Chapter 1Introduction

1.1On 22 June 2023, the Senate established the Select Committee on the Perth Mint and Commonwealth regulatory compliance (the committee) to inquire into and report on the corporate and regulatory compliance of Gold Corporation (GoldCorp) and its trading entity, The Perth Mint, with Commonwealth legislation, with particular reference to:

(a)current and historical compliance with Australian anti-money laundering regulatory requirements, specifically:

(i)the Anti-Money Laundering and Counter-Terrorism Financing Act 2006;

(ii)the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1);

(iii)the Privacy Act 1988;

(iv)the National Measurement Act 1960;

(v)the National Trade Measurement Regulations 2009; and

(vi)any other associated Commonwealth laws and regulations or instruments;

(b)events that led to the Australian Transaction Reports and Analysis Centre ordering the appointment of an external auditor to Gold Corporation under subsection 162(2) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006;

(c)events that led to the London Bullion Market Association initiating an 'Incident Review Process';

(d)matters concerning the corporate and statutory governance of GoldCorporation;

(e)the extent to which Australia's reputation as a precious metals producer, refiner and exporter may have been damaged by Gold Corporation's failure to comply with all necessary corporate and regulatory requirements; and

(f)any other related matters.[1]

1.2The committee was required to report to the Senate by 13 December 2023.[2] On15November 2023, the committee was granted an extension of time to 28March 2024. On 27 March 2024, the committee was granted a further extension of time to 21 June 2024 to present its final report.[3]

1.3The committee tabled an interim report on 20 December 2023.[4] The primary purpose of that report was to outline the context and timeline of events relating to The Perth Mint.

1.4This final report provides a more detailed analysis of the events and issues relating to The Perth Mint, and makes recommendations for improving governance, compliance and transparency.

1.5Details of the inquiry were made available on the committee's webpage and the committee invited organisations, key stakeholders and individuals to provide submissions.[5]

1.6The committee received 13 submissions (including seven public submissions) which are listed at Appendix 1 of this report. The committee also held the following public hearings:

27 July 2023, Canberra—with witnesses from Australian Government agencies attending;

10 August 2023, Canberra— with witnesses from Australian Government agencies attending;

3 November 2023, Perth—with representatives from the Western Australian (WA) Parliament, WA government agencies including the Gold Corporation (trading as The Perth Mint), and the Australian Transaction Reports and Analysis Centre (AUSTRAC) attending;

2 February 2024, Canberra—with witnesses from AUSTRAC;

19 February 2024, Perth—with current and former Gold Corporation officials and other key stakeholders;

8 May 2024, Canberra—with witnesses from AUSTRAC and the Australian National Audit Office (ANAO); and

18 June 2024, Canberra—with witnesses from AUSTRAC.

1.7A list of the organisations and individuals who attended these public hearings as witnesses can be found at Appendix 2. The public submissions, additional information received by the committee and Hansard transcripts are available on the committee's website.

Acknowledgement

1.8The committee thanks all those who have contributed to the inquiry by making submissions, providing additional information, and appearing at public hearings.

1.9The committee particularly acknowledges the cooperation of The Perth Mint and the willingness of the Chair, Mr Sam Walsh AO, the Chair of the Audit and Risk Management Committee, Mr John O'Connor, and present and past ChiefExecutives, Mr Paul Graham and Mr Jason Waters, to attend public hearings and participate in the committee inquiry.

1.10The committee notes that other witnesses asked to appear declined for various reasons including health, overseas travel commitments and obligations on them to participate in the deliberative processes for the WA Government's 2024–2025 State Budget.

1.11The committee also notes it sent correspondence to the former WA Premier, the Hon Mark McGowan AC, MLA, asking for his participation in the inquiry and that this correspondence was not responded to.

1.12The committee's views about witnesses' participation, or lack thereof, are captured in Chapter Four.

Report structure

1.13The report is comprised of four chapters.

1.14This chapter outlines background to the inquiry and The Perth Mint. Chapter2 outlines the regulatory environment, while Chapter 3 discusses GoldCorp compliance and governance matters. The final chapter, Chapter 4, presents the committee's view and recommendations.

Notes on references

1.15References to the Committee Hansard may be references to a proof transcript. Page numbers may differ between proof and official transcripts.

About The Perth Mint

1.16Details about establishment of The Perth Mint and its governance arrangements were outlined in the committee's December 2023 interim report.

1.17In summary, the GoldCorporation Act 1987 (WA) (GC Act) created Gold Corp, a government trading enterprise (GTE) 'wholly owned by the Government of Western Australia on behalf of the people of WA'. The Perth Mint is a subsidiary of Gold Corp (along with GoldCorp Australia); The Perth Mint is the trading name of Gold Corp.[6] The GC Act also enabled The Perth Mint to mint and market, gold, silver and platinum Australian legal tender and establish a bullion coin program.[7]

1.18As a state GTE, The Perth Mint is governed by a range of state legislation including the Financial Management Act 2006 (WA), the Corruption, Crime and Misconduct Act 2003 (WA), the Auditor General Act 2006 (WA), and the Procurement Act 2020 (WA), as well as certain Treasurer's Instructions.[8]

1.19Under the GC Act, Gold Corp is an agent of the Crown and all payments and all money due and payable by Gold Corp are guaranteed by the state Treasurer.[9] Asa result, parties dealing with The Perth Mint are ultimately dealing with the State of Western Australia.

1.20The Perth Mint is also governed by Commonwealth legislation relating to anti‑money laundering and counter-terrorism financing, national measurements and privacy. The Mint's obligations under these requirements are explored further in Chapter 2.

Gold Corp leadership

1.21Gold Corp is governed by a Board of Directors, including a WA Department of Treasury representative. Key ministerial, board membership and senior executive changes from 2015 are shown in Figures 1.1 and 1.2.

Source: Committee secretariat[10]

Source: Committee secretariat[11]

Relevant reviews

1.22The committee notes the following relevant reviews.

Attorney-General's Department—AML/CTF framework

1.23In April 2023, the Attorney-General's Department commenced industry and public consultation on proposed reforms to address higher risk financial sectors and simplify and modernise the anti-money laundering/counter-terrorism financing (AML/CTF) regime to ensure it is fit-for-purpose, improves compliance, addresses evolving threats, and meets international standards. Thisincludes streamlining the complex distinctions between Parts A and B of AML/CTF Programs, identifying and mitigating risks, and arrangements for entities within the designated business group.[12]

1.24The Australian Federal Police has worked closely with the department on the proposed reforms. The first round of consultation on proposed reforms was held between April and June 2023 following release of the first consultation paper. Asecond round of consultation was undertaken from 2 May to 13 June 2024, with five sperate consultation papers released, addressing different issues to be covered by the consultation.[13]

Australian National Audit Office—AUSTRAC

1.25The ANAO has proposed a performance audit on 'whether AUSTRAC is effectively regulating entities under the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006' during the 2024–25 year. AUSTRAC regulates over 17 000 entities under the act, including those in higher risk industries like the bullion sector.[14]

Australian National Audit Office—Audit quality

1.26The ANAO also flagged the possibility of a performance audit to 'assess the effectiveness of the Australian Securities and Investments Commission's oversight of audit quality under the Corporations Act 2001'.

1.27The ANAO noted that audit firm inspections and auditor surveillance are aimed at educating and influencing auditors and that 'enforcement action can be taken where significant non-compliance is identified'.[15]

Footnotes

[1]Journals of the Senate, No. 56, 22 June 2023, pp. 1600–1601.

[2]Journals of the Senate, No. 56, 22 June 2023, p. 1600.

[3]Journals of the Senate, No. 84, 15 November 2023, p. 2340; and Journals of the Senate, No. 108, 27March2024, p. 3240.

[4]See: Select Committee on the Perth Mint and Commonwealth regulatory compliance, Interim report, December 2023.

[5]The committee's website is available at: aph.gov.au/Parliamentary_Business/Committees/Senate/Perth_Mint_regulatory_compliance.

[6]Gold Corporation Act 1987 (WA) (GC Act), ss. 4(4), and ss. 35(1)(4) and (8); The Perth Mint, answers to written questions on notice, 24 October 2023 (answers received 2November2023), [p. 11].

[7]ThePerth Mint, The Perth Mint story and history (accessed 20 June 2024); AUSTRAC, Submission 1, p.8; The Perth Mint, answers to written questions on notice, 24 October 2023 (answers received 2November2023), [p.11].

[8]Government of Western Australia, Submission 5, pp. 1–2.

[9]GC Act, ss. 4(3) and s. 22; Government of Western Australia, Submission 5, p. 1.

[10]Figure 1.1 compiled from a range of sources: Mr Ronald Shane (Shane) Love MLA, Private capacity, Committee Hansard, 3 November 2023, p. 37; The Hon Bill Johnston MLA, Minister for Mines and Petroleum; Energy; Hydrogen; Industry; Industrial Relations, Western Australian Parliament, Committee Hansard, 3 November 2023, pp. 43 and 50; WAGovernment, WesternAustralian Government Gazette, Special, Perth, Friday 19 March 2021, No. 50, p. 1137; Parliament of WesternAustralia, MP Biographical Register: Mr Mark McGowan (accessed 15November 2023); Parliament of Western Australia, MP Biographical Register: Mr Colin Barnett (accessed 15November2023); Parliament of Western Australia, MP Biographical Register: Hon. David Robert Michael MLA BEc (accessed 18 January 2024).

[11]Updated since the Interim report. Figure 1.2 compiled from a range of sources: TheHonBillJohnstonMLA, WA Legislative Assembly, CommitteeHansard, 3November 2023, p.49; The Perth Mint, 'Perth Mint announces new Chairman', Media release, 18December 2018; MrJohn O'Connor, Non‑Executive Director, Gold Corporation trading as The Perth Mint, Committee Hansard, 3November 2023, pp. 12 and 20; The Perth Mint, 'Perth Mint CEO Richard Hayes announces retirement', Media release, 13 October 2021; The Hon Bill Johnston, Minister for Mines and Petroleum, WALegislative Assembly, Committee Hansard, 15 February 2022, p. 163; The Perth Mint, 'Jason Waters appointed CEO of Gold Corporation', Mediarelease, 10January2022; The Perth Mint, 'Gold Corp announces CEO resignation', Mediarelease, 30May2023; The Perth Mint, 'Paul Graham appointed CEO of Gold Corporation', Media release, 28August 2023.

[12]Attorney-General's Department, Modernising Australia’s anti-money laundering and counter-terrorism financing regime: Consultation paper on reforms to simplify and modernise the regime and address risks in certain professions, April 2023, pp. 7–9; Mr Alexander Engel, Assistant Secretary, Attorney-General's Department, CommitteeHansard, 27July 2023, p. 15.

[13]Mr Engel, Assistant Secretary, Attorney-General's Department, Committee Hansard, 27July 2023, pp.12–13; Attorney‑General's Department, Anti-money laundering and counter-terrorism financing; Attorney‑General's Department, Modernising Australia's anti-money laundering and counter-terrorism financing regime (accessed 19 October 2023 and 31 May 2024); Australian Federal Police (AFP), Submission 11, [p. 3].

[14]Australian National Audit Office, Draft 2024–25 Annual Audit Work Program: AUSTRAC’s regulation of anti-money laundering and counter-terrorism financing (accessed 2April2024).

[15]Australian National Audit Office, Draft 2024–25 Annual Audit Work Program: Australian Securities and Investments Commission’s oversight of audit quality under the Corporations Act (accessed 2April2024).