Conflict of interest allegation hovers over Ord Valley cotton partnership
A corporate law expert says hard questions need to be asked due to a conflict of interest in the award of a lucrative contract within Western Australia's emerging cotton industry.
Traditional owners in the Kimberley have questioned the independence of a tender process to develop 675 hectares of farmland in the Ord Valley, after discovering Duxton Farms was awarded the joint-venture partnership with Indigenous body MG Corporation while Paul Burke was on the board of both companies.
Duxton Farms, an ASX-listed company, produces cereal crops, cotton, wool and livestock at leased and owned properties across Australia.
Mr Burke declined to be interviewed for this story.
He featured in a program by the ABC's Four Corners last year that aired revelations of large-scale land clearing in the Northern Territory and free water licences, and highlighted the existence of a quasi-government entity, the NT Land Corporation.
The corporation manages about 600,000 hectares of land for economic development and has released the three largest parcels of land in the territory's history.
In 2020 the NT Land Corporation consulted with the NT Farmers Association, for which Mr Burke was chief executive at the time, to find developers for the land.
One of the successful development applicants was Duxton Farms, which appointed Mr Burke as a director in 2023.
Mr Burke told Four Corners at the time he was not involved in the decision-making process and any conflicts of interest were declared.
Further investigation by the ABC has now found Duxton Farms has entered into an agreement with prominent traditional owner group MG Corporation to develop and farm two lots of land in WA's Kimberley owned by native title holders.
A cotton crop has been planted on one of the lots, estimated to be worth more than $1.2 million.
There is no reference to this agreement on the websites of MG Corporation or Duxton Farms, or in Duxton Farms' announcements to shareholders.
Without access to information about the joint venture, ASIC could not comment on whether this breached Duxton Farms' obligations to shareholders.
Mr Burke sits on the board of both organisations.
He does not appear on the MG Corporation website page listing the board of directors.
However, the ABC has seen documents that show he is an independent director.
Helen Bird is a corporate governance specialist at the Swinburne Law School.
She said Mr Burke's absence on the MG Corporation website was legal, but she had questions for the corporation about it.
"Why wouldn't you be saying there's a justification for why this particular person has been appointed, given he's got a very strong association with someone you're entering into a lease agreement with?"
MG Corporation declined to be interviewed but provided a statement to the ABC.
"All proper processes were followed throughout the tender period," the statement read.
"As soon as it became apparent that there was a conflict of interest whereby one of MG Corporation's independent directors, Paul Burke, was also an independent director on the board of one of the companies tendering for the lease, Mr Burke immediately excluded himself from the process."
The Indigenous corporation said it followed proper governance procedures.
MG and other Aboriginal corporations are regulated by the federal government's Office of the Registrar of Indigenous Corporations (ORIC).
In a statement, ORIC said individual directors were responsible for identifying and declaring when they had a conflict of interest.
"It is up to the rest of the board to decide how to manage a conflict of interest," the statement read.
Miriwoong woman and past MG Corporation employee Candice Peart is a traditional owner of the land included in the joint venture.
She was involved in submitting an unsuccessful application for traditional owners of the region to farm the land.
Ms Peart said native title holders were not consulted on the results of the application process.
"We are left in the dark."
Ms Bird said there was a clear conflict of interest at play.
"You can't wear two hats in the one transaction, that's why there's a conflict," she said.
"And it's very similar to someone buying and selling land when you're representing both interests, you simply can't do it."
Ms Bird said there was a grey area around whether removing Mr Burke from discussions about the joint venture was sufficient.
Ms Bird said if MG Corporation was a public company, it would be obliged to provide accountability under the Corporations Act.
"The fact they're private means those obligations are far less imposing, but it's still people's money, it's still people's livelihoods and it's their own Indigenous people they need to be looking after first and foremost," she said.
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