Corruption Matters - November 2016 | Issue 48
Better governance for better community outcomes
The ICAC will soon release a report on its research into governance in Local Aboriginal Land Councils (LALCs). While governance within LALCs has become more robust over the years following legislative changes and increased internal accountabilities, the ICAC continues to receive complaints about certain core issues.
There are currently 120 LALCs in NSW. They were established following the enactment of the Aboriginal Land Rights Act 1983 (“the ALRA”), which recognises the prior ownership of NSW by Aboriginal people. Under the ALRA, the object of each LALC is to “improve, protect and foster the best interests of all Aboriginal persons within the Council’s area and other persons who are members of the Council”. 1
LALC activities include cultural activities, social and affordable housing, land dealings, business initiatives and projects funded by government grants. Their income can be diverse. Some LALCs are completely dependent on the annual funding of $140,000 that is provided by the peak body, the NSW Aboriginal Land Council (NSWALC), while others have substantial additional income that is usually derived through land dealings and business initiatives. Location can affect a LALC’s income. Commercial opportunities tend to be more available on the coast or in metropolitan areas and LALCs in these areas can tap into these opportunities.
As with all types of organisations, LALCs vary in their governance capabilities. Many LALCs operate successfully in the interests of their members, while some have had difficulties with chief executive officers and board members using their positions to obtain unauthorised benefits for themselves.
In the last 10 years, LALCs have been the subject of three ICAC public inquiries (operations Petrie, Nestor and Greer). The ICAC has also received a substantial number of complaints about LALCs between mid-2011 and mid-2016, most often raised by LALC members. These relate to matters such as improper use, or acquisition of, funds or resources by people in positions of trust, unmanaged conflicts of interests, and partiality in the allocation of resources.
There are a range of internal and external governance mechanisms in place – all well supported by NSWALC and other regulators – to ensure that LALC leaders exercise their powers accountably and in accordance with the principles of good governance. Nonetheless, despite the comprehensive governance system and effort that has been put into strengthening governance in the LALC network, certain governance challenges persist.
The ICAC’s research project was also prompted in part by recent amendments to the ALRA that now provide greater economic development opportunities for LALCs, which, while having the potential to bring important and long term benefits to LALCs, can also bring corruption risks.
As such, the ICAC’s report considers the steps LALCs and regulators can take to improve governance systems in the network.
To inform the project, ICAC staff conducted in-depth group interviews with CEOs, staff and LALC board members, met with the CEO of NSWALC and the five zone directors and distributed an online survey directed at LALC leaders. ICAC staff also interviewed a variety of stakeholders and subject matter experts and examined governance and regulatory models in the public, private and not-for profit sectors.
The ICAC’s forthcoming report contains a number of suggestions towards strengthening governance in the LALC network.