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When $400 million isn’t enough

The Murrin Murrin Joint Venture is a nickel-cobalt mining operation in the Goldfields-Esperance region of Western Australia, approximately 45 km east of the town of Leonora. Australia has the highest rate of Indigenous suicide in the world. Leonora has one the highest rates of Indigenous suicide in Australia.

A $1 million community fund aimed at supporting Indigenous health and education, hundreds of local jobs and lucrative contracts for Indigenous businesses, once promised by Anaconda founder and CEO Andrew Forrest, never eventuated. Those promises were made during negotiations between Forrest and 18 native title claimants before construction of Murrin Murrin commenced in 1997.

With no access to legal representation, and little understanding of what they were signing away, all 18 claimants agreed to confidential deals in exchange for a $25,000 cheque. Even by the poor industry standards of the 1990s, each of the claimants should have received the equivalent of at least 100 times that amount in royalties, contracts, employment, education and health care.

Today Murrin Murrin is the largest nickel-cobalt mining operation in the world, worth well in excess of $1 billion. Murrin Murrin is a joint venture between Minara Resources Ltd (formerly Anaconda) and Glenmurin Pty Ltd. In 2011 both companies were wholly acquired by Glencore International, a Swiss owned company registered in a Channel Islands tax haven. Between 2011 and 2014 Glencore paid virtually no tax on $15 billion in revenue from Australian mining operations.

In 2003, Andrew Forrest took control of Allied Mining and Processing, renaming it Fortescue Metals Group. In 2008 Fortescue lodged applications for three mining leases in the Solomon Hub area, some 800km north-east of Murrin Murrin, in the Pilbara region, and began negotiations with the native title holders through the Yindjibarndi Aboriginal Corporation (YAC).

Negotiations broke down after six months over the claim by the 700 traditional owners for a 0.5 per cent royalty from the mine, equivalent to around $50 million per annum on current iron ore prices. This figure was based on similar agreements negotiated by other mining companies in the region, such as Rio Tinto. By comparison Gina Rinehart receives 2.5 per cent in mining royalties for the land her father took from Indigenous people in the Pilbara in the 1950s.

Forrest’s offer was, and remains, cash payments capped at $4 million a year and $6.5 million a year in promised housing, jobs, training and business opportunities.

The YAC has been involved in an ongoing legal battle with Fortescue for the past eight years. Appeals to the Native Title Tribunal and the Federal Court failed to prevent the State Government issuing mining licenses for the Solomon Hub. Fortescue still refuses to budge and has helped fund a rival corporation who support Forrest’s offer.

Mining operations began in 2013 and Solomon is currently ranked as the sixth largest iron ore mine in the world. In the last six months of 2016, Fortescue recorded a US$1.2 billion profit – thanks to the export of 86.1 million tonnes of iron ore at $US90 a tonne. Fortescue are currently on target to ship 165-170 million tonnes of iron ore this year.

Today less than one percent of businesses in the Pilbara are owned by Indigenous people. The Indigenous unemployment rate in that region is 50 percent.

Andrew Forrest does not believe in paying royalties in the form of large cash payments to Indigenous communities. He calls this “corporate cash welfare” and “sit down money”. He does not trust Indigenous communities to invest the money wisely:

“…you know you’ve come to the end of the line. Social breakdown is complete. Now I’m not going to encourage with our cash that kind of behaviour.”

Forrest’s paternalism is at odds with other large mining operations in Australia, such as Rio Tinto and BHP. While those companies have still gained access to resources on Indigenous owned land at bargain basement prices, they have treated traditional owners as business partners, not children.

Where this has occurred, some of the money from royalties has been poorly invested – just as Forrest has made bad investments in the past – but much of it has delivered tangible benefits. All of the money has been entrusted to the Indigenous communities it is intended to benefit, rather than modestly doled out by a billionaire mine owner who insists he knows best.

This is not to say that Andrew Forrest cannot be generous with his money, when he can afford to be. Prior to announcing a $400 million donation last week, Forrest and his wife Nicola had donated around $222 million to various organisations and programs since 2001, largely through their philanthropic organisation, the Minderoo Foundation. Some of that money has gone towards causes such as climate change denial and promoting Forrest’s welfare agenda, but much of it has also delivered tangible benefits.

Philanthropy is in itself both a noble and necessary act that should be encouraged and applauded. It is however, a very poor substitute for welfare. Acts of philanthropy are entirely at the discretion of the philanthropist. It is difficult to imagine that anybody would donate money to a cause that has potential to act against one’s own interests. It is impossible to imagine in Andrew Forrest’s case.

Andrew Forrest does not believe in “sit down money”. The fact that that belief has help make him the third richest person in Australia is more than just a happy coincidence. Nor was it coincidence that the Abbott Government chose Forrest to conduct a review into Indigenous employment and welfare. Forrest’s recommendations, which include the cashless welfare card and attempts to control how welfare recipients spend their money, have been largely endorsed in the latest Federal Budget. They have also been roundly condemned by Indigenous and community groups who say they will produce a new economic subclass.

Indigenous communities, where unemployment is endemic, will be further disempowered. Those who find themselves negotiating with Andrew Forrest in future, will do so under the fear of a paternalistic and punitive welfare model. Under such a model, corporations provide the carrot, in the form of voluntary handouts and non-binding promises of employment and business contracts, while government provides the stick.

It is little different to the model that existed when Andrew Forrest’s great-grand-uncle, Sir John Forrest, took possession of 2000 hectares of “Crown land”, offering the Indigenous inhabitants only employment and patronage in return. That land is known as Minderoo, from which the charitable foundation takes its name. It is one of a number of cattle stations owned by Andrew Forrest.

When two small prospectors lodged applications to search for minerals on one of Forrest’s other cattle stations in 2016, Forrest successfully used native title laws designed to protect Indigenous land rights to stop them.

Andrew Forrest has done very well out of native title in the 20 years since he cut 18 cheques of $25,000. Forbes currently estimates his net worth at $5.78 billion.

In that same 20 years, little has changed for Indigenous Australians. Life expectancy remains 10 years behind non-Indigenous Australians. Indigenous children aged under five are now more than twice as likely to die as non-Indigenous children. Indigenous 15-year-olds are still, on average, about two-and-a-third years behind non-Indigenous 15-year-olds in reading and maths.

The resources that have made people like Andrew Forrest billionaires, mostly lie beneath Indigenous land. Indigenous people have felt the impact of mining more than any other Australians, yet they have benefited from it the least. The same tricks, paternalism and political back-scratching that once saw Aboriginal land sold from under them, is being used by Andrew Forrest to sell their resources from under them as well.

In towns like Leonora, people know the cost of having their future sold from under them – $400 million isn’t nearly enough.

15 comments

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  1. totaram

    Thank you for exposing this hypocritical ” philanthropist and “friend of the aboriginals”. I did not expect anything better, but it’s good to have the facts and figures. Send a copy of this to Turnbull, just to let him know that we have not been fooled.

  2. Matters Not

    Leaving aside the philanthropy bit, can anyone point out the ‘illegalities’ involved? You know, provide evidence that Forrest broke the law(s). And continues down that ‘illegal’ path?

    If not, then what’s the solution? How can ‘problems’ such as these be resolved in a ‘democracy’? In a system that is based on the Rule of Law.

  3. jamesss

    No corporation is a friend of any indigenous in any country or for that matter any person on the planet. There is though an unhealthy dark, corrupt and criminal agenda at the top of the pyramid to the bottom. There is a need to take our planet back.

  4. OPPOSE THE MAJOUR PARTIES

    withholding agreed or legally owed payments is the crime of appropriation and vests a civil action in the person owed the money in the tort of appropriation or in equity as estopple or breach of contract or misleading and deceptive conduct. forrest may have also obtained a benefit by deception which is also a criminal offence. More importantly, forrest is also propagating the abuses that were propagated by white invaders at settlement upon indigenous people. By english law the common law is invoked where ever an englishman exists unless it is in conflict with another established body of law. english common law applied immediately Cook took possession of the continent for the Crown meaning the common law applied. At possession the indigenous people became subjects of the Crown and entitled to the rights and protections afforded British subjects by law. that common law included the Magna Carta which institutionalised the principle of no acquisition of property belonging to subjects unless on just terms. This means if the Crown takes a subject’s land it needs to pay a fair price for it. The Crown gave land grants of indigenous subjects to other non indigeous subjects without first acquiring it from its indigenous subjects in a lawful way as compensation was never paid. Any grant of land or access to land granted by the commonweath or any state is hence invalid and illegal until such time as compensation is paid. until that occurs Forrests use of the land is illegal on an ongoing basis. Mabo is nonsense. Native title is a cocoction and fiction designed to perpetrate the subjugation of indigenous people. A Crown grant of land cannot extinguish native title or any subjects title if the land granted was not first acquired in a lawful manner on just terms in accordance with law. Australian settlement is unlawful and the extraction of minerals is criminal appropriation.

  5. OPPOSE THE MAJOUR PARTIES

    the rule of law does not in reality exist in aust. lip service is paid to it but its application is largely discretionary.

  6. danieldarko131

    Thanks Richard, great article. I’ll be sharing this around

    Andrew Forrest is a psychopathic bottom feeder, who orchestrated the Health Care Card that is used to centralize indigenous communities to exploit their labor, while $75 million of the donation is to eliminate slavery? That’s, “double double speak.”

    The government and business have got us fooled with “private property,” the right for a single individual to lay claim to the resources of the earth that sustain life.

    And to facilitate these property rights, they have to wipe out the indigenous people first. Aboriginals, American Indians etc. We are in the same boat as the indigenous people, they have just brainwashed us into accepting it as normal.

    it’s the biggest con in history

    Franco-Swiss philosopher Jean-Jacques Rousseau, in the aptly entitled, “Discourse on the Origin of Inequality” 1754
    “The first man who, having fenced in a piece of land, and said “this is mine,” and found people naïve enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows, “Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.”

    Karl Marx, in “The Communist Manifesto,” 1848
    The theory of Communism may be summed up in one sentence: Abolish all private property. “(not personal property that is often disingenuously alluded to)

    Oscar Wilde, in “The Soul of Man under Socialism,” 1891,
    “But this is not a solution: it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible. Charity degrades and demoralises and creates a multitude of sins. There is also this to be said. It is immoral to use private property in order to alleviate the horrible evils that result from the institution of private property. It is both immoral and unfair.

    Albert Einstein, “Why Socialism?” 1949
    The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. In this respect, it is important to realize that the means of production—that is to say, the entire productive capacity that is needed for producing consumer goods as well as additional capital goods—may legally be, and for the most part are, the private property of individuals.

  7. Glenice Garvie

    No friend of us mob. But a friend of the Gov mob. What else is new. Usual thing of geting goverment monies for doing good things. Yeah pay day.
    Glenice

  8. Hettie Lynch

    By no stretch of imagination could Forrest be described as a good and honorable man.

  9. Kaye Lee

    Forrest’s paternalistic ideas are the complete opposite of what our Indigenous community are asking for in the Uluru statement.

    MN,

    “can anyone point out the ‘illegalities’ involved? ”

    A Federal Court determination on exclusive native title rights could be handed down any day, and YAC plans to use any successful determination to sue FMG.

    Ms Read said she was determined to use the legal system to extract the cash compensation from FMG it had so far refused to pay.

    “All I can say to you is, when we get our native title, we will be putting in for compensation, and we will make you pay dearly.”

    http://www.abc.net.au/news/2017-05-23/pilbara-traditional-owners-upset-with-andrew-forrest-donation/8550112

  10. Kaye Lee

    “disgraced former West Australian premier Brian Burke boasts that he was able to lean on bureaucrats and MPs to have key legislation passed for the entrepreneur in just a few months, despite the process normally taking 18 months.

    ….. four judges in four separate court cases have questioned the businessman’s ethics and truthfulness during his colourful career.”

    http://www.theaustralian.com.au/business/before-he-was-a-billionaire-andrew-twiggy-forrest-ran-with-a-colourful-crowd/news-story/f4626a0eab940d2574f955c36c23479f

  11. Matters Not

    Re:

    A Federal Court determination on exclusive native title rights could be handed down any day, and YAC plans to use any successful determination to sue FMG.

    Ms Read said she was determined to use the legal system to extract the cash compensation from FMG it had so far refused to pay.

    A few points. There’s a need to get a successful determination. Then there might be endless appeals and the like.

    Good that she is using the (existing) legal system. Sensible and all that. But, generally speaking, real, positive outcomes require legislative change. Not only in this case but much more broadly.

    Forrest and Burke seemed to have understood that. Until …

  12. John

    Sit down money as opposed to golfing money. Forrest and Rinehardt have got rich by privatising land held in common for all Australians by Aboriginal people.

    “Swiss-based commodities giant Glencore has extended a deal with Libya’s state oil firm to be the sole marketer of one third of the country’s current crude oil production, sources familiar with the matter said.”
    http://www.reuters.com/article/us-glencore-libya-oil-idUSKBN15L0JM
    Funny how things work out.

  13. townsvilleblog

    Had this turkey paid income tax perhaps he wouldn’t have been able to make a big man of himself? It’s time that all billionaires and multi millionaires and ‘all’ foreign multinational corporations paid their fair share of income tax, Australia could have decent living standards for all.

  14. Kyran

    Ever since talcum’s legendary philanthropy of giving a fiver to a homeless person, whilst his wallet contained bigger notes, and his bank accounts, stored offshore, contained slightly larger amounts, my scepticism was heightened. Was the benefit to talcum the deeply personal satisfaction of ‘lending a hand’, or the barrage of cameras that would capture his benevolence?
    As I don’t know talcum or twiggy, I cannot make that call. I may even be considered harsh in adjudging a $400mill ‘donation’ (with strings attached), against a $110bill potential income (which is just one section of the claim).

    “The Federal Court has recognised an exclusive native title claim in WA’s ore-rich Pilbara, potentially allowing an Indigenous group to sue Andrew Forrest’s Fortescue Metals Group for millions of dollars in compensation.
    The decision, handed down in Sydney, grants native title to the Yindjibarndi people over an area of land that includes FMG’s Solomon Hub mine, worth an estimated $110 billion on current iron ore prices.
    The native title claim has run alongside a dispute over royalty payments generated from the FMG project, which is located to the north of Tom Price on Yindjibarndi land.”

    http://www.abc.net.au/news/2017-07-20/fmg-yindjibarndi-native-title-determination-twiggy-forrest/8727140

    You will need to read the rest of the article to understand twiggy’s use of the law and his abuse of familial connections within the community.
    I am always wary of philanthropy when the presence of a camera is more important than the intent of the ‘donation’.
    All hail twiggy, and talcum! ‘Men of straw’, portrayed as twigs. What substance (comparatively speaking).
    Thank you Mr O’Brien and commenters. Take care

  15. mark

    I think he is related to sir john forrest,and as such,believes himself the english lord and master.mark

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