11/12/2015 - 14:29

Aboriginal corporations grapple with division

11/12/2015 - 14:29


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Recent annual meetings have failed to resolve long-running divisions at two of WA’s most important Aboriginal corporations.

FRAUGHT RELATIONSHIPS: Michael Woodley is a key player dealing with the complex machinations of the state’s Aboriginal corporations.

Recent annual meetings have failed to resolve long-running divisions at two of WA’s most important Aboriginal corporations. 

When top Perth lawyer Martin Bennett, renowned for his forthright manner, is hired to attend a public meeting, it’s usually a sign of trouble.

That was certainly the case when the Yindjibarndi Aboriginal Corporation held a marathon nine-hour annual meeting in Roebourne late last month.

Mr Bennett was representing the Wirlu-Murra Yindjibarndi Aboriginal Corporation (WMYAC), a breakaway group that is financially supported by Fortescue Metals Group.

It was an opportunity to bring together the two groups, but with both sides having legal representation and mistrust abounding, it failed dismally, with the meeting unable to agree on new directors.

It was a similar story at Port Hedland, where the Gumala Aboriginal Corporation held its annual meeting.

With net assets of $92 million, Gumala is one of the state’s wealthiest Aboriginal groups, and its members are bitterly divided over who should be in control.

Gumala’s board has had three chairs in the past 12 months, with the latest being Julie Walker, who is a vocal critic of the trustee meant to keep oversight of the money.

The divisions at YAC and Gumala reflect many factors, including the impact of lucrative mining royalties, the legal complexities surrounding native title, and personal acrimony within Pilbara communities and families.

They are also coloured by defamatory accusations (which Business News is unable to publish) that serve to deepen the mistrust among community members.

The YAC dispute dates back more than five years and relates to long-running claims for native title and royalties over Fortescue’s Solomon project.

YAC chief executive Michael Woodley has been seeking an open-ended royalties deal with Fortescue.

“It’s the only mining company in the Pilbara that refuses to pay fair compensation,” Mr Woodley told Business News.

Fortescue chief executive Nev Power has countered with a capped royalties offer, which WMYAC supports.

“I think greed and attempts to get control of money has led to these types of disputes occurring,” Mr Power told ABC radio.

Fortescue believes training and employment delivers better outcomes, and in that regard has put its money where its mouth is, awarding numerous contracts to Aboriginal groups, including about $180 million of work to WMYAC.

“That far outweighs mining welfare, which is what YAC and Michael are looking for; they just want to control the flow of funds via cash payments,” Mr Power said.

However, the Fortescue executive’s critique ignores the fact that YAC has established its own contracting arm, Yurra, which recently announced its first major contract wins with Rio Tinto.

The formation of Yurra followed the signing of a land-use agreement with Rio Tinto in 2013.

The smooth passage of that agreement contrasts with the divisive debate over the Fortescue deal.

Falling royalties

While the Yindjibarndi people are fighting over prospective mining royalties, the members of Gumala Aboriginal Corporation are fighting over large but declining royalties.

Payments by Rio Tinto to Gumala under the Yandi land-use agreement soared over the past decade to $37.1 million in 2012-13, but have subsequently plunged to $7.6 million in 2014-15.

This partly reflects lower iron ore prices but is also due to a unique formula that links payments to the amount of ground disturbance at the mine site.

Gumala Aboriginal Corporation responded slowly to the collapse in revenue, leading to a dispute with its trustee, Gumula Investments, chaired by Colleen Hayward.

Former chief executive Steve Mav had his job terminated and auditor Grant Thornton has undertaken a forensic audit of the corporation’s books, and submitted a report.

Mr Mav insists the review was a political exercise but Professor Hayward says the auditor’s report entirely justified the trustee’s interest in assessing GAC’s books.

Financially, 2014-15 was a horror year for Gumala, which slashed member benefits but still incurred a net loss of $10.4 million.

After writing down the value of its South Hedland properties and providing for bad debts, its net assets also fell to $92 million from more than $100 million.

It was against this backdrop that Gumala held its annual meeting last month, two days before YAC’s annual meeting.

Gumala has a new chair but its board remains divided on the way forward.

The YAC meeting also failed to resolve differences, with supporters of both WMYAC and the current board nominating 12 candidates for the 12-member board.

With the constitution requiring a 75 per cent vote, neither bloc gained sufficient backing to succeed.

Mr Woodley attempted to break the impasse by suggesting each group put forward six nominees, but that also failed to win support.

This followed earlier attempts by Mr Woodley to bring together the two groups; last year, for instance, he offered to stand down as chief executive as part of a plan under which the two factions would have equal representation on the YAC and the Yindjibarndi Trust.

WMYAC leader Rodney Adams said the outcome of the AGM was further evidence community members had lost trust in the current management.

As for Mr Bennett’s role, a Fortescue spokesperson said the company’s financial support to WMYAC included money for legal representation.

“YAC had two lawyers of their own at the meeting and, given the conduct of proceedings, including the behaviour of the CEO, it is not surprising that WMYAC chose to use some of this financial support to engage legal representation for their members,” the spokesperson said.


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