Is the Adani seeking funding body – the NAIF some sort of sick joke?
Redcuchulain is concerned that the NAIF – the Northern Australian Infrastructure Facility has various issues to sort through before they decide upon a loan to Adani within the next few days. This article highlights a petition which calls on the Federal Government to suspend the operations of NAIF. That is until the Auditor General can conduct an appropriate investigation on the governance of the program.
An Unfortunate Acronym
Dictionary definition: naïf
nʌɪˈiːf,nɑːˈiːf/
adjective
1. naive or ingenuous.
noun
1.a naive or ingenuous person.
naïf
The Northern Australia Infrastructure Facility
Of course, we are now more familiar with the NAIF as applied to the Northern Australia Infrastructure Facility. With bipartisan support, The Government set up NAIF in July 2016. The aim was to provide concessional loans to finance development in Northern Australia. The fund has over $5 Billion dollars at its disposal. Seven independent board members sit on the board. Based on the Board’s recommendations, the Minister for Northern Australia (currently Senator Matthew Canavan) has the authority to approve the expenditure.
The NAIF board came under fire from critics in March 2017. They had yet to approve a single cent in funding, despite over 80 applications lodged. The NAIF Board had met just four times and had paid the board members a total of almost $560,000. (Under fire: NAIF board members under fire earning over $500k: Rockhampton Morning Bulletin)
Environmental groups have been arguing that the real reason behind the NAIF is to facilitate the transfer of Government money to the Adani Carmichael mine. The Australian Conservation Foundation claim that the fact that five of the seven directors have coal mining industry links are proof of this. Dirty Deeds Video – Australian Conservation Foundation. The NAIF have so far refused to comment on allegations regarding conflicts of interest. They simply say that ‘all of their Directors are aware of their obligations’.
Conflicts of Interest
The NAIF does have a published conflict of interest document NAIF Conflict of interest policy. Under this policy ‘examples of Directors’ Conflicts of Interest are where a NAIF Director also sits on the Board of another company which is applying for a financial facility from NAIF or where a NAIF Director holds shares in a company which has applied to NAIF for a financial facility.’
These provisions are insufficient. Particularly in the context of extremely large projects which may increase demand in a particular sector. One could reasonably expect personal gain even if not having a personal interest in an entity applying for funding through NAIF.
Former Treasurer Wayne Swan has described the Governance of NAIF, which was set up with bipartisan support, being like ‘Lehman Brothers’. Northern Australia Fund Governance as dodgy as Lehman Brothers : Australian Financial Review. The Auditor-General has indicated that a review of the NAIF may take place in the next year’s work program.
Some Shocking Revelations
This was all before the shocking revelations of the past week. The ABC, Guardian and Buzzfeed politics published stories regarding conflict of interest. The stories allege that one of the Directors, Karla Way McPhail, has a severe conflict of interest with respect to the NAIF decision on Adani. Ms. McPhail is featured in a story (below) in the Rockhampton Morning Bulletin talking up the Carmichael mine. Mining skills shortage threats if we miss training; Rockhampton Morning Bulletin
The articles published over the last week allege that Karla Way-McPhail has:
- Business interests which place her in a conflicted situation over the Adani mine decision.
- Appointed because she has a personal friendship with Minister Matthew Canavan
- Is a hyper-partisan supporter of the LNP and has recently deleted some Facebook posts which would confirm this.
ABC 30th May 2017 – Potential conflict of interests of NAIF Board Members
The Guardian 31st May 2017 – Conflict of interests for Director on NAIF Board
Buzzfeed Politics 1st June ‘Director on NAIF scrubs Facebook posts’
Buzzfeed Politics 2nd June 2017 “Minister appointed Mate to NAIF board”
ABC 2nd June 2017 – “Conflict of interests over approval of $900M loan spark Senate questions
Will There Really Be an Investigation, Barnaby?
Whilst these allegations certainly look concerning and Barnaby Joyce has promised there will be an investigation, is the problem with the NAIF not at a higher level?
How can Matthew Canavan, the Resources Minister, also be the Minister responsible for NAIF? Of course, Senator Canavan wants to get Adani approved. He has put a huge amount of work into the project. He would not be human if he was prepared to see it fail at this stage. Big mistakes are often made in projects and participants are too personally invested. This effect is known as the ‘Sunk Cost’. Recovery of work done is not possible. None of us want to fail. With failure, Senator Canavan risks a loss of political capital.
We are all human. Minister Canavan and the NAIF board members are as fallible and imperfect as the rest of us. Systems are supposed to be designed in such a manner as to protect us from our own nature.
I am in no way questioning the personal integrity of Minister Canavan, Ms. McPhail or any of the other board members. It is clear that all of these people have passion and drive and have contributed a lot to this country.
The Public Should Have Faith in the System Where Adani is Concerned
NAIF would appear to have been set up incorrectly. With a decision as important as a $900 million loan to Adani, it is imperative the public have faith in the system. A good start would be to split the ministerial portfolios a different way. This is so Senator Canavan, the decision maker, is not conflicted himself. The rest of the process regarding applicant selection, conflict of interest management and how board members should behave in the media I will leave to the Auditor-General. Needless to say, it should be to a standard which should satisfy a former treasurer.
If we fail to get the system right and leave this to the goodwill of the people concerned it may turn out badly for Northern Australia. Of course, there is always a small chance that it has been set up to achieve the results desired and that the choice of acronym is some sort of sick joke. In that case, if we fall for it, we are indeed a country of naifs!
Concerned about NAIF.
Sign the petition now.
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