Corruption watchdog warns of misconduct in mining towns

The WA Corruption and Crime Commission has warned that the significant investment miners make in Pilbara communities has pressured local councils into delivering outcomes for resource companies.

In a report tabled in the WA Parliament last week, the CCC said in 2011 a total $135 billion of funding was either committed or under consideration for resource-related infrastructure in the Pilbara.

 

“While some of these projects are not in direct partnership with local governments in the Pilbara, all significant projects in the region impact on the operations of those local governments,” it said.

 

The CCC review found that there was a lack of policies in place to reduce the risk of misconduct in the Pilbara, and some local staff felt “pressured and compromised” by resource investment in the region.

 

“During the review, staff at some Pilbara local governments indicated they felt significant pressure in responding to and delivering outcomes associated with large mining companies, their development proposals and their expectations,” it said.

 

“This situation is complicated by the fact that, in certain cases, mining companies were also offering significant financial assistance to local governments.”

 

The CCC also identified a “relaxed” method of doing business in the Pilbara, and said this culture had also resulted in council staff feeling compromised.

 

“It would appear that even large resource and development companies willingly engage on this basis from time to time,” it said.

 

“An example given involved an apparent preference by one company for discussing business over dinner, rather than in the Shire offices.”

 

In delivering its conclusions the CCC said local governments in the Pilbara had a “limited understanding” of the risk of misconduct, and the appropriate measures to manage these risks were not in place.

 

“Misconduct prevention was not perceived as a management role. Therefore, managers were not aware of, nor did they understand, misconduct prevention and awareness as one of their responsibilities,” it said.

 

“In determining how to prevent, identify and deal with misconduct in these circumstances, Pilbara local governments need to make informed assessments about the cost and benefits of developing systems to do so.

 

“In that regard, it is worth noting that serious misconduct has real potential to undermine the viability and reputation of local governments.”

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