#Reefgate: Foundation plans to keep “lottery win” fortune

August 11, 2018

The Great Barrier Reef Foundation has found itself the subject of unwanted attention as further details of its $443 million funding deal with Malcolm Turnbull come to light. However, as political editor Dr Martin Hirst writes, the GBRF has no intention of returning the money.

First published at Independent Australia

THE FEDERAL GOVERNMENT and the Great Barrier Reef Foundation are facing mounting pressure to nullify the agreement to hand the Foundation a $443 million lottery win.

However, in a statement to IA on Wednesday afternoon, the GBRF made it clear that it intends to continue with administration of the grant and that it had not had any conversation with the Prime Minister or Environment Minister about returning the money:

‘We are focused on delivering on the grant agreement and protecting and restoring the Reef. That’s our core mission — raising funds and working to deliver the science, the research and the projects that can best help the Reef.’

This week, Labor’s environment spokesperson, Tony Burke, launched an online petition demanding the money be returned to Treasury. The call for a refund of the grant has been backed by the Greens and several environmental groups. Greens leader, Richard Di Natale, said the deal “stinks” in a conversation on ABC radio.

“That money should be returned. There should be an open, transparent tender process and, if we had a national anti-corruption watchdog, this matter would be referred to it because it stinks.”

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So far, Malcolm Turnbull has resisted the growing pressure and continued this week to argue that the grant process was above board and, of course, used an interview on ABC’s 7:30 to claim that it was all Labor’s fault.

ABC 7:30 – MONDAY, 6 AUGUST 2018

LEIGH SALES (HOST): Let’s whip through other things that people will likely talk about when you resume next week. Can you explain why you gave a $500 million grant to the Great Barrier Reef Foundation without any tender process, grant application or competition?

MALCOLM TURNBULL: Well, it was a very thorough process, a whole Cabinet process leading up to the budget.

SALES: Before or after you offered the money, did the Cabinet process happen?

TURNBULL: It all went through beforehand. We had a whole ERC process. We concluded we wanted to offer the Great Barrier Reef Foundation…

SALES: How did you settle on them? They said they never asked for money.

TURNBULL: Well, that is right. But they are an outstanding Reef charity. They have had substantial money from the Federal Government before, including from a Federal Labor Government.

SALES: But how do we know that for the use of this money, an enormous investment in the Reef, how do we know that they are the best to spend that $500 million?

TURNBULL: That’s the judgement we took as Government.

SALES: Why wouldn’t you put that to competitive tender?

TURNBULL: Because they were clearly the best team to do it. Can I say to you, Leigh, what the Labor Party are doing now is they are embarrassed they did not put serious funding into the Reef. Under the Labor Party’s watch, the Reef was put on the endangered watch list by UNESCO. Because of our good management, it has come off the endangered list. The management of the Reef is regarded as the best in the world. We put this substantial amount of funding into it. The Great Barrier Reef Foundation attracts substantial funding from the private sector, it has support from the Queensland State Government and this grant, by the way, not only went through a Cabinet process, it actually went, it’s in the budget, it was voted on in Parliament. It’s in an appropriations act.

SALES: In an appropriations act, not as stand-alone legislation.

TURNBULL: It’s been considered and approved by the Parliament.

There’s plenty to unpack here, but first and foremost is Turnbull’s lie about the Reef being on the UNESCO “endangered watch list”. There is no such list, but perhaps there’s a clue to Turnbull’s reasoning behind the $443 million grant that blindsided most observers and other groups with an interest in Reef politics.

According to a briefing report by the Australian Conservation Foundation, the Government was looking for ways to keep a commitment it made to UNESCO in 2016 to commit $716 million to the Reef Action Plan 2050 between 2015 and 2020. This promise was made to keep the Reef environment off the World Heritage “In Danger” list that UNESCO keeps.

Without the extraordinary gift of funds to the GBRF, the Turnbull Government was never going to meet its obligations to UNESCO. In 2015, only $20.7 million was committed to Reef health and, in 2016-17, only $44.7 million.

The ACF briefing paper makes the point that the GBRF will not be able to spend the funds in time – by 2020 – to meet the Government’s promise to UNESCO. In fact, the Government’s and the Foundation’s own statements indicate that the funding will carry through to 2024.

The ACF argues that, on the evidence, it looks like the handout to the GBRF was an attempt to make it appear that the bulk of the $716 million promised to UNESCO was being honoured.

The ACF briefing concludes that the 2020 commitment is now at risk.

‘The Government has outsourced most of its investment commitment to Reef 2050 Plan actions to the Great Barrier Reef Foundation. In doing so, it has laden a single not-for-profit organisation with significant organisational scale, expertise and program delivery challenges. In doing so, the Federal Government has put at risk its 2020 investment commitment made to the World Heritage Committee.’

According to ACF Reef campaigner Matt Rose, Malcolm Turnbull also wanted a big political announcement that might help him in campaigning for another term.

Rose also told IA that by announcing the whole amount in the 2018 budget process it locked in the grant so that it could not be clawed back in future forward estimates. As Rose put it to IA, there are a lot of people in the COALition who would like to scuttle the deal.

The ACF is also sceptical that the GBRF can manage the obvious conflicts of interest that arise because many of its board members have strong links to the fossil fuel industry.

Meanwhile, another environmental group has set a cat among the pigeons, with a claim that the grant to the GBRF may breach the Government’s own funding guidelines. I came to a similar conclusion in my Sunday piece for IA, but the Environmental Justice Australia group has taken this a step further.

In its submission to the Senate Committee on Environment and Communication inquiry into the Great Barrier Reef 2050 Partnership Program, the EJA suggested that the $443 million cannot be considered a grant, but should be treated as a procurement.

Here are the relevant paragraphs from the EJA argument:

The Government has now been forced to respond to this suggestion and the Department of Finance told the ABC that the document quoted by the EJA should be read in conjunction with other documents. However, this may just be another attempt at deflection.

Whatever the outcome of the next few days, there will be more pressure on the Government and the GBRF when the Senate committee examining the grant and the fallout meets again next week.

Unlike last time, it is expected that board members from the Foundation will front to answer questions.

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Turnbull hits a reef: Gift to GBRF may sink him

August 11, 2018

This week, we learned that $443 million of taxpayer funds were gifted to a charitable foundation heavily supported by the fossil fuel industry without proper due diligence. As political editor Dr Martin Hirst writes, it might not save the Great Barrier Reef, but it might just sink Malcolm (Captain Bligh) Turnbull.

First published at Independent Australia as Malcolm Bligh hits a reef

MALCOLM TURNBULL has been MIA for most of the past week, but he emerged on Friday to defend his “captain’s call” decision to grant a business lobby group over $440 million in funds without, it seems, any due diligence at all.

The Prime Minister claims the funding process was above board and transparent, but this has not satisfied anyone outside of the Liberal Party.

Independent MP Andrew Wilkie told IA that the whole deal is “at best, a collapse in proper process” and has “a dodgy stench about it”.

The May Budget revealed the grant, $443 million plus change, to the Great Barrier Reef Foundation, which until it was thrust into the media spotlight with this huge cash injection, had flown under the radar for most people.

To say that it took established environmental groups and most of us by surprise is an understatement. According to Andrew Wilkie, the GBRF is “an obscure organisation” that was gifted nearly half a billion dollars (more when the interest it will earn the Foundation is calculated) “without any tender process.”

It seems that even the GBRF’s own executive was a little taken aback by the Government’s generosity.

The Foundation’s chief executive, Anna Marsden, expressed her surprise and told a Fairfax journalist that it felt like winning the Lotto:

“We didn’t have much time before the announcement to be prepared for it. It’s like we’ve just won lotto — we’re getting calls from a lot of friends.”

Well, yes, except the Great Barrier Reef Foundation didn’t actually buy a ticket in that particular lottery. It turns out, we learned this past week, that the Foundation had not even asked for the money — it was handed over on a whim by Prime Minister Malcolm Turnbull.

The details are well established now.

In early April, there was a private meeting in Sydney between Turnbull, Environment Minister Josh Frydenberg and the chair of the GBRF. The Foundation did not ask for the money and did not have the capacity to manage such a large injection of funds.

Indeed, the Foundation had six staff on its books and, in 2017, a turnover of just $8 million. This hardly put it in the position to become the lead organisation charged with coordinating efforts to save the Barrier Reef, from coral bleaching, eroding water quality and the effects of climate change.

That’s okay, then, because it has now emerged that climate change is not even mentioned in the publicly available documentation outlining the terms and conditions of this extraordinary gift.

And there’s no mention at all of the damage being caused to the Reef by fossil fuel consumption, or anything at all about proposals for more coal-laden bulk carriers to traverse fragile areas of the reef transporting brown coal to China and Japan.

This is surprising because scientists and environmental groups have identified the shipment of coal through the Reef as perhaps the most important threat to its ecosystem.

Another little snippet that adds further intrigue to this already curious tale is that the organisation that made the May 2016 claim that transporting coal is detrimental to reef health was the ARC Centre of Excellence in Coral Reef Studies at James Cook University.

This might leave you wondering why the Centre was not the recipient of the $443 million handout; or why other groups were overlooked.

Well, if there had been a competitive tendering process – the usual way such grant funds are distributed – maybe other groups with a good track record of work on reef recovery might have been given a share of the funds?

But, as we now know, there was no tendering process. The whole deal was concocted, cooked up, conceived and consummated with unseemly haste and in secret, away from public scrutiny.

Environment and Energy Minister Josh Frydenberg tried to clean up the spillage late in the week in a series of media appearances and, finally, Turnbull himself fronted the media and gave a grim press conference that repeated the assertion the deal was above the waterline, but he gave no relevant details.

Instead, what we got was the release of a boilerplate Grant Agreement that looks like someone’s unfinished homework. I’m going out on a limb here, but it looks to me like somebody in Turnbull’s office or the Department of Environment and Energy, did a quick “find and replace” editing job to put this together.

The released version is unsigned and sections of it are not completed, it is a standard template that someone forgot to clean up before putting it on the DEE website.

It is an extraordinary document and, given we know the GBRF did not apply for the funding, it is very light on details.

Applying for grants – particularly government funded grants – is a time-consuming, arduous and mentally-challenging task. Normally, all the details – such as a business plan, how you intend to spend the money, checks and balances, partners and governance arrangements – are worked out and presented in the application document.

Then, applications are assessed on merit and weighted according to how well the project is thought through and how robust the business case is in relation to partners, governance and so on.

However, none of this work has yet been done. The project agreement basically pays the Foundation to do all of this preparatory work with the grant money.

Not only that, but the initial funding, which runs for six years – the intended life of the project – has been handed out in one lump sum and it’s now sitting in Foundation bank accounts earning a tidy sum in interest. It has been calculated at around $40,000 per day.

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