A Northern Territory land council chief is accused of embezzling Indigenous royalties by funneling millions of dollars into his own mining company while locals live in poverty.
Mark Hewitt is the chief executive of the Anindilyakwa Land Council, responsible for managing royalties from the world’s largest manganese mine at Groote Eylandt, which is offshore but still part of the NT.
Australia’s National Audit Office found that $24 million, or 50 per cent, of 2021/22 mining royalties were invested in Winchelsea Mining, jointly owned and operated by Hewitt.
Anindilyakwa Land Council chief executive Mark Hewitt to face Senate estimates in Canberra
The money was funneled through other organisations, including Groote Holdings Aboriginal Corporation (GHAC) and Anindilyakwa Advancement Aboriginal Corporation (AAAC), according to the audit office.
As part of the May 2023 report, the auditors made 15 recommendations, 14 of which were agreed by the council.
Since then, the council says it has adopted most of the recommendations, most of which it describes as “administrative and procedural in nature.”
“We have implemented the recommendation to assess whether the management plans for the chairman and chief executive’s interests in Winchelsea Mining and Groote Holdings Aboriginal Corporation are effective,” Hewitt told AAP in a statement.
Territorial council chairman Tony Wurramarrba and Mr Hewitt are co-chairs of Winchelsea.
Mr Hewitt’s wife is also the territorial council’s chief investment and development co-ordinator, chief operating officer of GHAC and chief executive assistant of Winchelsea.
“The risk of conflicts of interest is high,” the auditors found, citing a combination of the chairman and chief executive’s influence on the board’s funding and management, as well as direct and spousal positions at GHAC and Winchelsea Mining.
“Current management strategies applied to this risk are insufficient or not implemented.”
The audit also found that the council’s finance committee approved 99 per cent of Mr Hewitt’s funding requests, compared to 53 per cent of other requests.
“The (audit) noted a disproportionate benefit to entities with which the CEO is associated,” the report reads.
Geoffrey Watson of the Center for Public Integrity said the results of the audit should be forwarded to the National Anti-Corruption Commission.
“To see that the territorial council’s royalties have been misused in the way identified by the audit is heartbreaking,” he told AAP.
“The conflict of interest will not be managed if people remain in those positions and the same exorbitant funds are paid to corporate entities associated with people closely associated with the management of the territorial council.”
He wonders why a “serious” audit like this has not received more publicity.
“It is so bad and so wrong that it needs to be urgently referred to the NACC,” he said.
In one case, Hewitt applied for funding on behalf of the AAAC, which is supposed to be an indigenous-only corporation.
The head of the territorial council is accused of embezzling indigenous royalties by funneling millions of dollars into his own mining company, while locals live in poverty.
“There was no clear reason for ALC’s CEO to be the applicant on behalf of AAAC as he does not hold any formal position at AAAC (although he is co-CEO and director of Winchelsea Mining, which is a subsidiary of AAAC).” says the report.
Finance committee meetings, designed to decide where royalties are directed, are held in Darwin or Cairns and are all attended by Mr Hewitt.
Aboriginal corporations based in Groote do not have the opportunity to submit funding applications in person, the report said.
The territorial council’s own internal audit committee was also found to have conflicts of interest.
Mr Hewitt said the council was working to ensure the chair of the council’s audit committee was “independent and undertaking all mandatory functions”.
The chair of the council’s audit committee, Mark O’Shea, is the founder of Enmark Consulting, to which the council paid $896,056 in consultancy fees between 2014/15 and 2021/22.
The committee’s bylaws require each member to provide annual statements of “any material or personal interest that prevents their membership.”
The president and other members have never made a statement.
Mr O’Shea remains chairman of the council’s audit committee.
Royalties for the Anindilyakwa people have ranged from $15.1 million in 2016/17 to $86.0 million in 2018/19.
Although the island is rich in manganese, most of the 1,500 indigenous residents still live in abject poverty.
Almost 50 per cent of locals left school before Year 9 and less than half are in full-time employment, according to the Australian Bureau of Statistics.
Life expectancy rates are low and almost half of the houses are overcrowded.
People living on the island told AAP royalties would be better served by improving health, housing and education outcomes.
“There’s so much money coming from the mine that everyone should live in a mansion here,” one person said.
South 32’s GEMCO mine at Groote Eylandt will close in 2032 after 65 years of operation. Winchelsea Mining plans to invest in continuing manganese mining on a small nearby island, but there are doubts whether the mineral deposit at the site makes that a viable operation.
Federal Indigenous Affairs Minister Linda Burney said she would continue to work with the ALC to ensure the recommendations are implemented.
The ALC will lead a federal parliamentary hearing on Friday.
