The environment minister, Josh Frydenberg, says his department conducted two stages of due diligence on the Great Barrier Reef Foundation before he approached the organisation on 9 April to offer $443.8m in funding.

Under pressure from Labor in the House of Representatives on Monday, the environment minister proffered a timeline of his decision making. It came after Frydenberg said on Sunday extensive due diligence had been done ahead of awarding the controversial grant, and the managing director of the foundation said on Monday she was unaware of that due diligence process and no one from the government had contacted her.

Frydenberg told parliament he took two submissions to the expenditure review committee of cabinet in March of this year, including one with “a proposal to establish a partnership with a non-government organisation, which was the Great Barrier Reef Foundation”.

Timeline Great Barrier Reef Foundation grant timeline Show Hide

Frydenberg takes a proposal to the expenditure review committee of cabinet granting funds to the reef foundation, and the department conducts a first stage of due diligence.



ERC approves the grant and an interdepartmental committee is established. Frydenberg is given authority to approach the foundation. Frydenberg approaches the reef foundation to see if they are interested in receiving the government grant. Bureaucrats work with the foundation about the terms of the funding. Frydenberg writes to the foundation outlining the terms and conditions of the funding. The foundation accepts the terms. The $443.8m grant is announced publicly. Frydenberg approves the grant guidelines. Foundation finalises their proposal. Frydenberg approves the necessary grant “based on a recommendation from my department, and the second stage of due diligence, which included as well work by the Australian Government Solicitor”.

He said the selection of the foundation reflected its “proven track record in philanthropic support” as Australia’s largest reef-dedicated charity, and its “extensive experience working with my department”.

Frydenberg said the first phase of due diligence by his department looked at the foundation’s “governance, structure, constitution, project management, fundraising history, capacity for growth, competition and scientific expertise”.

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He said following agreement from ERC, an interdepartmental committee was set up to progress the controversial grant, “and I was given authority to approach the foundation, which occurred on the 9th of April, to determine whether they were interested in entering into partnership, subject to the successful negotiation of the partnership agreement and final phase of due diligence”.

Frydenberg said his bureaucrats worked with the foundation over the next fortnight “to develop the fundamental principles of the partnership”, which included governance and financial management.

He then wrote to the chair of the foundation on 22 April to outline “these collaboration principles, making it clear that any Australian government funds were dependent on negotiating and executing a new grant agreement”. The chair of the board wrote back on 26 April accepting the terms.

The funding was announced on 29 April, and included in the May budget. On 24 May, Frydenberg said he approved the guidelines, on 29 May the foundation finalised their proposal and on 20 June, he approved the necessary grant “based on a recommendation from my department, and the second stage of due diligence, which included as well work by the Australian Government Solicitor”.

He said the department had concluded the grant was consistent with the government’s objective to protect the reef, represented value for money, and was consistent with the governance and accountability principles, and he approved the funding on that basis.

Earlier on Monday, Anna Marsden, the managing director of the foundation, said she was unaware any due diligence process was under way. In response to questions from Guardian Australia, the foundation said that it “had no conversations with the Australian government about the Reef Trust Partnership prior to the April 9 meeting”.

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Marsden told the ABC’s 7.30 last week the government grant had come as a “complete surprise”. She told a Senate inquiry in July the foundation had not heard about the proposed grant until April. “We were first informed of this opportunity to form a partnership with Reef Trust on the 9th of April this year”.

Labor used the resumption of federal parliament on Monday to put Frydenberg under pressure over the controversial grant process, asking questions in both the House and the Senate about the apparent contradiction between the government saying due diligence was done and the foundation being unaware of the process.

At one point Frydenberg stumbled over his words, suggesting the government had “solicited” the foundation’s interest in the grant – quickly correcting the misspeak to “elicited”.

The shadow environment minister, Tony Burke, asked whether any due diligence could have been carried out “on a foundation [the government] did not even contact”.

At a later point Burke asked Frydenberg “to table the Google search that constituted due diligence he was just referring to”.

Separate to the inquisition in parliament, the secretary of the environment department is seeking to expedite a probe by the Australian National Audit Office into the awarding of the grant.