Great Barrier Reef grant decision broke govt’s own rules, environmental lawyers say (ABC)

By Michael Slezak

The Turnbull Government’s $444 million grant to the Great Barrier Reef Foundation contravened its own guidelines for the allocation of such funds, according to environmental lawyers and governance experts.

Key points

  • Environmental Justice Australia argues grant should have been proposed as a “procurement”
  • That means a tender process should have happened
  • Governance expert agrees, saying Government’s process has been “deeply concerning”

The record investment in the reef was given out as a grant to fund projects to improve the health of the reef, without any competitive tender process.

But in a submission to the Senate inquiry examining the grant, lawyers from Environmental Justice Australia (EJA) argued it should have been characterised as a procurement — meaning a tender process was required.

Governance expert Professor Thomas Clarke from the University of Technology Sydney agreed with the lawyers’ conclusions, saying the Government’s process was “deeply concerning”.

EJA pointed to a 2014 document on the Department of Finance website that describes a “grant” as when, “the recipient receives financial assistance from the Commonwealth to help achieve its own goals (consistent with Commonwealth goals)”.

“Whereas in a procurement, the Commonwealth is usually purchasing goods and/or services that assist the Commonwealth in achieving its own goals,” the document reads.

More-recently published documents use different wording, saying a procurement is used to “assist the Commonwealth or a third party”.

The Department of Finance told the ABC the new wording was more complete, and the document quoted by EJA was meant to be considered together with others, also published by the department.

The Federal Government described the grant to the foundation as supporting the Government’s Reef 2050 Plan.

“It has been established to build on and support delivery of the joint Australian and Queensland government Reef 2050 Long-Term Sustainability Plan [Reef 2050 Plan],” the Government noted.

EJA said because of this, the funding should have been a procurement rather than a grant, and put out to public tender.

Professor Clarke added: “It should have been a competitive [tender] and I think the Government has been caught out on this and is in a dilemma. It has done it and now has to try to defend it.”

The managing director of the Great Barrier Reef Foundation, Anna Marsden, told the ABC’s 7.30 program the grant was a “complete surprise” when first suggested by the Prime Minister and Environment Minister Josh Frydenberg.

Mr Frydenberg was yet to respond to the ABC’s requests for comment.

EJA argues grant ‘not publicly defensible’

The Great Barrier Reef Foundation is a small environmental charity with a board comprised of representatives of Australian business, science and philanthropy. It is supported by companies including BHP, Qantas, Rio Tinto, Google and Orica.

The foundation is headed up by former Commonwealth Bank of Australia chairman Dr John M Schubert.

Under a procurement process, other parties would have been able to compete for the tender.

Even if it was appropriately considered a grant, EJA argued the Government had not properly administered it.

“On the evidence available to us, it appears the decision … was not impartial, not appropriately documented nor reported, and is certainly not publicly defensible,” the EJA submission said.

Prime Minister Malcolm Turnbull has defended the process, describing it as the, “single biggest contribution and investment in the health of the Great Barrier Reef ever”.

“The Great Barrier Reef Foundation is an outstanding organisation, this has been done completely transparently,” he said last week.

Professor Clarke agreed with EJA’s analysis that, as a grant, the process had been lacking, saying due procedures had been “entirely absent”.

“As a merchant banker, the Prime Minister may be used to large amounts of money, but not this large, and not with this lightness of touch,” he said.

“It doesn’t pass the pub test one little bit.”

University of Tasmania corporate governance expert Dr Tom Baxter said the grant raised a number of concerns.

“Outsourcing $444 million of scarce public spending, without a tender process, for one private player to administer, should raise questions in any context,” Dr Baxter said.

“All the more so for the Great Barrier Reef, where multiple organisations have long track records, including of public administration, contract management and research.”

Dr Baxter, who previously worked as a legal officer for the Great Barrier Reef Marine Park Authority, said it was strange the Government approached the foundation to establish the grant.

“Why didn’t the Government use standard Australian public sector processes? And if outsourcing, why did it deny other organisations the opportunity to bid for the work, such as by tender?” Dr Baxter said.

On Tuesday, Opposition spokesman for the environment Tony Burke said the grant should be taken back, and he launched a petition calling for the Government to do that.

EJA lawyer David Barnden said it appeared possible for the Government to take the money back, with a clause in the agreement allowing for the scope to be limited in line with changes in government policy, and for money associated with that reduced scope to be returned.

Published by ABC News Online on 8 August 2018

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