MINERALOGY
LTD — COMMERCIAL ARBITRATION
375. Mr B.S. WYATT to the
Minister for State Development:
I refer to the decision of Arbitrator Michael McHugh in the
matter between Mineralogy Pty Ltd and International Minerals Pty Ltd and the
State of Western Australia, and his finding, which states —
The failure of the Minister to
give a decision within that time means that he is in breach of the State
Agreement and is liable in damages for any damage that the Applicants may have
suffered as the result of the breach.
As the minister has been found to have failed to make a
decision pursuant to the state agreement act, has he received any advice on the
level of damages or exposure that taxpayers of Western Australia may have as a
result; and, if so, what is that potential exposure?
Mr
C.J. BARNETT replied:
This is a curious case. The proponent to develop the proposed
Balmoral South iron ore project of course is Clive Palmer. The company
submitted a proposal on the development of that project. The proposal covered a
significant number of aspects of what would happen. There was to be a mine, a
slurry pipeline, a desalination plant, a dredged shipping channel, a conveyor,
a trestle jetty, ship-loading facilities and so on. It was a complex project
that would fit within the Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement
Act. The proposal was judged by the Department of State Development to be
inadequate—in fact, manifestly inadequate. Therefore, it was rejected.
The company sought arbitration, which took place. The arbitrator made a
decision that basically—I am paraphrasing it—even if the
proposal was inadequate, it was a proposal and therefore, under the agreement,
should have been assessed rather than rejected. We, as a government, accept
that; we are not going to appeal that decision. However, members need to
understand that the proposal was manifestly inadequate, and that was the advice
I received. In the normal course of events under agreement acts, a company
would accept that and improve its proposal. I make the point that the
arbitrator said that what was submitted under the terms of the agreement in
legal terms was a proposal. He did not in any way suggest that it was a
satisfactory proposal. That is the point.
Mr
B.S. Wyatt: It was still a proposal.
Mr
C.J. BARNETT: It was a proposal. He made no comment on whether it was
adequate or inadequate.
Mr
B.S. Wyatt: He didn't need to, though.
Mr
C.J. BARNETT: No, he did not need to, but the advice I received was that it
was very much an inadequate proposal. What I find quite extraordinary about
this is that the arbitrator's decision was confidential between the
parties. That is the process as I understand it, yet at around 1.00 am on Friday,
6 June, a member of the Palmer United Party used parliamentary privilege to
table the decision of the arbitrator in the Queensland Parliament. It had no
relationship to Queensland at all. It related to a proposed mining development
in the Pilbara, Western Australia. I suggest that that is a misuse of a
parliamentary position, it is a misuse of privilege, and it is clearly using
Parliament for the commercial advantage of Clive Palmer and the company. That,
however, is a matter for the Queensland Parliament to deal with.
As it stands, I imagine that the
Balmoral South project will do some more work and resubmit its proposal,
because it was inadequate, and it will be assessed. At the moment, the
department is trying to find out which particular proposal the company wishes
to have assessed, because there have been a couple and they overlap, and that
will be assessed. Advice will come to me on whether that proposal is
acceptable, but it would have to be vastly different from the previous one.
I guess Clive Palmer is a bit of a
character in Australian politics now, but it seems to me that there is a clear
conflict in him and his parliamentary representatives promoting his commercial
interests in Parliaments in Australia. I am surprised therefore that the question
might be asked, although it is a fair question.
Mr
B.S. Wyatt: Of course it is.
Mr
C.J. BARNETT: It is a fair question.
I question the behaviour of this
company, but it will be treated according to law. I accept the arbitrator's
ruling that, technically, under the agreement act, the proposal, even though it
was, I suggest, inadequate, was deemed to be a proposal and therefore required
assessment, not approval. There was no comment on the merits of the proposal or
whether it should be accepted; he simply said that it was required to be
assessed as it was a proposal. The state government will comply with that and
we will carry on.
Most companies would work
cooperatively. I have said it publicly and I will say it in this place: one of
Mr Palmer's problems is that he is incredibly litigious on everything.
I dealt with him for several years during the 1990s. The Gallop government
dealt with him, and it did something that I was not prepared to do, but that
was its call. There is litigation between the Palmer company and CITIC Pacific
Mining over the Sino iron project, and that is damaging the reputation of
Australia and our mining industry in China. As Premier, I spend a fair bit of
my time trying to make sure that we can keep that damage to an absolute
minimum. Mr Palmer can pursue what he wants. The government will deal with him
fairly according to the law. He is a very hard person to deal with.