Covid commission boss Nev Power steps back at gas company amid conflict of interest concerns
The head of the Morrison government commission tasked with coming up with plans to revitalise the economy after the coronavirus crisis, Nev Power, is to step aside from his position as deputy chairman of a gas company over conflict of interest concerns.
“Because of the perceptions of conflict of interest he has stepped back from participating in board meetings and will not participate in the decisions of the board” of Strike Energy, a spokesman for the National Covid-19 Coordination Commission said on Friday evening.
The move came after Guardian Australia on Friday asked the NCCC how Power was managing his apparent conflict of interest as chairman of the commission and deputy chairman of Strike Energy, a West Australian company that is developing a gas field in the south-west of the state.
Late on Friday evening Strike Energy, which is listed on the ASX, had yet to inform the market that Power had “stepped back” from his position.
The leadership position of Power, a former chief executive of mining group Fortescue Metals, on the NCCC has raised concerns about a potential conflict of interest because the commission has heavily promoted gas development as a key way to boost economic growth after the coronavirus crisis.
On Thursday, Guardian Australia revealed a leaked draft report by a taskforce advising the NCCC recommended Australian taxpayers underwrite a massive expansion of the domestic gas industry.
The report, by a manufacturing taskforce headed by the former Dow Chemicals executive Andrew Liveris, suggested taxpayers should underwrite an increased national gas supply from multiple new fields and help build multibillion-dollar interstate gas pipelines, and the states should introduce “reverse auction” subsidy schemes for gas-fired power.
In addition to his position as deputy chairman of Strike Energy, Power also holds shares in the company worth more than $2.4m and holds options over shares that will become worth an additional $2.1m if the company’s share price rises to 35c.
Strike’s share price rocketed more than 8% on Thursday after it announced it had struck a deal with another company enabling it to sell gas from its West Erregulla field.
Australian Gas Infrastructure Group is to build a gas plant and a short pipeline connecting the field to the WA gas transmission network.
Guardian Australia does not suggest that Power has acted inappropriately in his position.
The Centre Alliance senator Rex Patrick said the NCCC was a public body and had an obligation to be open and transparent, including about the connections of committee members and how they dealt with conflicts of interest. He said he had concerns about its decision-making process.
“When you ask a lawyer a question you get a legal answer, when you ask a doctor a question you get a medical answer and when you ask a gas executive a question you tend to get a gas answer,” he said. “I have a fear that’s what’s happening in this case.”
Patrick said just as it was important in legal matters that justice was not just done, but seen to be done, it was important that the NCCC was both independent and seen to be independent.
“There is a perception of a conflict and that is problematic. One of the ways to address those concerns would be for the NCCC to open up its books to show alternatives [to gas] that were considered and enable people to see the cost-benefit analysis that’s been done to test the ideas that are coming forward,” he said. “Transparency is a disinfectant.”
Richie Merzian, from the Australia Institute, said a growing perception of a conflict of interest was cause for concern. He called on the government to ask Power to give evidence at a Senate inquiry into the management of the coronavirus crisis.
“You have gas executives handpicked by the prime minister’s office charged with shaping the economic future of this country and talking about a gas-fired recovery,” he said. “A question that should be asked is whether the prime minister and cabinet should be stepping in before this becomes a serious political liability.”
Merzian said the lack of a transparent accountability framework meant the public could not tell if work had been done showing support for the gas industry was the best way to create jobs. He said an analysis by the institute had found the gas sector was the worst option you could choose for mass job creation. “You can invest in any other sector and create more jobs,” he said.
The NCCC’s spokesman said the government deliberately chose as commission members “active business people … to bring a business perspective to the post Covid-19 recovery”.
He said the NCCC followed all governance protocols, including conflict of interest management, set down by the department it sits within, the Department of the Prime Minister and Cabinet. “Each of the commissioners has made declarations to the Department of the Prime Minister and Cabinet about their interests and those of their family members,” he said.
The spokesman said members declare conflicts at the beginning of every meeting and can “also declare any potential conflicts, if and when they arise, to the chair or the CEO”.
“Where a potential conflict might arise, appropriate arrangements are in place, such as recusal of that member from specific deliberations.”
He said that while the commission gave advice, all final decisions would be made by the government.