Chapter 3
Findings on Terms of Reference
3.1
The committee requested, and received a substantial quantity of material
from the Central Land Council (CLC), Centrecorp and Yeperenye Pty Ltd. That
material has all been placed on the committee's website, with personal and some
confidential details removed.[1]
3.2
Due to the huge quantity of documents, the committee was not able to
undertake an in-depth examination of these detailed management and financial
records of the CLC and Centrecorp. However, on an initial review of the essential
elements of this material, the committee did not find any evidence of
impropriety in the operation or management of either organisation, nor in the
relationship between the organisations. Accordingly, the committee decided that
it was unnecessary to further investigate by holding public hearings for the
inquiry.
3.3
However, the committee has residual concerns about the lack of
transparency in the operations of Centrecorp, and in the relationship between
the CLC and Centrecorp. Although both organisations denied that there was any
basis for concern, their reluctance to provide the committee with basic
financial and management documents did not demonstrate that either organisation
is committed to openness and accountability.
3.4
The committee also reiterates the transparency concerns identified in
two recent Office of Evaluation and Audit (OEA) reports, only some of which
appear to have been addressed.[2]
3.5
The committee's findings on each of its terms of reference, based on the
documents provided, are set out below. The issues are not dealt with in the
same order in which they appear in the terms of reference, but instead are set
out in a way which deals logically with key themes, and avoids repetition.
The relationship between the Central Land Council and Centrecorp[3]
Financial relationship
3.6
As noted in chapter 2, the CLC owns three out of the total five shares
in Centrecorp.
3.7
Given that the CLC is a Commonwealth statutory authority with various
reporting and transparency obligations, questions have been raised as to the
relationship between the two entities and whether Centrecorp should improve its
level of transparency and accountability.[4]
3.8
In 2006, the Australian National Audit Office (ANAO) undertook an
internal review of the matter of consolidation of entities with the land councils.
The ANAO submitted that the review 'was solely for the purposes of providing
advice based on the Accounting Standards as to whether these types of entities
should be consolidated in the financial statements of the Land Councils.'[5]
3.9
As a result of that review, the ANAO agreed to the current method of the
CLC's accounting for its interest in Centrecorp (i.e. nominally valuing its
three shares at $1 per share). The ANAO submitted to this inquiry that:
The accounting treatment, was agreed to on the basis that the
CLC does not have the power to govern the financial and operating policies of
Centrecorp so as to obtain benefits from its activities and thus does not have
control.[6]
3.10
The ANAO informed the committee that the basis of its ruling was
Australian Accounting Standards Board Accounting Standard number 127 entitled Consolidated
and Separate Financial Statements. Paragraph one of that Standard states that
'this Standard shall be applied in the preparation and presentation of
consolidated financial statements for a group of entities under the control
of a parent.'[7]
Paragraph four of the Standard defines control as 'the power to govern the
financial and operating policies of an entity so as to obtain benefits from its
activities'.[8]
3.11
The ANAO submitted that because Centrecorp's trust deed 'specifically
excludes CLC from receiving any benefit from the trust, CLC is not considered
to have control over Centrecorp.'[9]
3.12
Based on the ANAO's advice, land councils do not report on the
operations or financial statements of the external commercial entities in their
annual reports, as according to the OEA, 'they do not consider the commercial
entities to be related entities'.[10]
3.13
One of the implications of that advice is that '[a]s Centrecorp is not a
controlled entity of the CLC, it is not audited by the ANAO.'[11]
3.14
The OEA's 2008 audit of the Northern Territory land councils seems to
support the ANAO's view, stating that Centrecorp is '[a]n external economic
entity within the Central Land Council region facilitated and part‑owned
by the CLC.'[12]
3.15
The CLC, Centrecorp and the Department of Families, Housing, Community
Services and Indigenous Affairs, have each made statements to the effect that
no financial impropriety has occurred in the relationship between the CLC and Centrecorp.[13]
3.16
In an answer to a question on notice at the October 2008 Supplementary
Estimates, the CLC assured the Senate Community Affairs Committee that '[n]o
transfer payments have been made from the CLC to Centrecorp or from Centrecorp
to the CLC.'[14]
3.17
Centrecorp reiterated the assurance to this committee: '[t]he Central
Land Council has never sought, nor received benefit from the Charitable Trusts
or any related entity.'[15]
In relation to each of its trusts, Centrecorp submitted that:
No grants, loans or payments have been made to any director,
officer or employee of the Central Land Council except where persons in those
positions are also directors or officers of Centrecorp in which case the
payments are detailed [herein].[16]
3.18
The CLC has also objected strongly to the media's allegations that it
has an improper financial relationship with Centrecorp, submitting that:
Embedded in this repeated allegation is the necessary inference
that the CLC as:
-
A Commonwealth statutory authority;
-
That is governed by a representative council of 90 Aboriginal people
from throughout central Australia;
-
That is independently audited annually by the Commonwealth's Australian
National Audit Office;
-
That is subject to the Commonwealth Authorities and Companies Act;
-
That is subject to the Commonwealth Financial Management Act;
-
Whose budget is approved annually by the Commonwealth Minister;
-
That lodges its annual report with the Minister; and
-
The Minister tables the annual report in Parliament every year;
has, in spite of all of that scrutiny and all of those
controls, year after year somehow concealed a series of unlawful actions
involving the wrongful transfer to Centrecorp ... of large amounts of compensation
funds received on behalf of traditional landowners.
Setting the proposition out in this way demonstrates how
ridiculous the allegations are.[17]
Committee view
3.19
Due to the fact that the CLC and Centrecorp are treated as separate
financial entities for the purposes of Australian Government financial
reporting, and because Centrecorp is under no obligation to report to the
Australian Government, the committee found it difficult to make its own
assessment of the propriety of the financial relationship between the CLC and
Centrecorp.
3.20
Centrecorp provided the committee with highly edited versions of its
financial reports, with large quantities of data removed on the alleged grounds
that the information is 'commercial-in-confidence' or that it was beyond the
scope of the inquiry. The documents provided by Centrecorp are available on the
committee's website.[18]
3.21
On the basis of the limited financial information provided, the
committee was unable to find any evidence to contradict the CLC's statement in
its submission that '[t]here is no financial relationship between the CLC and
Centrecorp' beyond the CLC's 60 per cent shareholding. The documents did not on
their face disclose any payments between the two entities.
Management relationship
3.22
In its January 2008 audit of four Northern Territory land councils including
the CLC, the OEA noted of the relationship between the land councils and their
respective commercial entities:
In many instances, the Land Council retains a shareholding in
the entity and a certain number of positions on the governing committee of the
entity (as per the entity's rules of association).[19]
3.23
This is true of the CLC and Centrecorp, with the former holding two of
the four current board positions.
3.24
The OEA's useful diagram showing the relationship between Centrecorp and
the CLC is at Appendix 5.
3.25
In response to questions at Senate Estimates in October 2008 suggesting
that the CLC had a 'controlling interest' in Centrecorp on the basis of its
ownership of three of the five shares of Centrecorp, Mr David Ross stated:
...there is no financial impediment on either side of the
Central Land Council. We are not at risk one way or another. There are three $1
shareholdings and that is the end of it. There is no more involvement by the
Central Land Council in the day-to-day activity of Centrecorp...[20]
3.26
Similarly, Centrecorp submitted that 'the Constitution of Centrecorp
does not provide for any relationship between the number of shares held and any
concomitant right to appoint directors.'[21]
3.27
These statements are based on Centrecorp's trust deeds, regarding which Centrecorp
submitted:
[i]t follows that neither the Trustee, nor any shareholder of
the Trustee may obtain benefit from the Trust(s) nor incur any liability in
performing their duties as a Trustee. In other words, Centrecorp's
shareholders, including the Central Land Council, can never be paid any capital
or income from either CAACT and [sic] CACT by way of remuneration or otherwise
either directly or indirectly under any circumstances.[22]
3.28
Centrecorp's trust deed expressly states that:
Notwithstanding anything declared or implied in the Deed of
Trust:
-
the Trust Fund and the income thereof shall henceforth be possessed and
enjoyed to the entire exclusion of every member of the excluded class and of
any member of the excluded class whether by contract or otherwise;
-
no
part of the capital or income of the Trust Fund shall be paid or lent to or
applied whether by remuneration or otherwise howsoever for the benefit either
directly or indirectly of any member of the excluded class in any manner or any
circumstance whatsoever;
-
no
power conferred upon the Trustee by this Deed or by virtue of anything done
pursuant to this Deed or by law shall be capable of being exercised and no
provision herein contained shall operate in any manner that any member of the
excluded class will or may become entitled either directly or indirectly to any
benefit in any manner or in any circumstance whatsoever.[23]
3.29
The term 'excluded class' in the above excerpt of the Trust Deed, is
defined in the deed to include:
-
the Organisations (i.e. Centrecorp's existing shareholders);
-
the Shareholders;
-
any notional shareholder of the Trustee;
-
any person claiming under or in right of the Organisations or the
Shareholders or of any notional shareholder of the Trustee.[24]
3.30
Accordingly, Centrecorp has concluded that there is 'no management
relationship' or 'equitable relationship' between the CLC and Centrecorp, and
that '[t]he activities of Centrecorp as a trustee of CAACT and CACT are
entirely autonomous.'[25]
3.31
It should be noted however, while not disputing the veracity of that
statement, the OEA audit recommended that Centrecorp 'develop clear rules and
procedures for the declaration and management of potential conflicts of
interest' on its board, in order to ensure that the CLC, or any other
shareholder, did not improperly influence the management of Centrecorp's
trusts.[26]
3.32
The committee notes that the OEA was unable to make any findings with
regard to the Board's management of Centrecorp, and the level of influence that
those Board members who are also directors and members of the CLC have, as
Centrecorp refused to provide the OEA with minutes of board meetings, claiming
that those documents are 'commercial-in-confidence'.[27]
Committee view
3.33
Like the OEA, the committee is not in a position to draw firm
conclusions on the management relationship between the CLC and Centrecorp, and
specifically on the question of the level of influence the CLC has on the
management and distribution of Centrecorp's trusts.
3.34
The committee notes the findings of the OEA in its January 2008 report
on the four Northern Territory land councils, that:
Notably, the [OEA] found a lack of transparency surrounding
Land Councils' dealings with external commercial entities they established to
promote economic development, including Councillor appointments and positions
within these entities.[28]
3.35
While both the CLC and Centrecorp have repeatedly stated that no
management relationship exists between the two entities, neither organisation
has shown evidence of procedures in place to prevent such a relationship from
developing.
3.36
The committee suggests that, should the CLC and Centrecorp wish to avoid
continued speculation on the appropriateness of their management and financial
relationship, both organisations should be more forthcoming and transparent
about those arrangements. The committee found it difficult to identify any
evidence provided to this inquiry, other than assertions by the CLC and
Centrecorp, of the management of, and interaction between, the two
organisations.
Centrecorp's business activities and revenue
Business activities[29]
3.37
Centrecorp invests in a wide range of business activities, including a
supermarket, hardware retailer, tourist resort and car retailer. The business
ventures in which Centrecorp invests, include:
-
NT Gas Pty Ltd – Centrecorp owns 1.5 per cent interest.
-
Big O Pty Ltd – a hardware retailer in Alice Springs – Centrecorp
owns 50 per cent interest.
-
Magnetic Pty Ltd – a corporation established by Centrecorp to
acquire shares in an LJ Hooker real estate franchise. Magnetic (through another
trust) owns 50 per cent of the LJ Hooker Joint venture.[30]
-
Tancor Nominees Pty Ltd – which is the trustee of Tancor
Supermarket Trust, which trades as Milner Road Food Town. Centrecorp has a 50
per cent share.
-
Kings Canyon Nominees Pty Ltd – a trustee for the Kings Canyon
(Watarrka) Resort Trust which trades as the Kings Canyon Resort. Centrecorp
owns a 32.67 per cent interest in the resort.
-
Aboriginal Property Nominees Pty Ltd – a trustee for the Central
Australian Aboriginal Property Trust. Centrecorp owns 4.94 per cent of the
units in the trust through the CAACT (2.01 per cent) and CACT (2.93 per cent).
-
CAAMV Pty Ltd – a trustee of the CAAMV Unit Trust which holds 50
per cent of Alice Car Centre Pty Ltd which trades as Peter Kittle Motor
Company.
-
Yeperenye Nominees Pty Ltd – Centrecorp owns a 60 per cent
interest. Yeperenye Nominees is trustee for Yeperenye Charitable Trust which
owns Yeperenye Pty Ltd which in turn owns Yeperenye Shopping Centre.
-
Central Railway Equity Benefit Trust – and the associated company
(Central Railway Aboriginal Investment Pty Ltd) is an investment held in the
Alice Springs/Darwin railway operating company, on trust by Centrecorp for the
traditional owners. Centrecorp receives no benefit from holding this investment
and is currently restructuring ownership to transfer the asset to appropriate
Aboriginal bodies identified by the CLC.
-
Centrefarm Management Pty Ltd – a wholly owned Centrecorp
corporation established to provide corporate and management services to
horticulture projects on Aboriginal land.[31]
Sources of revenue[32]
3.38
Centrecorp receives its income from two main sources:
3.39
In terms of the financial performance and position of Centrecorp, the
OEA noted that Centrecorp does not produce 'group accounts' and for this
reason, it was not possible to identify the exact current value of its various
investments. However, the OEA stated:
...review of audited financial statements for those entities
that have been in receipt of Government support has revealed that Centrecorp
has been successful in growing the value of its asset base in the years since
Australian Government benefits were provided.[33]
3.40
Press reports have speculated that Centrecorp's assets are between $60
million and $100 million.[34]
3.41
The dividends received by Centrecorp and the value of shares owned by
Centrecorp are recorded in the financial statements of the two charitable
trusts, the CACT and CAACT, except its investment in Yeperenye Pty Ltd.
3.42
Centrecorp provided the committee with audited copies of the financial
statements of its two trusts. These statements were edited by Centrecorp,
purportedly to exclude '[f]igures for those investments acquired with private
funds, including external partners and operating in competitive environments',
which Centrecorp claims are 'commercial-in-confidence'.[35]
3.43
All of the statements have been externally audited by Deloitte Touche
Tohmatsu, and have received unqualified audit opinions.
3.44
The OEA review of the financial statements of the two Centrecorp trusts
established that the primary source of income for both is dividends and
distributions generated from their investment in commercial activities.
3.45
The total income and net profit generated by both trusts between the
financial years ending 2002 to 2008 is as set out at Table 2.
Table
2—Income and financial performance of CAACT and CACT ($)
Year |
CAACT total income |
CAACT net profit/(loss) |
CACT total income |
CACT net profit/(loss) |
Consolidated net profit/(loss) |
2001–02 |
1 030 869 |
663 886 |
1 146 159 |
1 126 236 |
1 790 122 |
2002–03 |
517 895 |
154 149 |
468 747 |
452 427 |
606 576 |
2003–04 |
876 115 |
573 193 |
216 891 |
205 770 |
778 963 |
2004–05 |
801 988 |
317 793 |
396 520 |
382 655 |
700 448 |
2005–06 |
508 471 |
(1 018 994) |
356 590 |
338 650 |
(680 344) |
2006–07 |
574 370 |
84 831 |
565 377 |
422 127 |
506 958 |
2007–08 |
2 159 218 |
1 338 536 |
1 291 650 |
(489 972) |
848 564 |
OEA, Performance
Audit of Centrecorp Aboriginal Investment Corporation Pty Ltd, November
2008, p. 31; Centrecorp, additional information, 21 August 2009 (received 24
August 2009).
3.46
Centrecorp also provided the committee with details of its assets. The
net asset position of CAACT and CACT, detailed in Table 3 below, demonstrates
that the financial position of both trusts is strong and has generally improved
over the years.
Table
3—Financial position of CAACT and CACT ($)
Year |
CAACT net asset position |
CACT net asset position |
Consolidated net asset position |
2001–02 |
5 274 610 |
3 710 272 |
8 984 882 |
2002–01 |
5 428 759 |
4 162 699 |
9 591 458 |
2003–04 |
6 002 051 |
4 752 124 |
10 371 520 |
2004–05 |
6 319 844 |
5 090 774 |
11 071 968 |
2005–06 |
5 300 850 |
5 090 774 |
10 391 624 |
2006–07 |
5 385 681 |
5 512 902 |
10 898 582 |
2007–08 |
5 943 217 |
5 022 929 |
10 966 146 |
OEA, Performance
Audit of Centrecorp Aboriginal Investment Corporation Pty Ltd, November
2008, p. 32; Centrecorp, additional information, 21 August 2009 (received 24
August 2009).
Grants and loans from the
Australian Government[36]
3.47
Centrecorp received significant levels of funding from the Australian
Government from 1990 to 2005 through a range of benefits including loans, share
transfers and grants totalling $25 102 311.[37]
The support focused on assistance in the acquisition of three investments; that
of Kings Canyon Resort, Yeperenye Pty Ltd, and the Peter Kittle Motor Company.[38]
The OEA has detailed the benefits to Centrecorp as follows:
Table 4—Summary of Australian Government
benefits provided to Centrecorp
Year |
Type of Benefit |
Source of Benefit |
Entity receiving Benefit |
Purpose |
Amount ($) |
1990 |
Loan |
ATSIC |
Centrecorp |
Purchase of shares in Kings Canyon Resort |
800 000 |
1991 |
Loan |
ATSIC |
Centrecorp as trustee of CACT |
Purchase of shares in Peter Kittle Motor Company |
190 000 |
1991 |
Grant |
ATSIC |
Centrecorp as trustee of CACT |
Consultant fees associated with purchase of shares in Peter Kittle
Motor Company |
160 000 |
1992 |
Grant |
ABTA |
Centrecorp as trustee of CACT |
Purchase of shares in Peter Kittle Motor Company |
310 000 |
1994 |
Grant |
ATSIC |
Centrecorp as trustee of CACT |
Consultant fees associated with purchase of shares in Peter Kittle
Motor Company |
30 000 |
1995 |
Grant |
ATSIC |
Centrecorp |
Purchase of shares in Kings Canyon Resort |
200 000 |
1997 |
Grant |
ATSIC |
Centrecorp as trustee of CACT |
Purchase of shares in Peter Kittle Motor Company |
800 000 |
1998 |
Loan |
ATSIC |
Centrecorp |
Purchase of shares in Kings Canyon Resort |
3799 508 |
2005 |
Share Transfer |
IBA |
Yeperenye Nominees Pty Ltd |
Transfer of 60 per cent share in Yeperenye Pty Ltd (valued at $32 688
005) |
19 612 803 |
TOTAL AUSTRALIAN GOVERNMENT BENEFITS |
25 102 311 |
OEA, Performance
Audit of Centrecorp Aboriginal Investment Corporation Pty Ltd, November
2008, p. 22.
3.48
Centrecorp did not provide the committee with information breaking down certain
aspects of its business and financial transactions which it claimed to be commercial-in-confidence.
It excluded any material relating to 'investments acquired with private funds,
involving external partners, and operating in competitive markets'.[39]
For this reason, much of the material provided by Centrecorp and published by
the committee contains blank sections or entire blank pages where information
has been removed by Centrecorp.
3.49
However, Centrecorp did provide some information relating to the success
of those businesses in which Centrecorp had acquired its interest with
Australian Government assistance. Centrecorp submitted that:
[The Australian Government] support assisted towards the
acquisition of two investments viz; units in Kings Canyon Resort Trust and
CAAMV Unit Trusts [which is the part owner of the Alice Car Centre] both
investments being partnered with the then Aboriginal and Torres Strait Islander
Commercial Development Corporation, now Indigenous Business Australia (IBA).
In the accounts of CAACT and CACT the funds are capitalised
as part of the asset cost in the respective balance sheets.[40]
3.50
In its submission to the committee, Centrecorp set out details of the
dividend payments of those Centrecorp investments which were in receipt of
government funding:
Table 5—Financial performance and dividend payments of
relevant Centrecorp businesses ($)
Year |
Kings Canyon Resort Trust Net profit (loss) |
Dividend received by Centrecorp (CAACT) |
Yeperenye Pty Ltd Net profit/(loss) |
Dividend received by Centrecorp |
Alice Car Centre Ltd Net profit/(loss) |
Dividend received by Centrecorp (CACT) |
2001–02 |
2 299 513 |
506 393 |
643 454 |
- |
873 792 |
786 623 |
2002–03 |
(160, 325) |
163 353 |
749 139 |
- |
1 162 198 |
327 746 |
2003–04 |
1 817 311 |
294 036 |
(247 191) |
- |
1 370 918 |
136 280 |
2004–05 |
397 026 |
156 981 |
2 990 683 |
- |
1 531 266 |
237 743 |
2005–06 |
(2 976 059) |
- |
1 598 369 |
- |
1 535 837 |
194 183 |
2006–07 |
1 031 665 |
- |
1 006 707 |
- |
1 770 073 |
358 954 |
Centrecorp,
Submission 3, p. 7.
3.51
In its audit of Centrecorp, the OEA found that:
Review of the direct benefits provided in respect of Kings
Canyon Resort, Yeperenye Nominees and Peter Kittle Motor Company investments
did not identify any instances where Australian Government funding was used for
purposes other than those specified in the relevant funding agreement.[41]
3.52
The OEA report examined the performance of those assets acquired by
Centrecorp using government funds.[42]
The OEA 'did not identify any instances where Australian Government funding was
used for purposes other than those specified in the relevant funding
agreement'.[43]
Benefits to Indigenous Australians and Donations[44]
3.53
Centrecorp's Memorandum of Association states that its purpose is to:
...undertake and implement activities which further the
economic and social developments of Aboriginals and which are conducive to the
advancement of Aboriginals.[45]
3.54
The main way in which Centrecorp seeks to achieve this aim is through
making charitable donations from the income from its investments. The donations
of each of the Centrecorp trusts over the past five years are set out in Table
6.
3.55
The OEA established through discussions with Centrecorp management that
the priorities for charitable donations included that of education, sport,
health and employment initiatives in the form of special projects or one-off
initiatives.[46]
Table
6—Donations by Centrecorp trusts, 2004–08 ($)
Year |
CAACT donations |
CACT donations |
Yeperenye Pty Ltd donations |
Total |
2003–04 |
22 027 |
- |
- |
22 027 |
2004–05 |
73 136 |
- |
- |
73 136 |
2005–06 |
124 105 |
- |
26 077 |
150 182 |
2006–07 |
99 085 |
135 511 |
65 870 |
300 466 |
2007–08 |
234 668 |
105 000 |
108 353 |
448 021 |
Centrecorp,
additional information, 21 August 2009 (received 24 August 2009). Note: figures
are rounded to nearest dollar.
How donation decisions are made
3.56
Of the management of donations, the OEA noted:
Although Centrecorp has established some basic procedures for
the administration of donations, there are no common procedural guidelines in
place across the network of organisations to guide those responsible for making
donations on the types of activities to be supported (in line with the
Charitable Objects of the Charitable Trust), the reporting arrangements to be
employed and process to be followed where a potential conflict of interest is
found to exist.[47]
3.57
Centrecorp informed the committee that its website sets out the process
for applying for a donation.[48]
The website gives an indication as to the factors that the Board of Directors
of the Centrecorp Foundation consider when assessing whether or not to make a
donation, and provides helpful advice as to what should be included in a
request.
3.58
Requests for donations must be made in writing, and should include:
-
details
of the application
-
contact
details
-
details
of the proposed activity
-
benefits
to be obtained from the proposed activity
-
a
budget showing the full cost of the proposed activity
-
any
proposed contribution by the applicant towards the cost
-
any
proposed fund raising activity
-
any
approaches to other sources of funding
-
any
other material relevant to the request
-
the
amount requested of the Centrecorp Foundation.[49]
3.59
Centrecorp accepts applications at any time, from individuals or
organisations.
3.60
The factors that the Board of Directors considers in making decisions
about donations are listed as:
-
Is the request aligned with the
overarching purpose of the Foundation (as outlined in the vision statement)?
-
Are there any alternative funding
sources available to the applicant?
-
Is the purpose more appropriate to
Government responsibility?
-
Is there potential for the
applicant to raise the funds themselves?
-
What are the amounts of previous
assistance granted from the Centrecorp Trust, the Foundation or other sources?
-
What is the ability of the
applicant to administrate the funds donated and the project being undertaken?
-
Will the funds demonstrably be
used for the purpose granted?[50]
3.61
While the committee notes that the above information on Centrecorp's
website appears to be an improvement from the information that was available at
the time of the OEA's report, in the committee's view the publicly available
information about Centrecorp's donation process remains insufficient to
demonstrate that the process is transparent and accountable. For example, there
is no indication of the prioritisation of grants, no appeal mechanism set out,
and the details of all successful grants are not published.
3.62
Accordingly, the committee is still inclined to agree with the OEA's
assessment that more transparency and/or accountability in the donation process
is desirable.
Benefits to Indigenous Australians
3.63
In terms of how its donations have benefited Indigenous Australians in
Central Australia, Centrecorp submitted:
The local Aboriginal Community in particular, is well
cognisant of Centrecorp and its philanthropic worth to the community. Over the
most recent years, Centrecorp has responded to over 300 requests for support,
most coming from organizations with multiple Aboriginal membership.[51]
(...)
The Charitable Trusts received requests from, and make
donations to, a broad representation of the Aboriginal Community of Central
Australia, including welfare organisations, a renal service, a hospital
volunteer group, local schools, interstate schools and colleges, a school
mentoring program, sporting groups, an employment taskforce (including local,
NT and Australian Government agencies), outstation communities, cultural and
arts groups, families and individuals.[52]
3.64
Centrecorp provided the committee with a list of the charitable
donations made by each of its trusts since 2002. Those documents, with the
names of individuals and Indigenous organisations removed, have been published
on the committee's website.[53]
3.65
Centrecorp submitted that its donations have, since 2000, totalled
nearly $1 million, and may be classified as follows:[54]
Education |
$400 183 |
Sport |
$179
957 |
Health & Welfare |
$135 397 |
Employment |
$128 087 |
Cultural & Art |
$111
443 |
3.66
The committee's analysis of the trusts' donations confirms this broad
breakdown.
3.67
Centrecorp's submission sets out a number of examples of the donations
it has made. For example Centrecorp stated that it sponsors numerous Aboriginal
youth sport teams, donates to 'every secondary and most primary schools [in the
region]' and sponsors disadvantaged Aboriginal student excursions. Centrecorp also sponsors over 30 Indigenous
students to attend interstate elite private schools. Centrecorp's submission
gives a number of other examples of programs that it has supported.[55]
3.68
The CLC submitted that, in addition to donations, Centrecorp's success
has other benefits for Aboriginal people:
...by pursuing the objects of the Trust to support Aboriginal people
in central Australia in areas of education, health, personal development –
particularly through sport, and in other ways consistent with the trust deeds,
over time it will assist Aboriginal people to participate more fully in
employment and economic activities, and ameliorate disadvantages due to poor
health, remoteness and so on.
As an Aboriginal controlled entity, Centrecorp sets a very
good example to the Aboriginal people of what can be achieved by long term
commitment to clear goals, sound governance and management, and financial
probity.
For many Aboriginal people in central Australia 'investment'
for the future is a difficult concept. Centrecorp also provides an outstanding
example of 'investment' as an instrument for economic and social improvement.[56]
3.69
However, it has been suggested by the media that some of Centrecorp's
investments are inappropriate because they 'stray from the objectives of [Centrecorp's]
charitable charter and are of little or no benefit to the indigenous people who
are meant to benefit from them'.[57]
Specifically, Centrecorp's investment in Milner Road Food Town, which operates
a liquor outlet has been criticised, as has the fact that '[m]any of its
operating companies appear to employ few indigenous people'.[58]
3.70
The OEA's report on Centrecorp sets out the total number of Indigenous
staff employed in each of Centrecorp's investments, and Centrecorp's comments
thereon. The OEA's Centrecorp report states that 20 of the total 241 staff
employed by Centrecorp related entities are indigenous employees; an indigenous
employment rate of 8.3 per cent.[59]
Information provided to shareholders and beneficiaries about Centrecorp[60]
3.71
Centrecorp informed the OEA that it provides copies of annual financial
statements of its trusts to each of its directors, who are representatives of
its three shareholders. However, OEA was also informed that the directors do
not provide these to Centrecorp shareholders and that no other formal report is
provided to Centrecorp's shareholders, nor is there any requirement for such a
report to be so provided.[61]
3.72
Whilst acknowledging this, the OEA found that as Centrecorp has received
substantial financial support from the Australian Government over time, it
should 'take steps to significantly improve the transparency of its
operations'.[62]
In this regard, the OEA stated:
The absence of any form of public reporting by Centrecorp,
which was established for the benefit of Central Australian Aboriginal people
demonstrates a lack of transparency. It also provides further weight to claims
made in the media as the beneficiaries of Centrecorp do not have access to any
other information.[63]
3.73
The OEA went on to recommend that:
...Centrecorp should consider how it might increase
transparency through the provision of more public and stakeholder information.[64]
3.74
There been some complaints reported in the media regarding the lack of
information that Centrecorp gives to the traditional owners whose money it is investing.[65]
Mr Chlanda, the Managing Editor of the Alice Springs News, submitted
that Indigenous people:
...are incensed that they are being kept in the dark by the organisation
supposedly acting in their interest, that they don't know the value of the assets,
and that they have no say in the distribution of the dividends – a miniscule
amount to date and arranged by unknown people.[66]
3.75
Centrecorp informed the committee that its publication, Centrecorp,
Building for the Future, 'has been widely distributed to Indigenous
organisations',[67]
including beneficiaries of the donations program. The publication includes
'details of the shareholding, the year in which it was acquired and a
description of each of [the] businesses in which equity is held'.[68]
3.76
In addition Centrecorp advised that 'a detailed set of audited annual
financial statements is provided to the Central Land Council'.[69]
3.77
The committee has not received the information provided by Centrecorp to
its shareholders and beneficiaries and therefore makes no independent finding
as to its adequacy. The committee did not consider it necessary to inquire
further into the issue, given the OEA's previous consideration, coupled with
the fact that none of Centrecorp's shareholders, or current or potential
beneficiaries submitted concerns to the committee.
3.78
However, the committee notes that during the course of this inquiry,
Centrecorp was not forthcoming with documents and information requested by the
committee. The committee requested various, fairly standard financial documents
from Centrecorp on 18 June 2009. It did not receive the requested documents
until 24 August 2009, and only after significant prompting. Furthermore,
the documents that were provided by Centrecorp were heavily edited, with
Centrecorp claiming that the omitted information was
'commercial-in-confidence'.
3.79
The committee notes its disappointment in the fact that Centrecorp was
not more transparent and helpful in its dealings with the committee.
Conclusion
3.80
In conclusion, on a prima facie examination of the heavily edited
documents provided to the committee by the CLC, Centrecorp and Yeperenye, the
committee found no indication of: the existence of an improper relationship
between the entities; any impropriety in Centrecorp's use of, or accounting
for, government funds; any improper conduct in Centrecorp's donations; nor
anything to suggest that Centrecorp is acting other than in accordance with its
charitable charter.
3.81
However, the committee notes its concerns about Centrecorp's
transparency, arising from its reluctance to provide the committee with basic
financial information about its operations and investments.
3.82
The committee found the CLC to be equally reticent in providing
information about its dealings with Centrecorp. The committee requested a range
of basic documents from the CLC on 18 June 2009, and did not receive the
requested documents until 17 August 2009, again with substantial prompting. The
documents that were received by the committee were heavily edited, with many
simply being blank pages (as all the information, other than headings, had been
removed).
3.83
The committee notes that while both organisations have repeatedly
disputed the media's allegations of improper conduct, their evasive attitude
towards this committee does nothing to assist their case.
Senator Cory Bernardi
Chair
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