Indigenous affairs minister uses powers under the NT Lands Right Act to force the council to meet over an alleged conflict of interest

This article is more than 1 year old

This article is more than 1 year old

In an unprecedented move, Nigel Scullion has used his powers under the Northern Territory Land Rights Act to compel the Northern Land Council to meet to resolve a perceived conflict of interest involving some of its senior executives.

It’s the first time since the Land Rights Act was introduced in 1976 that a minister for Indigenous affairs has used his powers in this way.

The NLC’s interim chief executive, Jak ah Kit, described the move as “gung-ho, irresponsible and not showing common sense”.

“Senator Scullion has politicised, and given credibility to, baseless allegations,” Ah Kit said.

The NLC’s full council is the major decision-making body within the organisation, and has 78 members elected from across the NLC’s seven regions.

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In December, members of the council wrote to Scullion, asking him to launch a full investigation into the NLC, as bitter tensions continued after the abrupt sacking of its chief executive, Joe Morrison, in November.

As well as questioning Morrison’s termination, members alleged there was a perceived conflict of interest between the NLC executive and the board of another organisation, the Aboriginal Investment Group (AIG).

The AIG is described as “a not-for-profit Aboriginal organisation, dedicated to creating Aboriginal prosperity through innovative investment”. It says it is “100% Aboriginal owned and self-funded”.

The AIG owns the building in Darwin which the NLC rents for $1m a year. There have been protracted negotiations over the rent since the 10-year lease expired in April 2017.

Members claim the rental negotiations were made more complicated by the fact that NLC executive members are also the board of the AIG.

Scullion told the Senate on Friday he had invoked his powers after receiving an audit report on the perceived conflict.

However, Ah Kit said the NLC had just completed six of its seven regular regional meetings, with the seventh due on Monday.

Ah Kit said in all six meetings “members said they don’t see conflict of interest with the chair and the deputy chair” and were concerned that the audit was “rushed and unfair”.

Ah Kit said a full council meeting would cost more than $200,000 to hold, and one was already scheduled for May.

He said legal advice provided to the NLC was that the report “does not comply with accepted auditing standards. It contains no recommendations or findings. It lists some, but not all, of the evidence, but makes no attempt to evaluate the evidence, or make findings of fact.”

Nevertheless, he said the full council meeting would go ahead on 8 March, as demanded by Scullion, because “we want to defend our reputation and our integrity, and show our good will”.

“We are not going to be taken to with a big stick by a minister of the crown because he thinks he’s right.”

The former chief executive, Joe Morrison, was appointed in 2014, after an external review of the NLC identified a “fundamental breakdown in the governance framework” resulting in “serious failings in almost all aspects of the council’s administration”.

In 2015, the Australian National Audit Office found weaknesses in the NLC’s financial management and reporting, but by the following year reported “there was a notable energy and commitment from staff and managers to achieve the aims of the reforms over the longer term”.

But midway through November, Morrison suddenly announced he was resigning for “personal reasons”, although he would stay on in the role until March 2019.

Eight of the nine-member executive of the NLC met two weeks later and resolved to terminate his employment immediately, a move that angered other NLC members, who claim they were not consulted on the decision and questioned the motivation for it, in an open letter.

“This letter, and the request to the Minister to intervene, were not the members’ preference in dealing with internal business of the land council” but they felt “this is the only approach left available that may result in answers to the allegations against the executive”.

“Please provide us (your members) the evidence and motivation that resulted in Mr Morrison’s automatic dismissal and public humiliation was not based on our (full council) resolution to obtain an approximate 25% reduction in the lease agreement on the property owned by the Aboriginal Investment Group (AIG), which interestingly you and the other NLC Executive members are directors of,” the letter says.

At the time of Morrison’s dismissal, the NLC was two years into a wide-ranging reform agenda covering almost all aspects of the governance and administration of the council.