Government’s response to the Recommendations of the Law and Justice Committee of the NSW Parliament regarding Compensation for NuCoal shareholders

One of the most infamous of Commissioner Ipp’s investigations was Operation Acacia.  This was the investigation of the circumstances surrounding the grant of an Exploration Licence (EL) at Doyles Creek in the NSW Hunter Valley. 

In late 2013 Ipp found that five persons were corrupt – Minister McDonald, former miners’ union leader John Maitland, Craig Ransley, Andrew Poole and Mike Chester.  He found that the grant was “so affected by corruption” that the EL should be cancelled, but had “two bob each way” by also recommending that along with the cancellation consideration should be given to compensating innocent shareholders.  Barry O’Farrell recalled Parliament for one day in January 2014 during what was otherwise a recess period to pass the “one punch” legislation and took the opportunity without any notice to also put up the Mining Amendment Act to give effect to Ipp’s first recommendation.  The legislation specifically denied the compensation issue despite Ipp’s recommendation.  It was all done with great haste and it’s doubtful that many of the Parliamentarians who voted for the Bill knew what they were voting for.  As articulated by The Hon. Dr Peter Phelps in the Legislative Council of Parliament on 13 February 2018:

“Certainly for the investors who were with NuCoal Resources and Cascade Coal the consequences have been absolutely terrible. After being called back to a sitting of this House at urgent notice by Premier O’Farrell, this House passed the ICAC bill which allowed for the expropriation without compensation. Why did we do that?

Members of this House were told that we did that because it was a recommendation of ICAC. What we were not told was that Premier O’Farrell had contacted Commissioner Ipp to have the commissioner look in the direction of recommending an expropriation of licence. We know about this only because an admission was made public subsequently that Premier O’Farrell had contacted Commissioner Ipp.

We also know that, even though there was no evidence whatsoever of corruption on the part of either Cascade or NuCoal, this Parliament decided to expropriate the licences from those companies without compensation, which was indirect contradistinction to what ICAC had recommended. ICAC had recommended that the licences be expropriated but that compensation be paid to innocent parties, including innocent investors in NuCoal and Cascade. Why did Premier O’Farrell decide to expropriate without compensation? I do not know. I can guess why. Perhaps he did not want to muddy the waters with ideas that there might have been some innocent people involved in those transactions—that it was all horrible “Macca” and horrible Eddie—whereas there are hundreds and hundreds of Cascade and NuCoal investors who now find themselves out of pocket.”

The value of NuCoal’s shares rapidly dropped and NuCoal’s shareholders were incensed.  The Mining Amendment Act didn’t only affect NuCoal, however.  Ipp’s other infamous investigation was operation Jasper.  This resulted in the Cancellation of the Mount Penny exploration licence at the same time that NuCoal’s EL was cancelled. Since then NuCoal, Cascade and their respective shareholders have waged a 6 year battle to get something for what was taken from them, while on the other side of the argument ICAC and the State have done everything in their power to close down those seeking justice. 

The score so far is – State convictions – zero.  Companies and shareholders – all cases won.  That’s right – exactly zero of the cases against the victims of ICAC’s corruption verdicts from these investigations have resulted in any conviction.  More to the point, ICAC and the NSW Supreme Court have publicly stated that NuCoal and its shareholders are innocent.  In Cascade’s case the Court has sent written acknowledgements to shareholders that they are also innocent.

These matters stand in defiance of the rule of law in NSW.  To fix them the State needs to pay appropriate compensation for its decision to cancel their exploration licenses.  And that’s where the Law and Justice Committee comes in. 

Last year the Hon Rev Fred Nile tabled a private members Bill to set in train a process to fix these matters.  The bill sought to appoint an independent arbitrator to examine the case of NuCoal and decide on compensation.  The Bill went to the Law and Justice Committee which held public hearing and took submissions.  It recommended against an independent arbitrator but acknowledged the case for compensation and put the matter back into Government to resolve.  After 6 months the Government accepted the first recommendation and reserved its position on the second recommendation.  In the meantime, NuCoal has written to the Government asking that they engage with the company to work things out. 

So it’s back to the Government – when will it do what it obviously should do?  When will it give justice to the 3000 people who invested lawfully in a company which sought to develop at its own risk a resource of the State?  What more do these innocent shareholders have to do?  Isn’t six years long enough to wait? 

Leave a Reply

Your email address will not be published. Required fields are marked *