The dusty streets of Parnngurr were filled with Toyota LandCruisers and tension. The Martu mob had come to the tiny desert town in the Western Australian outback to hear why one of its own should be exiled.
Teddy Biljabu, the 57-year-old ‘‘big-man’’ of the western desert, swaggered to the front of the Martu men only meeting. Barrel-chested and hot-tempered, Biljabu had climbed to power in the Martu world through a blend of charm, cunning and brute force. His passion for his people is undoubted, but his fists have made him no stranger to police.
All eyes were fixed on Biljabu as he raised what would be item one on the agenda of the next day’s July 18, 2013 special meeting for the Western Desert Lands Aboriginal Corporation. Watching with particular intent was a 44-year-old man with a calm face and a slight limp. This was Darren Farmer.
Farmer is something of an oddity in his community. A former commissioner with the Aboriginal and Torres Strait Islander Commission, he neither smokes nor drinks. And he has been one of the few brave enough to hold Biljabu and his fellow Western Desert Corporation directors to account, though his detractors say he is a troublemaker.
The limp – it is so slight you barely notice it at first – is the result of having been speared in the thigh as a younger man as a punishment for disobeying instructions. Farmer does not say what it was he did, only that the account has been settled: ‘‘I did something I was told not to do and paid the price.’’
Now, once again, he was doing what he had been told not to do. This time he was asking questions. He strode towards Biljabu, who was deputy chairman of the corporation. Where, he demanded to know, was the paperwork? And why couldn’t he or the others see it?
The paperwork in question outlined details of the deals Western Desert had struck with mining companies to allow them to dig on the 136,000 square kilometres of resource-rich Pilbara that are the Martu’s traditional lands.
These deals had brought about $50million into the corporation, a non-profit prescribed body corporate that is meant to use the money to benefit all Martu. But little of the money had gone into improving Martu townships.
Farmer kept on with his questions. Why had the Western Desert corporation spent $7million in four years on its handful of employees and paid directors more than $1million? How had well-connected corporate advisers pocketed millions, while much of the Martu mob lived in poverty? Why had the views of senior elders on mining proposals been ignored? Everyone at the meeting that day could tell it was not going to end well.
There are conflicting accounts of what happened next. Witnesses say Biljabu punched Farmer in the head. Others say Biljabu acted in self-defence. What is certain is that the meeting descended into chaos as other Martu men joined the fray. The fights rolled on for a day and a night. A senior elder was clubbed and Biljabu speared. In a sense these fights are still going today.
Heated debate – and sometimes violence – is nothing new at indigenous land-council meetings across Australia. These are the forums where the future clashes with the past; where members of some of Australia’s most impoverished communities weigh up the riches that mining can deliver against the cultural cost of digging up their sacred sites.
But what was different about that meeting last July was that the deals at the centre of all the trouble had been brokered by companies owned by the biggest names in Australia’s indigenous community, including the nation’s most influential Aboriginal, Warren Mundine.
The accountant Dalgleish, true to stereotype, was a stickler for detail and decided to dig further into Wolf and Wright’s activities. He found that in mid 2008 they had separately bought more than $1million worth of Perth property. This was close to the time Wright joined WDLAC and the Rio Tinto $21million deal was done.
Although he had no proof that the property purchases involved money from Rio Tinto, Dalgleish was intrigued by the confluence of events and brought them to the attention of WDLAC’s board. On May 7, 2009, Dalgleish wrote a confidential memo to WDLAC’s chairman in which he wondered how Wolf could have approved such an “outrageously excessive fee” as the $2.35million paid to Procter.
A day later, Wright paid out Dalgleish’s contract and asked him to leave. He was able to do this because he had become the corporation’s acting chief executive following Wolf’s departure, a promotion that had bumped his salary to $250,000.
Three days after his departure, Dalgleish reported his concerns to the WA police fraud squad, which in turn contacted Western Desert corporation. According to the police file, detectives were assured by Western Desert in September 2009 that Procter no longer acted for the corporation, and that an “independent third party” would examine the issues and provide recommendations.
A WA police spokeswoman says police never received a copy of any third-party review.
‘‘The matter is currently filed pending further contact from WDLAC as the complainant,’’ she says.
Procter is bewildered as to why anyone would seek police attention over the Rio deal. His company, he says, acted with integrity and its role was supported by the Martu people, who were $20million richer because of IndiEnergy’s involvement.
Dalgleish also contacted the federal regulator, the Office of the Registrar of Indigenous Corporations, which is meant to ensure good governance and financial probity at the more than 2500 indigenous bodies across Australia. ORIC also decided not to investigate.
Meanwhile, in early 2009, the Australian Uranium Association – the peak body for uranium miners – announced the members of its indigenous dialogue group. Wolf and Mundine were among those named to promote the potential for uranium mining to enrich indigenous communities.
At the same time, Procter was busy expanding the reach of his company, IndiEnergy. He began appointing ‘‘special advisers’’ from the mining, legal and financial worlds. By far his most important appointment was that of Mundine as a special adviser and advisory board member.
The two had known each other since 2004 when the Howard government appointed them as members of the body that replaced ATSIC.
By the time Abbott announced Mundine as head of his Indigenous Advisory Council in September 2013, he was a close business associate of both Wolf and Procter.
Australia may be a big country, but the indigenous business and politics scene is small and replete with overlapping interests. It was only a matter of time before one of Mundine’s business relationships would clash with his quasi-ministerial role.
Mundine’s potential for a conflict of interest became a reality in February when Procter announced IndiEnergy had taken a stake in an indigenous company whose co-owner, Larrakia Development Corporation, is actively seeking Commonwealth support.
Procter highlighted Mundine in the February announcement of his new venture, praising him and Abbott for promoting indigenous business opportunities. ‘‘Skin in the game is the only way indigenous organisations can attract the right people to assist them in reaching their commercial dreams,’’ Procter said.
But having skin in the game means you risk losing some. And this is the risk that emerged for Mundine when a company he part-owned became involved in the Western Desert corporation’s most contentious mining deal.
DISAPPOINTMENT AND REWARD
It was in 1897 that explorer Frank Hann first noticed the Pilbara region had creeks that flowed inland. He followed them, hoping to find a large body of fresh water. Instead he found a dry salt lake surrounded by sand dunes. Hann named it Lake Disappointment.
More than a century later, Reward Minerals also held great expectations for the lake. It had just identified 24.4million tonnes of potash within its boundaries.
But it needed Martu support. It would not be easy. Lake Disappointment is one of the Martu people’s most sacred sites, a place of dreamtime stories that tell of dangerous cannibal beings lurking in the lake.
In 1978, WA academic Robert Tonkinson, who had spent years studying the Martu, documented their fears. ‘‘Numerous stories were told to me about a person or people who had been foolish enough to trespass, and the tragic result that ensued.’’
Despite this, the Western Desert corporation in 2008 agreed to a deal with Reward Minerals. Procter and Wolf led negotiations.
A preliminary agreement was signed with Reward Minerals in March 2008, under which the Western Desert corporation would get equity in the mine and royalties from potash sold.
The stock market approved and Reward’s share price shot to $2.34.
But by mid-2008 the deal was floundering as Reward and Western Desert argued over who should pay the legal costs incurred during the negotiations. Procter moved to break the deadlock in his aggressive style.
In an email to Reward executive Greg Cunnold on July 24, 2008, he wrote: ‘‘I spoke to Clinton [Wolf] and he has had a gutful. If your position doesn’t change, December will roll around, nothing will be agreed, your stock price will be back to 40¢, your capital raising will be iced, your collective and individual market worth will be divided by 10 and you will all have a shitty Christmas.’’
The email apparently backfired.
Instead of paying WDLAC’s costs, Reward applied to the Native Title Tribunal to argue that WDLAC was negotiating in bad faith.
For a while it seemed that the future of Lake Disappointment would not be decided by money but by the ancient spirits. In early 2009, the Native Title Tribunal headed to the Pilbara community of Jigalong to hear about 12Martu elders talk about the lake.
Their testimony would make history. On May 28, 2009, tribunal deputy president Chris Sumner rejected Reward’s application to mine the lake.
It was the first time the tribunal had found in favour of traditional owners. The decision was later upheld by then federal attorney-general Robert McClelland.
It should have been the end of it, but it wasn’t. Reward Minerals had another crack at Lake Disappointment, this time pinning its hopes on a company formed in September 2010. Indigenous Investment Management had Wolf, Mundine and Perth dealmaker John Poynton among its directors and shareholders.
Wolf says Reward had accepted a pitch by Indigenous Investment Management to re-start talks with the Western Desert corporation over Lake Disappointment in late 2010. What nobody knew was that Reward’s new negotiating company had a hidden weapon, known to Wolf and perhaps a handful of others. Tony Wright – long a top executive of the Western Desert corporation – had a secret stake in Indigenous Investment Management during parts of the negotiation process, and again after the deal was done. His stake was obscured through shelf companies that also involved Wolf.
It put him in a unique position to influence the outcome. It may have also made him money. Wolf says Wright had no role in the negotiations and was there simply to ensure the company met its tax obligations.
Whatever the case, had Wright’s shareholdings become known, neither the Western Desert corporation, Reward Minerals nor Indigenous Investment Management could have escaped the conclusion that their negotiation had been compromised.Mundine, Wright and Wolf, as it turns out, were also shareholders and directors in another WA company, Geomara, during the Reward negotiations.
For Mundine, today’s revelations raise questions about his business judgment – and specifically about his company’s role in the Reward Minerals deal. How could anyone believe that the Martu people were being properly represented by the Western Desert corporation during negotiations when one of its top executives had an undisclosed interest in a predetermined outcome?
On April Fools’ Day 2011, Reward announced it was close to a deal on mining Lake Disappointment.
Western Desert enforcer Biljabu and his board allies went into overdrive, calling a special ‘‘on-country’’ meeting to discuss the proposal.
More than 100 Martu turned up, as did representatives of Reward Minerals. The discussions were tense, with senior elders steadfast in their opposition to mining Lake Disappointment.
But the power-brokers on the Western Desert corporation’s board worked assiduously to persuade the uncertain.
Little more than two years after the Martu had convinced the Native Title Tribunal to reject Reward’s first bid for Lake Disappointment, some of the elders’ wishes were disregarded by the entity meant to represent them. By now, there was serious infighting among the Martu, including those who believed the Western Desert corporation was selling them out.
Reward made the most of the confusion, telling the market it now had ‘‘majority’’ backing of the community. But the Western Desert corporation was also divided.
In August 2011, the corporation’s in-house lawyers, Emma Ashcroft and Ingrid Hebron, prepared a confidential 23-page document for the board. Their advice was explosive. They accused the Western Desert corporation of not acting in the best interests of the Martu people and of being seemingly in league with Reward Minerals.
‘‘It is the legal unit’s view that WDLAC is in breach of the majority of its legal obligations ... Inappropriate negotiation, consultation and informed decision-making processes were employed during current negotiations with Reward Minerals Ltd, despite repeated requests and advice from the in-house legal team. Consequently, this process has no validity and exposed to a risk of significant legal challenge.’’
The advice seemed to be ignored. The Western Desert corporation continued to rush headlong into a deal. On September 14, 2011, the corporation’s annual general meeting at Parnngurr passed two resolutions to accept Reward’s draft mining agreement and commercial terms.
In December 2011, Reward announced it would pay the Western Desert corporation $500,000 upon the signing of an agreement. Another $500,000 would come when mining began and there would also be royalties of 1.25per cent on potash sales. This money was meant to be held in trust for all Martu.
But the biggest prize was Reward’s issuing of 9.5million share options to the Western Desert corporation and Poynton’s Azure Capital, which was in effect the parent company of Indigenous Investment Management. The value of the options at the time was almost $10 million. The Martu will get millions more options as the project progresses.
With money now in the bank, the Western Desert corporation went on a spending spree. Despite its own rules banning the handing out of funds without the approval of all members, the board decided on February 16, 2012, to use the first $500,000 from Reward and $100,000 from the corporation’s operating budget to pay 30 select elders $20,000 each.
Five board members, including Biljabu’s brother, received $20,000 each. Another recipient had just finished his term as a director, and the parents of three board members were also paid. Wolf says ensuring money is properly handled is easier said than done. ‘‘Some Martu live on $9000 a year and so when money hits the account you say ‘that should go to education or something’ but it’s hard when you live in poverty.’’
Still, Farmer says many Martu people are bewildered by their board’s capitulation over Lake Disappointment. ‘‘Why did we fight so hard, only to let it go?’’
So where has the federal regulator been in all this? ORIC has long been aware of governance issues at Western Desert corporation. In 2010, it found the Western Desert corporation had failed to keep proper records, paid money to the board’s chair and deputy in breach of its rules and provided cars to directors – including Biljabu – without member approval. But no disciplinary action was taken against individuals responsible.
Farmer’s fight for answers has taken a toll. ‘‘I’ve been isolated, lost sleep, become ill and [been] made out to be the troublemaker who is stopping people getting their money,’’ he says.
Meanwhile, he says, the Martu communities have not benefited as much as they should have from the mining deals. ‘‘Go out into the communities and there is f--- all to show for all the millions.’’
A senior Western Desert corporation figure agrees with Farmer, but says a new education program is about to be rolled out in Martu communities and an outback roadhouse owned by Martu is about to open. None of this, he says, would have happened without the mining money.
After Mundine’s recent tough talk about not tolerating poor behaviour in indigenous corporations, Farmer had hoped Mundine might be the man to restore order in the Western Desert. But now he is not so sure.
Farmer says respect for traditional practices and good governance is the key to making native title work. He says the Martu mob is desperate for the federal regulator to do its job.
‘‘We need a stronger watchdog,’’ he says. ‘‘People are sick of fighting.’’
But until that happens, outspoken Martu like Farmer have to look out for themselves. As night falls on Wiluna, Farmer walks to the back of his four-wheel-drive. He pulls a blanket from the back and unfurls it in front of the headlights to show his boomerang and nulla nulla.
‘‘You have to have these with you these days. You don’t know when it is going to explode.’
The story The sorry tale of Lake Disappointment, the missing mining millions and Warren Mundine first appeared on The Sydney Morning Herald.