New findings from the Independent Commission Against Corruption have found a litany of dirty tricks were used by developers and politicians to ensure a container terminal was not built at Newcastle, the state’s largest bulk port.
A report was released on August 30 by ICAC’s Operation Spicer, which suggested expert shipping and ports advisors were ignored, the electoral chances of an Australian Labor Party MP were destroyed by her own Labor Party colleagues, and a State Minister acted corruptly.
In a nutshell, the key findings of the inquiry were that Buildev (a shorthand-term for a group of companies controlled by the former mining businessman, Nathan Tinkler), sought to scupper the plans of the then Newcastle Port Corporation to build a container terminal.
Instead, it appears that Buildev sought to have permission for a coal loading terminal built instead.
Even though Buildev was clearly “out of its depth” in building and operating a coal terminal (it did not have the skills, experience or financial firepower), having permission for a coal terminal would massively increase the value of a nearby coal mine owned by Buildev.
To that end Buildev sought the help of well-known politicians Joe Tripodi and Eric Roozendaal, both former ports ministers and, in Mr Roozendaal’s case, back in the timeframe around 2010-2011, both the State Treasurer and the NSW Ports Minister.
Order of events
Back in 2009-2010 Australia was experiencing a commodities boom and the various coal terminals at Newcastle were working flat out to export the black stuff. A Coal Chain Agreement was entered into by various parties, and authorized by the Australian Competition & Consumer Commission, to optimize access and expansion of coal export capacity at Newcastle.
It provided for the fourth coal terminal and land was put aside at Kooragang Island for this purpose. The agreement entered into effect on January 1, 2010. New infrastructure would be paid for by a levy on each tonne of coal.
BHP Billiton closed its steel-plant at Newcastle and ownership of the land was transferred to NSW. The land was divided – ‘Mayfield’ comprising 90 hectares with waterside access to the river (the Hunter River South Arm, adjacent to the meeting place of the North Arm); and ‘Intertrade’ 65 hectares and which was landlocked.
Intertrade passed into the ownership of the Hunter Development Corporation (Hunter) which put the site out to market as a site for general industrial, commercial and intermodal uses. Buildev companies became the developer.
Newcastle Port Corp (the pre-privatisation entity that owned and operated the port), which was then headed up by CEO Gary Webb, determined that Mayfield should not be developed as a coal terminal on the grounds of the existence of the Coal Chain Agreement and the plan to build a fourth coal terminal. It was concluded that a fifth terminal would jeopardise that agreement and would, in any event, be unsustainable.
The port decided to build a box terminal on the basis of diversification of its cargo throughput; to supplement Port Botany as it approached capacity; to take advantage of a box port gap as there is/was no box port between Botany and Brisbane; and to take advantage of the local road and rail connections. Installation of a box port would help upgrade the port’s bulk handling facilities and allow for more grain exports via Newcastle.
Market testing had discovered that private sector entities were willing to take on the risk of developing a box terminal. The port had entered into negotiations with, and had identified as the preferred proponent, the Newcastle Stevedoring Consortium. This entity included of Anglo Ports (headed up by the well-known Capt Richard Setchell); Spanish company Grup TCB, and Newcastle Stevedores (headed up by the well-known Geoff Beesley).
An alternative plan, political influence and questionable transactions
However, as the ICAC report makes clear, there were political machinations afoot.
“At the same time that the NPC was seeking to progress its arrangements, Mr Roozendaal was receiving an alternative proposal for the Mayfield site.”
Chapter 7 of the Operation Spicer ICAC report is quite detailed and complex but, in essence, it explains that Nathan Tinkler bought and controlled the Buildev Group by late 2008. He had a “direct interest and exercised a degree of control of the way in which the Buildev proposal advanced,” the Commission said of Buildev’s plan to have a coal terminal built.
Buildev was “actively involved” in pursuing and “attempting to influence political outcomes”, the Commission noted and Buildev “engaged in a number of questionable transactions”. Buildev made substantial donations across party lines, to the Liberals, the ALP and the Nationals.
For instance, Mr Tinkler directed that a $20,000 donation be made to the National Party, however, he became angry because the “National Party had failed to respond adequately to his donation… which he thought was a waste of money because he did not get a hearing on the subject of the fifth coal terminal.”
Buildev’s goals were, in the short-term, to prevent Newcastle Port entering into a contract with the box terminal consortium (Anglo Ports, Grup TCB and Newcastle Stevedores) so it needed stop Mr Roozendaal granting permission to enter into final negotiations.
Its second goal was to preserve the viability of its coal terminal proposal which it would do so by creating an “easement”, which is somewhat akin (but is not exactly like) a right-of-way. This easement would connect the land-locked Buildev site to the harbour and would lie across the Mayfield site, allowing Buildev to build infrastructure across the Mayfield site. Such an easement would destroy the value of the Mayfield site as a box terminal.
By at least October 2010, Buildev’s plans were being discussed with Mr Tripodi & and Mr Roozendaal.
The Commission found that Mr Tripodi was hoping to secure “some kind of future benefit” from Buildev in relation to the building of a fifth coal terminal, the Commission concluded, as he had been moved to the back bench in late 2009 and would not seek re-election in 2011. “It would have been necessary for him to consider some kind of life post-Parliament,” the Commission noted.
By late 2010, the Commission concluded, Mr Tripodi’s conduct “demonstrated a desire to advance Buildev’s interest, whether or not that coincided with his role as a public official”.
An important meeting took place on November 8, between Mr Tripodi, Mr Roozendaal, Gary Webb and various other people. A lawyer verbally advised that the Buildev propose jeopardized the multi-party Coal Chain Agreement (the agreement that would build the Kooragang Island coal terminal).
Another meeting took place on November 19, 2010, notes of which revealed that there was a conspiracy to “slow or derail Anglo” being Anglo Ports, Grup TCB and Newcastle Stevedores from building a box terminal at Newcastle. Those notes showed that “Joe” [Mr Tripodi] would seek to get Eric [Mr Roozendaal] “to stop the Anglo deal going to board this Friday”.
“Mr Tripodi had agreed [with Buildev] that he would arrange it with Mr Roozendaal so that Buildev’s short-term objective was advanced… The Commission is satisfied that Mr Tripodi used his position as a member of Parliament to influence Mr Roozendaal to prevent the deal between the [Newcastle Port Corporation] and the Newcastle Stevedoring Consortium [‘NSC’; comprised of Anglo Ports, Grup TCB (a Spanish company), and Newcastle Stevedores] for construction of a container terminal from progressing by stopping the [Port] from entering into commercial negotiations with the [Consortium].
This was done as follows – Mr Roozendaal demanded from Mr Webb the Board Agenda for a forthcoming meeting to determine whether the box terminal deal was going to go before the Port’s Board. Mr Roozendaal then summonsed Mr Webb to his office and gave instructions that the deal should not proceed until Treasury had reviewed the process. Accordingly, the deal was delayed.
“Buildev’s short-term objective had been secured,” the Commission concluded.
Mr Roozendaal then, in February, gave instructions to the Port granting approval for negotiations with the box terminal consortium but subject to the condition that an easement be granted in favour of the Intertrade site over the Mayfield land expressly allowing for the provision of a coal loading terminal.
The Corruption Commission pointed out that (a) this was exactly what Buildev wanted as only it could take advantage of the easement; (b) the easement put an enormous burden on the Mayfield site likely removing its attractiveness as a box terminal (c) Minister Roozendaal would not refer to easement when making the announcement as, in the Commission’s inference, Mr Roozendaal did not wish his actions to come to light.
Mr Roozendaal then quickly revoked, before February 15, 2011, permission to negotiate for a box terminal.
“This effectively killed off any chance of advancing the container terminal before the NSW state election on 26 March 2011,” the Commission said.
On February 16, 2011, executives from Buildev met with a journalist employed by local newspaper, the Newcastle Herald. Those executives selectively leaked two pages out of a 22 page confidential NSW Government Treasury briefing paper to the journalists.
The cover addressed the Mayfield and Intertrade sites while the contents of the page shown to the journalist, page 10, were critical of the box terminal plan.
According to the Commission, Mr Tripodi was the original source of that leak – he leaked the documents to Buildev, which then decided to leak the documents to the journalists. Mr Tripodi was, in the Commission’s view, “panicking” because of this action by Buildev as, the Commisssion inferred, there could be serious consequences for him.
The Commission said that the page was leaked by Buildev to the journalist with a view to damaging the prospects of the box terminal and thereby promote the interests of Buildev.
“The Commission is satisfied that Mr Tripodi could have been in no doubt of the confidential nature of the report. Each page of the report is marked confidential. Its contents were obviously confidential. The contents dealt with a substantial infrastructure project worth hundreds of millions of dollars. The Commission finds that, when Mr Tripodi provided the Treasury report … Mr Tripodi was improperly motivated to provide an advantage to Buildev, thereby ingratiating himself with the management of Buildev in the hope he could secure future benefit from Buildev.”
Because of this act, the Commission found that Mr Tripodi had acted in breach of s8 and s9 of the Independent Commission Against Corruption Act 1988.
In respect of s8 the Commission said – “His [Mr Tripodi’s] conduct was serious and merits criminal punishment having regard to his responsibilities as a member of Parliament…”; and, in respect of s9, it added, “if the facts it has found were to be proved on admissible evidence to the criminal standard of beyond reasonable doubt and accepted by an appropriate tribunal, these would be grounds on which such a tribunal would find that Mr Tripodi has committed a common law offence of misconduct in public office.”
Jodi McKay was back in 2010-2011 an ALP MP for Newcastle and the Minister for the Hunter. She, in the words of the Commission, “presented two problems for Buildev”.
The first of which was that she discovered that part of her election campaign had been funded by Buildev, which is not allowed as political donations by property developers were illegal. This is not too relevant to the box terminal issue and we mention it in passing.
The other problem is that she was very much in favour of building a container terminal and was pushing Mr Roozendaal to announce the box terminal deal.
As the NSW election was due in March 2011, Buildev evidently saw an opportunity to get rid of Ms McKay.
In late February / early March, it was as if an occult hand had, er, lent a hand, by distributing 8,000 A4-sized, anonymous, colourful pamphlets screaming “Stop Jodi’s Trucks” in six suburbs surrounding the Mayfield site. The pamphlets somewhat disingenuously implied that Ms McKay was responsible for the 1,000 trucks and it was based on a figure that might be reached sometime in 2034 if the box terminal had stellar performance. The pamphlets referred to a variety of problems arising from “1,000 trucks in our neighbourhood every single day of the year” including increased air pollution and “pedestrian danger for children and the elderly.”
The whole pamphlet drop had, of course, been organized by Buildev executives including Nathan Tinkler and the printing paid for by Buildev. Mr Tripodi – an ALP member and MP it must be remembered – nominated the printer and helped with the design process, knowing all along that it would damage Ms McKay’s re-election campaign as and ALP MP.
Apart from the recommendations by the Commission to punish Mr Tripodi for leaking a confidential document to Buildev, nearly everyone involved in this tawdry drama will go completely unpunished owing to the operation of a three year time limit on punishing various offences.
The Commission did note that “the common law conspiracy entered into by those parties is not affected by the limitation period and could be made the subject of a successful prosecution. It is worth noting in passing that the offence of conspiracy is a serious one and convicted offenders can incur substantial penalties.”
However, it then went on to recommend that prosecutions not be brought anyway.
This article originally appeared in ABHR affiliate Lloyd’s List Australia.