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Statement of Events: Jenolan Caves 2004-2006

NSW Government and Jenolan Caves Reserve Trust Management 2004-2006

Is the Government’s $22.5 million funding justified?1

YEAR INCOME $ GRANTS $GOVT

PA COST $GOVT

FULL COST $2004-2005 -368,005 -1,034,648 -1,402,653 -1,402,6532005-2006 -5,497,092 -1,215,739 -6,712,831 -8,115,4842006-2007 -9,411,040 -478,711 -9,889,751 -18,005,2352007-2008 -533,565 -427,891 -961,456 -18,966,6912008-2009 5,494,568 -6,720,712 -1,226,144 -20,192,8352009-2010 -4,180,959 -90,000 -4,270,959 -24,463,7942010-2011 -1,616,6232 -500,000 -2,116,623 -26,580,4172004-2011 -16,112,716 -10,467,701 -26,580,417 -22,580,4173

Why was Senior Counsels’ advice ignored?4

7 September 2004: Robertson, T.F. SC advice: “the appointment of the administrator is a nullity,

and in any event would be invalid because it was made for an improper purpose”.5

4 December 2008: Garnsey J.J. QC advice: “purported appointment in 2004 of Mr. Griffin as

administrator… was, in my opinion, invalid and not authorised under the Act”.6

Unless Senior Counsel’s advice was reckless, the government dishonestly appropriated property

belonging to Rosecharm Pty Ltd, the ultimate shareholder. At the least, this is theft.

PART 1

1 Trading results and government funding: JCRT Annual Reports (2004-05 to 2010-2011) 2 Includes an amount of $1 million for xx3 Reference is made to the Trust’s request for $4 million over five years fro capitol works4 From 8 December 2009, the Minister for the Environment was the Hon. Frank Sartor MP. In 2010, JMA wrote to several government parties alleging the appointment of Allan Griffon was not authorise under the Act and they intern referred the correspondence to Minister Sartor who, in tern, responded stating ‘the government believes the appointment was valid’. It is unclear why the Minister acted to conceal evidence he relied on. There appears some doubt he was not telling the whole truth and it is noted that for the two years he was Minister the Trust reported losses of $5.8 million.5 Robertson, T.F. SC advice presented in part by Coalition in Parliament in 2005 (7 September 2004)6 Garnsey J.J. QC advice presented to St George Bank, copied NSW Government (4 December 2008)

(Printed 9 February 2012)


On 31 January 2003, did the Minister have authority and powers under the National Parks

and Wildlife Act 1974 (NSW) to appoint an administrator?

19 June 1996: The Acting Minister for the Environment (the Hon. Bob Debus MP) states,7 “the Bill

ensures independence of the Trust… [Its] object is to amend the Act so as to… establish the Trust

to have the care, control and management of the lands so dedicated.

17 October 1996: The Attorney General (the Hon Jeff Shaw QC, MLC) states,8 “the independence

of the Trust is guaranteed by the Act”.

23 April 1997: The National Parks and Wildlife Amendment (Abercrombie, Jenolan and Wombeyan

Kast Conservation Reserves) Bill (“the Bill”) received assent.

Amendments in the Bill were set out in the National Parks and Wildlife Amendment (Abercrombie,

Jenolan and Wombeyan Kast Conservation Reserves) Act 1997 No 2 (NSW) (“the Act”),9 and the

amendments included:

Section 58V(2): The Trust is appointed as trustee of the Jenolan Caves Reserve Trust lands, and the

care, control and management of those lands is vested in the Trust.

Section 58W(1): The Trust has responsibilities, powers, authorities, duties and functions conferred

or imposed on it by or under this or any other Act.

Schedule 1, Amendments to the Act note:

Section 5 Definitions: Jenolan Caves Reserve Trust (“the Trust”) means the Jenolan Caves Reserve

Trust established by the Act. Member of the Jenolan Caves Reserve Trust Board means a person

holding office under section 58ZA.

Section 58ZA(3): The affairs of the Trust are to be managed by the Trust Board.

19 June 1996: The Hon. Bob Debus MP states,10 “Given the importance of the caves… and highly,

well-recognised successful management of them by the Trust… with slightly modified membership

will give greater emphasis to conservation focus of the Trust and enhance its reputation, as a

conservations manager… [enabling] the highest level of protection for the natural and cultural

values of [karst] areas.

7 The Hon Bob Debus MP statements to Parliament, Hansards (19 June 1996)8 The Hon Jeff Shaw QC, MLC statements to Parliament, Hansards (17 October 1996)9 National Parks and Wildlife Amendment (Abercrombie, Jenolan and Wombeyan Kast Conservation Reserves) Act 1997 No 2 (NSW)10 The Hon Bob Debus MP statements to Parliament, Hansards (19 June 1996)

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Section 58ZA(2):11 The Trust Board will consist of the following 11 members appointed [all except

one member not nominated] by the Minister:

(a) One member elected by the Minister... [with] expertise in karst conservation

(b) Two members nominated by the NSW Aboriginal Land Council

(c) One member nominated by the Director General [NSW Department of the Environment]

(d) One member nominated by the General Manager of Tourism NSW

(e) One member nominated by the Minister for Urban Affairs and Planning

(f) One member nominated by the National Parks Association NSW

(g) One member nominated by the Minister for Local Government

(h) One member nominated by the Australian Speleological Federation

(i) One member nominated by the National Trust (NSW), and

(j) One member nominated by the Nature Conservation Council

11 Section 58ZA(2) sets out the composition of the members of the Trust Board and names the parties responsible to nominate them

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PART 2

In 1996 Bob Debus stated in Parliament the Bill being introduced would result in a slightly

modified Trust, with emphasis on conservation, that would be an independent statutory body

with duties to care, control and manage certain karst lands. It could apply to the Public

Reserves Management Fund for capitol works funding.

23 April 1997: Upon receiving assent, the objects of the Act were set out in its long title, which

states: “[To] amend the Act to dedicate certain lands as karst conservation reserves... to establish

the Trust to manage those reserves.”

19 June 1996: The Hon. Bob Debus introduced the Bill in Parliament and set out the government’s

intentions.12 He noted the government’s purpose in amending the Act was as follows:

(a) The restructured Board will have emphasis on conservation

The legislation will give greater emphasis to conservation focus of the Trust and enhance its

reputation as a conservations manager.

Jenolan Caves…as a karst conservation reserve under the Act will enable the highest level

of protection for the natural and cultural values of those areas.

The Trust is recognised nationally and internationally as an outstanding manager of these

lands.

(b) The Trust, with modified membership, will be a statutory body

Given the importance of the caves… and highly, well-recognised successful management of

them by the Trust… with slightly modified membership [will] continue to manage these

areas rather than the Director-General of National Parks and Wildlife.

The speleological societies have made representations to the Minister seeking confirmation

the Trust would be a statutory authority responsible directly to the Minister.

(c) The Bill will ensure the independence of the Trust

The Bill will ensure the independence of the Trust and enable it to continue its effective

planning and management programs. It will increase the ability of the Trust to manage use

of the karst conservation areas for which it is responsible.

[Speleological representative], Mr. Kier Vaughan-Taylor wrote to the Minister requesting

that in the karst conservation legislation… the Trust [will] remain independent and continue

its program of reform, particularly at Jenolan.

12 The Hon Bob Debus MP statements to Parliament, Hansards (19 June 1996)

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Australian Speleological Federation, NSW Speleological Council and Sydney University

Speleological Society (“the speleological societies”) made representations to the Minister

seeking confirmation the independence of the Trust would continue.

(d) To ensure care, control and management of karst lands

The object of the Bill is to amend the Act so as to… establish the Trust to have the care,

control and management of the lands so dedicated.

The result of this Bill will be to enhance karst conservative in [NSW] and to give additional

powers and responsibility to the existing Trust.

[Jenolan Caves] are regarded by many as a national icon and therefore warrant reservation

and protection under the Act.

(e) The Public Reserves Management Fund can assist funding capital works

[The Trust] will continue to be able to apply for further funding under the Public Reserves

Management Fund to assist it with major capital works.

[It] is financially independent, funding activities from entrance fees to Jenolan Caves; it can

seek support from Government through the Public Reserves Management Fund.

17 October 1996: The Attorney General (the Hon Jeff Shaw QC, MLC) responded to questions

raised by the Hon Elisabeth Kirkby MLC, based on the above statements made in the Legislative

Assembly by the Hon. Bob Debus MP, Acting Minister for the Environment. Hansards notes: 13

Kirkby : Did the government make a commitment to establish an independent regime of

karst management controlled by the Trust?

Shaw : The government repeatedly stated the Trust will be an independent body reporting

directly to the Minister.

Kirkby : If so, does the government intend to honour [this] commitment?

Shaw : Please refer to the Act, the Bill ensures the independence of the proposed Trust in the

management of karst areas within its control.

Kirkby : Did the government make a commitment to enact a separate Karst Conservation

Act?

Shaw : The government gave the following pre-election commitment: “Labor will pass the

Karst Conservation Act to protect cave sites such as Jenolan Caves… under the Minister for

the Environment” and has now met this commitment. 13 Hansards Transcript, Legislative Council, Karst Conservation Management and Legislation No.72 (17 October 1996).

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Kirkby : If so, does the government intend to honour its commitment?

Shaw : Please refer to the [amendments], introduced into the Legislative Assembly by the

Acting Minister for the Environment, the Hon. Bob Debus, on 19 June 1996.

Kirkby : Will the Minister provide details of experts used in preparation of the government’s

proposed karst conservation legislation?

Shaw : The government consulted the Trust, speleologists and National Parks in developing

proposals.

Kirkby : What advice did these experts give and to what extent was that advice adopted by

the government?

Shaw : The independence of the Trust is guaranteed by the Act… [it] is the most effective

management body and should remain independent from the National Parks.

20 November 1996: Hansards reports statements made by the Hon. Pam Allen, MP, Minister for the

Environment, as follows:14

(a) Labor will introduce legislation to further protect the caves

Legislation has been introduced that greatly enhances the protection of the caves, or kast

conservation.

In accordance with commitments made by [Labor] when we went to the recent State

election… this legislation provided that the caves will have virtually identical status to that

of national parks.

(b) Labor has given assurances about the Trust’s future role

The Trust [will not]… be smothered by the National Parks and Wildlife Service. The

government has given the Trust repeated assurances of this [not happening].

I do not know why so many caving fraternity... are frightened at the prospect of the caves

being accorded virtually identical status to that of national parks.

(c) Concerns raised by the speleological societies are unjustified

There has never been any question about the value of the Trust or it’s future role. The Trust

will [continue to] have responsibility for the care, control and management of the European

heritage within [karst] lands.

14 http://www.parliamenr.nsw.gov.au/prod/parlment/hansart.nsf/V3Key/LA19961120012

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I do not think the government could do anything to completely satisfy [speleological

societies’] concerns… they are worried Big Brother or Big Sister will take over the Trust.

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PART 3

Were the following statements (and actions) by the Minister deceptive and dishonest, and

were they known to be untruthful by members of the government?

(a) Under s.58ZD, the Minister can appoint a person to audit the Trust’s affairs however, in

August 2003, the Premier appointed Council of Cost and Quality of Government (“CCQG”)

members, instead of the Minister, who had specific powers under the Act..

Section 58ZD(1): The Act headed “Inspection of Trust” states “the Minister may appoint a person

to inquire into, or carry out an audit of, any of the affairs of the Trust.”15

20 August 2003: The Trust’s Chair circulated a letter from the Premier to the Minister

approving the Minister’s request to the Premier’s Department to undertake an urgent review

of the Trust.16

The Premier’s letter noted the task will be undertaken as a Special Review under the

auspices of the Council on the Cost and Quality of Government (the CCQG).

The Minister’s failure to comply with s.58ZD meant he relied on a report by the CCQG to

the Premier and Cabinet, on his behalf, and was not provided to the Parliament.

The CCQG report on the affairs of the Trust was not intended under the Act and was not

transparent, as it was not provided to the Parliament, the Trust or the public.

(b) The Government apparently withheld funding stability and safety repairs to Main Road 253

causing public safety concerns and real problems of responsibility raised by the Trust Board,

from 1995.

24 July 2002: Trust Board Minutes refer to safety and stability of Main Road 253:17

20 March 1995: Trust advised RTA it had undertaken major future development study for

Jenolan Caves. Engineering consultants (SMEC) raised concerns regarding slope stability of

the main Sydney road entry into Jenolan Caves (MR253).

August 1997: Minister Debus wrote to Lew Laing (RTA) expressing the Trust’s concerns

regarding the stability of MR253.

15 National Parks and Wildlife Amendment (Abercrombie, Jenolan and Wombeyan Kast Conservation Reserves) Act 1997 No 2 (NSW)16 The Hon Bob Debus MP, Minister for the Environment, File note of presentation to the JCRT Board Meeting (6 December 2003) obtained through FOI.17 Document headed JCRT Business Papers – Draft Minutes of Board Meeting 24 July 2002

8


27 September 1999: Trust Board meets with RTA. The RTA recognises problem of road

stability due to old construction methods and geological processes but [this is not treated as

a] matter of priority due to [government] funding constraints.

29 September 2000: Trust wrote to RTA expressing concern on stability and RTA proposed

a more comprehensive inspection be undertaken.

12 September 2001: Trust wrote to RTA again requesting a copy of the RTA’s detailed

Slope Risk Assessment report.

The following information relating to MR 253 was published in ‘Minutes of the Jenolan Caves

Reserve Trust Board Meeting’, held:

17 December 2002:18 Trust notes concerns and copy of detailed Slope Risk Assessment report

not received. Trust resolved to seek advice from a barrister, as to the terms in which the Trust

should be conveying concerns to the government.

Trust resolved to write to the Minister expressing profound dismay regarding the stability of

MR253, which is still not resolved. Trust seeks to obtain a copy of Slope Risk Assessment

through Freedom of Information.

19 February 2003:19 Trust Chair advised Slope Risk Assessment report obtained from RTA

through FOI received. The Trust resolves to refer report to geotechnical consultants Coffey

Geosciences Pty Ltd for their advice on the content of the document.

22 May 2003:20 Board received Coffey report indicating substantial concerns with MR253

stability, as identified in RTA report. The concerns included at least one section of the road with

Assessed Risk Level 1… the highest level of risk to life or property.

Chair unsuccessfully sought to brief Minister or his staff that day. Trust Board recognised this

was paramount and requested the Minister for Roads and RTA to secure immediate interim

closure of MR253 to secure the safety of Trust staff and visitors.

18 June 2003:21 The Trust General Manager advised he met RTA that day and confirmed it had a

short-term strategy that was acceptable to the Trust.

18 ibid (17 December 2002)19 ibid (19 February 2002)20 ibid (22 May 2003)21 ibid (18 June 2003)

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20 August 2003:22 The General Manager provided update to the Board on 16 August 2003 RTA

meeting. RTA has still not provided its geotechnical survey; given importance of the issue,

General Manager will request Director-General, Premier’s Department, to raise this with Chief

Executive of the RTA.

15 October 2003:23 The General Manager advised the Trust Board the geotechnical report by the

RTA had been forwarded to Coffey Partners who advised the report identified 11 problem areas

within the road with one being of significant importance.

6 December 2003:24 The Minister attended Trust Board Meeting. His Meeting Notes state “I’m

pleased to report the Minister for Roads committed to $18.5 million over 3 years (commencing

2003-04) to upgrade the Jenolan Caves Road with possibility for a further work totalling $6M

from 2006-07.”

Minutes recorded by the Trust note the Minister stated “There will be extra funding for the

safety package, coming straight from Treasury of $18M over three years beginning now to

upgrade MR253 committed by the Minister for Roads.

The General Manager’s report noted, “RTA was addressing the identified problems with the

current road arrangements. Boom gates are being installed and signage upgraded.”

8 December 2003: A memorandum to all Trust Staff by Andrew Fletcher, General Manager,

Jenolan Caves Trust, stated: “The Minister confirmed the Government will also provide funding

to the Trust for infrastructure enhancements... the RTA has committed to upgrade sections of

MR 253.”25

24 August 2004: File note recording meeting: Megan Pryke, Keir Vaughan-Taylor and NSW

Speleological Society stated Government “spending $18M [on road] because only other option

is to close the reserve. ... the government said [it] would only fund the road upgrade if [it] gets

more control over Trust (Debus didn’t like the model). As soon as the Trust disappeared [on 6

December 2003], road money was provided.”26

(c) Government withheld capital funding the Minister had said it could apply for under the

Public Reserves Management Fund, which meant the Board was unable to comply with its

Plan of Management and maintain the Trust’s Jenolan Caves assets and karst.

22 ibid (20 August 2003)23 ibid (15 October 2003)24 ibid (6 December 2003)25 Andrew Fletcher, Memorandum headed “Minister’s Briefing on Special Review (8 December 2003).26 File note, meeting between Megan Pryke, Keir Vaughan-Taylor and NSW Speleological Society (24 August 2004)

10


19 June 1996: The Hon Bob Debus stated in Parliament: “The Trust is financially independent,

funding activities from entrance fees to Jenolan Caves; it can seek support from the Government

through the Public Reserves Management Fund.27

The Trust will, in effect, be reconstituted under the Act… [it] will continue to be able to apply for

further funding under the Public Reserves Management Fund to assist it with major capital works.

19 February 2003: Trust Minutes record, under “Capital Works Program… the Trust was not in a

position to fund required capital works programs necessary to provide underground infrastructure

of a suitable standard into the future. It was proposed that a submission be made to Treasury for a

further $4M over the next four to six years.”28

6 December 2003: Minister’s notes prepared for Board meeting note the Government “will fund a

safety package involving measures to address urgent caves and surface infrastructure that pose a

significant risk to public safety at a cost of $5.7M over 3 years (2004-05 to 2006-07).”29

This is not consistent with the Trust’s Board minutes during the past year, which do not raise the

need for “funding required for urgent caves and surface infrastructure that pose a significant risk

to public safety“, but seek funds for the capital works program necessary to provide underground

infrastructure of a suitable standard into the future.

8 December 2003: Following the 6 December meeting, a memorandum was sent to all Trust staff

by Andrew Fletcher, General Manager. It stated: “The Minister confirmed the Government will

also provide funding to the Trust for infrastructure enhancements... [and] the RTA has committed to

the upgrade of sections of MR 253.”30

4 June 2004: The Minister later addressed Parliament and stated: “The Council recommended a

capital works program to address the outstanding infrastructure works. A backlog of capital and

maintenance work has arisen across all four reserves.”

Hansards reports the Minister stated: “Jenolan was not recovering enough revenue to reinvest

sufficiently, even in its own infrastructure and product development, and was forced to rely on

government grants to cover shortfall.”31

27 Ibid 318528 Trust Minutes (19 February 2003)29 The Hon Bob Debus MP, Minister for the Environment, File note of presentation to the JCRT Board Meeting (6 December 2003) obtained through FOI.30 Andrew Fletcher, Memorandum headed “Minister’s Briefing on Special Review (8 December 2003).31 ibid

11


This was inconsistent with the Minister’s statements recorded in 6 December 2003 Draft Minutes of

the Trust, and contradicts 19 June 1996 statements when he emphasised “the trust was financially

independent… [and] can seek support from Government through the Public Reserves Management

Fund.”

24 May 2004: News Release from the Office of Attorney General and Minister for the Environment

headed “Jenolan Caves to Undergo Facelift”.

One of Australia’s oldest tourist attractions, Jenolan Caves, will be part of a $4M facelift to

protect the caves, improve facilities for 250,000 annual visitors, and boost regional tourism,

Environment Minister Bob Debus said today.

Mr Debus said the biggest overhaul in Jenolan’s history includes a $4 million capitol works

program at the Jenolan, Wombeyan, Abercrombie and Borenore caves including a range of

priority infrastructure upgrades and maintenance throughout the caves to improve the visitor

facilities.

The revitalization program aims to improve… and enhance caves systems as a major tourist

destination for local and overseas visitors. Improvements will be made to lighting, handrails

and steps within the caves and to walking tracks and other facilities in the surrounding

areas.”32

(d) The Minister failed to provide independent advice to the Trust Board on 6 December 2003,

and later the Parliament and public, when he referred to rights under the s.58ZE to appoint

an administrator and not reappoint the Board when the current term expired.

6 December 2003: The Minister is on record as having briefed the Trust Board on outcomes from

the Special Review by the CCQG. He told the Board when the term of the Board concludes on 31

January 2004, an administrator will be appointed (as provided under the Act) and the administrator

will have all the powers, responsibilities, duties and functions of the Board. Trust Minutes note:33

The CCQG Review confirmed the Trust Board was asked to deal with problems it could not

cope with and these problems cannot be reconciled unless there is substantial change to the

structure altogether, dramatic change. …There was not a word of criticism of the Board in

the Review, but of the government that asked the Trust to deal with matters beyond [the

Board’s] capabilities.

32 The Hon Bob Debus MP, New Release (24 May 2004).33 Trust Minutes (6 December 2003)

12


The Administrator will resolve the Caves House lease. The Labor government was not

responsible for writing the looney lease. The government, having more resources, can deal

with these issues better. [Our] purpose is to better integrate the commercial activities into a

total plan for management of the area.

The Administrator will consider the following operational matters; Risk management

strategy, Jenolan consulting, Caves House lease and other issues of detailed nature. I, and

the Government, greatly appreciate the work this Trust and we will ensure we say so.

Richard Mackay is reported to have said the Board will recommend the Administrator be

engaged, [with] Government funding the Administrator. The minutes note the Chair said it

became apparent government was not going to fund the full package, and the Board agreed.

Meeting notes state: “got to get relevant bits of Government working on roads, get money to

[Trust] managers for capitol works.

Following the Minister’s presentation and Board discussions, it was resolved that:

(1) The Board note information provided by the Minister on outcomes of the Special Review

by the CCQG, and

(2) The Board recommends to the Minister that at the expiry of the current Board’s term on

31 January 2004, an Administrator be appointed pursuant to 58ZE of the Act to facilitate

the implementation of decisions made by the CCQG.

Prior to and at the 6 December Board Meeting, there was no evidence the Board members:

sighted the Special Review carried out by the CCQG; or

obtained advice if the CCQG was entitled, under the Act, to carry out its review, or

sighted the basis for the recommendations because the review was not transparent; or

could support the Minister’s actions in allowing their term to expire by effluxion of time; or

had necessary powers to recommend to the Minister to not comply with s.58ZA(1); or

had necessary powers to recommend to the Minister to not comply with s.58ZA(2); or

had independent advice the Minister could appoint an administrator under s.58ZE; or

sought independent legal advice prior to making recommendations to the Minister, or

was advised to seek independent legal advice by Bob Debus, the Attorney General.

13


24 August 2004: File note recording matters discussed at a meeting between Megan Pryke and Keir

Vaughan-Taylor, and the NSW Speleological Society, notes:34

The CCQG review findings confirmed what the Board was saying: it needs supplementary

funding from government.

The government says the Trust has to be self-funding [but] it gave the Trust the Borenore

Caves without funding to look after them.

The administrator suggests the Trust was insolvent [however] it were not because it had

[$1.5M] in the bank.

There were problems with the road. We did not understand why this package of $18M is not

dependent on legislation being passed.

The Minister was appraised of road concerns years ago and did nothing.

The Minister’s report makes very vague statements about structural problems.

The government is looking at an integrated solution [but] the Caves House [lease] would

require the government buying [it] and relicensing [it] to a private entity.

The Board members are nominated by various organisations [and] the Board has done some

good things.

When [the Board] tried to force some action over the road, it probably brought about its

demise.

The legislation says [the Minister] has to reappoint the Board after six months. He cannot

reappoint the administrator.

The government said it would only fund the road upgrade if it gets more control over the

Trust (Debus did not like the model).

As soon as the Trust disappeared, the road money was provided.

We think the Board should be maintained. It would be very hard for a conditional operation

at Jenolan Caves to be maintained without some capital injection by the government.

34 File note, meeting between Megan Pryke, Keir Vaughan-Taylor and NSW Speleological Society (24 August 2004)

14


(e) In the absence of advice the Minister had powers under the Act to appoint the administrator,

he misled the Parliament when he published notice on 20 January 2004 pursuant to s58ZE

regarding the appointment of the Administrator.

20 January 2004: The Minister’s Notice published in the Government Gazette stated:

“pursuant to section 58ZE of the Act, [I] appoint Mr. Alan Griffin as Administrator to the

Jenolan Caves Reserve Trust from 1 February 2004 to 31 July 2004.”35

The Minister knew “the only circumstance an administrator can be appointed to the Trust is

where the Minister removed all members of the Board from office. He did not do this, their

term of office expired by effluxion of time and was not truncated by removal.36

(f) Further, the Minister also appointed the Administrator of the Trust for an improper purpose.

4 June 2004: Hansards reports the Minister said, “an administrator should be appointed to

review the management of the Trust… [and] make an analysis of the Trust’s financial and

structural arrangements”.37

The purpose of appointing an administrator is to ensure the affairs of the Trust are property

conducted and to enable in due course the reappointment of a Trust Board in accordance

with the Act.

As the power to appoint the administrator only arises when the Minister removes all Board

members, it is a reserve power to be exercised when the Minister is of the opinion the Trust

Board hasn’t properly performed its functions of care, control and management of the karst

lands. In this case, the administrator has no wider function than s.58ZE(3) of the Act, and it

is not to carry out an investigation.

Auditing affairs of the Trust is the responsibility of a person appointed under s.58ZD, of the

Act to inquire into or audit Trust affairs. The appointment of an administrator avowedly to

investigate the Trust and, as a precursor to extinguishment of the Board and its powers of

care, control and manage Trust lands, is beyond the scope of the power of appointment.

The power to appoint an administrator was exercised to achieve a result contrary to the

provisions of the Act, a conclusion readily drawn from the fact the Minister sought to amend

the Act in 2004, unsuccessfully, to authorise a result (handing over control of Trust lands to

the Director-General of the Department) that he could not otherwise achieve.

35 The Hon Bob Debus MP, Notice in Government Gazette (20 January 2004)36 Tim Robertson SC advice, referred to Parliament by Coalition (7 September 2004).37 The Hon Bob Debus MP, Hansards (4 June 2004)

15


(g) The Minister failed to respond to stakeholder concerns, including allegations he acted

unlawfully by breaching sections of the Act, in particular s.58ZE.

Section 58ZE of the Act is the source of power to appoint an Administrator to the Trust, and sets

out the Minister’s duty to reappoint Members to the Trust Board:

58ZE Removal of Trust Board members and appointment of administrator

(1) The Minister may, by notice published in the Gazette:

(a) remove any or all of the members of the Trust Board from office , or

(b) remove all the members of the Trust Board from office and appoint a person as the

administrator of the Trust.

(2) If the Minister removes any or all of the members of the Trust Board under subsection (1), the

Minister is to appoint new members of the Trust Board to fill the positions of the members so

removed as soon as practicable and, in any case, within 6 months after removing the members.

6 December 2003: The Minister advised the Trust Board the Administrator will be given a fixed

contract term for 2 years.

The Administrator’s appointment is limited to six months according to s.58ZE(2) and this is a lack

of evidence indicating the Minister intended to reappoint the Trust Board, having not contacted the

stakeholder bodies responsible for nominating members under s.58ZA(2) and suggests the Minister

intended to disregard the basis for relying on s.58ZE.

1 August 2004: The Minister still had not reappointed new members to the Board in contravention

of the Act. The Minister had no powers to appoint the administrator, and likewise, had no powers to

reappoint the administrator six months later. The Administrator remained until 1 July 2006.

23 August 2004: Megan Pryke, President, the NSW Speleological Council wrote to Mark Andrews,

the staff member assisting the Minister for the Environment, and notes:38

[The Speleological Council] has been advised by Mr. Griffin the Minister purported his term

as administrator. On our reading [of the Act], there is no power to appoint an administrator,

save for a term not to exceed six months.

At the expiry of that term, the Board must be reappointed. For this reason, we consider the

Minister’s failure to reappoint the Board to be in breach of the Act.

38 Megan Pryke, Letter to Mark Andrews (23 August 2004)

16


Please provide, in detail, your justification for this.

6 January 2005: Administrator writes to Caves House lessee regarding allegations his appointment

was in breach of the Act. A copy of the Administrator’s letter was provided to the Minister and the

Government’s lawyers, Mallesons Stephens Jacques. The Administrator states:

[You] have problems with [the Trust’s] compliance with the Act and question the operation

and legal status of the Trust. For the record, the Trust rejects your allegations [it] is not

complying with the Act. 39

20 January 2005: Megan Pryke writes to the Minister and Administrator setting out an outline of

the Speleological Council’s concerns:40

I write to express ASF’s deep concern at the process being undertaken to restructure the

management of lands currently being managed by the Trust. In summary, ASGF considers the

process suffers from the following flaws:

Failure to address the key issue… to manage the reserves in an ecologically and

economically sustainable manner

Attempting to put in place a new management regime without a definite plan for the future

of the reserves (ie: Jenolan commercial precinct)

Substantial diminution in stakeholder involvement in management in all proposed models

Proposed changes to management are based on spurious arguments with no economic

justification

Proposed commercial licence is likely to erode rather than augment available funds

6 June 2005: Megan Pryke wrote to the Shadow Minister for the Environment, the Hon Michael

Richardson MP, noting:41

We are concerned [governments] proposals are not in the best interests of management of

Trust lands. We are writing to seek [the Coalition] support for a Legislative Council inquiry

into the operations of these four reserves and their future management.

39 Alan Griffin letter to Jenolan Caves Resort Pty Ltd (6 January 2005)40 Megan Pryke, Letter to Mark Andrews (20 January 2005)41 Megan Pryke letter to the Hon Michael Richardson (6 June 2005)

17


In the past, the Trust has been required by Government to run in a financially independent

manner. The government has provided individual grants for specific projects… but has not

financed the Trust’s day-to-day operations.

In 2003, the CCQG reviewed the Trust’s operations. We understand this review was partly

prompted by the Board wishing to access increased government funding for its operations,

given its income was insufficient to cover essential infrastructure works.

The administrator has told us the Review found the financial model… was not sustainable as

the potential to invest in renewing or replacing infrastructure was limited.

We are concerned the government’s proposal is not in the best interests of the reserves and

may lead to a decline in management quality of these reserves.

We consider the transfer should not take place until the government is able to satisfactorily

guarantee there will be no decline in management.

In our view, this is the best safeguard… [for] stakeholder based management Board.

(h) The Trust required government funding to address stability and safety concerns with MR253

and because at least one section of the road had ‘Assessed Risk Level 1’, the highest level of

risk to life, and because it required capital for infrastructure, but it was not insolvent.

18 June 2003: The Board Minutes note it resolved: The proposed 2003/2004 operational budget to

be adopted; and the proposed 2003/2004 capital works budget to be adopted. The Board noted that

at present the Trust was solvent and able to pay its debts as and when they fall due.42

30 June 2003: The Trust’s Annual Report43 noted, two weeks later, it had cash reserves totaling $1.5

million.

20 August 2003: Minutes note the Chair circulated a copy of a letter from the Premier of NSW to

the Minister approving the Minister’s request for an urgent review of the Trust, to be undertaken as

a Special Review, under the auspices of the Council on the Cost and Quality of Government (the

CCQG).44

15 October 2003: Minutes note the Trust General Manager provided a verbal report to the Board on

the improved outlook for the Trust. Revenue year to date was 96.57% to budget [down 3.4%] whilst

expenditure for year to date was 87.98% to budget [down 12.02%].45 42 Trust Minutes (18 June 2003)43 Jenolan Caves Reserve Trust Annual Report at 30 June 200344 Trust Minutes (20 August 2003)45 Trust Minutes (15 October 2003)

18


30 June 2004: The Trust’s Annual Report46 notes Trust cash reserves of $5.66 million.

30 June 2005: The Trust’s Annual Report47 notes Trust cash reserves of $5.6 million.

(i) The Minister apparently makes unsubstantiated statements in the Parliament on 4 June 2004

regarding the need for the urgent CCQG review.

4 June 2004: The Minister addressed Parliament in his Second Reading Speech and advised it on

the Government’s purpose for amending the Act.48

(1) The Minister sets out the alleged purpose of amendments to the Act

[The Bill] proposes minor amendments to Sect. 8 and 58ZA of the Act. … [it] allows the

Minister to appoint the Director General of the Department of the Environment and

Conservation as an alternate to the Trust Board.

The minor amendments… I have described are required to transfer the management

responsibility from the Trust to the DEC.

(2) The CCQG review reinforced the need for revised capital arrangements

In recent years, the Trust has only been able to meet its financial resource requirements by

deferring capital works. … [It] is not recovering enough revenue to reinvest sufficiently

even in its own infrastructure and product development

[The Trust] has relied on government grants to carry out essential works. … The review has

recommended a capital works program to address the outstanding infrastructure works.

I announced a revitalisation package to conserve the natural and iconic assets of the caves…

[it] includes $18 million [for] Jenolan Caves Road and $4 million capital works program to

upgrade important cave and above ground infrastructure.

(3) Trust’s financial arrangements required the urgent CCQG review

[The Trust] was forced to rely on Government grants to cover the shortfall. … Jenolan is

expected to subsidize maintenance of the other reserves. … [There is] a backlog of capital

works and maintenance across all four reserves. … Supplementation was required from the

Government in 2003/2004.

46 Trust Annual Report at 200447 Trust Annual Report at 200548 National Parks and Wildlife Amendment (Jenolan Caves Reserve Trust) Bill 2004

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I announced a revitalisation package to conserve the natural and iconic assets of the caves.

The package includes:

(1) $18 million program of works on Jenolan Caves Road, and

(2) $4 million capital works program to upgrade important cave and above ground

infrastructure.

(4) The review is silent on Trust’s care, control and management of caves

Last July, Government commissioned the Council on the Cost and Quality of Government to

carry out a Special Review of the Trust. … [It] recommended when the term of the Trust

Board expired in January 2004, an Administrator should be appointed;

[The Review] found that although the Trust performed well within constraint of existing

financial arrangements, the financial structure could not be sustained indefinitely. … [It]

recommended when the Administrator was appointed, he should develop a strategy for

implementation of the government’s policy decisions.

(5) Minister reports plan to revitalize karst reserves in New South Wales

The Board expressed concern about long-term financial sustainability of the Trust under its

existing business model49. … Government proposes to increase efficiency of management of

karst reserves in NSW while maintaining the highest levels of environmental protection.

The Administrator has analysed the Trust’s financial and structural arrangements and [has]

confirmed recommendations of the CCQG.

I have announced a revitalisation package to conserve the natural and iconic assets of the

caves. …The package includes establishment of a specialist unit within DEC to ensure best

practice management of karst areas throughout NSW. This will be carried out by:

(1) Establishment of a Karst Management Advisory Committee… comprising key

stakeholder representatives, including speleologists, local government, traditional owners

and the National Trust.

(2) Consolidation of the management of karst reserves, ensuring Abercrombie,

Wombeyan, Borenore and Jenolan managed, along with the State’s thirty other

significant cave systems, by one organisation.

49 There is no evidence of this comment being made in recent Trust Minutes (2002-2003)

20


4 June 2004: Megan Pryke, wrote to the Shadow Minister for the Environment, Michael Richardson

and presented an independent view on unsubstantiated statements by the Minister:50

The government and administrator claim the Trust was to be self-funding [however] it was

set up to report to the Minister… and like DEC, is eligible for Treasury funding.

The $18M committed [by government] to the RTA road is due to serious safety concerns

[and] this work is substantially complete demonstrating the Bill is not necessary.

The $4M capital works program is a continuation of work being done by the Trust [with]

$3M to address safety concerns and $1M to establish a self-guided cave.

The transfer of functions from Trust to DEC is only changing funding within departments

[as] alternative-servicing arrangements could be made between the Trust and DEC.

The Bill may seem benign in that it does not remove from the legislation provisions relating

to the Trust’s composition. Its purpose seems to be so government can bypass stakeholder

involvement in the decision-making process.

We have met the administrator who is working under an ambit given by the government and

have asked government to review a cabinet decision made last year. The decision was based

on the CCQG review yet the review document has not been published.

The Bill is not necessary for the proposed revitalisation package to be implemented.

21 June 2004: The Shadow Minister for the Environment, Michael Richardson provided an internal

memorandum to the Opposition stating “the government has advanced no compelling argument for

abolishing the Trust.” 51

50 Megan Pryke, NSW Speleological Council, letter to Michael Richardson MP dated 4 June 200451 The Hon Michael Richardson MP, Memorandum setting out Coalition’s views (dated 21 June 2004)

21


PART 4

On 12 October 2005, the Minister made statements in the Parliament seemingly based on lies,

concealment and not telling the whole truth. This had the effect of damaging the Jenolan

Caves asset value and the commercial value of the Caves House lease.52

12 October 2005: Bob Debus made the following statements under privilege:53

The Minister said he “initiated a special review of the Trust in 2003 by the CCQG [which]

found the Trust was managing its finances without recourse to recurrent funding, despite

structural impediments caused by a business model put in place by the former Coalition

Government.” The Minister failed to mention the basis for the CCQG’s unsubstantiated

remark nor did he provide justification for this statement.

If the CCQG made the remark, the Minister’s statement “the review found the Trust had

been doing well in difficult circumstances that could not be corrected without substantial

structural change” was said without supporting evidence however it supports the Minister’s

6 December 2003 statement at the Trust Board meeting when he said the Coalition structure

was “looney”. 54

The Minister said “to implement [the CCQG] review’s recommendations I appointed an

administrator whose job was to develop proposals for structural and legislative changes to

place the caves on a sound footing and to develop a new business model for the Jenolan

Caves commercial area”. The Minister doesn’t say why the CCQG review failed to address

this point.

The Minister stated, “I say by way of parenthesis the appointment of the administrator has

been examined by the Crown Solicitor, who found it was valid not only at the time but on an

ongoing basis. In the Crown Solicitor's view, there is no question about the validity of the

appointment of the administrator, the opinion of this or senior counsel notwithstanding”. In

an email to JMA, it is reported DEC said “to the best of [my] knowledge no document exists

and [I] talked to DPC who [said] they didn’t have it55.

The Minister said: “the former Trust has fully supported everything I have done with respect

to Jenolan Caves. I have had the most amicable relationship with former Trust members. I

52 In the two years the Administrator was managing the Trust, there may be an argument the value of the Caves House lease fell from $11.5M in February 2004 to nil value. Without a Trust Board, the property could not be sold. 53 Hansards (12 October 2005)54 Trust Minutes (6 December 2003)55 Email from JMA to one of its committee members, recording DEC statements. (12 May 2011)l

22


had a meeting with them on 6 December 2003, at which they made it clear they believed the

course of action being taken by the Government was appropriate.” The Board had no other

options because they were under serious pressure dealing with real MR253 and were unable

to secure capitol funding from the Public Reserves Management Fund.

When the Board received the Coffey report on 13 May 2003,56 it noted substantial concerns

with stability and safety of MR253: “at least one section of road had Assessed Risk Level

1… the highest level of risk to life or property. Board Minutes noted it had taken eight yeas

for government to confirm it would fund repairs and throughout that period the Trust Board

members were accountable.

24 August 2004: NSW Speleological Society files state Megan Pryke and Keir Vaughan-

Taylor said the Government only agreed to spend $18M upgrading the Sydney road because

the only other option is to close Jenolan Caves and the government’s position was “it would

only fund the road upgrade if it secured more control over Trust, as the Minister didn’t like

the model. As soon as the Trust [agreed to] disappear, money was provided.”57

The Minister said “in the past year visitation to Jenolan was up 6 per cent and it was up 5

per cent the previous year. The number of visitors to Jenolan reached 240,000 in 2004-05,

the highest since 1999-2000. These demonstrate propositions of the Coalition are wrong.

Notwithstanding claims about failures of tourist promotion, the fact is visitation to the caves

has been significantly increasing”. This is not totally correct because when Debus changed

the board’s composition in 1997, visitation was 270k. It has fallen to 240k (-12%) yet in the

five years prior, when the Coalition’s board was in place visitation increased by 30%.

The Minister said “the Government developed a revitalisation package for the caves to

conserve the natural assets and to assist local communities by providing more regional

employment and increase opportunities for tourism. It has increased funding with a $4M

capital program to upgrade the caves infrastructure….” In fact, $4M was for capitol works

that Debus referred to this in his speech to Parliament on 19 June 1996. He twice said the

Trust will “be able to apply for further funding under the Public Reserves Management

Fund to assist it with major capital works”.

The Minister made an untruthful statement when he said “the Bill is a result of detailed

negotiations with stakeholder and user groups. [The Shadow Minister] read out a lengthy

letter from Megan Prike apparently suggesting she represented the Speleological Society…

56 ibid (22 May 2003)57 File note, meeting between Megan Pryke, Keir Vaughan-Taylor and NSW Speleological Society (24 August 2004)

23


Someone better able to so represent that society will be appointed to the karst advisory

committee.” In other words, does Ms Pryke believe she represents the NSW Speleological

Society. In fact, she does. She is the Char of that prominent speleological society.

The Minister lied about asbestos. He said “we often hear allegations raised by the lessee the

Government failed to address asbestos issues at Caves House. Those issues were raised

again by the [Shadow Minister] today, but the lease is absolutely specific: the responsibility

for the asbestos is clearly with the lessee”. In fact, the word asbestos does not even appear in

the Caves House lease.

The Minister lied to Parliament about test results and water quality. He said: “there are

allegations the Government is not supplying potable water to Caves House. These were

raised again today by the [Shadow Minister]. More than 15 years of testing by the

Department of Health show the Government has been supplying drinking water that

complies with the Australian guidelines.” The Minister knew the Trust was supplying

unfiltered, contaminate water to the public. The government allowed contaminated water to

be supplied to the public for two years after it knew about the problem and after signage

warning the public to only drink bottled water was removed in 2005.

24


PART 5

Did the Government breach the Occupational Health and Safety Act 2000 (NSW) and the

Crimes Act 1900 (NSW) by providing unfiltered, contaminated water to Jenolan Caves

visitors and staff in 2004-2006?

The Act sets out the duties of persons to provide potable drinking water to the public and the Trust

failed to do this at Jenolan Caves from 2004-2006.

The Occupational Health and Safety Act 2000 (NSW) 58 allows criminal penalties to be imposed on

an employer failing to provide safe workplace. The duty of care is breached in circumstances where

the risk was foreseeable and significant and where a reasonable person would have taken proper

precautions.

In determining a reasonable person taking proper precautions against a risk or harm, the law takes

into account the probability harm would occur if care were not taken, the likely seriousness of the

harm, the burden of taking precautions to avoid the risk of harm and the social utility of the activity

that creates the risk of harm.

Breaches of s.41A of the Crimes Act 1900 (NSW) 59 relates to poisoning water supply and in this

case a person is guilty of an offence if the person introduces any poisons or other destructive or

noxious thing into a supply of water, and the person intends to injure persons. In this case, breaches

of the Act carry a maximum penalty of imprisonment for 5 years.

Breaches of s.44A of the Crimes Act 1900 (NSW) relates to persons failing to provide necessities of

life. A person has a duty to provide other persons with necessities of life. A person cannot, without

reasonable excuse, intentionally or recklessly fail to provide other persons with necessities of life. A

person is guilty of an offence if the failure causes danger of death or serious injury, or likelihood of

serious injury, to other persons. Breaches of the Act carry a maximum penalty of imprisonment for

5 years.

Did the Government have reason to believe Jenolan Caves drinking water was not decontaminated

between 2004-2006, especially as sickness appears 48-72 hours after the public drink the water? Or

did they believe that infants, aged and vulnerable people would not become ill?

27 January 2005: Ecolab, Water Test Results and Recommendations were preened to the Minister

and Administrator.60

58 http://www.volunteeringaustralia.org/files/4M470AJYX9/OHS%20NSW.pdf59 http://www.austlii.edu.au/au/legis/nsw/consol_act/ca190082/s41a.html60 Richard Brown, Business Development Manager, Ecolab, letter to David Templeton, JMA (27 January 2005)

25


[Ecolab] was assigned to carry out water testing… Australian Drinking Water guidelines

indicate safe potable water be provided to the end user. The guidelines state water supply

will be maintained within the following:

Total aerobic heterotrophic bacteria (TPC) <100

Ecoli <1

Total Coliforms <1

Large numbers of aerobic heterotrophic bacteria (TPC) were detected in both holding tank

#1 (17,450 cfu/ml) and holding tank #2 (>25,000 cfu/ml). These organisms are the make-up

of various strains of microorganisms.

Recommendation: UV sterilisers are proven to perform poorly under conditions of

increased suspended solids [torpidity]… Due to high levels of bacteria in both tanks, the

potential risk of water contamination after UV steriliser is greatly increased.

Ecolab strongly advise: An alternate water source be provided, the current supply does not

have an appropriate microbial control program and is not acceptable as a safe, potable water

supply. The water, if consumed by the public is placing those persons at risk of exposure to

a potential health risk.

8 February 2005: JMA twice collected water samples. The first set was collected in sterile jars and

delivered to Barrett and Smith Pathology,61 Lithgow, and sent for analysis to Sonic Healthcare:

Total Pore Plate Count (TPC) E.coli Total Coliforms

Hill Flats Kitchen (HFK)62 10 3 4

Chisolms kitchen (CK) 3,800 13 21

Chisolms Bar (BCB) 10 2 7

St Trins staff kitchen (STK) 1,500 3 5

Gatehouse bathroom (GHB) 30 2 5

Caves House (AHB) 4,700 <1 8

Caves Case (NB) 40 11 20

3 March 2005: JMA approach SONIC HEALTHCARE to carry out a second set of tests. On 11

February 2005, tests were carried out Bob Sinclair, Manager Environmental Testing, Food and Water

Testing and provided the following results, signed the Sonic Water Quality Report:63

61 Certificate of Analysis microbiology results collected 8 February 2005 signed by Sonic Healthcare and copies provided to the Trust by the JMA parties62 Codes on water samples were documented at the time and the locations are reported above on best possible basis 63 Sonic Healthcare Water Quality Report sent to JCR/ JMA (3 March 2003)

26


Total Pore Plate Count (TPC) E.coli Total Coliforms

Trails Bathroom (TBT) 1,600 35 25

Staff Bathroom (STB) 270 2 8

Staff Kitchen (STK) <1000 4 6

Trails Kitchen (TKS) 10 2 4

Trails Sink 1 (TS1) 1,100 25 5

Trails Sink 2 (TS2) 850 9 11

Trails Bistro (BCB) 10 2 4

Caves House Room 311 (113) 1,400 3 3

Caves House Room 217 (712) 190 2 3

Bob Sinclair: Recently microbiological tests (for thermotolerant coliforms) of the resort’s tap

water revealed positive results, with levels outside the National Health and Medical Research

Council Guidelines for Drinking Water in Australia. I was asked to write a report [when] I

visited on 11 February 2005.

Inspection of Site (11/2/05): On the day of inspection, the roof of the first cylindrical tank was

intact but rusty and in need of replacement. The surface of water in the tanks contained hand-

sized pieces of vegetation as flotsam.64 Trees overhang both tanks with potential for leaves to

fall into any available opening.

Public Health Implications: It seems unacceptable the supplied water is not sufficiently

decontaminated to be of potable standard. The results of 19 water samples collected showed

varying levels [of E.coli] ranging up to 35 colony-forming units (cfu’s) per ml, all water

having passed through the UV filtration unit.

Remedial Action: Microbiological safety of water is ideal when multiple barriers are in place

to prevent introduction of pathogens (disease causing organisms). The first step to consider is

ways to reduce contamination at the source. A course filter to screen debris and schedule of

maintenance to check, and, if needed, unblock the filter. The second step is to upgrade the

disinfection system so it operates acceptably.

3 November 2005: Bryan Belling, Abbott Tout lawyers write to the Trust’s lawyers, John Samaha

and Nick Reeves, Mallesons Stevens Jaques, following 12 October 2005 Trust/ JCR meeting:65

64 Hand-sized pieces of vegetation as flotsam and debris in the tank meant the UV steriliser is only partly effective 65 JCR/ Abbott Tout letter to Government/ Mallesons Stevens Jaques following 12 October 2005 meeting (3 November 2005)

27


[JCR] instructions are that absent water being properly filtered, there is no point in

undertaking joint water testing… JCR’s position is:

1. The Trusts water infrastructure, so called, is considerably run down and inadequate and

dies not provide clean and potable water.

2. That the water is not filtered.

3. That without filtration, the UV sterilisation system is inadequate to protect consumes of

the water.

4. There have been matters of complaint raised by JCR with the Trust for significant

periods of time. The Trust contends that the water is, at all material times, clean and

potable.

5. That under the Services Agreement, the Trust is obliged to provide water suitable for

human consumption 24 hours a day.

6. The Trust promised I the Plan of Management…. adopted in 1989 that the water would

be of the highest quality.

7. The Trust owns the infrastructure.

8. The Trust is obliged to fix and maintain the infrastructure.

9. The Trust has failed or refused to do so, in spite of requests for may years past.

10. The need to address these issues is urgent.

11. The failure to address these issues has resulted in loss and damage being sustained by

JCR and has expose JCR to legal liability.

12. JCR has no obligation to meet the costs of addressing these water and water quality

issues.

To the extent that our client misconceives these matters, you will no doubt clarify matters for

it, in writing.

10 November 2005: JCR referred the RP Meagher AO QC advice was provided to the Premier’s

department the same day:66

66 RP Meagher AO QC appointed to the Court of Appeal of the Supreme Court of NSW in 1988 where he served for 16 years. Following his retirement from the Court of Appeal he reviewed the Jenolan matters and reported his advice that was provided to the Premiers Department on the same day.

28


There is, on the facts, no dispute the Trust is in default of its obligations. Water it provides (when it

does provide it) is hopelessly far from potable... Service Agreement... reinforces Trust’s obligations

to supply, and keep supplied, potable water. The Trust is in default under this. 67

9 December 2005: Did the Minister have a duty of care to ensure the Administrator and Trust kept

the public signage in-place advising the public to only drink bottled water, before the filtration was

installed the following August (2006)?

Signage was said to have been removed shortly after all parties received the Meagher advice. In this

case, were the actions of Government reckless or deliberate when they removed signage, placing at

risk any of the hundreds of thousands of vulnerable people visiting Jenolan Caves.

14 March 2006: GREATER WESTERN AREA HEALTH SERVICE, Peter Tissen, Senior

Environmental Health Officer, Greater Western Pacific Health Unit, Bathurst writes to Mr. Andrew

Fletcher, General Manager, the Jenolan Caves Trust regarding contaminated water samples:68

Greater Western Pacific Health Unit is concerned about bacteriological sample results from

Jenolan Caves Water reticulation system. [We] feel the most effective means of assuring the

drinking water quality, and protection of public health, is through preventative management

approach that encompasses all steps in water production from catchment to consumer.

Attached were the Water Microbiology Laboratory Reports of Analysis carried out by the

Institute of Clinical Pathology and Medical Research. It reported:

17 January 2006, Sample 260180025 – E.coli 9, Coliforms >200

7 February 2006, Sample 260390017 – E.coli 5, Coliforms 48

7 February 2006, Sample 260390018 – E.coli <1, Coliforms >200







14 February 2006, Sample 260470043 - E.coli 4, Coliforms 43



67 Service Agreement; 29 June 1990 2.1 ‘the Trust is the authority responsible for the supply of Services to the Land’; Annexure A the Trust will supply ‘to the Land at a maximum of 2800 litres of water per hour suitable for human consumption every 24 hours.’ 68 GWH letter titled ‘Water Management at Jenolan Caves’ (dated 14 March 2006)

29


14 February 2006, Sample 260470047 - E.coli <1, Coliforms 21


30


PART 6

All members of the Executive Council failed to investigate the allegations the Minister had

appointed the Trust Administrator without powers under the Act and, as a result, cost the

public over $22.5 million.

There is evidence two Ministers’ for the Environment lied, concealed and failed to tell the whole

truth about the authority of the Minister, under the Act, to appoint the Administrator in 2004, and

both acted to make the resale of the property impossible.

1 February 2004: The Minister for the Environment, the Hon. Bob Debus, alleged he had powers

under the National Parks and Wildlife Act 1974 NSW to allow the term of the Trust Board to expire

by effluxion of time, and then not reappoint a Trust Board.

Until allegations of the lawful appointment of the Administrator are investigated, the government is

unable to assume it has good title to fund, operate and sell Caves House. Likewise, it cannot return

Jenolan Caves, Blue Mountains and Central West tourism to their previous levels.

The government must pay attention to public opinion because it can be held accountable at for its

actions, possibly before the next election. There can be a price to pay even when a lie works out as

the Government intended as it will inevitably damage any body politic by allowing a poisonous

culture of dishonesty.69

The chronology headed Jenolan Caves Water 2004-2006 raises allegations of dishonest conduct by

the previous government. It refers to endangering public health, failing to provide necessities of life

and allowing water to be contaminated. These are potential breaches of the Occupation Health and

Safety Act 2000 (NSW) and Crimes Act 1900 (NSW) and provide penalties including imprisonment

for up to five years.

The JMA Parties suggest the incoming Government has a duty to investigate these allegations. The

evidence supporting this supposition is not in dispute, however, who in the last government acted

recklessly or dishonestly. It is suggested all Executive Councilors knew what was happening and

failed to Act responsibility.

In 2004-2005, all Labor Executive Councilors knew what was happening.

In the Legislative Assembly:

69 Prof John Mearsheimer (Professor of Behavioural Science, University of Chicago) titled Why Leaders Lie (Oxford University Press) 2011, p69

31


12 October 2005: The Hon Michael Richardson MP, Shadow Minister for Environment, is reported

in Hansards:70

Make no mistake; Jenolan Caves is in a mess. An Administrator, Alan Griffin, has been in

place for 21 months. We are of the view the Government is running the case in an illegal way.

Jenolan Caves is NSW largest inland tourist attraction. Government… could not even provide

clean water to Caves House, the kiosk and businesses, one starts to get rather suspicious.

5 November 2005: Peter Trute, Daily Telegraph, reports on Jenolan water:71

Visitors are warned not to drink water after E.coli bacteria were found in water samples. The

management at Jenolan Caves Resort yesterday put up signs warning its visitors to drink only

bottled water. Visitors [staying overnight]… have been given free bottled drinking water for

more than a year.

The Administrator responsible for the [Trust], Alan Griffin said the ‘health department testing

has shown water is safe’. A spokesman for the Environment Minister Mr. Bob Debus said

“contamination claims [are] totally unsubstantiated.”

9 November 2005: The Hon Michael Richardson MP:72

I refer to an article in Saturday’s Daily Telegraph that reported operators of commercial

facilities at Jenolan Caves had erected a sign warning the water was not fit for drinking. This

is a disgrace. It is certainly an environmental standard that should not be applicable to the

Government. In the twenty first century one would expect, when one visited a major tourist

attraction such as Jenolan Caves, at the very least, to be able to drink the water.

My understanding is the operators of commercial facilities at Jenolan Caves offered to

install a filtration system at their own expense to ensure visitors and guests to the caves can

get supply of potable water. The licensee of Caves House has, I understand, been providing

guests with bottled water for some time because of this problem [which is] of Government’s

own making.

In the Legislative Council:

19 October 2005: The Hon Rick Colless MLC, states:73

70 See below: http://www.parliament.nsw.gov.au/prod%5Cparlment%5Chanstrans.nsf/V3ByKey/LA20051012?open&refNavID=HA7_1 page: 1845471 See below: http://www.parliament.nsw.gov.au/prod/parlment/hansart.nsf/V3Key/LA20051109006?open&refNavID=HA8_172 Notice of Motion10 November 2005, not called up prior to the House being prorogued on 19 May 200673 < http://www.parliament.nsw.gov.au/Prod/Parlment/Hansart.nsf/V3Kev/LC20051019050 >

32

http://www.parliament.nsw.gov.au/Prod/Parlment/Hansart.nsf/V3Kev/LC20051019050

http://www.parliament.nsw.gov.au/prod%5Cparlment%5Chanstrans.nsf/V3ByKey/LA20051012?open&refNavID=HA7_1

http://www.parliament.nsw.gov.au/prod%5Cparlment%5Chanstrans.nsf/V3ByKey/LA20051012?open&refNavID=HA7_1


A letter dated 15 June this year from David Templeton, manager JMA, which runs the kiosk

at Jenolan Caves, to Bob Carr, former premier of NSW, he points to problems the government

has been creating for the lessees at Jenolan Caves commercial zone. I repeat the bill does not

deal with those issues. In fact, the Minister denied this in his reply. [JMA] letter states:

Dear Mr Carr,

JMA provides food and beverage to staff and tourists at Jenolan Caves. Sonic water tested

Jenolan Caves tap water and confirmed that drinking water contains E.coli and other bacteria

from water tanks with open tops. The Administrator and Trust Managers were told this was

happening…

JMA really wants the Government and Resort [to] fix these problems immediately or to set up

a public inquiry and find out why people’s lives continue to be placed in danger and these

very important things ignored.

JMA and every staff member ask you to find the time to deal with this now.

Did Mr Templeton and his staff members receive a response from Mr Carr to this very

important issue – water possibly contaminated with bacteria that could give cave visitors

gastroenteritis and worse?

One has to wonder why the Government, which is supposed to be responsible for issues such

as providing clean water to visitors to Jenolan Caves, has taken such a cavalier attitude

towards this issue.

Did the Government not care about health and safety of visitors to the caves, or was this part

of the Government’s plan to try undermining the lessees in the commercial zone and forcing

them out of business so the Government could carry out Bts preferred option.

20 October 2005: The Hon Don Harwin MLC:74

I was in the Chamber when my colleague the Hon Rick Colless led the Opposition on the

[Bill]. The Opposition is of the view the Bill should not proceed to the second reading today

but instead be referred to General Purpose Standing Committee No. 5 for inquiry and report.

No satisfactory reasons have been given for replacing the Trust with [DEC].

The situation regarding deferred capitol works is very serious. My colleague the Hon Rick

Colless in discussing correspondence received from [JMA] regarding water quality is also 74 < http://www.parliament.nsw.gov.au/Prod/Parlment/Hansart.nsf/V3Kev/LC20051020042 > P18874

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certainly very disturbing. I received copies of that correspondence as well. It is a serious

situation, and is indicative of what has happened to Jenolan Caves under this Government.

I was extremely disturbed to hear details the Hon Rick Colless went through in his speech

about the relationship between the Government and leasehold at Jenolan and believe the

House would benefit from further information as a result of an inquiry conducted by the

General Purpose Standing Committee No. 5 before the bill is second read.

There are very serious issues at stake and we want them considered.

What has followed is potentially serious. The government must investigate whether the Minister

had powers under the Act to appoint the Administrator. This has been the subject of written advice

by two senior silks and requires closure

During the Government period at Jenolan Caves it has spent $22.5 million of public money while

operating a property that it is alleged was secured unlawfully during the Bob Debus/ Alan Griffin

period, and this should not continue.

Despite the cost, the standard of Caves House accommodation has fallen from 4½ stars, when rated

by the official industry ratings body AAA Tourism in February 2004, to its present 3 stars rate at

the time JMA obtained its last report.

Now, the ABC is reporting views of Oberon Council

Better protection urged for Jenolan Caves75

18 January 2012: The Oberon Council says urgent planning is needed to preserve one of central

western New South Wales' most iconic tourist attractions. Concerns have been raised about the

availability of funding and maintenance of the Jenolan Caves. It says the current arrangements for

maintaining the caves are unsustainable and the federal and state governments must step in.

Oberon Councilor, Keith Sullivan, says a strategic plan is needed. "The major concern is there

won't be sufficient funding available in the short-term to continue the upgrading of the caves, and if

it does go into private ownership, it'll become beyond the economic means of the Australian family

person and we want it to continue to grow and be protective forever and ever," he said.

The JMA parties suggest government appoint a recently retired judge of the NSW Court of Appeal

or High Court to investigate these allegations so the future of Jenolan Caves returns to its previous

position as the premier inland tourist destination in NSW. 75 ABC News Release, “Better protection urged for Jenolan Caves” 18 January 2012 <http://www.abc.net.au/news/2012-01-18/better-protection-urged-for-jenolan-caves/3780484>

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