CLAYTON UTZ

Review of Doyles Creek Exploration Licence Allocation Process:

Preliminary Report 4 November 2011

PRIVATE & CONFIDENTIAL

CABINET IN CONFIDENCE

Clayton Utz Lawyers Level 15 1 Bligh Street Sydney NSW 2000 Australia PO Box H3 Australia Square Sydney NSW 1215 T +61 2 9353 4000 F +61 2 8220 6700

www.claytonutz.com

Our reference 60020/15426/80122559

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Contents

1. Executive summary and recommendation ............... ................................................ 1

2. Scope of review ........................................................................................................... 1

2.1 Instructions ............. ........................•. .............................................. .......... . . . . . 1

2.2 Provision of documents ...................... . . . . . . . ....... . ............. . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . 1

2.3 Enquiries undertaken to date ................................ ......... . . . . . . . . . . . . . . .... . . . . . . . . . . . . . . 1

3. Background .................................................................................................................. 2

3.1 General background . . . . . . . .•..• . . . . . . . . . . . . . . . . .. . . . . . . . . . ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............. 2

3.2 Chronology ................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . ...... . . . . . . . . . . . . . .. . 2

3.3 Key individuals ............ . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .... . . . . . . . . . . . . . . . . . ... . . . . . . . . ........ ...... 2

4. Issues arising from review ......................................................................................... 2

4.1 Non compliance with Departmental Guidelines .............. . . . . ....... . . . .. . . . ... . . . . . . . . . 3

4.2 The Minister's invitation to John Maitland to apply for an exploration licence over Doyles Creek .. . . . . . . .. . . . . ...... . .. . . . . . . . . . . . . ............. . . . . . . . .... 3

4.3 Department's advice on the proposal for a training mine at Doyles Creek ................................................................................................. 8

4.4 Advertisement of the Doyles Creek exploration licence application ...................................................................................................... 8

5. The OCM Report .......................................................................................................... 8

5.1 Scope of the OCM Report ............................................................. . . . . . . . . . . . . . . . . 9

5.2 OCM Report findings ......................................................................... . . . . . . . . . . . . 9

5.3 Deficiencies of the OCM Report . . . . .. . . ........ . . . . . . . ... . . . . . . . . . . . . . . . .. . . . .. . . . ...... . . . . . . . . . 10

6. Questions arising from the Report .......................................................................... 11

7. Further areas of inquiry ............................................................................................ 11

8. Options and recommendations ................................................................................ 13

8.1 Do nothing further ........................................................................................ 13

8.2 Departmental inquiry .................................................................................... 13

8.3 Reference to ICAC ....................................................................................... 14

8.4 Parliamentary inquiry ................................................................................... 15

8.5 Special Commission of Inquiry ..................................................................... 15

9. Recommendations .................................................•.................................................. 16

10. Concluding remarks .................................................................................................. 17

Annexure A - Chronology ......................................................................................................... 18

Annexure B - Key Individuals ................................................................................................... 23

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1. Executive summary and recommendation

We consider that, in light oflhe facts surrounding the allocation of Exploration Licence No. 7270 (Doyles Creek EL) (as presently known), there is a circumstantial case of wrongdoing and breach of public trust.

Having regard to the nature of the information disclosed to date and the public interest in this matter, we recommend that the NSW Government set up a Special Commission of Inquiry into the circumstances surrounding the allocation by the Department of Primary Industries (the Department) of the Doyles Creek EL, including, but not limited to, the role of the former Minister for Mineral Resources (Ian Macdonald) (Minister) and his office in the allocation of the Doyles Creek EL and such other matters that a Special Conunissioner considers to be appropriate.

In making this recommendation we would like to stress that while the Departmental staff appear to have followed Departmental guidelines and made appropriate reconunendations, the Minister appears not to have followed the Department's recommendations and advice.

2. Scope of review

2.1 Instructions

We have been engaged by the Department to investigate the efficacy and decision making process in respect of the allocation of the Doyles Creek EL. SpeCifically, we have been asked to undertake an initial review of the documentation pertaining to the granting of the Doyles Creek EL with a view to making a recommendation to the NSW Goverrunent on what steps, if any, should be taken next.

At Sections 6 and 7 of this Preliminary Report (Report) we have set out several areas for further investigation, which the NSW Government may wish to consider in light of the recommendation made' above.

2.2 Provision of documents

In response to our request to the Department to be provided with all relevant documentation relating to the Doyles Creek EL, we were provided with two electronic files which, when printed, comprised approximately one lever arch folder of documents (double sided).

2.3 Enquiries undertaken to date

We have conducted the following enquiries in the course of preparing this Report:

(a) reviewed the documents provided to us by the Department;

(b) reviewed the independent probity report which was prepared by O'Connor Marsden & Associates Pty Limited (OCM Report) at the behest of the former NSW Government;

( c) carried out extensive media searches relating to the grant of the Doyles Creek EL;

(d) conducted historical Australian Securities and Investments Commission company searches with respect to companies associated with the granting of the Doyles Creek EL; and

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(e) interviewed Alan Coutts, the former Deputy Director General of the Department of Primary Industries, on 17 August 20 II regarding the Department's procedures at the time and its involvement with the Doyles Creek EL.

3. Background

3.1 General background

Doyles Creek Mining Pty Limited (DCMP) was granted Doyles Creek EL over the Doyles Creek area on 15 December 2008, after being invited to apply for an exploration licence by the Minister.

It is important to note that the Doyles Creek EL was a direct allocation and no public tender process was involved.

The Doyles Creek area is situated in the Upper Hunter Valley with a surface area of approximately 27 square kilometres. It is 105 kilometres from the port of Newcastle and within 10 kilometres of a rail coal loading facility at Wambo. The southern boundary is limited by a national park and the eastern boundary by the township of Jerry's Plains. We understand that it is an ecologically and enviromnentally sensitive site due to its proximity to the Jerry's Plains township and the Wollemi National Park.

The Doyles Creek EL was subject to a number of conditions by the Department, including that any subsequent mine would be designated as a "training mine".

On or about 5 February 2010, NuCoal Resources NL (NuCoal) acquired all of the issued capital in DCMP. On 17 February 20 I 0, NuCoal floated on the share market with a value of $100 million.

Of particular significance to any further enquiries is the role of the Minister and that of John Maitland, being the then Chair of DCMP, who was integral to the allocation of the Doyles Creek EL and is also a significant shareholder in NuCoal. There is a suggestion that since April 20 I 0, John Maitland has sold $6.21 million worth of shares in NuCoal (this figure is based on various media reports and is unconfirmed). In addition, media reports suggest that his family retains 33 million shares in NuCoal, which are currently worth appr.oximately $9.4 million.

In response to growing calls by the then NSW opposition for an independent inquiry into the Doyles Creek EL, an independent probity review was commissioned in the form of the OCM Report.

3.2 Chronology

A chronology of the key factual events associated with the Doyles Creek EL is set out in Annexure A of this Report.

3.3 Key individuals

A list of the key individuals involved in the Doyles Creek EL is set out in Annexure B of this Report.

4. Issues arising from review

The following issues arise for consideration from our review of the documentation provided to us by the Department and our own preliminary enquiries.

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4.1 Non compliance with Departmental Guidelines

The allocation of coal exploration areas is infonned by the Guidelines Jar Allocation oj Future Coal Exploration Areas (March 2006. updated January 2008) (Guidelines). The Guidelines define four categories of coal allocation areas (being Major Stand-Alone Areas, Substantial Additions to Existing Mines, Minor Additions to Existing Mines, and Small Areas Unrelated to Existing Mines) and the process for the allocation of each category.

Doyles Creek is classified as a Major Stand-Alone Area. A Major Stand Alone Area is defined as an area containing sufficient coal to justify the establislunent of a substantial new mine and infrastructure. The Guidelines provide that Major Stand-Alone Areas will be allocated by one of four methods, all of which require a competitive process (being a tender or expression of interest). The Department acknowledges this requirement in its Ministerial briefing dated 22 February 2007:

liThe area has been estimated to contain 62 million (annes a/underground coal reserves. As such, it would be classified as a major stand alone area under the current Guidelines for Allocation of Future Coal Exploration Areas (March 2006) and subject to allocation by competitive tender or expression of interest with a

financial contribution."

The remaining three categories defined by the Guidelines (and which do not apply to Doyles Creek) all envisage circumstances in which allocations may be made without competitive tendering. However, the introduction to the Guidelines makes it clear that the nonn is for allocations to be made on a competitive basis:

"Normally allocations are made 011 a competitive basis, however, there may be circumstances where coal allocations are made subject to certain conditions and including afinancial contribution."

The need to comply with the Guidelines was acknowledged by the Minister in correspondence with John Maitland on 21 August 2008 relating to the application for an exploration licence over Doyles Creek, and was expressed as follows:

"Any c01isent that isjinally given will be made under the Government's Guidelines Jar Allocation oj Future Coal Exploration Areas (copy attached) and any filture mining development will be subject to afinancial C011lribution as per the table in the Guidelines. II

Ultimately, though several parties showed interest in the Doyles Creek area, the Doyles Creek EL was not allocated by a competitive tender process, but rather was directly allocated to DCMP. As will be seen below, an issue which arises is whether the Ministerial discretion miscarried at law by reason of its exercise in breach of the Guidelines and because it was exercised in furtherance of a "training mine", which is arguably a proposal that does not fall within the subject matter, scope or purpose of the Mining Act 1992.

4.2 The Minister's invitation to John Maitland to apply for an exploration licence over Doyles Creek

The Department provided infonnation and advice to the Minister on the proposal to establish a training mine at Doyles Creek by:

(a) Ministerial briefing dated 22 February 2007:

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On 22 January 2007, John Maitland submitted a briefing note to the Minister's office outlining a proposal for an underground training mine in the Doyles Creek area.

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Allan Coutts responded to this briefing note on 6 February 2007 by requesting further infonnation.

On 15 February 2007, John Maitland (in his capacity as then Chair of ResCo Services Pty Ltd (ResCo» wrote to the Minister requesting consent for ResCo or a related entity to apply for an exploration licence over Doyles Creek.

On 22 February 2007, Brad Mullard (then Director Coal and Petroleum Development) prepared a Ministerial briefing addressing the proposal contained in John Maitland's briefing note.

The Ministerial briefing notes that several companies had previously expressed an interest in the Doyles Creek area, but that their proposals had not been progressed due to the sensitive nature of the area, being its proximity to the Jerry's Plains township and the Wollemi National Park. The Ministerial briefing further noted that the fonner Mine Safety Council (now called the Mine Safety Advisory Council) had considered a previous similar proposal in late I 999-early 2000 and that the Council had detennined that the "training mine" concept no longer be pursued.

The Ministerial briefing outlined three potential options for the Minister to consider:

(i) reject the current proposal;

(ii) seek competitive expressions of interest for the proposed area under the Guidelines, which includes a financial contribution; or

(iii) refer the proposal to the Mine Safety Advisory Council and seek the Council's advice on the current training mine proposal to inform the Minister's further consideration.

Option 3 was recommended as the appropriate initial action. There is no evidence in the documentation we have reviewed to indicate that this actually occurred. The documentation does not contain any evidence of a response to John Maitland's proposal.

(b) Departmental internal analysis prepared 1 3 May 2008:

On 1 8 March 2008, Jolm Maitland (in his capacity as Chair of DCMP, being a related entity to ResCo) made a second application for consent to apply for an exploration licence over Doyles Creek.

On 13 May 2008, an internal analysis by the Department's Manager Operations, Mineral Resources, prepared for Allan Coutts concluded that the Minister consider a competitive allocation process, with a requirement to either establish a training facility or establish a broader industry training fund. As a result of this analysis, Allan Coutts wrote to John Maitland advising him that the proposal required further examination and referral to the Minister.

We have not been able to review this internal analysis and associated correspondence because it was not in the Department's file, but the effect of it is described in the OCM report.

According to a report by the Sydney Morning Herald, the Minister and two of his staffers had dinner with John Maitland on 17 June 2008. A number of unions and Felix Resources Limited prepared letters to the Minister (see further below) dated after 1 7 June 2008, and in most cases

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prior to 21 August 2008, stating in similar terms their support for a training mine at Doyles Creek.

On 21 August 2008, the Minister wrote to John Maitland, noting that he had been advised that the University of Newcastle, the Australian Council of Trade Unions, the Westpac Rescue Helicopter Service, along with several mining companies had given their support to DCMP's proposal. In fact, the letters of support from the University of Newcastle and the Westpac Rescue Helicopter Service were dated after 21 August 2008 and many others were dated in September 2008.

In his letter of 21 August 2008, the Minister invited Mr Maitland to apply for an exploration licence over Doyles Creek. Importantly, this invitation was the only invitation extended to any company in relation to the Doyles Creek area and the Department was unaware at the time that the invitation had been made. When the allocation of the Doyles Creek EL became controversial, Ian Macdonald was reported in the Sydney Morning Herald on 22 December 2010 as alleging that he invited DCMP's application on the advice of the Department. We have found no evidence in support of this contention and, in fact, the evidence in our possession is to the contrary. The evidence suggests the invitation of 21 August 2008 by the Minister was written without the Department's knowledge or encouragement.

This is a significant matter, because the invitation on 21 August 2008 constituted in effect, (and at the very least a partial) exercise of a Ministerial discretion under section 13(3) of the Mining Act 1992 to grant consent to apply for an exploration licence to DCMP. It is referred to in Departmental documents in December 2008 as a "consent". It constituted a departure from the Guidelines, which required competitive tenders for Major Stand Alone Areas like Doyles Creek. The decision of the Minister was made without any recommendation or knowledge of the Department and was inconsistent with the Department's advice to that point in time. The letter of 21 August 2008 is the only document giving any insight into the reasons for the exercise of the Ministerial discretion.

On 29 September 2008, and in specific response to the Minister's invitation in his letter dated 21 August 2008, DCMP submitted a fonnal application for an exploration licence over the Doyles Creek area under Part 3 of the Mining Act 1992. The application included a fee of $22,800 and a number of letters of support from various associations and businesses associated with the area and the mining industry, including:

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(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

Greg Combet, AM MP (ALP, Federal Member for Charlton) dated 24 September 2008;

Kerry Hickey MP (ALP, then Member for Cessnock) dated 26 September 2008;

Robert Coombes MP (ALP, then Member for Swansea) dated 29 September 2008;

Cliff Marsh and Richard Jones on behalf of Hunter Region Westpac Helicopter Service dated 24 September 2008 (although not on the letterhead of that organisation);

Mick Buffier on behalf ofXstrata Coal undated;

Brendan McPherson on behalf of Donaldson Coal Pty Limited dated 8 August 2008;

Brian Flannery on behalf of Felix Resources dated 30 June 2008;

Peter Murray on behalf of United Collieries/ CFMEU dated 7 July 2008;

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(i) Colin Randall on behalf of Hydromining Coal Australia dated August 2008;

(j) Ian Murray on behalf of the Northern District Branch of the United Mineworkers' Federation of Australia dated 22 August 2008;

(k) Sharan Burrow on behalf of the Australian Council of Trade Unions dated 6 August 2008;

(I) Merv Mahon on behalf of the NSW Council of Retired Mineworkers dated 5 September 2008;

(m) Milton Morris AO on behalf of the Hunter Valley Training Company Pty Limited dated 23 September 2008;

(n) Ray Barker OAM on behalf of Skills DMC dated 29 September 2008;

(0) Geoff Pike on behalf of Sparke Helmore dated 23 September 2008;

(p) Stuart Barnett of Slater & Gordon dated 26 September 2008;

(q) Nicholas Saunders on behalf of the University of Newcastle dated 29 September 2008; and

(r) Gary Kennedy on behalf of the Newcastle Trades Hall Council undated.

Interestingly, the letters of support all contain very similar "themes of support" for the concept of a training mine including the alleged:

• skills shortage in the mining industry;

• length of time necessary to gain the requisite mining skills;

• growth of the mining industry;

• involvement of the Newcastle University, Hunter Valley Training Company and Westpac Rescue Service; and

• community benefit.

Indeed, the letters of support from United Collieries and United Mineworkers' Federation of Australia are identical in form, which raises questions about the genesis of these letters and the circumstances in which they were created.

The letter of offer for an exploration licence was presumably given to John Maitland by the Minister on 5 December 2008. The letter appears to have come about in the circumstances recorded in a file note by Melanie Brown, Acting Team Leader Coal and Petroleum Titles, which is in the following terms:

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"File Note

T08-0168

ELA 3628

At 9 15 am Brad Mullard, A/Executive Director Mineral Resources (ED), advised that Minster Macdonald was meeting with John Maitland oj Doyles Creek Mining Pty Limited (DCM) at 11 am today.

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The ED directed that an offer document and submission be prepared for an exploration licence, in satisfaction of the consent previously given by the Minister in relation to an ELA for the Doyles Creek Training Mine proposal.

An application, including fee, had previously been submitted by DCM on 1 October 2008. The application had not been entered into TAS at the time as Titles Branch were waiting on fitrther advice from the ED.

The offer was prepared on the following directions:

• Term of four years

• Security of$30,000

• Special conditions as provided by Trish Madden, Manager Operations.

The application was entered into TAS with the original October application date.

Melanie Brown

5 December 2008"

There are other documents on file, dated 5 December 2008, that are consistent with the processing of the application for the Doyles Creek EL.

There is also a Ministerial brief on file, dated 5 December 2008, supporting the signing of a draft letter to DCMP offering an exploration licence for Doyles Creek. The reconunendation in the Ministerial brief prepared by Melissa Brown of the Department does not seek to justify the flward of the exploration licence. It states that the letter should be signed "in accordance with the previolls consent given to apply for an exploration licence" by the Minister in the letter dated 21 August 2008.

The draft letter accompanying the Ministerial brief is by the Minister to John Maitland of DCMP, advising that the Minster can now offer an exploration licence in satisfaction of the application. There is not a signed copy of that letter on the Departmental file.

There is a further letter from Ms Brown of the Department to DCMP, dated 15 December 2008, which states that the Doyles Creek "/icence was granted and has effect on and from 15 December 2008". The letter then goes through various matters explaining the terms and conditions of the exploration licence.

The apparent absence of a reasoned basis for the Minister to have exercised his discretion to grant the exploration licence to DCMP is revealed in an email by the Deputy Chief of Staff to the Minister (Jamie Gibson) to Graham Hawkes of the Department dated 23 December. The terms of the email are as follows:

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"Hi Graham,

Geez mate 1 am sorry bllt could we please get a page or 2 of dot points on Doyles Creek training mine - i.e. how good it will be, how it address the skills shortage as pointed out by the ACA, how it will be state of the Art, that $250K goes to Newcastle Uni each year for research and that they are subject to all normal royalty payments etc.

Upstairs have seen it and are having a bit of a panic. if we could get it asap that's another one on my tab!

Thanks,

7

Cheers"

(As Mr Gibson's email address shows he was based in Governor Macquarie Tower, we assume the reference to "upstairs" is a reference to the Premier's Office.)

On Christmas eve 2008, the first public announcement was made with regard to the Doyles Creek EL. In the United States, govenunent circles making likely controversial govenunental announcements just prior to the commencement of major public holidays is referred to as "putting the garbage out". It is hoped that by announcing the decision at that time it will not be afforded any media or other attention.

4.3 Department's advice on the proposal for a training mine at Doyles Creek

The Department's position on the proposal for a training mine at Doyles Creek in February 2007 and May 2008 is set out at Sections 4.2(a) and 4.2(b) above, respectively. In February 2007, the Department advised the Minister that he could either reject ResCo's proposal or seek expressions of interest for the proposed area, but recommended that he refer the proposal to the Mine Safety Advisory Council to seek the Council's advice on the current training mine proposal in order to inform the Minister's further consideration (it is not apparent that this course of action was undertaken). Brad Mullard prepared this briefing. In May 2008, the Department similarly concluded that a competitive tender allocation process be considered, with a requirement to establish a training facility or a broader industry training fund. As stated above, a competitive tender allocation process did not occur.

On 5 December 2008, a Ministerial letter was provided to the Minister, with a covering briefing note prepared by Melanie Brown (Acting Team Leader Coal & Petroleum Titles, Mineral Resources Division) recommending that the Minister consent to DCMP's exploration licence application in accordance with the previous consent given to DCMP to apply for the licence (being the Minister's letter to DCMP dated 21 August 2008) and noting that the consent was subject to future financial contributions under the Guidelines. This letter and briefing, which are at odds with the Department's advice of February 2007 and May 2008, were prepared at the direction of Brad Mullard.

This consent resulted in a direct allocation of the Doyles Creek EL to DCMP.

4.4 Advertisement of the Doyles Creek exploration licence application

We understand that it is usual practice, though not a legislative requirement, for exploration licence applications to be advertised prior to the licence actually being granted. Since the events in question, by reason of the Mining Amendment Act 2008, which did not come into force until 15 November 20 I 0, it has become a legislative requirement under section 1 3A of the Mining Act 1992 that an applicant must advertise the lodgement of an application for an exploration licence.

On 5 December 2008, the Minister consented to DCMP's application for an exploration licence. On 1 0 December 2008, DCMP was advised that it must advertise its application (though no deadline was imposed). On 1 5 December 2008, the Doyles Creek EL was granted and this was publicly announced on 24 December 2008.

However, the exploration licence application was only advertised on 8 January 2009, some 25 days after the Doyles Creek EL was granted.

5. The OeM Report

The OCM Report was commissioned by the fonner NSW Govenunent in 2010 and submitted to the Department of Premier and Cabinet on 23 August 2010. This was an internal

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investigation and we have not been provided with the briefing papers or instructions that were provided to O'Connor Marsden and Associates Pty Limited.

On 13 September 2010, Steve Whan, the then Minister for Mineral Resources, revealed during a Budget Estimate Hearing that an independent probity audit of the allocation of the Doyles Creek EL had been conducted by O'Connor Marsden and Associates Pty Limited at the direction of fonner Minister, Paul McLeay, and that a report had been prepared.

On 21 September 2010, in response to calls by the NSW opposition, Steve Whan made the OCM Report publicly available.

5.1 Scope of the OCM Report

The OCM Report describes its scope as follows:

"Our engagement has as its objective to perform a probity review whether the process for granting the EL has been conducted with due regard to probity in accordance with the Mining Act 1992 no. 29 (the Act).

We have focussed on the following probity principles:

• Transparency

• Accountability and Responsibility

• . Confidentiality and Conflict of Interest

• Value for Money"

5.2 OCM Report findings

The OCM Report made the following findings:

(a) In granting the exploration licence, the Minister was acting within the powers granted to him under the Mining Act 1992.

(b) There are examples of direct allocations by former Ministers. While most involve extensions to existing mines, there are some examples where direct allocations resulted from direct approaches for specific areas.

(c) The Guidelines could be enhanced from a transparency perspective by:

(i) providing examples of circumstances where coal allocations are made subject to conditions; and

(ii) requiring the Minister to publicly advertise his intention to make a direct allocation.

(d) Approval processes could be improved from a transparency and probity perspective by:

(i)

(ii)

(iii)

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providing examples in the Guidelines of circumstances in which direct allocations might be made;

publishing exploration licence conditions on the Department's website;

mandating competitive allocation processes for all coal allocations estimated to be greater that 100 million tonnes;

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(iv) establishing a public exposure test for all direct allocations;

(v) strengthening the approval conditions for the transfer of ownership in exploration titles;

(vi) requiring a record to be maintained that issues of conflicts of interest have been specifically considered during a direct allocation process.

5.3 Deficiencies of the OeM Report

[n our view, the OCM Report does not appear to meet its stated objective.

Rather than considering whether probity standards are met, it merely made recommendations for enhancing probity. For example, it did not investigate or make a finding in relation whether the Minister may have made a decision that was in excess of his power and subject to administrative review or whether any conflicts of interest were involved in the granting of the Doyles Creek EL.

[t is also notable that the OCM Report did not consider whether the Guidelines were complied with. The OCM Report recommended that competitive allocation processes be mandated for all coal allocations estimated to be greater that 100 million tonnes. This recommendation suggests that the authors appear to have wrongly considered that the decision of the Minister complied with the Guidelines. The Guidelines already mandated competitive allocations for Major Stand-Alone Areas. Doyles Creek, with an estimated 62 million tonnes of coal was classified as a Major Stand-Alone Area. The OCM Report certainly did not draw attention to the fact that the Minister exercised a discretion which was contrary to the Guidelines and also contrary to the express advice of his Department.

The OCM Report also did not disclose whether the examples of previous direct allocations (referred to at paragraph 5.2(b) above) involved areas falling into the category of Major Stand­Alone Areas or rather were related to small areas which, according to the Guidelines, do not necessarily require a competitive tender process.

Further, we understand that key individuals such as [an Macdonald and John Maitland were not interviewed for the OCM Report.

[n short, we do not consider that the OCM Report was the result of a robust investigation into the matters at hand. [n particular, we consider that there is a case warranting investigation as to whether the Minster's decision was subject to judicial review and liable to be declared void for jurisdictional error.

Even broad discretions such as those that are given to the Minister under sections 22 and 13(3) of the Milling Act 1992 must be exercised within the matter, scope and purpose of the statute concerned: see Ministerfor Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24. The decision maker is not pennitted to take into account irrelevant considerations in the exercise of a broad discretion and must take into account relevant considerations. The Mining Act 1992

does not have as part of its matter, scope and purpose the training of miners. It is an act that has as its purpose the licensing of exploration, prospecting and mining, environmental matters in relation to licensed mining activities and royalties. It does not concern matters of education, training or occupational, health and safety. The granting of an exploration licence solely because it could be used for the establishment of a training mine would appear to be an exercise of discretion by the Minister that was outside of his power, which required him only to take into consideration matters relevant to the scope and purpose of the Mining Act 1992.

The High Court recently struck down a purported exercise of a broad Ministerial discretion concerning the Malaysian refugee agreement in PlainliffM 7012011 v Minister for Immigration and Citizenship [2011] HCA 32.

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In addition, by reason of the Minister going against his Departmental Guidelines in failing to use a competitive tender process and to consent to the DCMP application in circumstances where the only then existing Departmental advice was that of February 2007 and May 2008, neither of which advocated such a course, suggests that the Minister's decision was either made in bad faith or was so unreasonable as to meet the description of being manifestly unreasonable as that tenn is used in decisions following Associated Provincial Picture Houses Ltd v WednesblilY CO/paratian [1948]1 KB 223.

The Minister's decision may well be voidable on the bases of it being in excess of jurisdiction, bad faith or manifestly unreasonable. The OCM Report failed to consider any of these matters. Given that the purported exercise of a Ministerial discretion has conferred such a large intended or unintended benefit upon John Maitland, in circumstances where other interested parties did not have the opportunity to apply for the exploration licence, there is a strong public interest in determining whether the Ministerial actions were within or outside of a lawful exercise of the power granted by the legislature to the Minister.

6. Questions arising from the Report

The following questions arise from Sections 4 and 5 of the Report:

(a) was the Minister's decision to grant the Doyles Creek EL in excess of his lawful authority either because he exceeded the jurisdiction granted to him under the Mining Act 1992 or because his exercise of the powers granted by the Act was made in bad faith or was manifestly unreasonable?

(b) why were the Guidelines not complied with?

(c) on what basis did the Minister invite John Maitland to apply for an exploration licence over Doyles Creek contrary to the advice of the Department?

(d) in what circumstances were the letters in support of a "training mine" brought into existence?

(e) on what basis did the Department's advice in relation to the proposal for a training mine at Doyles Creek and the need for any exploration licence to be allocated by a competitive tender process change between February 2007 and December 2008?

(I) why was the Department's usual practice of requiring an exploration licence application to be advertised for a period before granting the associated licence not followed on this occasion?

(g) what were the tenns of reference for the OCM Report?

(h) what instructions and documentation was the OCM Report based on?

(i) which Department personnel, if any, were interviewed for the OCM Report?

U) why did the OCM Report fail to make substantive findings in relation to the allocation of the Doyles Creek EL?

7. Further areas of inquiry

In order to properly consider and endeavour to answer the questions raised at Section 6 of the Report, further investigations are required which are beyond the scope of our current instructions.

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We have identified the following areas of inquiry which would likely assist in answering these questions:

(a) there appears to be documentation missing from the Department's file, which should be located and reviewed, in particular:

(i) any correspondence between the Department and John Maitland in relation to:

• John Maitland's briefing note of 22 January 2007;

• John Maitland's applications for an exploration licence over Doyles Creek, both in his capacity as Chair of ResCo and Chair of DCMP;

(ii) any correspondence between the Department and the Minister's office in relation to:

• the Minister's consent of 21 August 2008 to invite DCMP to apply for the exploration licence;

• the Minister's decision to grant the exploration licence in December 2008;

• the reasons for the Minister's decisions in August and December 2008.

(iii) any legal advice obtained by the Department or the Minister prior to the Minister making the decisions in August and December 2008;

(iv) all documentation relating to the internal analysis of DCMP's exploration licence application prepared on 13 May 2008;

(v) the public announcement of the Doyles Creek EL;

(vi) all correspondence relating to the commission of the independent probity review of the Doyles Creek EL allocation process;

(b) all documentation held in the Minister's office including emails to and from that office in relation to the application for the Doyles Creek EL and the Ministerial consents in August and December 2008 including any legal advice in relation thereto;

(c) research regarding the association between Ian Macdonald and John Maitland, which might involve a review of all correspondence (electronic and otherwise) between Ian Macdonald and John Maitland, their staff and associates, for the period of approximately January 2007 to February 2009;

(d) a review of the materials used in the preparation of the OCM Report, including:

(i)

(ii)

(iii)

Legal\305329993.2

the instructions and documents provided to O'Connor Marsden Pty Limited for the purposes of conducting the probity review;

any file notes, memos, records of interview, working papers or other similar documents created for the purpose of preparing the OCM Report;

the terms of reference of the OCM Report;

12

(e) interviews with key individuals (these individuals can be identified on request but we would prefer not to identifY them at this stage given the sensitive nature of this matter);

(I) research regarding the circumstances surrounding NuCoal's acquisition of DCMP; and

(g) research regarding the sale of Johu Maitland's shares in NuCoal and the use that has subsequently been made of those proceeds.

8. Options and recommendations

On the infonnation contained in this Report there appears to be a number of courses of action that are open to the Department (NSW Goverrunent).

8.1 Do nothing further

The Department could rely on the OCM Report that was commissioned by the former NSW Goverrunent to do nothing further. As stated above, the OCM Report ultimately concluded that the Minister acted within the powers conferred on him by the Mining Act 1992 in granting the Doyles Creek EL and made a number of reconunendations for improving the approval process. The OCM Report made a number of recommendations for reform to the Mining Act 1992 and the Guidelines. The Department could simply undertake to ensure that the recommendations made in the OCM Report have actually been implemented.

However, we consider that, in light of the facts surrounding the allocation of the Doyles Creek EL (as presently known), there is a strong circumstantial case of wrongdoing and breach of public trust and it would therefore be inappropriate for the Department to do nothing further.

8.2 Departmental inquiry

A Departmental inquiry would usually be conducted by an independent auditor in private, with the resulting report made publicly available.

This course of action is relatively quick and cheap and the Department would be able to retain a significant degree of control over the process of investigation and costs.

However, this fonn of inquiry operates outside of a statutory framework and so is unable to utilise any coercive powers or protections, including:

(a) power to compel witnesses to give evidence�

(b) power to administer an oath or affirmation;

(c) power to compel the production of documents; and

(d) protection by any immunities or privileges for those involved, including inquirers, lawyers and witnesses.

The absence of these powers means that, if there is no cooperation by participants, the inquiry is unlikely to fulfil its purpose and achieve an outcome. It is unlikely that Johu Maitland or Ian Macdonald would produce documents or be interviewed for such an inquiry. Former members of Ian Macdonald's staff or the former Premier's staff would also appear to be relevant witnesses and are likely to also be uncooperative.

The internal audit conducted by O'Connor Marsden Pty Limited was essentially a Departmental inquiry. As discussed above at Section 5, we consider that the OCM Report was

Legal\305329993.2 13

deficient in several significant respects. Specifically, it did not adequately review the conduct of the Minister and the Department in granting the Doyles Creek EL. These deficiencies highlight the limits of this form of inquiry. The inquirers lacked any form of coercive power and so were unable to ensure access to essential documentation and witnesses. It is particularly notable that Ian Macdonald and John Maitland were not interviewed as part of the internal audit.

We consider that a second Departmental inquiry would be of little utility, given:

(e) a Departmental inquiry has already been conducted with limited success;

(I) the lack of coercive power available to inquirers, which is likely to be essential in obtaining much of the outstanding information identified at Sections 6 and 7; and

(g) the public interest in this matter.

8.3 Reference to ICAC

An alternate course is for the current Minister or Department to refer the fanner Minister's conduct to the Independent Commission Against Corruption (ICAC) under section 10 of the Independent Commission Against Corruption Act 1988 (ICAC Act). Whilst this will be a less expensive form of inquiry from the Department's point of view, there are a number of shortcomings with such a course of action.

The ICAC only fully investigates matters that it decides to investigate. The NSW Government will not have control over the extent, timing or nature of an ICAC investigation.

The ICAC can only investigate matters of corrupt conduct under the ICAC Act. Corrupt conduct has a very narrow meaning under the ICAC Act and requires that there be a criminal offence or a breach of an applicable code of conduct. The code of conduct for Ministers is not an applicable code of conduct for the purposes of the ICAC Act. The code of conduct for Members of Parliament is an applicable code of conduct for the purposes of the ICAC Act, but it is concerned with actions in the Houses of Parliament rather than the exercise of Ministerial discretions and, as a consequence, this matter may be of little interest to the ICAC.

As a consequence, the ICAC does not have the ability to investigate matters relevant to the potential good public policy outcomes in these circumstances including:

(a) whether the Minister acted in a manner that fell short of corrupt conduct under the ICAC Act but nevertheless has exposed the NSW Government to administrative review;

(b) whether the NSW Government should pass legislation to recover the windfall gain enjoyed by individuals because there was an absence of a competitive tender process;

(c) what changes to the Mining Act 1992 should be made to prevent Executive abuse of power in the future;

(d)

(e)

Legal\305329993.2

whether the NSW Goverrnnent granted the exploration licence too cheaply in this case , given the potential for significant windfall gains by persons granted a licence (as exemplified by this case);

whether there are grounds to justity the Minister refusing to grant a mining lease over the Doyles Creek area and whether the NSW Government could be exposed to compensation claims by the current holders of the Doyles Creek EL or shareholders in the company; and

14

(I) whether there should be legislation passed to prevent the NSW Government being exposed to compensation claims.

8.4 Parliamentary inquiry

A possible alternate form of inquiry is that of a Parliamentary inquiry.

The powers to compel witnesses to give evidence in a Parliamentary inquiry are limited to compelling witnesses who are resident in NSW. The power to compel witnesses does not include current members of either House of the Parliament. That could be significant because there may be relevant witnesses who fall into either category of exclusion.

A Parliamentary inquiry also has only limited powers to compel the production of documents. The only documents that it can compel are State Papers. Many non-State papers will be relevant to investigating all of the circumstances of the Doyles Creek EL allocation.

Furthermore, inquiries of this kind do nol have the benefit of experienced counsel assisting, who are properly briefed, to question the relevant witnesses. Inquiries can have the appearance of a political investigation because they do not have an independent person of the status of a retired judge, as can an ICAC investigation or a Special Commission ofinquiry.

As a consequence of the above identified features, a Parliamentary inquiry is likely to be a less rigorous form of inquiry than one conducted by the [CAC or a Special Commission of Inquiry.

8.5 Special Commission of Inquiry

Special Commissions of Inquiry are conducted under the Special Commissions a/Inquiry Act 1983 (NSW) (SCI Act) and generally occur where, as in this instance, the subject matter of inquiry is of great significance and involves high levels of public dissatisfaction. Special Commissions ofinquiry are a unique and effective method of investigating matters that involve often legitimate conflicting interests of a complex nature and satisfying the need for public confidence to be restored in Executive Government.

In relation to the Doyles Creek EL, the 2007 Departmental advice to the Minister was that the area has sensitive environmental features - it was close to the township of Jerry's Plains and the Wollemi National Park with alluvia connection to the Hunter River. The case for a training mine was not thought to be convincing. Departmental policy for competitive tendering was not followed notwithstanding the interest of a number of other parties in a grant of the exploration licence.

A Special Commission ofinquiry could investigate:

(a)

(b)

(c)

(d)

Legal\305329993.2

whether the Minister has grounds to refuse a mining lease application in relation to Doyles Creek when it is made;

if such a refusal is made, will there be grounds for the current holder of the Doyles Creek EL and its shareholders to seek compensation from the NSW Government?

what value have the original shareholders in DCMP realised and is there a case for legislative action to recoup the windfall gain for the people of NSW?

what was the true motivation for the grant of the Doyles Creek EL by the Minister and did he exceed his power under the Mining Act 1992?

15

Only a Special Commission of Inquiry can properly investigate the above matters and make recommendations to the NSW Government as to the preferred way for it to manage the many different public interests requiring consideration in this case.

The key benefits of Special Commissions of Inquiry, compared to internal Departmental inquiries, are the coercive powers and protections conferred by the SCI Act, which provides:

(al the Commissioner has the same protection and immunity as a Judge of the Supreme Court in discharging his or her duties: section II; and

(b l the Commissioner may compel any person to give oral evidence under oath or affinnalion and produce any documents in his or her custody: sections 14-17.

The scope of the Commissioner's power is defined by the tenns of reference for the Special Commission of Inquiry, allowing a degree of control over the process.

The hearing before the Commissioner is held in public, unless there is a satisfactory reason for it to be held in private. This feature of Special Commissions ofinquiry promotes transparency and public confidence.

The Commissioner is required to report to the Governor in connection with the subject matter of the Special Commission of Inquiry. This report is made public, further enhancing public confidence.

While the outcomes from a Special Commission of Inquiry are likely to be far more robust than those from a Departmental inquiry, this inevitably comes at a comparatively greater expense of resources and time.

We nevertheless consider that the expenditure of resources and time required for a Special Commission ofinquiry are justified in the present circumstances for the following reasons:

(al there is clearly substantial public concern over the allocation process of the Doyles Creek EL and the potential future allocation of a mining licence;

(b) the nature of the inquiries required to provide answers to the questions raised at Section 5 of this Report necessitate coercive powers to compel witnesses to give evidence and produce documents;

C c) there is a need to ensure the utmost level of transparency in order to maintain public confidence; and

C dl the facts surrounding the allocation of the Doyles Creek EL, as they are presently known, already establish a circumstantial case of wrongdoing and breach of public trust.

9. Recommendations

We recommend the NSW Government set up a Special Commission of Inquiry into the allocation of the Doyles Creek EL.

In proposing this course of action, we make the following comments:

Cal

Lega11305329993.2

while Departmental staff appear to have followed the Guidelines and made appropriate recommendations, the Minister appears not to have followed the Department's recommendations and advice;

16

(b) the Special Commission of Inquiry should be established at the soonest possible opportunity, while the issue is still current and prior to any application for a mining licence over the Doyles Creek area;

(c) given that the Special Commission of Inquiry will investigate a former Minister of the Crown, the Commissioner should be a retired Judge and preferably a fonner Justice of the High Court of Australia, or a person of similar stature;

(d) the terms of reference should allow the Commissioner broad powers to compel witnesses and the production of documents and adopt any procedures that he or she considers appropriate for the expedient and proper conduct of the Inquiry; and

(e) the questions put to the Commissioner should be broad enough to allow him or her to investigate any possible wrongdoing or breach of public trust in connection with the allocation of the Doyles Creek EL.

10. Concluding remarks

In the event that the NSW Goverrunent chooses one of the options in Sections 8.2 to 8.5 above (that is, it opts to do something other than nothing further) it will be necessary to retrieve documents of the kind identified in Sections 7(a) to 7(d) above from the NSW Goverrunent's records. As retrieval of these documents may take some time, we strongly recommend that this process of the retrieval and assessment commence immediately while the NSW Goverrunent decides on its favoured option as to the future conduct of the investigation. This will allow a speedy implementation of the NSW Goverrunent's preferred option.

Legal\305329993.2 17

Annexure A - Chronology

Date Event Sonrce

September 1989 - Exploratory drilling at Doyles Creek by Ministerial Briefing 22 April 1991 Bayswater Colliery Company provides data February 2007

estimating the area to contain 62m tonnes of coal reserves. (As such, it is classified as a Major Stand-Alone Area under the Guidelines).

22 January 2007 John Maitland submits a briefing note to the Briefing Note 22 January 2007 Minister's office outlining a proposal for an underground training mine in the Upper Hunter Valley.

30 January 2007 Then Deputy Director General of the Ministerial Briefing 22 Department of Primary Industries, Alan Coutts, February 2007 (actual requests further details from Mr Maitland correspondence not in file) regarding the proposal. In particular, he seeks specific infonnation as to how the proposed mine would operate on a commercial basis and what, if any, support would be required from the government.

6 February 2007 Initial response received from John Maitland. Ministerial Briefing 22 February 2007 (actual correspondence not in file)

15 February 2007 Written request made by John Maitland in his Letter from ResCo to the capacity as Chair of Res Co for consent to apply Minister dated 15 February for an exploration licence over Doyles Creek. 2007

22 February 2007 A Ministerial briefmg prepared by Brad Mullard Ministerial Briefing 22 is provided to the Minister It is noted in the February 2007 briefing that several companies had previously expressed an interest in the Doyies Creek area but that these proposals had not been progressed due to the sensitive nature of the area due to its proximity to the Jerry's Plains township and the Wollemi National Park. The briefing further noted that the former Mine Safety Council (now called the Mine Safety Advisory Council) had considered a previous similar proposal in late I 999-early 2000 and that the Council had determined that the training mine concept no longer be pursued.

The briefing outlined three potential options for the Minister to consider:

1. reject the current proposal;

2. seek competitive expressions of interest for the proposed area under the Guidelines, which includes a

Legal\305329993.2 18

Date Event Source

financial contribution; and

3. refer the proposal to the Mine Safety Advisory Council and seek the Council's advice on the current training mine proposal to infonn the Minister's further consideration.

Option 3 was recommended as appropriate initial action.

18 March 2008 John Maitland (in his capacity as Chair of Letter from DCMP to Allan DCMP), submits a written request to the Coutts dated 18 March 2008 Department for consent to apply for an exploration licence over the Doyles Creek area. He makes reference to the previous correspondence between ResCo and the Department dated 15 February 2007 and advises that DCMP is associated with ResCo.

13 May 2008 An internal analysis by the Department's OCM Report (documents not in Manager Operations, Mineral Resources, is file) prepared for Allan Coutts. It concludes that the Minister consider a competitive allocation process, with a requirement to either establish a training facility or establish a broader industry training fund. As a result of this analysis, Allan Coutts writes to John Maitland advising him that the proposal requires further examination and referral to the Minister.

17 June 2008 Ian Macdonald (and two of his staffers, Jaime Sydney Morning Herald 29 Gibson and Craig Munnings) have dinner with May 2010 John Maitland, allegedly paid for by the Department, to discuss coal mining.

21 August 2008 Ian Macdonald writes to John Maitland, inviting Letter from Ian Macdonald to him (in his capacity as chair of DCMP) to apply John Maitland dated 21 August for an exploration licence over the Doyles Creek 2008 area, subject to the provision of a supplementary submission outlining in detail the industry and wider community support for such a proposal. The letter notes that any consent finally given will be made under the Guidelines.

2 September 2008 The Department receives an inquiry from the Email from Ian Kirkwood Newcastle Herald regarding the status of the (Journalist, Newcastle Herald) Doyles Creek EL. The inquiry refers to the to Lyndall Derrig Minister having written to John Maitland, inviting him to submit an exploration licence application for the Doyles Creek area. It is only

Legal\305329993.2 19

Date Event Source

subsequent to this inquiry, it would appear, that the Department became aware that the Minister had written to John Maitland on 21 August 2008.

29 September 2008 DCMP submits a fonnal application for an DCMP Exploration Licence exploration licence over the Doyles Creek area Application 29 September 2008 under Part 3 of the Mining Act 1992. The application includes a fee of $22,800 and a number of letters of support from various associations and businesses associated with the area and the mining industry.

5 December 2008 A Ministerial letter is provided to the Minister, Ministerial letter 5 December with a covering note prepared by Melanie 2008 and File Note of Melanie Brown (Acting Team Leader Coal & Petroleum Brown 5 December 2008 Titles, Mineral Resources Division) recommending that the Minister consent to DCMP's exploration licence application, in accordance with the consent previously given by him. This letter was prepared at the direction of Brad Mullard.

5 December 2008 The Minister makes offer of an exploration A draft letter is attached to the licence to DCMP. Ministerial Briefing dated 5

December 2008. No fonnal letter appears in the file.

10 December 2008 The Department advises DCMP that notice of Letter from the Department to its exploration licence application must be DCMP dated 10 December placed in the Land Newspaper and attaches 2008 guidelines relating to the advertisement.

12 December 2008 A Ministerial briefing is prepared by Tracey Ministerial Briefing 12 Godwin (Team Leader Coal & Petroleum Titles, December 2008 Mineral Resources Division), which recommends that lan Macdonald grant an exploration licence to DCMP subject to the tenns and conditions specified in the licence document.

15 December 2008 Exploration Licence No 7270 is granted to Exploration Licence No. 7270 DCMP by the Minister. The Doyles Creek EL dated 15 December 2008 is subject to a number of conditions including conditions relating to environmental management, a landholder liaison program, the company's commitments to establish a training mine, as well as the need to meet financial contributions to the State.

24 December 2008 The allocation of the Doyles Creek EL is Media release is not in the file. publicly announced.

Lega\\305329993.2 20

Date

8 September 2009

5 February 2010

18 March 2010

26 March 2010

April 2010

21 April 2010

4 June 2010

24 June 2010

July 2010

23 August 20 I 0

22 September 20 I 0

Lega11305329993.2

Event

Jock Laurie is formally appointed as Chair of the Training Mine Coal Exploration Project Community Consultative Committee.

NuCoal acquires all the issued capital of DCMP. NuCoal floats on the share market in February with a value of approximately $IOOm.

The then NSW opposition calls for an independent inquiry into the allocation of the Doyles Creek EL.

Managing Director ofNuCoal states that if the mine goes ahead, NuCoal's value will probably jump to between $500m-$800m.

John Maitland sells $ 1.1 3m of shares in NuCoal

The Minister states in Parliament that he received a recommendation from the Department of Primary Industries that the Doyles Creek training mine go ahead.

ran Macdonald resigns from the Ministry.

NuCoal releases a statement predicting 70 percent increases in expected coal reserves from Doyles Creek.

The former NSW Government commissions an independent probity review.

O'Connor Marsden & Associates Pty Limited conducts a probity review. It concludes:

"On the basis of our work pel/armed it would appear thal the then Minister acted within the powers afforded to him under the legislation in granting the EL to DCMP. There are a number 0/ examples where direct allocations have been previously made by previous Ministers.

Notwithstanding the above we consider that there are several opportunities to further enhance key probity principles in relation to the application/or, and the subsequent awarding of, coal mining ELs. These opportunities are referred to above and include providing a greater level of consultation and communication to key stakeholders to support the decision making process. II

Steve Whan, Minister for Primary Industries,

Source

Letter from the Minister to Jock Laurie date 8 September 2009

Proactive Investors 19 February 2010 and Sydney Morning Herald 18 March 20 I 0

Hansard 13 March 20 I 0

Sydney Morning Herald 26 March 2010

Sydney Morning Herald 26 April 2010

Hansard 21 April 2010

Various

Proactive Investors Australia 24 June 2010

Hansard 23 September 20 I 0 and the OCM Report

OCM Report

Media Release 22 September

21

Date Event Source

publicly releases the OCM Report. 2010.

November 2010 John Maitland sells $1.3m worth ofNuCoal Hansard 10 November 2010 shares.

16 December 20 10 NuCoal provides an increased estimate for coal Mining Reporter 16 December production at Doyles Creek. 2010

17 December 2010 John Maitland sells $3.78 million worth of The Land Newspaper 22 NuCoal shares. December 20 I 0

22 December 20 I 0 The Sydney Morning Herald reports that Ian Sydney Morning Herald 22 Macdonald told the Herald he wrote to ran December 20 r 0 Maitland in August 2008 to invite him to apply for the exploration licence over Doyles Creek only on the advice of the Department.

Legal1J05329993.2 22

Annexure B - Key Individuals

Name Positions Held

Ian Macdonald Relevant Ministerial positions include:

Agriculture (2 April 2003 - 3 May 2004) Fisheries (2 April 2003 - 3 May 2004) Primary Industries (3 May 2004 - 5 September 2008) Natural Resources (3 August 2005 - 2 April 2007) Mineral Resources (3 August 2005 - 5 September 2008) Energy (2 April 2007 - 5 September 2008) State Development (2 April 2007 - 5 September 2008) Energy (8 September 2008 - 14 September 2009) State Development (8 September 2008 - 17 November 2009) Primary Industries (8 September 2008 - 17 November 2009) Mineral Resources (8 September 2008 - 17 November 2009) Mineral and Forest Resources (8 December 2009 - 5 June 2010) State and Regional Development (8 December 2009 - 5 June 20 10) The Central Coast (8 December 2009 - 5 June 20 10) Major Events (I I March 2010 - 5 June 2010)

Resigned from the Ministry on 4 June 2010 and from Parliament on 7 June 2010.

John Maitland Fonner Chair of DCMP and ResCo.

Fonner national secretary of the Construction, Forestry, Mining and Energy Union.

Shareholder ofNuCoal - Invested $ 165,623 in NuCoal shares between October 2006 and September 2009, equating to 9.2% ofNuCoal. Sold NuCoal shares worth $ 1.13 million in April 2010, shares worth $1.3 in November 2010, and shares worth $3.78 million in December 2010. Jonca Investments (owned by the Maitland family) retains 33 million shares (5% ofNuCoal) currently worth $9.4 million.

Inaugural member of the Coal Competence Board 2006 - current (appointed by Ian Macdonald).

Alan Coutts Deputy Director-General of the NSW Department of Primary Industries (March 2006 -November 2008).

Director-General of the NSW Department of Mineral Resources prior to 2006.

Brad Mullard Fonner Director, Coal and Petroleum Development, Department of Primary Industries.

Executive Director Minerals, Department of Trade and Investment, Regional Infrastructure and Services.

Melanie Brown Fonner Acting Team Leader Coal & Petroleum Titles, Mineral Resources Division

Paul McLeay Minister for Mineral and Forest Resources (5 June 2010 - 6 September 20 10).

Steve Whan Relevant Ministerial positions include:

Primary Industries (8 December 2009 - 28 March 20 I I)

Shadow Minister for Resources and Primary Industries (20 June 201 I -

Legal\305329993.2 23

Name Positions Held

present)

Jamie Gibson Former staffer of Ian Macdonald.

Craig Munnings Former staffer of Ian Macdonald.

Jock Laurie Chair of the Community Consultation Committee for the Doyles Creek Mining Project (November 2009 - present).

NSW Farmer's Association President (2005 to 2009).

NSW Farmer's Federation President (November 20 I 0 - present).

Glen Lewis Managing Director of NuCoal.

Legai1305329993.2 24