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Monday, 7 March 2005
Page: 191


Senator Mark Bishop asked the Minister representing the Treasurer, upon notice, on 22 December 2004:

(1)   Was Mr John Phillips AO re-appointed Chairman of the Foreign Investment Review Board on 24 April 2002 for a further term of 5 years.

(2)   Is Mr Phillips also Chairman of the Australian Gas Light Company (AGL).

(3)   Has Mr Phillips made a formal declaration of his pecuniary interests; if so: (a) when; (b) in what form; and (c) to whom was the declaration made.

(4)   Is the Minister aware: (a) that in 1999, Western Power and AGL invested in a 360 kilometre gas pipeline and a power station to supply gas and electricity to the Windimurra vanadium project; (b) that in April 2004, Xstrata Plc decided to permanently close the Windimurra mine; and (c) of any effect the mine closure has had on AGL’s investment in the gas pipeline project.

(5)   With reference to the article ‘Xstrata bid to test Costello’s resolve’ appearing in the Australian Financial Review on 20 December 2004: (a) what representations has the Minister had from the Prime Minister in relation to Xstrata Plc’s bid for WMC Resources Limited; (b) what form did those representations take, and when did they occur; (c) what representations has the Minister had from the Minister for Finance and Administration in relation to Xstrata Plc’s bid for WMC Resources Limited; (d) what form did those representations take, and when did they occur; (e) is the Minister aware of allegations that Mr Marc Rich, who was indicted in a United States federal court for evading more than $48 million in taxes in 1983, is connected with Xstrata Plc; and (f) what investigations has the Treasurer undertaken to determine the extent of Mr Rich’s connection with Xstrata Plc.

(6)   Is the Minister satisfied that Mr Rich is a fit and proper person to potentially have a significant interest in or influence over WMC Resources Limited and therefore the Olympic Dam uranium mine.

(7)   Is the Minister aware of allegations by the Director of Central Intelligence’s Special Advisor for Strategy regarding Iraqi Weapons of Mass Destruction Programs, Mr Charles Duelfer, that Xstrata Plc had been involved in the Iraq ‘oil for food scandal’; if so: (a) what investigations has the Minister made of these allegations; and (b) what has been the outcome of those investigations.

(8)   Is the Minister aware of allegations by Global Witness that Xstrata Plc and Mr Rich had been involved in providing oil-backed loans to the Angolan Government; if so: (a) what investigations has the Minister made of these allegations; and (b) what has been the outcome of those investigations.

(9)   Is the Minister aware of concerns that the Commonwealth will receive up to $100 million per year less in taxation in the event Xstrata Plc is successful in its takeover bid for WMC Resources Limited; if so: (a) what investigations has the Minister made of these concerns; and (b) what has been the outcome of those investigations.

(10)   With reference to the article ‘WA taxpayers in cold as mine fate is sealed’ appearing in the West Australian of 25 March 2004, is the Minister aware of the statement in that article that ‘Xstrata is the world’s biggest producer of vanadium and said in February last year that mothballing Windimurra would put “upward pressure” on vanadium prices’.

(11)   (a) What investigations has the Minister made of these and or other allegations of market manipulation and price control by Xstrata Plc, and what has been the outcome of those investigations; (b) if no investigations have been made, why not.

(12)   Have any other investigations been conducted into Xstrata Plc with respect to taxation matters, foreign exchange, trade practices, or corporate law in Australia; if so, what are the details in each case.


Senator Minchin (Minister for Finance and Administration) —The Treasurer has provided the following answer to the honourable senator’s question:

(1)   Yes.

(2)   No, he was appointed Chairman of the Australian Gas Light Company (AGL) on 5 November 1992 and resigned on 30 December 2003.

(3)   Yes, when he took on his position as Chairman of the Foreign Investment Review Board, he provided a declaration to Treasury. Mr Phillips has been scrupulous in absenting himself from considering proposals involving any conflict of interest.

(4)   Given the above, questions regarding AGL’s involvement and interests are not of material relevance.

(5)   All and any such representations are confidential. However, I note that all advice I have received indicates that Mr Marc Rich is not connected with Xstrata Plc and has not been connected with Glencore International AG (which owns a substantial interest in Xstrata Plc) since November 1994.

(6)   Given the above, questions regarding Mr Rich’s character are of no material relevance to any foreign investment application regarding Xstrata Plc’s bid for WMC Resources Limited.

(7)   to (12) All foreign investment proposals that are subject to the operation of the Foreign Acquisitions and Takeovers Act 1975 (the FATA) are examined carefully to determine whether they raise any national interest concerns.

All relevant information regarding a particular proposal which may bear upon the national interest test will be taken into account by the Foreign Investment Review Board (FIRB) in providing advice to the Treasurer. It is usual practice for the FIRB to undertake appropriate consultations, including with relevant state governments, in relation to proposals, and consideration is also given to any public submissions it receives.

Details of cases considered by the FIRB are confidential between the Board and the parties concerned. No details are provided to third parties, and confidentiality requirements are strictly observed. This practice will be followed for any application in relation to WMC Resources Limited and Xstrata Plc.