Senate Environment and Communications Legislation Committee, , 7:06:30 to 7:25:16
Examination of conflict of interest management procedures within the CEFC, specifically regarding the chair's role on the Foreign Investment Review Board (FIRB).
Topics: Integrity, Procurement
Speakers: Hon Tim Ayres, Speaker 27, Hon Sarah Henderson, Speaker 30, Varun Ghosh
Well, so could you um you've going to table?
>> Yes, we we'll table that.
>> Well, could you do that now? Is that possible?
>> Uh, sure.
>> Okay. Or as soon as you can facilitate that. Uh I mean it it is just as I say this is an investment to a foreign entity that has um because a lot of Tasmanians take a very different view that they think that this consider this land to be very precious
>> well that's because because they're being told by you and your colleagues that this is prime agricultural land and it simply isn't the the the dairy asset unable to be sold. Um, this is uh a foreignowned agricultural mixeduse facility that was sold to another uh owner. Tasmania's own classification system in a system that goes from prime agricultural land one uh through to uh through the bottom uh uh classifies this as five six and seven depending on which parcel of land you're talking about. Efforts to sell the dairy part of the operation failed. No credible buyer could be found. Um, but it's also not true to say that this land won't be used in part for farming. There's 3,000 head of cattle currently grazing, supporting six jobs. Um, they'll be cropping part of the property's ongoing use. It'll produce around 5 million tons of construction grade timber which will be available for processing in Tasmanian sawmills and will support the construction of Australian homes. Uh it will the the overall project will support 190 jobs, planting, forestry, grazing and restoration work. Um it was already entirely foreignowned. It's now 49% Australianowned. No native vegetation is going to be cleared for plantations. I mean the the the the the way that this has been represented is completely inconsistent with the facts.
>> Well, I'm asking the questions, Minister, and so I I am >> well, not complaining about the question. I am raising legitimate concerns about this about this investment and the due diligence undertaken by by by the CEFC. um was so the chair of the CEFC sits on the board of FURB. That's correct.
>> Steven is currently on the board of FIR or a member of FURB or board. I'm not
sure. >> Um in terms of the decision by FURB, what what steps were taken to manage that particular situation where there could be a potential conflict of interest?
>> Yeah, I can't answer the steps that FURB took. I can answer
>> No, I'm asking from the >> Sorry, sorry. I'm asking about the CFC steps.
>> So within CFC, this this uh project was under our delegated um approvals, which means it's a decision for our internal management investment committee comprised of our executive who approved the project. So it didn't actually go to the board for approval per se. It did go to the board to keep them informed on the way through. Steven the chair of CFC who has the potential conflict mentioned was recused in all circumstances and discussions on this project. If I can senator
>> so he sat on the he sat on the furb board but he recused himself in relation to any investment decisions by the CFC. Is that correct?
>> He he was not involved in any uh process of investment decision around the decision to invest in Russia lagoon at CFC. And if I may, Senator, I just want to clarify something I said before about reference to the land as being degraded. I just want to correctly read that for the record. So the Russia Lagoon is marginal land consisting of classes 5, six, and seven. This is under the Tasmanian government's clar classification system. Class 5 is non-arable land suitable for pastoral use and grazing requiring ground cover management to prevent erosion. Class six is low inensity grazing land with severe physical or climactic limitations. Class 7 is land with very severe to extreme limitations which make it unsuitable for agricultural use. So just for the record I want to be clear that um that's how that land has been designated.
>> Less less than 14% of the property has historically been allocated to dairy farming. Less than 14%. And that part of it couldn't be separated and sold because nobody would buy it >> because it was so degraded.
So just I just want to go back to this conflict of interest issue. So Mr. Scarlett recused himself from the investment decisions. Was there any was there any um pro property certificate in relation to the conflict of potential
trying to think how I answer that question best. I think the best way to answer it is when any any of any of our board potentially have uh conflict that's arisen at the time that the conflict arises. So Steven's participation in FURB was noted to our board. I can't tell you the specific date but probably when he joined FURB. Um and so we are aware that any projects coming up that do require the purvey of furb under our board Steven would be um recused from in that sense and not privy to any of that information.
>> Senator, it's it's um the the procedures that are required to be followed are said under the PGPA act rules >> and uh we follow those rigorously inside the CDFC. We also establish information barriers where somebody is uh you know at risk of potential conflict and we've got um we ensure that they're not you know the investment papers for example are not distributed uh to the to the individual who's recused from attending So there's detailed uh you know uh sort of register of of obviously um the declarations of interests that are made by people uh and that's required under the PGP act as well and then as the conflicts are you know noted or registered then we put in place a set of procedures to ensure that uh rigorous compliance with uh the integrity legislation is in place at all times.
All right. Well, look, we've got a we've got a range of um other questions that we will put on notice due to time, but thank you very much for your time and thank you, chair.
>> Thank you very much. Uh well, on that note, we will suspend for 10 minutes for afternoon tea. And at that point, I will welcome uh officers from Snowy Hydro Limited. But uh for now uh thank you very much to the officers from the Clean Energy Finance Corporation for your evidence and the work that goes into preparing for these hearings. much. Uh we now call officers from Snowy