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Sinodinos, Sen Arthur
Australian Water Holdings
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Thursday, 28 February 2013
Senator SINODINOS (New South Wales) (20:10): I rise to make a statement to the Senate regarding Australian Water Holdings, AWH, and, separately, matters relating to my statement of registrable interests. I became a non-executive director of AWH on 31 October 2008, a position which I resigned when I entered the Senate. AWH has been operating in the North West Growth Centre of Sydney since the early 1990s. It began life as the Rouse Hill Infrastructure Consortium. I was excited by the opportunity because the company was seeking to grow to the next stage, building on its work in the North West Growth Centre and potentially becoming a national water services company. A separate entity, Australian Water Queensland, a subsidiary company of Australian Water Holdings with its own board, was responsible for identifying business opportunities in the Queensland water market.
My view was that completing the rollout of water infrastructure in the North West Growth Centre was important to opening up land and housing and new job opportunities, and that a judicious combination of public and private capital would accelerate the timetable for infrastructure rollout. Senators may not be aware that the then New South Wales Labor government did agree to consider an unsolicited bid from AWH for a public-private partnership. There was a proper process, including a probity adviser. AWH was unsuccessful in that process.
I cannot recollect when I first became aware of the involvement of Eddie Obeid Jnr in Australian Water Queensland, but it was not before I joined the company. I had no reason to regard his presence in the company as signifying some greater involvement by the Obeid family in AWH, and I had very limited dealings with him. I have never met any other members of the Obeid family. I became non-executive chairman of AWH on 3 November 2010. I was not aware that, at around this time, the CEO of the company had negotiated what has been reported as a personal loan agreement with members of the Obeid family, secured against shares in Australian Water Holdings. I believe that there should have been such a disclosure made to me.
On 27 January 2011 the board of AWH agreed to provide me with a shareholding in AWH, part of which was subject to conditions precedent and all of which had to be documented and approved.
Because I believed I was entitled to that shareholding and had been assured that it would be forthcoming, I disclosed it on my Senate register promptly on entering the Senate. Because of these assurances that a transfer would occur, I characterised this publicly as a gentleman's agreement. I did not request at any time that shares be healed secretly on my behalf, nor did I mean to suggest that a shareholding was being held on my behalf. These shares have never been issued to me, nor will I be pursuing them. Tonight I confirm a media report that I have forgone all and any entitlement to this shareholding. On 26 February 2013—that is, Tuesday, which was also my wedding anniversary—my lawyers wrote to Australian Water Holdings renouncing this interest. I seek leave to table this letter.
Senator SINODINOS: Obviously, I was shocked and disappointed to learn that a company whose mission I believed in and was passionate about was financially linked to the Obeid family. I believe that should have been disclosed to me at the time. I had no reason to suspect any such involvement, but it should have been disclosed. I played no role in the awarding of the January 2012 contract to AWH by Sydney Water. I was by then in the Senate and Mr Michael Costa, who succeeded me as chairman, was responsible for securing that agreement. I understand from public statements by New South Wales government ministers that this process was conducted at arm's length between the two parties to the contract, AWH and Sydney Water.
In relation to political donations by Australian Water, these were handled by the management of the organisation at their discretion. I do not recollect donations to political parties being discussed at the board level. My understanding of the relevant funding and disclosure laws is that companies are able to make donations and political parties are able to receive them. I am of course referring to the laws applicable at the time. Any matters relating to the receipt and recording of such donations by the New South Wales Liberal Party is properly the responsibility of the state secretariat.
I also wish to disclose that I have made some further amendments to my statement of registrable interests today. I am grateful for this being brought to my attention by a journalist. None of this relates to Australian Water holdings. On entering the Senate I should have declared the following unpaid directorships. The first is in a start-up healthcare company, Move2Live Pty Ltd, that has not traded since its inception. I was appointed on 14 March 2011, but I have had no involvement with this company since entering the Senate and have now both registered that directorship and resigned formally from the board, and I have taken appropriate action in relation to my register of interests. Second, on entering the Senate I disclosed my membership of the board of the Aboriginal Employment Strategy Limited, AES, a not-for-profit organisation of which I am particularly proud because it specialises in placing and mentoring Indigenous Australians into employment. I recently resigned my unpaid directorship of AES. That company and another called Firestick ICT Pty Ltd operated effectively as a single business with the same board even though they are two separate entities. Firestick provides telephone and ICT services to the primary company—to AES, in other words. I believed that I had made a complete disclosure by registering my directorship of the main entity, AES, but it is a requirement that I disclose my directorship of the separate entity. I have now done so and have also resigned from that entity.
It is a matter of public record that I was an office bearer of the Liberal Party, including president of the party in New South Wales, until December 2012. In that context, I should have disclosed my directorship of three entities related to the New South Wales Liberal Party. The Liberal Party uses these companies as vehicles for employing its staff and holding its assets. I have corrected my register of interests in this regard.
I also disclosed earlier this week my directorship of the Sir Paul Hasluck Foundation, which promotes the memory and work of Sir Paul Hasluck. For the purpose of completeness, I have also updated the register with respect to my directorship of the Octant Foundation, a not-for-profit organisation established by the Australian Institute of Management. Octant works to educate business leaders. I disclosed my directorship of the Australian Institute of Management upon entering the Senate. However, I should have included this related organisation. ASIC, the Australian Securities and Investments Commission, records that I ceased being a director of Octant on 21 November 2012, when I resigned from AIM, the main entity. Resigning from AIM was recorded in my register of interests.
I apologise unreservedly to the Senate and to my party colleagues, if I can use such a term in the Senate, for these oversights. I believe that at no stage were there any matters arising from these directorships which may have occasioned a conflict of interest, but the responsibility for overlooking these and for not following them up is mine and mine alone, and I take that responsibility. I also add that I take my responsibilities in the Senate and to my party very seriously. I have often contemplated: what is the cost of being in public life? But the cost of being in public life is, where possible, to make full and frank disclosure. I am disappointed that it took a journalist to remind me of these directorships on this occasion. If I treat life as a learning experience, it is a reminder that all of us have to be so careful and always think ahead about these matters. I will not detain the Senate too much longer tonight, but I hope that by making a clean breast of this I may also send a message to my colleagues on all sides that we always have to be very careful of these matters, because what you think is an innocent oversight can be looked on perhaps not as favourably by others. Again, I apologise to the Senate and promise to be much more punctilious and rigorous in pursuing these matters in the future.
Senate adjourned at 20:20