Home / Politics / ICAC / The Hon. Dr Peter Phelps – Speech in Parliament (13/02/2018)

The Hon. Dr Peter Phelps – Speech in Parliament (13/02/2018)

The following speech was given The Hon. Dr Peter Phelps in the Legislative Council of Parliament on 13 February 2018.

The Hon. Dr PETER PHELPS (17:04): I am not a member of the Committee on the Independent Commission Against Corruption [ICAC], but I commend its work and I commend the people who work on the committee. The committee report “Review of the 2014-2015 and 2015-2016 Annual Reports of the ICAC Inspector” relates to the work of the ICAC Inspector in the past two financial years. The ICAC Inspector for the last two years was the Hon. David Levine AO, RFD, QC, and is now Mr Bruce McClintock, SC. I commend their work.

The Inspector is an important position which maintains a role of watching over the Independent Commission Against Corruption and ensuring that in a number of instances, procedural fairness, amongst other things, has been granted to people who have attended ICAC. That is a very important role, given what has happened in ICAC over many years.

I refer members to recent reports in the media that people who have suffered particular hardship brought about by the investigations into Operation Jasper and Operation Acacia have been making representations to the current Inspector in relation to those investigations. I urge Mr McClintock, the new ICAC Inspector, to take these matters quite seriously. Operations Jasper and Acacia revolved around the granting of licences at Doyles Creek, Mount Penny and Glendon Brook. Allegations had been raised in relation to the involvement of Mr Eddie Obeid and Mr Ian Macdonald. I will come to that a little later. Suffice it to say that the conduct of operations Jasper and Acacia were dreadful—not least because of the involvement of the then Premier Mr Barry O’Farrell, who sought to intervene in the matter by writing directly to then Commissioner Ipp in relation to proposals for the expropriation of the titles at the Doyles Creek and Mount Penny operations.

As Liberals we should believe very strongly in the sanctity of private property and private property rights. But following the Operation Jasper and Operation Acadia investigations three bills were introduced. Two of those bills were introduced by Mr O’Farrell. The three bills were the Mining Amendment (ICAC Operations Jasper and Acacia) Bill 2014, the Criminal Assets Recovery Amendment Bill and the Mining and Petroleum Amendment Bill 2014. There was a subsequent bill introduced by Premier Baird; however, we do not need to go into that at this stage. Suffice it to say that the conduct of the inquiry in relation to Jasper and Acacia was substantially flawed. As I understand it, people who have suffered debilitating consequences of that inquiry have written to the current Inspector of ICAC, Mr McClintock, to seek some form of redress. That is an important feature of our system, and it should be followed through to the maximum extent possible.

Although Inspector Levine previously stated that he had limited resources to investigate these matters, I urge the Government to make more resources available if Inspector McClintock does not have the resources to deal with these matters effectively. The entire Acacia and Jasper investigation was handled terribly. It was handled almost to the point of gross mismanagement—the sort of gross mismanagement which leads one to consider whether it should be considered a valid investigation in the first place.

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.

It is worthwhile drawing to the attention of the House the experiences of the Lantry family, who have no objection to my mentioning their names. The Lantrys—Darrell, Michelle and their then two-year-old son, Oscar—were all shareholders. The family lost “a few hundred thousand” dollars, given that all parties, including the confiscator-in-chief former Premier Barry O’Farrell, declared NuCoal innocent, and are rightly calling for NuCoal to be compensated. Darrell Lantry explains:

I am an average guy who works my whole life, works two jobs and so forth, so had a go at the sharemarket over the years and have been semi-successful.

The 3,400 NuCoal shareholders became political cannon fodder for Premier O’Farrell and his pursuit of NuCoal and Cascade Coal. They were roadkill on the juggernaut that was directed towards Eddie Obeid. Michelle Lantry, who works full time, recalls:

When Barry Farrell first suggested the lease could be taken from NuCoal, I remember Darrell saying “that can’t happen, that’s never happened … they can’t just come and do that, that would never, never happen.”

Michelle Lantry is right. One of the first acts of this Parliament was to establish the principle that there should be no expropriation without compensation. The State Government granted the right to compensation until a later New South Wales Government changed the rules. That is not replicated in the Federal Constitution, which specifically states that expropriation must be met with fair and reasonable compensation. What the subsequent New South Wales Government did was rushed, silly, economically vandalic and now leaves the State facing large‑scale compensation claims. The claimant investors are not mum and dad Australians: They are Americans, New Zealanders and Japanese. Through the free trade agreements we have with those countries, all the American, New Zealand and Japanese investors have taken recourse to the non-expropriation clauses of those agreements to seek compensation from Federal Minister Ciobo. Ultimately, that compensation will fall back on the New South Wales Government.

It is time for the ICAC Inspector to seriously examine what happened in Operation Jasper and Operation Acacia, particularly focusing on the horrible manner in which it was handled and the disgraceful manner in which measures subsequently were implemented in Parliament. Finally, I state on the record that Ian Macdonald might not be innocent, but I am coming more and more to the belief that he was nowhere near as guilty as portrayed.

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One comment

  1. Dr Phelps speech prompts a few observations

    First Observation
    The NSW Govt has made substantial changes to ICAC in the past year – 3 commissioners instead of 1, no more public hearings unless all approve, etc etc. The Government – now thankfully without the dead hands of Premiers O’Farrell and Baird to stop them – realised that something had to be done. So these changes were made the “fix” the problems of ICAC that were first created under Commissioner Ipp (note that before him there were no problems) and continued under Commissioner Latham.

    Second Observation
    Unfortunately fixing things prospectively doesn’t “fix” the problems that were created by these two problem Commissioners. This can only be done by addressing each matter individually and rectifying things to the extent that this can be done in the present time. NuCoal is one of these and needs its specific fix – compensation.
    Dr Phelps has clearly now come to this conclusion and is leading the charge to pursue it.

    Third Observation
    One for ongoing talks between the Australian Government under the Free Trade Agreement. The NSW Government has clearly admitted – through its actions and legislative changes made to ICAC – that it had problems with ICAC. Members of the Government’s own party want the problems fixed – so the NSW Government needs to get on with fixing NuCoal and not creating further problems for Australian Government – and huge embarrassment. This matter won’t be going away in Australia and hard to imagine that the US Government will be happy to just let go of this self-admitted (by the NSW Government) problem – till a due process is allowed or the problem otherwise solved. How can the NSW and Australian Governments pretend that they support the rule of law and a rules based international trade regime while this whole mess persists.