Minister for Northern Australia Matt Canavan has defended the appointment of a Queensland businesswoman to a fund deciding on a $900 million loan to mining giant Adani, despite concerns of a conflict of interest.

Key points: Conflicts of interest raised over NAIF board member Karla Way-McPhail, who is chief executive of two mining-related companies

Conflicts of interest raised over NAIF board member Karla Way-McPhail, who is chief executive of two mining-related companies The Minister for Northern Australia defends Ms Way-McPhail, says she brings "a lot of business expertise"

The Minister for Northern Australia defends Ms Way-McPhail, says she brings "a lot of business expertise" Senator Murray Watt questions the Minister over Ms Way-McPhail's links to the Queensland LNP

Earlier this week, the ABC revealed Northern Australia Investment Facility (NAIF) board member Karla Way-McPhail held an interest in mining companies and supports the Liberal National Party.

Ms Way-McPhail is the chief executive of two companies that work in the mining industry.

Adani has applied to the NAIF for a loan to build a rail line from its proposed Carmichael coal mine in Queensland's Galilee basin to the Abbot Point port.

Senator Canavan and NAIF management would not comment directly on whether Ms Way-McPhail had recused herself from deliberations on the Adani loan.

Queensland Labor senator Murray Watt led the questioning of NAIF chief executive Laurie Walker and the minister at a Senate estimates committee.

"All of the board members are skilled, experienced, non-executive directors," Ms Walker said.

"They understand their duties and obligations, particularly regarding conflicts of interest.

"The NAIF doesn't publicly disclose which directors have recused themselves, because we're obliged, obviously, under privacy act provisions to maintain that information as personal information and not disclose it.

"There are processes which I'm absolutely confident have been adhered to."

Senator Canavan confirmed he had been consulted on the appointment of Ms Way-McPhail to the board, and the Industry Department said it also undertook its own vetting of board members.

"She's a very well regarded individual in the community and, I think, brings a lot of business expertise, particularly from northern Australia to the board," he told the committee.

"I've become friends with Ms Way-McPhail over time, I'd say that."

Questions raised over Way-McPhail LNP donations

Senator Watt questioned the Minister over Ms Way-McPhail's links to the Queensland Liberal National Party (LNP), including photos of her with Senator Canavan and Queensland MP Michelle Landry at party fundraisers.

He also raised records showing Ms Way-McPhail had donated money to the LNP.

"It sounds like that's all from public documents that are on the public record," Senator Canavan responded.

"I can't confirm or deny those public records, they're obviously not the responsibility of this committee or this department.

"There's no great revelation here, if these have all been disclosed in accordance with the law and put on the public record."

Industry Department defends Way-McPhail interests

Senator Watt and Greens Senator Larissa Waters raised comments Ms Way-McPhail had reportedly made on social media in favour of coal mining, and asked whether that amounted to a conflict of interest in her role on the NAIF board.

"It's also always the case that when you look to finding board members who are relevant to a specific area, you're likely to have them interested in the areas and we do expect that people will need to recuse themselves because [of] the potential conflict of interest," the Industry Department's Mike Lawson told the committee.

"We would have no members of the board if the board members couldn't make comments about their businesses in other areas.

"There will be projects that Ms Way-McPhail has no pecuniary interest in, would not need to declare a pecuniary interest and would be a valued member of the board for that purpose."

LNP senator Ian Macdonald raised a number of objections to the questioning about Ms Way-McPhail's suitability for the role, describing it as an "outrageous attack" on someone not able to defend themselves before the committee.