Questions Raised Over Record Government Charity Grant

Questions have been raised about why a small environmental charity with close corporate links has received a $444 million grant from the federal government with no tender process.    

During Senate Estimates on Monday, the government was grilled over its decision to award a $444 million grant to the Great Barrier Reef Foundation (GBRF) – described as “the biggest single grant to the reef in Australian history”.

When the government announced the agreement, it said GBRF would use the money to “tackle crown-of-thorns starfish, reduce pollution into the reef and mitigate the impacts of climate change”.

But Labor, the Greens and crossbench senators questioned what due diligence was done before awarding the record funding.

Department of Environment and Energy (DEE) secretary Finn Pratt revealed there had been no tender or application process for the grant.

Labor Senator Kristina Keneally inquired why the government had seemingly not undergone a thorough process in the course of its decision making.  

“I did a lot of due diligence on my husband before we got married. You don’t seem to have done any due diligence on this organisation before you announced a half a billion dollar commitment to them,” Keneally said.

She expressed concern that the government awarded GBRF the grant despite not approaching the board beforehand to discuss it.

What we have learned so far from this #estimates is that the Turnbull Govt decided to grant the largest ever funding for the Great Barrier Reef ‘in Australian history’ – nearly half a billion dollars – to the Great Barrier Reef Foundation with no open or transparent process.

— Kristina Keneally (@KKeneally) May 21, 2018

Stephen Oxley, DEE’s first assistant secretary in the heritage, reef and marine division, said a due diligence process was underway, but admitted there was still no agreement between the foundation and DEE.

“We are in a process at the moment where both the government and the Great Barrier Reef Foundation have expressed their intention to enter into a partnership agreement,” Oxley said.

“We are now going through quite a comprehensive due diligence process where we conclude whether it can be consummated, for want of a better word.”

Oxley said the department had examined if the charity – which currently employs six full-time staff and made about $8 million in revenue last year – would be able to increase its size and scale to handle the $444 government investment.

Questions were also raised about why the money was given to GBRF instead of departmental agencies such as the Marine Park Authority.

“I’m trying to understand what was the process that led to this massive amount of taxpayer dollars going to one foundation,” Keneally said.

“Was there any competitive tension? Was there any testing of capacity? Was there any open invitation? Was there any contest between the foundation and [the Marine Park Authority’s] capacity to deliver this outcome?

“It seems you can’t answer these questions here today – or you’re unwilling to.”

In response, Education Minister Simon Birmingham said the government had taken due diligence before awarding the grant.

“The government obviously did due diligence in relation to the foundation, has a history of engagement with the foundation and believes the foundation is well-placed to lead efforts in this regard which is why, indeed, this injection with a detailed plan is being made,” Birmingham said.

Labor and Greens’ senators also questioned the foundation’s close corporate links during estimates.

GBRF is chaired by John Schubert, a former chair of Esso Australia and the Commonwealth Bank, while the chairman’s panel includes executives from BHP, Rio Tinto, AGL, Orica and major banks NAB, ANZ, and Commonwealth Bank.

Labor’s shadow environment minister Tony Burke said the government was showing a lack of transparency around the decision.

“The government still can’t explain why the money went to the foundation instead of being managed through the department or the Marine Park Authority, nor can it explain why the decision was taken without the foundation even being aware that it was being considered to carry out work on a scale completely beyond its historic capacity,” Burke said.  

“With the Great Barrier Reef, Australia is responsible for one of the most precious environmental assets on the planet. Decisions over the reef’s future should not be chaotic, haphazard, and lacking in accountability.”

GBRF managing director Anna Marsden indicated at the time of the funding announcement that the money would be used to develop partnerships and collaboration.

“Over the next three months, the foundation will work closely with the Department of Environment and Energy and Great Barrier Reef Marine Park Authority to ensure this investment will be delivered to best effect through a range of delivery partners,” Marsden said.

Pro Bono News reached out to GBRF for a response, but a spokesperson said the organisation did not wish to comment on issues of political debate.