Mine or theirs: inquiry turns to Doyles Creek

MORE than three years ago the Independent Commission Against Corruption received a complaint from Appletree Flat property owners in the Hunter Valley about the granting of a coal exploration licence to Doyles Creek Mining.

They were concerned about the timing of the announcement by the then-Minister for Mineral Resources Ian Macdonald - Christmas Eve, 2008 - the lack of a tender, and the failure to follow even basic exploration licence procedures including advertising the application.

Appletree Flat property owner Craig Chapman tells the story of what happened next.

"Nothing," he said.

"The ICAC said it wasn't going to investigate."

Which is ironic, considering the ICAC last November described its inquiry into Macdonald's granting of another Hunter coal exploration licence in 2008 - Mount Penny at Bylong, also in the Hunter Valley catchment - as "the most important investigation" it had ever undertaken.

The Mount Penny investigation certainly lived up to its colourful opening day description as an inquiry which would expose "corruption on a scale probably unexceeded since the days of the Rum Corps".

There was former NSW government minister Eddie Obeid's family's secret 25 per cent interest in the winning coal company which netted $30 million, with the promise of a further $30 million; Macdonald's denial that he was a "crook" who rigged a government tender for his mate; tapped phone calls; trust funds bulging with unexplained millions; a "magnificent seven" group of millionaires who stood to make more millions, and even a cliffhanger finish when "coal king" Travers Duncan launched legal action to close down the inquiry.

And the best live theatre of 2013 starts again on Monday with public hearings in Sydney into Operation Acacia, the ICAC's investigation of the Doyles Creek training mine proposal.

Craig Chapman will be there, in the public gallery, after four years of fighting not only mining interests, but the government and bureaucracy that processed the Doyles Creek proposal.

He wants to know why his family is still having to fight to stop NuCoal Resources, which acquired all of the issued capital in Doyles Creek Mining, from entering the Chapmans' Appletree Flat farm to explore for coal.

In the next few weeks the ICAC inquiry will explore, among other things, "the circumstances surrounding the making of profits, if any, by the shareholders of NuCoal Resources".

It is a bit like living in a parallel universe, Mr Chapman said.

"NuCoal wants access. On the one hand we've got Doyles Creek being investigated by ICAC, yet here we are being issued with letters so they can enter our property," he said.

BYLONG Valley Protection Alliance secretary Craig Shaw, who sat through 20 days of the ICAC inquiry into Mount Penny, sympathises.

He is familiar with the experience of watching explosive allegations about a mining company exploration licence at a corruption inquiry, while challenging another mining company attempting to explore for coal on his property.

Mr Shaw did not line up for hours with other members of the public to watch Obeid give evidence, and he saw only a few hours of Macdonald in the witness box.

They might have been the sensational star turns of the ICAC inquiry, but Shaw's time was concentrated on other lesser known players in the Mount Penny exploration licence approval. He was more concerned about the bureaucratic system behind the scandals.

"I just wanted to know how it came about. What was the process? Where did the public servants fit in? Who said what to whom?" he said.

"The inquiry has established that Obeid had a direct benefit, and there's no doubt there's going to be a lot of headaches for a lot of people flowing from this, but I think the most important thing is how did this happen, and how do we stop it happening again?

"I would like to make a written submission to the inquiry about the process of mining licences in NSW and the need for transparency.

"At the moment there's nothing when you buy a property to tell you there might be an exploration licence over it, or in our case a number of exploration licences over it.

"It just doesn't come up. Decisions are made, exploration licences are granted, and there isn't a mechanism by which the people most affected have a say. All you get is the mandatory advertisement in The Land and if you don't happen to see it, you don't know about it until a mining company is trying to access your property.

"In the last 12-14 months there have been two new exploration licences granted in the valley for rare minerals, and I missed them.

"Even if you're super aware of these things, as I am, you don't know. Information is power, and what the inquiry so far has shown is that too much information is with the powerful, and withheld from the public.

"Clearly the system we have in place to date isn't going to cut it in future. I don't like the idea that what will emerge from these inquiries is the idea that we have a few rogue elements who've done the wrong thing and that's all.

"What we've seen is this couldn't have been possible unless there were certain systems, or lack of systems, in place and a too-cosy relationship between industry and government."

OPERATION Acacia will investigate the circumstances surrounding the invitation to Doyles Creek Mining Pty Ltd to apply for an exploration licence over land described as ecologically and environmentally sensitive due to its proximity to Jerrys Plains township and Wollemi National Park.

The Doyles Creek mine is also a potential threat to Coolmore thoroughbred horse stud.

The inquiry follows a Clayton Utz preliminary report to NSW Cabinet in November 2011 which found a "circumstantial case of wrongdoing and breach of public trust" in the granting of the exploration licence.

The report explored the role of Macdonald in granting the licence and his relationship with Doyles Creek Mining chairman John Maitland, who was also a shareholder in NuCoal.

The report canvassed Macdonald's invitation to Doyles Creek Mining in August 2008 to tender a formal application for an exploration licence, and the use of letters of support from prominent Hunter Region individuals, including Labor politicians, and organisations backing a training mine.

The letters contained "very similar 'themes of support' for the concept of a training mine", Clayton Utz found.

They supported Doyles Creek because of a skills shortage in the mining industry, the growth of the mining industry, and the involvement of Newcastle University, Hunter Valley Training Company and Westpac Rescue Helicopter Service, Clayton Utz said.

Craig Chapman and his brother Bryan said they hope the ICAC inquiry explores the relationship between Doyles Creek Mining and Newcastle University, which signed an agreement with Doyles Creek to receive $1 million over four years to establish the NSW Institute for Frontier Geoscience.

The university signed a separate agreement with the then NSW Department of Primary Industries, headed by Mr Macdonald, to receive another $1 million over four years towards the institute.

The institute would "provide the leadership, teaching and research capacity as well as stipends to contribute to a sustainable minerals industry in NSW", the agreements noted.

The agreement with Doyles Creek would "automatically terminate if Doyles Creek ceases for any reason to hold the exploration licence or mining lease".

A subsequent scholarships agreement in March 2010 noted the university would immediately terminate scholarships to geology students if Doyles Creek's funding "ceased at any time".

Bryan and Craig Chapman are concerned at the continuing financial relationship between the university, the department and Doyles Creek after the negative Clayton Utz report.

A university spokesman said five-day postgraduate courses offered by the institute were developed in consultation with the coal industry and the NSW Government, and were designed to align with market needs.

The university confirmed it had run only one of four proposed five-day courses in November and December last year. Courses cost $3500 per student. Courses were run based on demand.

Bryan and Craig Chapman are also concerned that Doyles Creek has continued exploration activities despite the fact its four year-licence expired on December 15 last year.

"The Premier has said the government can't do anything about the exploration licences because of the risk of having to pay compensation, but if the exploration licence has expired, where's the risk?" Craig Chapman said.

"If it's expired, it's expired."

A spokesman for NSW Trade and Investment confirmed the exploration licence expired last December.

An application to renew the licence was lodged by NuCoal on November 21 and was "currently under consideration", the spokesman said.

"In accordance with Section 117 of the Mining Act 1992, EL 7270 [the exploration licence] remains in force until the renewal application is determined and the holder of EL 7270 is entitled to continue exploration activities."

BRYAN Chapman said he might not attend the ICAC hearings. After four years of fighting to protect the family farm, he is happy for the ICAC commissioner David Ipp to take control.

But he has expectations that go beyond exposing Ian Macdonald's actions in the lead-up to the Doyles Creek exploration licence approval.

"What I hope will happen is that the bureaucracy is overhauled, because the bureaucratic system we have in place now is complicit in this," Bryan Chapman said.

"As Craig Shaw has said, we are the citizens here, and we are not being protected by the public service we pay for.

"We shouldn't have to fight against the government to protect ourselves.

"Citizens who are going about their peaceful business should not have to fight against a multinational company, and a government and a bureaucracy, to be able to continue going about their peaceful business, and yet that's what has happened.

"The publicity has been about the millions of dollars made by some powerful people, but the impact on people living in the areas that are subject to these decisions is the crux of the matter as far as I'm concerned.

"Whether Eddie Obeid got $50 or $50 million isn't the point. Just having to fight, every single day, worrying about 'Am I going to get another letter?', and what's going to happen next, that's the point because it's not right.

"The system we have in place now is absolutely geared against people just trying to live their lives in peace, and when you try to make a complaint you're complaining to the very people who are part of the decision-making process.

"I hope the ICAC addresses issues like that."

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