The federal government has asked a West Australian indigenous corporation to show cause why it should not be placed under special administration amid concerns about its handling of millions of dollars in mining company money.
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The Office of the Registrar of Indigenous Corporations' (ORIC) action comes after Fairfax Media last year exposed serious financial, conflict of interest and governance concerns affecting the Western Desert Lands Aboriginal Corporation (WDLAC), which is responsible for the interests of outback WA's Martu.
WDLAC has received about $30 million from mining companies, including Rio Tinto and Reward Minerals, in return for its support for mining on Martu lands.
But little of the money has flowed to the wider Martu community, which largely remains mired in poverty. Instead, millions of dollars have gone towards the salaries and fees of WDLAC's small staff, some directors and their families, as well as consultants.
A delegate of ORIC registrar Anthony Bevan on Tuesday wrote to WDLAC to invite the corporation to give reasons why it should not be under special administration.
"If I do this, your corporation will be run by a special administrator appointed by the Registrar. That person will have a broad range of powers over the affairs of your corporation," the delegate wrote.
The show cause letter was sent after ORIC recently received the results of an external examination of WDLAC's books by former Australian Securities and Investments Commission investigator Adrian Borchok.
ORIC has legislative power to appoint a special administrator in circumstances where a corporation has traded at a loss or where its officers have "acted in their own interests".
ORIC's intervention at WDLAC comes two weeks before Martu people will be asked to vote on the WDLAC board's recommendation that an indigenous land use agreement with miner Newcrest Mining be granted.
As reported by Fairfax Media last year, some WDLAC meetings have erupted in violence between certain directors and Martu men.
Former Aboriginal and Torres Strait Islander regional commissioner Darren Farmer last year spoke out about his violent expulsion from WDLAC after challenging the board over its mining deals and handling of the millions of dollars in proceeds.
Mr Farmer on Wednesday said he was pleased by ORIC's show cause notice to WDLAC and hoped it would lead to a clean out and restructure of the organisation.
"I got a beating. I got speared over that organisation," Mr Farmer said.
Late last year, WDLAC advised its members that it could no longer provide financial help to communities or individuals because of a decline in mining activity on Martu lands.
WDLAC has until May 8 to give reasons why it should not be placed under special administration.
