The Sydney Morning Herald from Sydney, New South Wales, Australia • Page 19

WEDNESDAY, MAY 17, 2000 www.smh.com.au 19 FEATURES JLJL JL LL LLCLaL it? JL JL Oil tTflJll N-r- I 1 -'Jr. 'Jkrf 'J 1 How did a "model" deal between black and white descend into accusations of missing money and threats of legal action? Greg Roberts investigates. Norman Johnson and (inset) Noel Pearson. Bottom right: Frankie Deemal (left) discussing the pipeline route with South Pacific's Terry Piper. IV'" vi i nl WHO HAS NEGOT IATED WHAT BIRRI GUBBA ABORIGINAL CORPORATION Received $400,000 from Chevron and $400,000 from Rio Tinto subsidiary Pacific Coal, developer of the $500 million Hail Creek coalmine, for studies, organising negotiations and other pared by Johnson for consultations with Pacific Coal show thousands of dollars were charged for use of a vehicle by Johnson when the vehicle had been purchased for Birri Gubba by Pacific Coal.

Other documents show that the Wirri Yuwiburra Community Benefit Trust, established to receive payments associated with the project, bought three properties in the Sarina-Nebo area. Company records give Johnson's address as one of the properties Bush Haven units in Sarina which was purchased for $360,000. In a letter last December to Robert Downey, Pacific Coal's lawyers, the company's business development manager, Peter McMahon, suggested that the use of trust funds for the properties did not comply with the trust deed's requirements. McMahon said the company was "reluctant to make a further payment to the trust until it is satisfied that the administration of the trust is in In an earlier letter to a trustee, McMahon complained that the trust had not replied to four requests for information about its administration. The company paid $650,000 to the trust in September 1998.

Disbursements from the trust To get 25 groups together and to co-operate together is a huge achievement for Aboriginal people. Noel Pearson. CAPE YORK LAND COUNCIL Negotiated Heads of Agreement with Chevron, developers of the $3.5 billion gas pipeline between Papua New Guinea and Gladstone, in 1997. Chevron to pay $6 million in compensation and assistance to indigenous communities. The council faces deregistration by the Federal Government, subject to appeal.

PNG Port Moresby I Bowen Hail work. Placed in liquidation in January. Formerly headed by Norman Johnson, who now heads the Wirri Yuwiburra Touri Aboriginal Corporation. i Mackay Pipelines Existing Proposed SfFfl WIRRI YUWIBURRA COMMUNITY BENEFIT TRUST Received $650,000 from Pacific Coal in compensation and assistance. Some money unaccounted for.

Further payments being withheld. A 1 Qid i y. i X' Rockhamptorr Townsville fj jMtlsa -1 HAIL CREEK Gladstone! Barcaldine jr i v.BRISBANE I BANE Wilson told the Herald that Pacific Coal had negotiated substantial payments in return for guarantees that the mine would proceed without opposition from traditional owners, but Johnson had not been in a position to give such guarantees. A member of the Wirri clan, Ross Watson, said Pacific Coal could face legal action because there are two rival native title claims over the mine site, and many claimants had been ignored. "They haven't negotiated in good faith with us," Watson said.

Pacific Coal's external affairs manager, Jim Singer, said the company believed the groups it had negotiated with represented the traditional owners. "We've worked through a fairly lengthy process to ensure we were talking to the right people," he said. Singer said he had not seen evidence that company money had been misused: "We are happy with Norm and the work that's been done." He said the expenditure of money given to the trust was the trust's responsibility. "Once it is provided to the trust, its accountability is in the hands of the Aboriginal community." Despite his assurances, no further payments have been made to the trust since December. Chevron signed a so-called Heads of Agreement in 1997 to facilitate its pipeline development but the company has come under fire over its negotiations with indigenous representatives led by Johnson and lawyer Noel Pearson.

Johnson and Pearson, who was the CYLC chairman when negotiations began, feature heavily in Chevron's public relations material promoting the pipeline. Documents show that a Cairns-based private company, the Bal-kanu Cape York Development Corporation, and Birri Gubba would be sponsoring organisations "for receipt of moneys for field purposes" from Chevron. The secretary of Balkanu is Pearson's brother, GerhardL ATSIC has cut off funds to Balkanu, which has received about $350,000 from Chevron. The CYLC, which negotiated the Heads of Agreement, faces effective deregistration by the Federal Government as a result of an ATSIC review. That review raised questions about the propriety of contracting agreements between the land council and Balkanu, and found that the council had failed to meet key financial accountability standards.

A letter written last November by Terry Piper, South Pacific Pipeline's community affairs manager, confirmed that "Chevron has for some considerable time had contract arrangements with Balkanu and the Cape York Land In 1997, the CYLC established Cape York Community Consulting to disburse contractual pipe- I Ahmat (Cape York Land Council chairman) and the estate of Norma Chevathun. Cape York Corporation owns: CAPE YORK COMMUNITY CONSULTING Company established to disburse Chevron contractual funding. Cape York Corporation owns: BALKANU CAPE YORK DEVELOPMENT CORPORATION It received $350,000 from Chevron for studies, organising negotiations and other work. Secretary -Gerhardt Pearson, Noel Pearson's brother. NATIONS JOINT company established to disburse compensation funding.

is Frankie Deemal, Noel cousin. Its sole shareholder Johnson. CAPE YORK CORPORATION Private company with three non-beneficial shareholders -Noel Pearson (former Cape York Land Council chairman), Richard Chevron in 1998 that, after negotiations with 'our elders and our a proposed agreement with the company had received unanimous support at a meeting and that "all the necessary authorities were Johnson acknowledged the receipt of $55,000 paid to Birri Gubba by Chevron in a letter to the company and, after explaining that the costs of meetings "kind of blew asked for a further $35,000 as part of a $163,000 negotiated funding agreement. The letter acknowledged that "we have not received any sort of budget from An agreement implementation committee was established by parties to the pipeline nego i-- I i i i Moomba FIRST COMPANY The Chevron Secretary Pearson's is Norman ANDMARK native title deals between Queensland Aborigi- npc unH twn i WAr companies, covering resource projects worth more than $4 billion, have been tarnished by the collapse of an indigenous corporation which has received large sums from the companies. Auditors are attempting to account for $800,000 in contractual payments to the Birri Gubba Aboriginal Corporation from the companies, Chevron and Rio Tinto.

Management consultants have described the corporation's financial records as a mess and have recommended steps to recover "missing" assets. Executives of the Rio Tinto subsidiary Pacific Coal also have serious concerns about how an additional $650,000 paid to an indigenous trust has been spent, with some trust payments not authorised by the trustees. Meanwhile, the Aboriginal and Torres Strait Islander Commission has cut off funds to another indigenous company which has received payments from Chevron, and the Federal Government is moving to dereg-ister the Cape York Land Council (CYLC), which spearheaded the Chevron negotiations. Earlier, the Federal Government had hailed the Chevron negotiation process as a model for all developers. Now traditional owners left out of negotiations have warned of possible legal action for compensation against Pacific Coal and Chevron.

Pacific Coal's negotiations concern its $500 million Hail Creek coal mine development in the Bowen Basin, in' central Queensland, where it plans to mine 5.5 million tonnes of coking coal a year. Chevron, through its subsidiary South Pacific Pipeline, plans to pump 600 million cubic feet of gas daily from 2003 through a pipeline from Papua New Guinea to Gladstone, Queensland. The $3.5 billion pipeline, Australia's biggest resource project, traverses the traditional lands of 26 Aboriginal groups. A key indigenous negotiator on both projects is Norman Johnson, the Birri Gubba corporation's former head and the present head of the Wirri Yuwiburra Touri Aboriginal Corporation, based in the central Queensland town of Sarina. Johnson is also the sole shareholder of the First Nations Joint Company, established by Chevron in 1 998 to disburse $6 million in compensation and assistance to indigenous communities.

The money has not yet been paid to First Nations. Birri Gubba was placed in liquidation by the Queensland Supreme Court in January following action initiated by the Registrar of Aboriginal Corporations. Pacific Coal and Chevron had each paid about $400,000 to Birri Gubba for cultural and other studies, organising meetings for negotiations and related work. BDO Kendalls, the auditor appointed by the court, is attempting to determine if the money has been accounted for. It has found that audited annual accounts have not been lodged by Birri Gubba for several years and has asked Chevron to provide details of-its payments.

ATSIC has ordered a separate review of Birri Gubba. A report last year by the review's management consultants, Indecorp, to the corporation's board said: "There is strong indication that Norman Johnson his position as chief executive officer of Birri Gubba to further the interests of himself and others at the expense of Birra Gubba." The report said the corporation's membership records had not been maintained and board minutes and other records are missing, in breach of legislation. Indecorp recommended that the lineage of corporation members be checked and that it be determined "what assets have gone Its report said the documentation of "all financial transactions and other records are in a mess" and recommended a budget be worked out for Chevron and ATSIC grants. Movement requisitions pre account show $59,500 of this was paid to Birri Gubba in "loans andor An audit report of the trust prepared by Pricewaterhouse-Coopers last October said that $200,000, earmarked to be spent on the Nebo Keeping Place, had been transferred to other accounts. From discussions with Johnson, and from the auditors' own observations, the report said, none of the money had been spent for that purpose and this was "completely contrary" to the agreement with the company.

Trust budget explanation notes show Johnson's salary was paid by Pacific Coal, Chevron and the Federal Government. The minutes of a meeting of trustees last December said "certain payments from the trust fund have not been including $82,000 spent on vehicle purchases and expenses and $47,900 paid to Birri Gubba. Birri Gubba's former coordinator, Rick Wilson, said he was concerned about the lack of accountability for funds paid to the corporation. "The final straw for me was when we received $5,000 from ATSIC to recover artefacts and the money was spent on personal purposes," he said. "Those artefacts are still waiting to be picked up." HAIL CREEK COAL communities and had "done something right which other companies could learn according to a Cheron newsletter.

Pearson told, the Herald he was no longer directly involved with Chevron but the company-had acted responsibly. "To get 25 groups together and co-operate together is a huge achievement for Aboriginal people that is positive," he said. Pearson said Balkanu and the CYLC had had their annual returns audited and there was nothing improper about the relationship between them. The suggestion by Rosendale that a private company should not receive public money was typical of misinformation being spread by people who did not understand the facts, he said. Pearson criticised the move to deregister the CYLC: "This is the land council that on Wik.

This is the council where we actually have a process for resolving land claims. Nobody can say the council is not performing and should be deregistered. They haven't got any grounds to do that" Deemal said First Nations had confidence in Johnson. "Some of the Birri Gubba moneys are still being sorted out and that is a cross we have to carry," he said. "There are no difficulties at all with the money from Chevroa" Chevron's Piper said he was satisfied that money paid to all indigenous groups had been accounted for.

He said it was "up to the Aboriginal process" to determine if Johnson should continue as the sole shareholder of First Nations. Piper said agreements had yet to be finalised and consultations would be held with landowners who had not yet been involved "Lester and these people should come to a meeting and familiarise themselves with a process that the Aboriginal people are very proud of. It is a process we are very happy with and very confident with." Johnson declined to return repeated calls or to respond to written questions. New Writers' Forum returns next week Oesoiiaince groan Quake eeiyirBe funding. This company is, in turn, owned by the Cape York Corporation, which has only three issued shares held by Noel Pearson, Richard Ahmat, the CYLC chairman, and the estate of Norma Chevathun.

The Cape York Corporation also owns Balkanu. Pearson said the corporation is the trustee for a charitable trust and its structure does not allow shareholders to profit personally from it. Chevron confirmed it has paid Balkanu about $350,000. Balkanu receipts show $112,000 was paid for legal services through Balkanu to Arnold Bloch Leibler, the Melbourne firm which formerly employed Pearson. Documents show Johnson assured topes to communities along the pipeline route.

Johnson, as head of the Birri Gubba Aboriginal Corporation, in the central Queensland town of Sarina, was seen by both Chevron and Pacific Coal as the key to winning over traditional owners further south, in the Bowen Basin. Now, however, all these negotiations have been tarnished by the revelation that Birri Gubba has been placed in liquidation, with auditors attempting to account for $800,000 paid to it by Chevron and Pacific Coal for work done on their behalf (see story above). Under a 1 997 agreement with the Wirri Yuwiburra Traditional Owners Group, Pacific Coal agreed to pay up to $250,000 a year to communities, on top of $600,000 for business development and cultural heritage assistance. It has already paid $650,000 to a trust, some of which was passed to Birri Gubba before it was placed in liquidation. Pacific Coal has frozen further payments.

For its part, Chevron has agreed to pay $6 million in compensation and assistance and tiations in 1998. Meeting records show that Johnson, Pearson and Frankie Deemal Pearson's cousin and the secretary of First Nations would be responsible for engaging advice to "develop models and options for all issues to do with incorporation and commercial A 1997 memorandum signed by Pearson required "that the content of the negotiations with Chevron will be kept Records show that the public contributed to pipeline negotiations in 1997 through a $250,000 grant from ATSIC, which was paid to Balkanu. Tony Irelandes, chairman of the State Joint Ministerial Advisory Committee on Housing and community had authorised the CYLC to negotiate and that the council had appointed Pearson as a representative. Pearson strongly defends his role with Chevron: "Rather than sit back and comment on a project that is going to walk over the top of you, it makes commercial sense that you get to understand the company and are seen as partners Then you will see the benefits and opportunities offered Chevron has paid $350,000 to the Balkanu Cape York Development Corporation, a private company, for contracted work associated with the negotiations. Balkanu has also done contracted work for the CYLC.

Questions about these contracts were central to the findings of an ATSIC review that the CYLC had failed to meet key financial accountability standards and proved it was representative of its communities. The CYLC will appeal but is unlikely to be recognised from July 1 by the Federal Government as a representative native title body and is expected to be stripped of public funding. Infrastructure, said there was widespread concern in indigenous communities about the way ChevTon had disbursed funds, and that the company could face legal action. ATSIC's north Queensland commissioner, Lester Rosendale, said funds to Balkanu had been cut because of concerns about its structure. "It is a private company that should not have been getting public money," he said.

Rosen-dale was critical of Chevron. "The traditional owners, many of them, don't know what's going on." But the Federal Government has applauded Chevron's negotiations. The Employment Services Minister, Tony Abbott, said Chevron had built a "very effective" partnership with indigenous a wDouiroeir A new group, the Aboriginal Corporation of West Coast Cape York Peninsula, is expected to be approved by the Aboriginal Affairs Minister, John Herron. The secretary of Chevron's First Nations, Frankie Deemal, blames internal Aboriginal politics for the assault on the CYLC, and misgivings about Chevron. "When you get 25 or 30 groups together you are not going to satisfy everybody," Deemal said.

"You might have one or two people who are always going to be disgruntled." South Pacific Pipeline's community affairs manager, Terry Piper, does not regard the Birri Gubba developments as significant He pointed out that under the Petroleum Act, Chevron was not required to negotiate with the claimants of land where native title had been extinguished, but was doing so anyway. "We want agreement with all the groups regardless of whether native title continues," Piper said. "We don't want to see losers in this. We want everyone to be winners." Greg Roberts has left open the prospect of communities having up to 2 per cent equity in the pipeline. But some native title claimants are angry at being left out of the negotiation loop.

A leading member of the Wirri clan, Ross Watson, compared the Pacific Coal agreement unfavourably with other native title settlements, such as the $60 million package offered by Pasminco for its $1 billion Century Zinc mine in north-west Queensland. "Most people oppose Hail Creek. But if it is to go ahead, we want more than these beads and blankets he said. Watson said both Pacific Coal and Chevron had ignored some traditional owners and could face legal action. But both companies insist they have gone to lengths to talk to the right people; Pacific Coal says its package is reasonable.

A 1997 memorandum required Chevron to communicate with "the Aboriginal community" only through, or in the presence of, a nominated CYLC representative. The memorandum said the principle from 26 Aboriginal clans over what will be Australia's biggest resource project Chevron's plan to pump gas from reserves in the PNG Highlands to Queensland were given a major impetus with last month's announcement by Rio Tinto subsidiary Comalco that Gladstone is the preferred site for its $1.4 billion alumina refinery. Johnson was also a central figure in negotiations, completed in 1997, concerning central Queensland's $500 million Hail Creek coalmine in the Bowen Basin. That development is planned by another Rio Tinto subsidiary, Pacific Coal. The proposal has been put on ice in the wake of low world coal prices, but the native title agreement has been welcomed by an industry still coming to grips with the requirements and complexities of the High Court's Wik decision.

Pearson spearheaded the negotiations with Chevron as head of the Cape York Land Council (CYLC), representing Far North Queensland THE firebrand Aboriginal activist Noel Pearson is not accustomed to singing the praises of giant multinational resource companies. But he enthusiastically supports Chevron, the major partner in the development of a $3.5 billion gas pipeline between Papua New Guinea and Gladstone. Chevron's subsidiary South Pacific Pipeline is so proud of its successful negotiations to win native title agreement over its pipeline that it has produced a promotional video, Bridging the Gap. Pearson and fellow activist Norman Johnson feature prominently in it, with Pearson commending Chevron for avoiding damaging Aboriginal protests and costly legal challenges. And Johnson declared that the negotiations showed Aborigines "are not opposed to The Federal Government is so impressed it has hailed the Chevron negotiations as a model for all developers, with the company securing agreement in.