Aboriginal Land Council CEO Funnelled $24 Million to His Own Company, Audit Finds

Children of the Yolngu people from north-eastern Arnhem Land prepare to perform the Bunggul traditional dance during the Garma Festival near Nhulunbuy, East Arnhem Land, in Australia, on Aug. 4, 2018. AAP Image/Mick Tsikas

The Anindilyakwa Land Council will appear before a federal parliamentary hearing on Feb. 16 to explain why $24 million (US$15.6 million), or 50 percent, of the mining royalties it received in 2021-22 were invested in a company co-owned and operated by its CEO Mark Hewitt and chair Tony Wurramarrba.

The Council is responsible for managing the royalties from the world’s largest manganese mine on Groote Eylandt, the largest island in the Gulf of Carpentaria, which is part of the Northern Territory.

Royalties have ranged from $15.1 million in 2016-17 to $86 million in 2018-19.

The Australian National Audit Office (ANAO) found the money went to Winchelsea Mining, owned by the two men, through other organisations including the Groote Holdings Aboriginal Corporation (GHAC), and the Anindilyakwa Advancement Aboriginal Corporation (AAAC).

Mr. Hewitt’s wife is the land council’s coordinator of major investment and development, chief operations officer of GHAC, and chief executive assistant of Winchelsea.

Conflicts of Interest Risk

“The risk of conflicts of interest is high,” auditors found, citing the influence of the chair and CEO on Council funding and management, plus the Hewitts’ employment at GHAC and Winchelsea Mining.

The investigation found the Council’s finance committee approved 99 percent of the funding requests from Mr. Hewitt, compared with 53 percent from other sources.

The finance committee meetings, which are where decisions are made on royalties, are held in Darwin or Cairns and are all attended by Mr. Hewitt. Groote-based Aboriginal corporations do not have the opportunity to present funding applications in person, the report found.

“The [audit] observed disproportionate benefit to the entities with which the CEO is associated,” the ANAO concluded. “The current management strategies applied to this risk are either insufficient or not implemented,” it said.

In one case, Mr. Hewitt applied for funding on behalf of the Anindilyakwa Advancement Aboriginal Corporation, which is supposed to be a solely Indigenous corporation.

“There was no clear reason for the [Land Council] CEO being the applicant on behalf of AAAC, since [he] holds no formal position in AAAC (although he is co-CEO and director of Winchelsea Mining, which is a subsidiary of AAAC),” the ANAO found.

Report Made 15 Recommendations

As part of the May 2023 report, auditors made 15 recommendations. The Council claims to have implemented 14 of these, most of which it describes as “administrative and procedural in nature.”

“We have implemented the recommendation to assess whether management plans for the chair’s and CEO’s interests in Winchelsea Mining and Groote Holdings Aboriginal Corporation are effective,” Mr. Hewitt said in a statement.

The Land Council’s internal audit committee was also found to have conflicts of interest. Its chair, Mark O'Shea, is the founder of Enmark Consulting, to which the Council paid $896,056 in fees between 2014-15 and 2021-22.

Rules require that each member of the audit committee provide an annual declaration of “any material or personal interests that would preclude them from being members.” The chair and other members have never made such a declaration. Mr. O'Shea remains the council audit committee chair.

Mr. Hewitt said the council was working to ensure the council audit committee chair was “independent and undertaking all mandatory functions.”

Majority of Indigenous Residents Live in Poverty

Although Groote Eylandt is rich in manganese, the majority of the 1,500 Indigenous residents still live in severe poverty. Half of the residents left school before year nine, and less than half have full-time employment, according to the Australian Bureau of Statistics. Life expectancy rates are low, and almost half of all houses are overcrowded.

Time could be running out to change their lives as South 32’s GEMCO mine on Groote Eylandt is due to close in 2032 after 65 years in operation.

Winchelsea Mining says it plans to invest in continued manganese mining on a small nearby island, but there are doubts that the level of mineral deposit at that site would make it a viable operation.

The company’s website claims it “holds extensive exploration tenements around the Groote Archipelago and extending across the seas and islands to the Australian mainland.”

It claims to be “a joint venture between the Anindilyakwa Advancement Aboriginal Corporation (AAAC) and AUS China International Mining Pty Ltd.” That company has $5 million in fully paid shares and is wholly owned by Dongfang Yu. There are two other directors, Hui Yu and Shi Juan Guo. The company’s registered business address in Sydney is also home to education businesses OZNSTUDY and A&A Intl Education.

Joint Venture with Australian-based Chinese investor

Mr. Hewitt and Mr. Wurramarrba are believed to have met Mr. Dongfang in Rizhao, China, when they were part of a delegation organised by NT Chief Minister Michael Gunner, and sponsored by Darwin Port operator Landbridge. It was Landbridge’s billionaire owner, Ye Cheng, who reputedly introduced the trio.

In a response to a parliamentary question, the office of the NT Chief Minister said Mr. Dongfang had been invited as a representative of Qingdao Yicheng, a China-based supplier of industrial components.

In an application for mining rights made by Winchelsea (pdf), Mr. Donfang is listed as “Co-Chief Executive Officer” of that company alongside Mr. Hewitt.

Federal Minister for Indigenous Affairs Linda Burney said she would continue working with the Land Council to ensure the ANAO’s recommendations are implemented.

AAP contributed to this report.