IT WAS Christmas Eve, 2008, and the New South Wales government was ”putting the garbage out”.
”It is hoped that by announcing the decision at that time (on the cusp of the biggest holiday of the year) it will not be afforded any media or other attention,” says a leaked cabinet in confidence report on the process prepared by Clayton Utz.
No wonder they wanted to keep it quiet.
The decision had been made by the then Labor government of NSW to award a coal exploration licence to a company in which union boss John Maitland held a stake.
The licence was awarded without a tender. The minister responsible at the time was none other than Ian Macdonald.
A little over a year later, in February 2010, Maitland’s company, Doyles Creek, was sold to NuCoal. NuCoal was promptly floated on the sharemarket with a value of $100 million. And Maitland – a former secretary of the Construction, Forestry, Mining and Energy Union – had made almost $10 million.
He cashed in $1.13 million of his NuCoal shares in April of that year, a further $1.3 million in November and $3.78 million in December.
His private company, Jonca Investments, still appears on the NuCoal register with a 4.4 per cent stake (down from 11 per cent).
The same minister who signed off on the Maitland deal has been at the dead centre of the Independent Commission against Corruption revelations this month, which have been characterised as perhaps the biggest corruption scandal since the Rum Rebellion.
The same year that he approved the Doyle’s Creek licence, then primary industry minister Ian Macdonald opened up tracts of land in the Bylong Valley for coalmining. ALP powerbroker Eddie Obeid had bought a property there. Its value rose fourfold.
The Obeid deal is code-named Operation Jasper. Doyles Creek is code-named Operation Acacia, and Operation Acacia is the next item on the agenda for ICAC.
The inquiry promises to engulf many more business and political figures before it is done, among them one of the world’s largest goldminers, Newcrest Mining.
It has become clear that any deal and any licence approval that involved Ian Macdonald or Eddie Obeid will need to be scrutinised.
Eddie Obeid had the mines portfolio in NSW from April 1999 to April 2003, during which time Newcrest was granted mining licences over its leviathan Cadia East goldmine in NSW. Exploration company Gold and Copper Resources is now disputing those licences. The challenge for Newcrest is that some of the nation’s most influential mining identities are behind GCR*.
That brings us to former NSW planning minister Tony Kelly, who, ICAC found in July last year, had acted corruptly in relation to the purchase of a union retreat at Currawong.
It was Tony Kelly who signed Newcrest’s Cadia East planning approval – an approval which now faces a legal challenge from GCR, which alleges that Newcrest is mining outside its mining leases.
And it was none other than Ian Macdonald who was minister of mineral resources when Newcrest announced to the market in 2010 it had completed the other regulatory requirements for Cadia East. Documents seen by BusinessDay indicate that Newcrest had not even lodged its necessary mining lease applications at that time.
The explosive revelations at ICAC has come at a bad time for Newcrest, especially as the Mines Department too should come under the purview of the inquiry. It is unlikely that department bureaucrats were in the dark as to the activities of their political overlords.
The Doyles Creek report mentioned above found there was ”a circumstantial case of wrongdoing and breach of public trust” and recommended a special commission of inquiry into the allocation by the department (then the Department of Primary Industries) of the Doyles Creek exploration licence.
According to the report, the minister invited Maitland to apply for an exploration licence over Doyle’s Creek; which, the department acknowledged in a ministerial briefing of February 2007, had an estimated 62 million tonnes of coal and ought to be put up for tender.
”Ultimately, though several parties showed interest in the Doyles Creek area, the EL [exploration licence] was not allocated by a competitive tender process but rather was directly allocated to Doyles Creek.”
The decision came down to ”ministerial discretion”, said the report. Yet it noted that Clayton Utz in its investigation had not been able to review the correspondence on the matter as ”it was not in the department’s file”.
The department was unaware at the time that the minister had invited Maitland to apply – and it followed the appropriate protocols, according to the report. Still, a department officer did make the offer to Doyles Creek in December 2008.
Besides the missing department documents, there was this: the exploration licence application was only advertised on January 8, 2008, ”some 25 days after the Doyles Creek EL was granted”.
The NSW Greens are introducing a motion in Parliament this week to have the Mount Penny coal licence, which is the subject of the current ICAC investigation, suspended due to what they claim may be ”false and misleading” information in the application document.
Under the Mining Act, a licence may be terminated or suspended if it can be shown that the applicant ”provided false and misleading information” to the authority that granted it.
Last week, Rob Oakeshott called for the review of all ministerial decisions under Eddie Obeid and Ian Macdonald, particularly in the resources portfolio. What is required is a review of all decisions in the Mining Department since Obeid became minister in 1999.
*Gold and Copper Resources is a private company and in no way related or involved with the listed Golden Cross Resources (ASX:GCR).