behaviour, self-interest or corruption. The
sometimes divisive nature of group representation and the
tensions that can occur between family groups and sub
groups, creates an opportunity for manipulation by either
mining companies or representatives.
The lack of transparency of agreements means that there

is no opportunity to monitor agreements and ensure that
benefits generated from agreements are distributed to the
wider group and are not being used to benefit individuals,
agents, or representative organisations.
Summary
185 Sarah Prout, Aboriginal Assests, The Impact of Major
Agreements Associated with Native Title in Western Australia, The Native title parties entering into agreements with mining
University of Western Australia, Curtin University Research Project companies require representation and assistance to
(2017) negotiate agreements. NTRBs, PBCs, applicants, and
186 Paul Cleary ‘Native Title Contestation in Western Australia’s private agents have an important role to play in the facilitation
Pilbara Region,’ 3 (3) International Journal for Crime, Justice and of negotiations. Native titles parties place trust in their
Social Democracy 2014 132,142;. representatives to represent them professionally, fairly, and
187 TJ v State of Western Australian [2015] FCA 818, 38; Wirlu- equitably. If this trust is broken by unprofessional and corrupt
murra, Our Projects www.wmyac.com/our-projects/.
188 TJ v State of Western Australian [2015] FCA 818, 115, 190 Ibid 101
189 Ibid 32. 191 Ibid 102 – 103 as per Rares J.
42
behaviour the impacts on disadvantaged communities can be regard the entirety of agreements as ‘confidential’.194
severe. Communities may not receive the benefits that mining
agreements can bring. Pre-negotiation agreements signed between representatives
of native title parties and resource companies are also
2. Transparency of agreement making commercial, contractual agreements that do not require
disclosure. These agreements can include negotiating
The low level of transparency of agreements between native protocols and confidentiality provisions.195
title parties and mining companies has been identified as a
vulnerability that could enable corruption in the future acts There is considerable public debate regarding the level of
negotiation process. transparency that agreements between native title parties
and resource companies should have.
Registered agreement
Stewart, Tehan, and Boulot argue that agreements should
A native title agreement is a commercial agreement have a low level of transparency for the following reasons:
between the native title party and the mining company. The
• Native title is an interest in land and a form of land
agreement is usually confidential and the Western Australian
ownership and equates to the same stipulations as to
government is not party to the agreement. This agreement is
the rights accorded to freehold landowners regarding
often described as an ancillary agreement.
the transparency of agreements for resource sector
payments for mining tenements
To comply with the Native Title Act 1993 requirement for a
statutory agreement, the government requires a section 31 • The right of native title parties to protect sacred,
agreement, also called a State Deed, to be signed by all significant and personal information
three parties: the native title party, the applicant, and the
• The right of resource sector companies and native title
Minister for Mines and Petroleum or delegated official.192
parties to hold commercially sensitive information in
The State Deed is lodged with the NNTT and the Department
confidence.196
of Mines and Petroleum can then grant the tenement. The
State Deed contains limited information pertaining to the Arguably there would be benefit to native title parties if
signatories. agreements were made transparent and the following
clauses were applied to the agreement-making process:
Transparency of agreements
• Benchmarking of payments. Some payments to native
There is no requirement to report the commercial, ancillary, title parties are well known, especially those paid by BHP
agreement between a native title party and a resource and Rio Tinto in the Pilbara due to information leaked
company. Due to the contractual nature of ancillary from agreements. The benchmarking of payments often
agreements, the parties can agree to disclose or not disclose rests with economic advisors, some who have negotiated
the contents of the agreement. In practice, parties choose agreements for many years. Increased benchmarking
not to do disclose payments and the other components of would allow native title parties to understand what is
the agreement though it has been reported that Rio Tinto and appropriate, resource sector companies of what the
also the Kimberley Land Council have made some elements expectation is, and reduce negotiating times because of
of agreements public.193 unrealistic expectations of both native title parties and
resource sector companies.197
In the ATNS working paper, Transparency in Resource
• Access to information on payments, and other
Agreements with Indigenous People in Australia the reasons
components of the agreement would provide information
for the low level of transparency are attributed to a range of
for the wider Indigenous community in the agreement
factors including:
area, regarding negotiated benefits and the future
• Low legal requirement for disclosure impacts of the mining projects. Cases have been reported
where the access to agreements by members of the
• The viewing by some or all or the parties to agreements Indigenous community has been impeded by formalistic
as well as regulators, as private or commercial contracts approaches of representative bodies or by agents.198
similar to agreements with private land-holders, Native title parties would also then have the information
especially where the State is not a party to form an understanding of what payments and benefits
• The availability of (and preference for) more informal, were distributed to agents and service providers.
more flexible and less resource-intensive (and hence less
burdensome in terms of disclosure) types of agreements
over more formal, and marginally more transparent
alternatives such as ILUAs; and
• A widespread tendency by parties to agreements to 194 Ibid 8.
195 Expert interviews (Perth, February, March 2017).
196 Stewart above n 193, 8-11; Expert interviews Regional Western
192 Department of Mines and Petroleum, Native Title Process, Australia (January 2017), Perth (February, May 2017) Brisbane
Guidelines for completion of State Deed www.dmp.wa.gov.au/ (March 2017). Industry reports that native title parties request that
Minerals/Native-Title-Act-Process-5548.aspx. agreements be kept confidential, Expert interviews (Perth, February,
193 Miranda Stewart, Maureen Tehan and Emille Boulot, June 2017).
‘Transparency in Resource Agreements with Indigenous People in 197 Expert interview (Perth, December 2016)
Australia’ (Working Paper No 4, Agreements, Treaties and Negotiated
Settlements Project, 2015) 9. 198 Expert interviews (Perth, February, March, May 2017)
43
Stewart, Tehan and Boulot argue that increased transparency 3. Imbalance of resources and power
would provide models and templates for parties to future
agreements; enable more comprehensive analysis of It is widely recognised that there is an imbalance of
outcomes of agreement making for Indigenous people; resources between mining companies and native title
address complexities in power balances; address the parties at the negotiating table.200 The imbalance of
frustrations of government; enable analysis of the equity of resources can be categorised as an imbalance of
agreement making processes; and increase accountability in knowledge and skills, an imbalance of financial capacity,
the implementation of agreements.199 and an imbalance of power.
Confidentiality need not apply to all the elements of mining Indigenous people in remote communities where mining
agreements. Partial disclosure would allow for the protection occurs often do not have the skills to negotiate a mining
of culturally significant information, and sensitive commercial agreement nor the financial resources to hire the expertise
information. required. The costs of negotiation can be high for native title
parties. Costs that need to be covered include travel costs
Analysis of risk for Indigenous people and their advisers, and the costs of
legal, economic, and environmental expertise.201
The lack of transparency involved in agreement making
coupled with the imbalance of power and resources between Mining companies have the human and financial resources
the parties, together with the potential for self-interested to effectively negotiate a position of advantage. The larger
representation of native title parties, creates an enabling mining companies in Australia recognise the imbalance in
environment for corruption. resources and will fund the cost of negotiations for native
title parties. However, it has been reported that smaller
Lack of transparency in agreement making led to the risk – companies may not provide the resources for Native
What is the risk that the content of final agreements between Title parties to engage effectively in negotiations. The
mining companies and Indigenous parties will be kept WA Chamber of Minerals and Energy notes that ‘some
secret? This risk scored very highly because agreements are proponents are unable to provide such funding in addition to
not transparent except for the minimal information obtained paying benefits under the agreements negotiated, including
in a Section 31 notice. This risk can lead to adverse impacts for economic reasons or due to compliance with national and
for Indigenous communities and enable corruption. It should international anti-corruption legislation’; and that ‘proponents
be taken into account that native title parties should have the being required to directly fund native title parties distorts the
same rights to keep a commercial agreement confidential negotiation process’.202
as freehold landowners rights for compensation for mining
leases. The risk assessment does not provide allowances PBCs also have to find the financial and human resources to
for the complexity of the agreement-making process, the manage the legal proceedings that either they, other native
policy environment, and the historical and cultural factors that title groups or the mining company instigate. The number of
contribute to future act negotiations. proceedings can be considerable. The Yindjibarndi Aboriginal
Corporation has of June 2017 managed 50 legal cases in
The lack of transparency of agreements and monitoring the courts; and since 2010, 29 mining company applications
of the implementation of the terms of an agreement could under section 16 and 18 of the Aboriginal Heritage Act
lead to the lack of distribution and implementation of 1978 (WA) for the excavation or destruction of sites of
benefits, environmental damage, and destruction of sites of significance.203
significance by mining activities.
The future act process can also create an imbalance of
Summary power between mining companies and native title parties.
Native title parties can be disadvantaged in the right to
Low levels of transparency can enable corrupt practices by negotiate phase and in NNTT arbitration. Where negotiations
service providers, private agents, and applicants leading to have gone to arbitration, as of June 2017, the NNTT has
significant adverse impact on communities. Compensation refused three future act applications.204 The NNTT does not
negotiated by native title parties with mining companies may rule on the content of an agreement but only whether an
not be distributed to the wider native title group in whose act may or may not proceed. Knowing that arbitration will
name the agreement was negotiated. Mining companies be in their favour, the extent to which mining companies will
have the opportunity to negotiate agreements that may
not distribute benefits to native title parties in accordance
with native title rights, and the lack of accountability
means that implementation of agreement terms are not
200 Sarah Burnside, ‘Negotiation in Good Faith under the Native
monitored. However, native title and future act negotiations
Title Act; A critical analysis’ in Cynthia Ganesharajah ed Land, Rights,
are contested and complex, and this should be taken into Laws: Issues of Native Title (Native Title Research Unit, 2009) 1, 6.
account when viewing the risk assessment.
201 O’Faircheallaigh, above n 146, 1, 4- 5.
202 Chamber of Minerals and Energy WA, Submission to Deloitte
Access Economics, Review of the Roles and Functions of Native
Title Organisations 14 October 2013 9.
203 Search function Austlii www.austlii.edu.au/; Expert interview
(Perth, February 2017)
204 National Native Title Tribunal, Search Future Act Applications
and Determinations www.nntt.gov.au/searchRegApps/FutureActs/
199 Stewart above n 193, 11, 12. Pages/default.aspx.
44
negotiate in good faith can be questioned. O’Faircheallaigh

observes that ‘Aboriginal parties are under considerable
pressure to settle during the Right to Negotiate period, while
mining companies are under no such pressure knowing that
if they do not achieve an agreement that suits them, they can
go to the Tribunal and obtain the interests that they need to
proceed with their project’.205
Indigenous parties can also come from a position of what

Prout describes as ‘entrenched disadvantage.’206 The legacy
of historical dispossession through colonisation, settlement
and pastoral development, alienation from the legal system
and the ‘exclusion from mainstream education, and health
systems has direct implications for contemporary capacity,
confidence and alacrity in entering into negotiations’.207
Summary
Native title parties enter negotiations from a considerable

position of disadvantage. They can often lack the skills,
knowledge and financial resources to enter into negotiations
on an equitable basis. The inequity is further compounded
by the imbalance of power built into the future act negotiation
process, and by the systematic and historical disadvantage of
Indigenous people in Australia.
Vulnerabilities and risks – native title
What is the risk that those negotiating with a

Representation of native title parties mining company on behalf of a Native Title Party High
will not represent community members’ interests?
What is the risk that the content of final

Lack of transparency in agreement-making and
agreements between mining companies and Very High
negotiations
Indigenous parties will be kept secret?
205 Ciaran O’Faircheallaigh Negotiation in the indigenous world:

Aboriginal peoples and the extractives industry in Australia and
Canada (Routledge 2016) 112.
206 Prout above n 185, 21.
207 Ibid
45
This section looks at the issues, There are three interlinked theoretical concepts that analyse
how influence and corruption work: regulatory capture, policy
vulnerabilities and risks that have been capture, and state capture.
identified as applying across jurisdictions
and approvals processes. Some of
these issues have been identified in the Regulatory capture, policy capture, and
preceding sections on the approvals state capture
processes assessed in each State. The Regulatory capture
section also looks at risks that have a
broad impact in the context of mining in Regulatory capture can be defined as the close identification
of a government official with the industry that s/he is
Australia and issues that are relevant to regulating. It can involve sympathy with the problems that
both the Commonwealth and the States. industry confronts in meeting standards, identification with
the interests of industry, and favourable bias toward particular
companies and the problems they face.209 Whilst regulatory
capture can be an issue for mines department staff involved
CROSS CUTTING ISSUES in the monitoring and auditing of mines, the checks and
balances in place for the approvals process for exploration
licences and mining leases can prevent regulatory capture
affecting the approvals process.
The research has shown that vulnerabilities and risks
Policy and state capture
can apply across jurisdictions and approvals processes.
These vulnerabilities are inadequate due diligence
The OECD defines policy capture as the result or process
by government into the character and integrity of
by which public decisions over laws, regulations or policies
proponents and protection of whistle blowers. Further, a
are consistently or repeatedly directed away from the public
vulnerability has been identified that applies to the approvals
interest and towards the interests of a narrow interest group
process for large infrastructure projects in both Western
or person.210
Australia and Queensland, the capacity for industry to
influence decision-making.
Transparency International notes that state capture
can broadly be understood as the ‘disproportionate and
unregulated influence of interest groups on decision-making
Industry influence processes where special interest groups manage to bend
Industry influence in resource sector development has been state laws, policies and regulations through practices’.211
identified as a corruption risk relating to the governance of
mining, particularly in regard to large infrastructure projects Integrity systems have an important role to play in reducing
in Western Australia and Queensland. The risk relates to the capacity of industry to influence government.
the capacity of industry to influence both the policy and the
political agenda of government in regard to the development Commonwealth integrity frameworks
of major resource projects.
Integrity systems are ‘the interconnecting institutions, laws,
The states’ stated goal for economic development, procedures, practices and attitudes that promote integrity
investment promotion, and job creation through large and reduce the likelihood of corruption in public life’.212 The
infrastructure projects can drive the policy agenda. There is a state based integrity systems are described in the Western
fine line between the public good of economic development Australia and the Queensland sections of the report. The
and ‘bad’ decisions where the affects on the environment Commonwealth has established some integrity systems and
and community are not taken into account. Policy needs to offices including:
take into account legitimate interest groups like the mining
• Lobbyist Code of Conduct and Lobbyists Register,
industry, whilst ensuring there is not undue influence or
Statement of Ministerial Standards, Register of Members’
interference in the business of government. Notably, there
have been documented Corruption and Crime investigations
in Australia that have involved the investigation of politicians
with close ties to industry, for corruptly influencing the
mining approvals process, which in some cases has led to 209 See the ICAC investigation Mine Subsidence Board –
convictions and imprisonment.208 allegations concerning former district manager (Operation Tunic) 23
March 2016 www.icac.nsw.gov.au/investigations/past-investigations/
investigationdetail/210
210 OECD, ‘Preventing Policy Capture’, 30 March 2017 OECD Public
208 Independent Commission Against Corruption New South Governance Reviews www.oecd.org/corruption/preventing-policy-
Wales, NSW public officials and members of Parliament - capture-9789264065239-en.htm
allegations concerning soliciting, receiving and concealing 211 Transparency International, State Capture: an Overview (11
payments (Operation Spicer) 30 August 2016 www.icac.nsw.gov. March 2014) www.transparency.org/files/content/corruptionqas/
au/investigations/past-investigations/investigationdetail/220; Nicole State_capture_an_overview_2014.pdf.
Chettle ‘Ian McDonald jailed for 10 years for misconduct in public
office, John Maitland also imprisoned’, ABC (online) 2 June 2017 212 Transparency International cited in Accountability Round
www.abc.net.au/news/2017-06-02/macdonald-and-maitland-jailed- Table, Corruption our Policy www.accountabilityrt.org/wp-content/
over-mining-licence-deal/8580914. uploads/2010/08/Corruption-Our-Policy.pdf
46
Interests and Register of Senators’ Interests213 moving to well-paid positions post politics is common.218 For
example Martin Ferguson, who was the Labor administration’s
• Australian Commission for Law Enforcement Integrity,
Minister for Resources, became a lobbyist for the resources
Commonwealth Ombudsman, Australian National
industry.219 Likewise, the Liberal party Minister for Resources,
Audit Office, Office of the Australian Information
Ian McFarlane, became the chief executive of the Queensland
Commissioner.214
Resources Council in 2016.220 Conflicts of interests involved
Whilst anti-corruption bodies operate in Western Australia in ministerial project approvals may not be immediate and
and Queensland, the Commonwealth has not established apparent, but they are implicit in the fact that politicians may
an anti-corruption agency. If corruption does occur there is potentially receive benefit at a time in the future for the doing
no defined mechanisms for reporting and investigation. The of an act.
lack of an anti-corruption body also means that there is an
absence at Commonwealth level of anti corruption training of The Lobbyists Code of Conduct states that retired Ministers
government representatives, and of anti corruption research and Parliamentary Secretaries must wait 18 months before
and policy development. In addition, there have been calls lobbying on matters with which they have had official
for the Commonwealth to establish a Parliamentary Integrity dealings.221 This does not apply to Ministers moving to industry
Commissioner and develop Codes of Conduct for the House associations. Whilst industry associations are not classified as
of Representatives, the Senate and Ministers.215 lobbyists for the purpose of the lobbyist register, they play a
significant role in lobbying government and trying to influence
Whilst in Australia, where there are some systems in place policy.222 Several commentators have raised concerns
to prevent ‘disproportionate and unregulated’ influence, there about the role of industry associations and think tanks in
are still avenues by which industry can influence politicians, influencing government policy on climate change, coal mining,
and capture the policy agenda. These avenues include and on resource taxes.223 Industry associations have also
‘revolving doors’, lobbying, political donations and the culture utilised well-resourced advertising campaigns to influence
of mateship. government. During the 2010 Federal and 2017 Western
Australian elections, industry associations campaigned against
mining taxation through regular and targeted advertising in
Avenues of influence
Revolving doors and lobbyists
Revolving doors involves the movement of personnel between

government and industry. The revolving doors can be between
lobbyists and government representatives and officials,
and industry and government representatives and officials.
As of September 2016, of 538 lobbyists registered by the 218 Lisa Cox, ‘Indian miner Adani hires Labor and Liberal staffers
Department of the Prime Minister and Cabinet, 191 are former to make its case’ The Conversation 4 July 2014 www.smh.com.au/
government representatives.216 Lobbyists who have worked business/mining-and-resources/indian-miner-adani-hires-labor-
and-liberal-staffers-to-make-its-case-20150702-gi3yg8.html; Max
in government have the advantage of having knowledge of
Philips, ‘The revolving doors between miners and government’ on
the system and portfolios, but also have the connections and Jeremy Buckingham (27 March 2015) www.jeremybuckingham.
networks in government to effectively lobby for industry.217 org/2015/03/27/the-revolving-door-between-miners-and-government/;
The practice of ex politicians and senior government staffers David Holmes, The fossil-fuelled political economy of Australian
elections’ The Conversation 22 June 2016 www.theconversation.com/
the-fossil-fuelled-political-economy-of-australian-elections-61394.
213 Department of Prime Minister and Cabinet, About the Register,
www.lobbyists.pmc.gov.au/index.cfm; Department of Prime Minister 219 Rennie, above n 216.
and Cabinet, Statement of Ministerial Standards www.pmc.gov.
au/resource-centre/government/statement-ministerial-standards; 220 Anna Henderson, ‘Former resources minister Ian MacFarlane
Parliament of Australia, Register of Members Interests www.aph. says new mining job complies with code of conduct’, The ABC 26
gov.au/Senators_and_Members/Members/Register and Register September 2016 www.abc.net.au/news/2016-09-26/ian-macfarlane-
of Senators’ Interests www.aph.gov.au/Parliamentary_Business/ appointed-to-run-queensland-mining-lobby/7876942.
Committees/Senate/Senators_Interests/CurrentRegister 221 Department of Prime Minister and Cabinet, Lobbyist Code of
214 Australian Commission for Law Enforcement Integrity www. Conduct, cl 7 www.lobbyists.pmc.gov.au/conduct_code.cfm#register.
aclei.gov.au/; Commonwealth Ombudsman www.ombudsman.gov. 222 Inga Ting ,’Political donations: Mining hits back at Labor’ The
au/; Australian National Audit Office www.anao.gov.au/; Office of the Sydney Morning Herald (online) www.smh.com.au/federal-politics/
Australian Information Commissioner www.oaic.gov.au/ political-news/political-donations-mining-hits-back-at-labor-20150205-
215 The Australian Collaboration, Democracy in Australia 1372gf.html; Department of Prime Minister and Cabinet, Lobbyist
– Ministerial and parliamentary codes of conduct, www. Code of Conduct, cl 3.5.
australiancollaboration.com.au/pdf/Democracy/Ministerial-codes- 223 Guy Pearse, ‘Quarry Vision: Coal, climate change and the
of-conduct.pdf; Parliament of Australia, Establishment of a National end of the resources boom,’ (2009) 33 Quarterly Essay; Wayne
Integrity Commission www.aph.gov.au/Parliamentary_Business/ Swan, ‘The 0.01 per cent, the rising influence of vested interests in
Committees/Senate/Establishment_of_a_National_Integrity_ Australia’, The Monthly (online) March 2012 www.themonthly.com.au/
Commission/NIC; rising-influence-vested-interests-australia-001-wayne-swan-4670 177;
216 George Rennie, ‘The revolving door; why politicians become Mike Seccombe, ‘How the Minerals Council of Australia has govt’s
lobbyists and lobbyists become politicians’, The Conversation 26 ear on coal’, The Saturday Paper (online) 24-30 October 2015 www.
September 2016 www.theconversation.com/the-revolving-door-why- thesaturdaypaper.com.au/news/politics/2015/10/24/how-the-minerals-
politicians-become-lobbyists-and-lobbyists-become-politicians-64237. council-australia-has-govts-ear-coal/14456052002539; George
Rennie, Lobbying 101: How interest groups influence politicians
217 Graham Readfearn, ‘Get to know your lobby groups’ ABC and the public to get what they want The Conversation 9 June
News (online) 22 March 2012 www.abc.net.au/news/2012-03-22/ 2016 www.theconversation.com/lobbying-101-how-interest-groups-
readfearn-get-to-know-your-lobby-groups/3906036. influence-politicians-and-the-public-to-get-what-they-want-60569;
47
an attempt to influence election results.224 Unions also play

a significant role in lobbying political parties and providing
support through political donations.225
CASE STUDY: ADANI CARMICHAEL
In-house lobbyists are not required to register as lobbyists.
Government relations staff, or other staff of a corporation MINE LOAN APPLICATION AND
do not need to register if they are lobbying on behalf of the
company that employs them or on behalf of the group holding
ROYALTY HOLIDAY
company.226 In 2012, it was noted that there were 4,000
lobbyists employed by corporations and industry groups that Adani has applied to NAIF for a billion-dollar loan for a
are not captured on the register.227 rail line to link the proposed Carmichael Coal Mine and
the Port at Abbot Point. Environmental Justice Australia
The lobbying register contains information on the company, lawyers have written to the NAIF to raise concerns about
the name of lobbyists, whether they previously were a the conflict of interest of two NAIF board members with
government representative and who their clients are.228 connections to Queensland mining companies that could
Information is not made available, unless applied for under benefit financially if the Adani mine is approved.230 The
FOI, on the lobbyists Ministers meet with, and how often they Australia Institute has reported that there is a lack of
meet. internal guidance documents for investment decisions
and raised the concern that political pressure is being
The close relationship of industry and government and applied to the NAIF Board to approve the Adani loan.231
the capacity for influence can extend to board members
of agencies responsible for approving loans for large
mining projects. The Department of Industry, Innovation
and Science, the Australian Government administers the
Northern Australia Infrastructure Facility (NAIF) under the
Northern Australia Infrastructure Facility Act 2016. NAIF
offers concessional finance of up to $5 billion over five years Political donations
to encourage private sector investment in infrastructure that
benefits Northern Australia.229 The under-regulated system of political donations in Australia
can allow special interest groups to attempt to influence
policy and decision-making.
Candidates, registered political parties and their state or

territory branches are required to make an annual disclosure
of donations received that are more than the disclosure
threshold to the Australian Electoral Commission (AEC).
From 1 July to 2017 to 30 June 2018 the disclosure threshold
is more than $13,500.232 The states have different rules. For
example in Western Australia annual disclosure is required
for donations over $2,300. In Queensland donations above
$1,000 must be disclosed and disclosure is required twice a
year.233
The political donation system has been criticised due to

Businessperson walking through systemic loopholes, the inconsistency across jurisdictions,
the revolving door in motion blur and the lack of transparency.234 Political donations can be
Source: By Official/Shutterstock. made through ‘associated entities’ to hide the source of
224 Mark Davis, ‘A snip at $22m to get rid of PM’ Sydney Morning
Herald (online) February 2011 www.smh.com.au/business/a-snip-at- 230 Environmental Justice Australia, ‘Loan bodies Adani conflict:
22m-to-get-rid-of-pm-20110201-1acgj.html ; Jacob Kagi, ‘WA mining answers needed’ (Media Release, 29 May 2017) www.envirojustice.
tax: Colin Barnett blasts industry over offensive against Brendon org.au/media/loan-bodies%E2%80%99-adani-conflicts-answers-
Grylls’ ABC News 2 February 2017 www.abc.net.au/news/2017- needed.
02-02/wa-premier-slams-mining-lobby-campaign-against-grylls- 231 Tony Swann ,’Don’t be so Naif: Adani and Governance of the
tax/8236114. Northern Australia Infrastructure Facility (NAIF)’, Australia Institute
225 Ibid Rennie. (March 2017) www.tai.org.au/content/adani-and-governance-
northern-australia-infrastructure-facility
226 Department of Prime Minister and Cabinet, Frequently Asked
Questions www.lobbyists.pmc.gov.au/faq.cfm#q11 7. 232 Australian Electoral Commission, Financial disclosure overview
www.aec.gov.au/parties_and_representatives/financial_disclosure/
227 Readfearn above n 217. Overview.htm
228 Department of Prime Minister and Cabinet, Who is on the 233 Yee Fui-Ng, ‘Explainer; how does our political donations system
Register www.lobbyists.pmc.gov.au/who_register.cfm work and is it any good?’ The Conversation 30 May 2016 www.
theconversation.com/explainer-how-does-our-political-donations-
229 Department of Industry, Innovation and Science, the Australian system-work-and-is-it-any-good-60159.
Government, Northern Australia Infrastructure Facility www.industry.
gov.au/industry/Northern-Australia-Infrastructure-Facility/Pages/ 234 Joo Cheong-Tam, Money and Politics: The Democracy We
default.aspx. Can’t Afford (UNSW Press, 2010).
48
funds.235 Associated entities are groups with connections to of the funder, and that can be utilised as an evidence based
a political party such as unions, think tanks, and fundraising resource for assessment, lobbying or advocacy.243
groups. In a situation akin to money laundering, donations
can be split into amounts under the disclosure level, Culture of mateship
and given to multiple different branches – and it is not
illegal.236 There is no real-time disclosure and there can be Australia takes considerable pride in the ethos of mateship as
a considerable time lag of up to 20 months between the a defining national characteristic.244 Yet, this lauded attribute
donation and public reporting by the AEC.237 can create a corruption vulnerability in the mining approvals
process when the relationships, and revolving doors between
Unlike other democracies, Australia does not limit political government, industry and lobbyists are examined.
donations, or ban political donations from foreign interests.238
In contrast, the US, UK, and Canada all ban foreign In investigations into mining corruption and misconduct in
donations.239 The ultimate source of foreign donations can Queensland, Western Australia and NSW, and subsequent
be difficult to trace. In 2016 the ABC investigated Chinese convictions in Queensland and NSW, the friendship or the
businesses and found that they are the largest foreign linked lack of it between politicians and miners or their lobbyists
donors to both political parties.240 Four Corners reported that was raised as a defence. The Minister in Western Australia
ASIO has warned the major political parties against taking stated to the CCC, ‘I regret how our friendship, my friendship
donations from billionaires linked to the Chinese Communist may have been used but I don’t change my friends.’245 In
Party as some of these Australian-Chinese donors have been Queensland, Gordon Nuttall claimed the payments mining
charged by the FBI with bribery.241 executives made to him were a ’personal transaction
between friends’.246 In NSW, Ian McDonald’s lawyer’s argued
It can be easy to draw the connections between donating that the Minister granted a mining tenement to Doyle’s
funds to a political party and gaining a quid pro quo Creek Mining because of the merits of the proposal, and not
advantage. The advantage can be ideological, I give because they were ‘mates’.247
because I believe in this cause, or it can be pecuniary, I give
because I expect to gain a reciprocal benefit. As reported These cases illustrate the value put on the concept of
in the Conversation ‘the managing director of Transfield friendship and mateship and that it can be construed as a
Services, Luca Belgiorno-Nettis, recently likened political justification for misconduct or corrupt acts.
donations to the Latin saying do ut des: “You give in order to
have given back”.’242 Transparency and commercial agreements
Academic institutions and research centres whose funding The capacity for industry to influence mining approvals
is dependent on industry can also be captured by the process can be exacerbated by the lack of transparency of
industry they are investigating. Industry funded research commercial agreements between the state and a corporation.
can be outcome based and has the potential to produce This lack of transparency is illustrated by the deferred
biased reports providing results that meet the expectation payments being considered by the Queensland Government
for the Adani Carmichael Coal Mine.248
Analysis of risk
235 Nick Evershed, ‘Political donations: where Australia’s political
parties get their money’, The Guardian (online) 10 February 2017 Revolving doors, lobbying and donations to political
www.theguardian.com/news/datablog/ng-interactive/2017/feb/10/ parties enable industry influence; and the provision of
political-donations-where-australias-political-parties-get-their-money.
236 Ashlynne McGhee, ‘The missing millions: Political donations
likened to money laundering’, ABC News 1 February 2017 www.
abc.net.au/news/2017-02-01/political-donations-likened-to-money-
laundering/8227952
243 Sheldon Krimsky, ‘Do Financial Conflicts of Interests Bias
237 Adam Gartell, ‘Loophole will allow donations made in dying days Research?’ (2013) 38(4) Science, Technology & Human Values
of federal election to stay secret’, Sydney Morning Herald (online)
31 January 2017 www.smh.com.au/federal-politics/political-news/ 244 James Page, ‘Is Mateship a Virtue?’ (2002) 37(2) Australian
loophole-will-allow-donations-made-in-dying-days-of-federal-election- Journal of Social Issues, 193, 194 ; Nick Dryenfurth ‘John Howard’s
to-stay-secret-20170131-gu2533.html Hegemony of Mateship: The Politics of ‘Mateship’ in the Howard
Decade’ (2007) 42(2) Journal of Political Science 211, 212-214.
238 Marian Sawer, ‘Australia trails way behind other nations’ The
Conversation 2 June 2016 www.theconversation.com/australia-trails- 245 Rebecca Carmody, ABC Stateline, The corruption inquiry that
way-behind-other-nations-in-regulating-political-donations-59597. has the government on its knees 2 March 2007, www.abc.net.au/
stateline/wa/content/2006/s1863286.htm
239 ‘FactCheck Q&A: Is Australia one of the few countries worldwide
to accept foreign donations?’ The Conversation 19 September 2016 246 ‘Corrupt ex-minister Nuttall arrives for sentencing’ Sydney
www.theconversation.com/factcheck-qanda-is-australia-one-of-the- Morning Herald (online) 16 July 2009 www.smh.com.au/national/
few-countries-worldwide-to-accept-foreign-political-donations-65343. corrupt-exminister-nuttall-arrives-for-sentencing-20090716-dm54.
html?deviceType=text; Michael West, ‘Mateship, it is obvious can
240 Chris Uhlmann, ‘Chinese donors to Australian political parties: come at a high price’, Sydney Morning Herald (online) 11 May 2013
who gave how much?’ ABC News 21 August 2016 www.abc.net.au/ www.smh.com.au/business/mateship-it-is-obvious-can-come-at-a-
news/2016-08-21/china-australia-political-donations/7766654. high-price-20130510-2jdk0.html.
241 Nick McKenzie, ‘ASIO warns political parties over foreign 247 Chettle above n 208.
donations’ Four Corners ABC 6 June 2017 www.abc.net.au/
news/2017-06-05/asio-warns-political-parties-over-foreign- 248 ‘Adani and Queensland Government reach agreement over
donations/8590162. royalties for Carmichael coal mine’ ABC News (online) 30 May 2017
www.abc.net.au/news/2017-05-30/adani-coal-mine-back-on-track-
242 Yee above n 233. after-royalties-agreement/8573558.
49
loans, legislative amendments249, and policy directives to privacy protection.252 The Corporations Act 2001 (Cth) only
enable a mining project can reasonably be interpreted as a covers disclosure made in ‘respect of contraventions of
consequence of industry influence. corporate law, rather than tax or other law’.253 The Senate
Economics Reference Committee Issues Paper found:
The vulnerability of industry influence led to the contextual
risk, What is the risk of policy capture, and state capture Specific concerns raised by the Joint Committee included
by mining companies? The inconsistency of integrity the limited scope of the definition of protected disclosures,
frameworks in Australia, especially in regard to the the lack of any requirement for companies to establish
Commonwealth, the considerable ministerial or senior internal processes to facilitate whistleblowing, and the fact
government official discretion involved in decision-making the proposed protections did not clarify what role, if any,
for large infrastructure projects together with the culture of ASIC had in preventing reprisals against whistle blowers,
mateship, can enable influence in the approvals process. or acting to protect whistle blowers when reprisals took
The opportunity for influence and the impact it can have place. The Joint Committee also criticised the fact that
on democratic processes and institutions led to a score of the whistle blower protections did not extend to cover
significant for the risk assessment. anonymous disclosures.254
Australia’s adversarial parliamentary democracy assists in Because of the common career trajectory between
the exposure of state and policy capture. Opposition parties government and industry, whistle blowers in government or
question government decisions and policy in the house and the private sector can lose their right to a career because
in the media, and will provide the media with information if both industry and government can effectively blackball them.
there is a suggestion of corruption or injudicious decision-
making. Whilst inadequate protection of whistle blowers has been
identified as a vulnerability, a full risk assessment has not
Summary been undertaken due to the existing Australian research and
advocacy for improved whistle blower protection.255
Policy and state capture have the potential to impact the
approvals process for large infrastructure projects in diverse
ways by causing governments to rush through legislative
amendments to enable mining approvals; and to adapt
Due Diligence
assessment and decision-making for industry benefit. It The corruption vulnerability of inadequate due diligence
also has the potential to enable the corruption of politicians investigation into the character and integrity of the applicant
and senior government representatives. State capture is and the principals of a company applies in both Western
of particular concern when approvals processes allow Australia and Queensland for all the approvals processes
the exercise of discretion either by a Minister or senior examined except for Native Title where it is not applicable.
government representative. Under-regulated practices
including revolving doors, lobbying, and political donations as Whilst it is common for mining companies to investigate the
well as an entrenched culture of mateship are the vehicles background of partners, contractors and agents to minimise
that can allow policy and state capture to occur for large risk, government departments involved in the mining
infrastructure mining projects in Western Australia and approvals process do not undertake adequate due diligence
Queensland. into the character and integrity of applicants, or the track
record for responsible business conduct of the company and
its directors in either Australia or overseas for mining leases.
Whistle blowing The due diligence that is currently undertaken relates
The Whistling While They Work 2 research reports that the to financial capacity and environmental records. Whilst
protection and support of whistle blowers in Australia requires approvals for large infrastructure projects in Western Australia
comprehensive law reform.250 Brown states that the ‘few and Queensland require financial investigation into the
protections proposed or enacted for the private and not-for- capacity of the proponent, the financial investigation does not
profit sectors are piecemeal and potentially inconsistent’.251 involve an examination of beneficial ownership to understand
who the real owners are.
The existing regulatory frameworks for the private sector
provide inadequate protection: victimisation is not prohibited, In Queensland, proponents are required to provide
there are no provisions for compensation, and there is limited details of their environmental record when applying for
suitable operator status for an environmental authority; or
252 Fiona McLeod, ‘Strengthening Australia’s National Integrity

249 Mineral and other Legislation Amendment Bill 2016 (Qld); Chris System: Opportunities and Imperatives,’ (Paper presented at National
McGrath, The Queensland Bilateral’ 2002/2003 8(33) Queensland Integrity Conference 2017, Brisbane, 16 March 2017) 7.
environmental reporter 145, 150.
253 Ibid.
250 Whistling While They Work 2 www.whistlingwhiletheywork.edu.
au/. 254 Senate Economics Reference Committee, Parliament of
Australia, Corporate whistleblowing in Australia: ending corporate
251 AJ Brown, ‘Despite businesses best efforts whistleblowers still Australia’s cultures of silence, (2016) 20.
lack protection under Australian law: new research’, The Conversation
8 November 2016 www.theconversation.com/despite-business-best- 255 See Transparency International www.transparency.org.au/index.
efforts-whistleblowers-still-lack-protection-under-australian-law-new- php/our-work/whistleblowing/; and Whistling While They Work 2
research-66910. www.whistlingwhiletheywork.edu.au/?page_id=5
50
when submitting an Environment Impact Statement for a

coordinated project or a controlled action.256 The proponent
must also provide in the EIS details of any proceedings under
a law of the Commonwealth or State.257 This self-reporting CASE STUDY: ADANI GROUP
requirement does not extend to proceedings in jurisdictions
outside Australia.
Adani’s track record of poor environmental compliance
Whilst previously the ownership of companies investing in has been described in the section Coordinated Projects
mining in Australia were predominately Australian, American, but Adani companies are also under investigation in India
and Japanese the landscape has changed significantly with for financial crimes relating to the importation of coal and
the entry of companies from China and other countries that capital equipment and the illegal export of iron ore.262
have low scores on the Transparency International Corruption
Perceptions Index.258 The investigation of companies Environmental Justice reported in the Adani Brief that
operating offshore can be difficult given the opacity of five Adani companies in India are under investigation
different countries’ systems of reporting and enforcement. for inflating the quality and value of coal imported from
Engagement with civil society in the country where the Indonesia.263 The Directorate-General of Revenue
company is headquartered can provide useful information on Intelligence stated that the objective of the overvaluation
the reputation and day-to-day practice of a mining company. was ‘siphoning off money abroad; and to avail higher
power tariff compensation based on artificially inflated
Foreign companies and individuals have the same rights as cost of the imported Coal’.264
local companies to apply for mining tenements. However,
foreign companies have to abide by the guidelines of the An Adani Group company has also been investigated
Foreign Investment Review Board (FIRB) and if necessary for transfer pricing by the Directorate of Revenue
apply for approval. Exploration tenements are not generally Intelligence for the over valuation of imported power and
considered to be an interest in the land and may not be infrastructure equipment to allow the difference in value to
notifiable to the FIRB. Mining tenements are considered to be sent to another Adani company in Mauritius.265
be a type of Australian land, and an acquisition and interest
that requires examination under the Foreign Acquisitions and It has also been reported that Adani Enterprises illegally
Takeovers Act 1975 (Cth).259 Investors from countries (e.g. exported 7.7 million tonnes of iron ore from the port of
USA, Singapore, Malaysia, Chile, China, Japan and South Belekeri, Karnataka, between 2006 and 2010. To facilitate
Korea) with Free Trade Agreements with Australia do not the illegal exports it is alleged Adani paid bribes to port
need prior approval for investments up to $1.1 billon.260 and customs officials, the police, and local politicians.
The fraud involved Adani overloading trucks and receiving
The Foreign Investment Review Board assesses the iron ore from suppliers who did not have permits. Adani
character of the investor for notifications for approval. Enterprises is the parent company of the company
However, character assessments only rely on self-disclosure developing the Carmichael Coal Mine in Australia.266
of transparent commercial operations, corporate governance,
and compliance with Australian laws.261 Questions can be raised regarding whether Adani’s
record in India was disclosed to the FIRB and the
Queensland and Commonwealth governments. If the
record was disclosed what further investigations did
the Australian and State government take and was
the Adani’s record taken into account when approving
the Carmichael Coal Mine and Adani Abbot Point port
terminal?
256 Environmental Protection and Biodiversity Conservation

Regulations 2000 (Cth) sch 4; Environmental Protection Act 1994
(Qld); Department of Natural Resources and Mines, Queensland
Government, Queensland mining and petroleum industry
overview (July 2016) www.dnrm.qld.gov.au/__data/assets/pdf_
file/0004/238072/queensland-mining-petroleum-overview.pdf 1.
257 State Development and Public Works Organisation Regulation
2010 reg 35, sch 1 item 6
258 Expert interview (Perth, December 2016); Transparency
International, Corruption Perceptions Index 2016 (25 January 262 Stephen Long, ‘Adani facing multiple financial crime, corruption
2017) www.transparency.org/news/feature/corruption_perceptions_ probes,’ ABC News (Online) 22 December 2016 www.abc.net.au/
index_2016. news/2016-12-22/adani-companies-facing-multiple-corruption-
259 Foreign Investment Review Board, Australian Government, probes/8140100.
Foreign Investment in Mining www.cdn.tspace.gov.au/uploads/ 263 Environmental Justice, The Adani Brief (15 February 2017)
sites/79/2015/11/24_GN_FIRB_2016.pdf. www.envirojustice.org.au/major-reports/the-adani-brief , 10-11.
260 Department of Mines and Petroleum, Government of Western 264 Directorate of Revenue Intelligence, Government of India, Coal
Australia, Secure Investment Location www.dmp.wa.gov.au/ Alert www.epw.in/system/files/pdf/2016_51/14/Coal%20Alert_1%20
Investors/Secure-investment-location-18318.aspx. PGT.pdf.
261 Foreign Investment Review Board, Australia’s Foreign 265 Environmental Justice above n 261, 12-13.
Investment Policy (December 2015) www.firb.gov.au/resources/
policy-documents/ 266 Environmental Justice above n 26, 14- 15
51
Analysis of risk
The vulnerability of inadequate due diligence led to the

process practice risk What is the risk that there is inadequate
due diligence on applicants’ integrity such as past
lawful conduct and compliance? The transparency and
accountability of the approvals processes (with the exception
of State Agreements) to some extent ameliorates the risk and
a robust media exposes instances of the impact of the risk.
Inadequate due diligence into applicants has the potential

to have significant adverse impacts. It creates a risk that
companies or principals with a history of noncompliance,
criminal or corrupt behaviour or with a record of
environmental damage, and other poor business conduct,
including human rights violations, can operate in Australia;
and it has the potential to allow mineral rights to fall into
the hands of companies that may not practice responsible
business conduct, which creates the potential for significant
adverse environmental and social impacts. Further, if
proponents do not comply with the terms of their lease, or
abandon the mine whilst in production, governments can
be left with liabilities that include non-payment of royalties;
management of stabilisation and subsidence issues and
other care and maintenance issues. Likewise, post mine
closure, government can be left with considerable clean
up and rehabilitation issues. Non-compliance can result in
native title parties not receiving compensation or the benefits
agreed to, and there is also the potential that cultural heritage
sites can be destroyed or damaged.
Finally, the lack of investigation into beneficial ownership

means that the ultimate ownership of companies operating
mines in Australia is unknown, and opens the possibility for
corrupt players to be mining for resources in Australia.
As stated by Transparency International Australia:
It is important to lift the veil of secrecy over those who

ultimately own or control companies to ensure that
wrongdoing is exposed and any illicit financial benefits
flowing into or through the company (including those from
corruption) are disrupted. This could prevent the misuse of
companies for illicit activities such as tax evasion, money
laundering, bribery, corruption and terrorism financing.
There is often a web of corporate structures or other
arrangements, often quite complex, which the Australian
government currently cannot penetrate.267
Summary
Inadequate due diligence into the character and integrity of

applicants for mining rights is a significant risk for mining
approvals in both Western Australia and Queensland. This
risk is flagged for mining approvals due to the adverse
impacts the risk can have for government, the environment,
and community; and the lack of investigation into the ultimate
beneficial ownership of mining companies applying for mining
rights can allow for those with a record of corruption and/or
noncompliance to mine for resources in Australia.
267 See TIA submission to Australian Government consultation

www.transparency.org.au/wp-content/uploads/2017/03/2017-03-20-
TIA-Submission-on-consultation-paper-to-increase-transparency-of-
beneficial-ownership-of-companies1.pdf. Goldmine at Kalgoorlie, Western Australia.
Source: By Gilles Paire/Shutterstock.
52
Vulnerabilities and risks – Cross cutting issues


Inadequate due diligence investigation diligence on applicants’ integrity such as past High
53
DISCUSSION OF RESULTS
Distribution of results
The tables below show the distribution of results of the risk
assessment by risk, and by approvals process.
Distribution of results by risk
Risk Approvals process and location Score

cadastre agency’s awarding of licences and Mining leases and exploration licences, WA Low
leases?
What is the risk that confidential information

regarding applications for mining leases and Mining leases and exploration licences, WA Low
exploration licences will be leaked?

Coordinated Projects Qld Medium
accuracy of environmental impact statements?

the Coordinator-General’s recommendations, Coordinated Projects Qld Medium
evaluations and imposition of conditions?
Mining leases and exploration licences WA

What is the risk that there is inadequate due Mining leases Qld
unlawful conduct and compliance? State Agreements WA
Coordinated Projects Qld
What is the risk of policy capture, and state State Agreements WA

High
capture by mining companies? Coordinated Projects Qld
What is the risk that the negotiation process

and the components of the negotiations,
State Agreements WA High
including what is negotiable and non-
negotiable, will not be publicly knowable?

mining company on behalf of a Native Title
Native Title High
Party will not represent community members’
interests?

agreements between mining companies and Native Title Very high
54
Distribution of results by approvals process
Number and score

Approval process Risks
of risks

Mining leases Qld diligence on applicants’ integrity such as past 1 High

cadastre agency’s awarding of licences and
leases?
Mining leases and exploration licences, WA 2 Low
What is the risk that confidential information
regarding applications for mining leases and
exploration licences will be leaked?
diligence on applicants’ integrity such as past
1 High
What is the risk that the negotiation process and

the components of the negotiations, including
what is negotiable and non-negotiable, will not be
publicly knowable?
State Agreements WA What is the risk of policy capture, and state 3 High
diligence on applicants’ integrity such as past
unlawful conduct and compliance?

the Coordinator-General’s recommendations,
Coordinated Projects Qld evaluations and imposition of conditions? 2 Medium

accuracy of environmental impact statements?
diligence on applicants’ integrity such as past 2 High
unlawful conduct and compliance?

mining company on behalf of a Native Title Party 1 High
will not represent community members’ interests?
Native Title

agreements between mining companies and 1 Very high
55
Nine risks were assessed in total with six risks applying is the potential for considerable impact on the environment
to approvals processes in Western Australia, five applying and communities if the discretion is injudiciously applied.
in Queensland, and two to Native Title mining agreement
making. The risk assessment scores ranged from low to The risk of external influence and the vulnerability of
very high with a cluster of scores in the mid to high range. Ministerial discretion also applies to State Agreements in
The greater number of risks for WA can be attributed to the Western Australia. The risk was not assessed as there is a
decision to undertake a full risk assessment for a larger lack of evidence of impact due to the decreasing use of State
number of identified vulnerabilities for exploration licences Agreements as an approval mechanism for large mining
and mining in Western Australia than for other processes infrastructure projects in Western Australia, but it should also
assessed. be noted as a factor especially given that State Agreements
were assessed as having a lack of transparency and the
The distribution of results and the analysis in the report capacity for industry to influence approvals.
show the relationship of different risks with each other,
how particular risks can be distributed across approvals
processes, and how the aggregation of risks can compound
a risk and potentially lead to an increase in its significance.
Large mining infrastructure
projects
The risk scores can reflect how robust an approvals process There was a significant distribution of risks for large
is to corruption. For example, exploration licences and mining infrastructure projects in each state. The risk of inadequate
leases in WA had two low scoring risks and one high scoring due diligence applied to both coordinated projects in
risk. The checks and balances in the approvals system, and Queensland and State Agreements in Western Australia
government integrity systems prevented the low scoring risks and the vulnerability of industry influence in the approvals
from having a high likelihood of occurrence and impact. process applied to large infrastructure projects in each state.
The risk of external interference in the approvals process can

Risks distributed across create a significant vulnerability for industry influence in the
approvals processes approvals process for large mining infrastructure projects.
Discretionary decision-making creates a higher potential
Particular risks were distributed across jurisdictions and for industry influence in the process, and industry influence
approvals processes. Whilst the scores for these risks were can lead to the risk of policy and state capture by mining
low, medium or high, the fact that certain risks occurred companies.
across approval processes in Western Australia and
Queensland is significant. What is the risk of policy capture, and state capture by
mining companies? Score: High
What is the risk that there is inadequate due diligence
on applicants’ integrity such as past lawful conduct and This contextual risk occurs for large infrastructure projects in
compliance? Score: High WA (State Agreements), and Qld (coordinated projects). The
likelihood of this risk occurring was high because of under
This risk was reported in the all approvals processes regulated practices such as political donations, lobbying, and
assessed except for Native Title where it was not applicable. revolving doors. These practices provided evidence of a high
The risk had a high likelihood of occurrence because of the level of impact for the influence of industry.
limited due diligence undertaken by mining departments,
and the potential impacts if the risk occurred were high. The capacity for industry influence is further enhanced when
The occurrence of this risk across both jurisdictions and all there is no transparency in the approvals system as occurs
processes, except for native title, suggests a significant and for State Agreements Acts in Western Australia.
pertinent risk for the mining approvals processes in Western
Australia and Queensland. State Agreements Western Australia: What is the risk
that the negotiation process and the components of the
What is the risk of external interference in the ‘agencies negotiations, including what is negotiable and non-
approvals’? Score: Low, Medium negotiable, will not be publicly knowable? Score: High
This process practice risk relates to the identified This risk is significant because of its score and because of the
vulnerability of ministerial or senior government sum of the affects of low transparency, policy and state capture
representatives’ discretion in decision-making and it and discretionary decision-making. Whilst State Agreement
occurred for mining leases in Western Australia and for Acts have not had extensive use for mining projects in
the coordinated projects approval process in Queensland. recent years, State Agreement Acts, and the more secretive
In the case of mining leases in Western Australia the State Development Acts, are still available for use in mining
risk was scored as minor because the risk assessment infrastructure development. If a decision is made to use these
demonstrated that the checks and balances in the agreements in the future, there will be significant risks.
approvals system acts as a corruption deterrent.
Another risk was identified for large infrastructure mining
Discretional decision making for coordinated projects had projects in Qld.
a medium score, which reflects the fact that the system
has some elements of transparency and accountability, but
the system is not as rigorous as the approvals systems for
mining leases in Queensland or Western Australia. There
56
What is the risk there is no verification of the accuracy or Agreements in Western Australia, inadequate due diligence
truthfulness of environmental impact statements? Score: has the potential to compound the impact of state and policy
Medium capture, low transparency of negotiations and increase the
likelihood of state and policy capture.
The risk that there is no verification of the accuracy of an
EIS scored as medium because there is some accountability Further inadequate due diligence has the potential to
built into the coordinated projects assessment and evaluation increase negative impacts on native title parties and
process including public review, the capacity for evidence to compound the risk of low transparency in agreement-making
be tested in the Land Court when mining leases are applied and could lead to manipulation of agreement-making, of
for, and Commonwealth oversight (for Federal approvals). native title groups and have severe effects for Indigenous
These accountability factors were weighed against the communities and their land.
discretion of the Coordinator-General to make evaluations
and the lack of a formalised process of independent review.
This risk has the potential to be compounded when

Other minor risks
combined with the capacity for industry to influence What is the risk that confidential information regarding
the approvals process. In Queensland there is a public applications for mining leases and exploration licences
perception that the management of the EIS process has will be leaked? Score: Low
been driven by the needs of the mining industry, and in turn,
the influence of the mining industry has been questioned. This risk was assessed for exploration licences and mining
leases in Western Australia and it was noted that this
risk could have been assessed for other jurisdictions and
Native Title approvals processes. The risk was assessed as a low level
risk due to the limited evidence of impact and the safeguards
What is the risk that the content of final agreements in the system to prevent its occurrence.
between mining companies and Indigenous parties will
be kept secret? Score: Very High
This risk had a very high score because mining agreements

Limitations of results
with native title parties have limited transparency and It was necessary to be selective in the choice of jurisdictions
there is evidence of negative impacts on the distribution of and approvals processes for assessment due to the time
benefits to Indigenous people. The focus of the risk is on allocated for the research. The results would benefit from
disclosure, and could not take into account the complex further research into other jurisdictions to assess how the
factors that should be taken into account when arguing for risks apply in other state contexts. For example, it would
and against transparency in Indigenous agreement-making be useful to assess if there is inadequate due diligence
in Australia. undertaken by mining companies in other states and
territories to assess whether the risk applies for mining
What is the risk that those negotiating with a mining across Australia.
company on behalf of a Native Title Party will not
represent community members’ interests? Score: High The results would benefit from a comparative risk analysis
of approvals in WA and Qld. Further research could
Evidence of representatives negotiating agreements on be undertaken into environmental approvals for mining
behalf of native title parties engaging in self-interested leases and large infrastructure projects in WA, and for
behaviour and corruption, and of mining companies mining leases in Qld to compare the systems and the
manipulating native title representatives led to a high score States’ approach to environmental approvals. Likewise,
for this risk. The lack of transparency and accountability the results would be enhanced by further research into the
in agreement-making increased the likelihood of the risk administration of native title in Queensland.
occurring.
In addition, the analysis of state and policy capture would be
strengthened if research was undertaken into the amount
Aggregated risks and number of mining company donations to political
parties.
The aggregation of significant of risks can compound the
cumulative impact and the likelihood of a risk occurring. Further research into the cultural acceptance of mining in
For example, when inadequate due diligence is undertaken each state and of public sector officials attitudes to mining
into mining companies and their principals it can allow and integrity would allow for a deeper analysis of the context
companies and directors with a corrupt record to mine for of mining and would strengthen the results.
resources in Australia. This has the potential to increase
the severity of the impact of the other risks assessed and When discussing a risk it should be noted that the risk is
increase the likelihood of corruption. For example, in the an outcome, and what may be significant are the factors
case of coordinated projects approvals in Queensland, that could enable a risk to happen. For example the risk of
inadequate due diligence can increase the severity of the policy and state capture is enabled by the system of political
impacts of state and policy capture, external influence in the donations. Therefore, if action is to be taken to prevent
approvals process, and the lack of independent review of an the risk it should be directed at the systems that support
EIS. Inadequate due diligence can increase the likelihood its occurrence, namely, amongst other factors, political
of the occurrence of state and policy capture and external donations.
influence in the approvals process. Likewise, for State
57
CONCLUSION
Mining approvals are complex processes with many variables The results also demonstrated that the limited transparency
and approvals pathways. Mining legislation intersects with of native title mining agreements is a very high risk and
other Acts, state and Commonwealth, and approvals can there is a high risk that representatives negotiating with a
involve administration across multiple departments. Complex mining company will not represent the interests of native title
contextual and cultural factors are also significant factors that parties. However, as noted in the Native Title section, there
influence the approvals processes. are complex issues to be taken into account when assessing
Native Title risks.
The research and the results of the risk assessment
demonstrated that the approvals processes and the systems
in place for exploration licences, and mining leases in
Western Australia, and mining leases in Queensland have
high levels of transparency and accountability that acts as a
corruption deterrent for many of the vulnerabilities identified.
However, a significant risk was identified for mining leases
and exploration licences that also applies to mining approvals
for large infrastructure projects – inadequate due diligence
into an applicant’s integrity. This is a significant corruption
risk for government departments administering mining
approvals in Western Australia and Queensland as it has the
potential for future impacts, especially given the changing
nature of the ownership of mining in Australia.
State Agreements and coordinated projects, large mining

infrastructure project approvals processes in each State,
were assessed as a having a high number of interrelated
and compounded risks. The risk assessment indicated the
potential for industry influence in the awarding of approvals
for large mining projects. The research noted that the
inadequate regulation of political donations and lobbyists is a
significant factor that could enable the influence to occur. The
risk of industry influence for large infrastructure projects was
compounded by the assessed vulnerability of Ministerial or
senior civil servant’s discretion in the awarding of approvals.
The coordinated projects process for evaluation and

assessment of an EIS under State and Federal law
was assessed as having elements of transparency and
accountability. Yet the level of discretion available to the
Coordinator-General, specifically in relation to the evaluation
of environmental impact statements, led to two medium
level risks being assessed: risk of external influence in
the awarding of approvals, and another risk regarding the
inadequate verification of the accuracy of environmental
impact assessments.
Large mining infrastructure projects approved in Western

Australia under State Agreement Acts were assessed with
a high level of risk due to the lack of transparency of the
negotiation process, but the limited contemporary use of
State Agreement Acts was noted. The lack of transparency,
and the capacity of industry to influence the process through
the application of Ministerial discretion compound the
significance of the risk.
The level of public interest in the approvals process for

large mining projects, an active civil society, robust media,
and a competitive and entrepreneurial mining industry
work as powerful corruption deterrents and increases
the accountability of the approvals processes in Western
Australia and Queensland.
Port Hedland, Western Australia.

Source: By Adwo/Shutterstock.
58
Summary
The mining approvals processes investigated in Western

Australia and Queensland have elements of transparency
and accountability, and the robust nature of public
interrogation of mining approvals helps to hold government
and the systems to account. However, risks ranging from
minor, through to very high have been identified in the mining
approvals system, which creates an enabling environment
for corruption. The vulnerabilities and the risks identified by
the study can provide a guide to future action for combatting
corruption in the mining approvals processes in Western
Australia and Queensland.
59
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67
APPENDIX A
The appendix contains detailed flow charts mapping the
approvals process.
68
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Transparency
International Australia
A Company Limited by Guarantee
ABN 23 068 075 525
Registered Office:
Level 4, Deutsche Bank Place
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PO Box 2041 Blackburn South, Victoria 3130
Phone +61 3 9877 0369

Email info@transparency.org.au
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Select Committee into the Political Influence of Donations

Acronyms and abbreviations - p13

WESTERN AUSTRALIA Due Diligence - p50

Exploration Licence and Mining Lease

A key risk identified for large scale mining and coordinated

Chief Executive Officer

ABOUT THIS REPORT

This Report Disclaimer

Title: Corruption Risks: Mining Approvals in Australia

The research involved an investigation

Geologists Sampling Rocks in the Pilbara, Australia

Summary of risk assessment 4. The inadequate protection of whistle blowers

Iron ore Mining Operations Pilbara Region, Western Australia

Phase I of the programme (2016-2017) involves the

With an understanding of the nature and causes of corruption

The BHP Billiton Foundation supports the participation

The M4SD Programme study

The aim of the M4SD Programme study is to identify the

Super Pit Kalgoorlie, Western Australia

A project ‘declared’ by the Coordinator-General, Queensland that meets the

An action that is deemed to be significant by the Department of Environment,

A prospecting licence, exploration licence, retention licence, mining lease, general

A prospecting permit, mining claim, exploration permit, mineral development

Acronyms and abbreviations

AEC Australian Electoral Commission

CCC Corruption and Crime Commission (WA)

DEHP Department of Environment and Heritage Protection (Qld)

DMP Department of Mines and Petroleum (WA)

DNRM Department of Natural Resources and Mines (Qld)

DSD Department of State Development (WA or Qld)

EIS Environmental Impact Statement

FIRB Foreign Investment Review Board

ILUA Indigenous Land Use Agreement

M4SD Mining for Sustainable Development Programme

MACRA Mining Awards Corruption Risk Assessment

MNES Matters of national environmental significance

NNTT National Native Title Tribunal

NTRB Native Title Representative Body

NTRBC Native Title Registered Body Corporate

NTSP Native Title Service Provider

PBC Prescribed Body Corporate

Background either under Native Title or available to be claimed, so

Methodology Data collection and research methods

The MACRA tool contains a list of 89 common risks for

these risks and the underlying vulnerabilities/sources using

1 Michael Nest 2016

In addition, DMP has integrity systems in place and inducts,

The stipulation in the Act is similar in section 59(6) regarding

discussed above, but subsequent safeguards were put

Where there are potential problems is the culture of

In summary, the power of the Minister to grant or not grant

history of noncompliance, criminal or corrupt behaviour will

Mining companies will also, when working in high risk

Whilst previously the ownership of companies investing in

Inadequate due diligence into the character and integrity

Vulnerabilities and risks Exploration Licences Western

Vulnerability Risk Score

Minister has discretion to grant or refuse an

What is the risk that there is inadequate due