and under the Howard “regime” how things have progressed in three years?

Subject: Senate: Chief Scientist in pocket of Rio Tinto

Thursday, 5 August 2004

SENATE 25627 CHAMBER

COMMITTEES

Employment, Workplace Relations and Education
References Committee

Report:

Senator CROSSIN (Northern Territory) (3.42
p.m.)-On behalf of the Chair of the Employment,
Workplace Relations and Education References Committee,
Senator Carr, I present the report of the committee
on the Office of the Chief Scientist, together
with the Hansard record of proceedings and documents
presented to the committee.

Ordered that the report be printed.
...
Senator BROWN (Tasmania) (3.57 p.m.) – The committee has found that there is a clear conflict of public and private duties arising from the dual parttime roles performed by Dr Batterham. His circumstances
fall squarely within any mainstream definition
of conflict of interest. The follow-on from that is that
clearly the Chief Scientist should relinquish one of his
jobs. It is not tenable for the Chief Scientist to maintain
both the jobs of Chief Scientist of this nation and chief
technologist for the major coal company, Rio Tinto.

(My note: and uranium miner/exporter)

There is a clear conflict of duty and interest as seen
from the public’s point of view. The committee’s findings
speak volumes of that, but they speak also of the
need for there to be an improvement in the way in
which the government applies Public Service rules to
all posts to ensure that this sort of conflict does not
apply in the future.

I want to point to the some of the background as to
why the Chief Scientist has been found to be in an invidious
position from the point of view of public perception.
Rio Tinto is a big corporation. We are in an
age where there is enormous concern about global
warming. We are in an age where government has a big
role in stimulating technology and research about ways
forward that get us off the global warming treadmill
and the position of the world’s worst per capita polluter
amongst industrialised nations.

The government has been very tardy about that.
There has been not only limited but also dwindling
government input into renewable energy and energy
efficiency businesses, which are hugely job prospective
and hugely export oriented for the future of this country.

I want to point out here that 12 or 13 years ago we
outcompeted Japan in the production of solar panels.
Now Japan produces 50 per cent of the world’s output
and Australia produces less than one per cent. This is
the sunshine country. Japan is technology oriented and

looks much more at the future. It has streeted the field
while this government has pulled the purse strings.
But the government has not pulled the purse strings
everywhere.

When we look at Rio Tinto, the company for which the

Chief Scientist has been chief technologist
since his appointment in 1999, we find that some
$340 million in direct, indirect or enhancing grants has
gone to that corporation.

- In October 2001, $35 million went, in the form of a

24-year interest free loan, to the Rio Tinto Foundation

for a Sustainable Minerals Industry.

The foundation is not a legal entity; it is an advisory
group to Rio Tinto.

Also in October 2001, $102 million went to a

strategic investment incentive for energy generation

to support the Comalco alumina refinery
at Gladstone.

In May 2002, another $125 million went to a

strategic investment incentive for the HIsmelt
iron smelter.

More funding has gone to cooperative research centres

in which Rio Tinto has core participation.

In December 2000, $14.5 million went to the
CRC for Coal in Sustainable Development.

In December 2002, $21.8 million went to the

CRC for Greenhouse Gas Technologies.

In December 2002, $18.8 million went to a

sustainable resource processing investigation.

In August 2003, $23.4 million in additional
funding was allocated to the CRC for Greenhouse Gas
Technologies with in-kind contributions from Geoscience
Australia, the CSIRO and the Australian Greenhouse Office.

When you look at the other side of the ledger,

Mr Acting Deputy President, you find that the well of
funding for the sunrise industries for environmental
technology-which are based on renewable energy
serving the whole of Australia and on energy efficiency-
is basically dry.

We have seen this extraordinary conjunction of the

billowing of government largesse directly and

indirectly to a huge company like Rio Tinto, whose

chief technologist is Dr Batterham, at the same time

as Dr Batterham has been the Chief Scientist
for the government – whose role is to advise the
government on the way forward. This gives the appearance
of a conflict of interest.

We heard a lot in the committee process about how
the Chief Scientist absents himself from decisions
which involve Rio Tinto, about how he is not there
when the vote is taken and about how-when it comes
to CRCs and applications for other funding from Rio
Tinto – a firewall is set up in Rio Tinto so that the
Chief Scientist is not involved. But the committee
could not get, and did not get, any indication from Rio
Tinto of what that firewall was – nor did anybody in
the government have any idea of what the firewall was.
Nobody could tell us. Any fair observer from the outside
would be led to believe that this firewall is a fiction-
insofar as anybody could believe that there are
tight, laid-down and publicly examinable rules which
are, in effect, a firewall.

We all know that it is not about the words you say

and it is not about the contacts you make;

it is about the influence you have that can
work enormously to favour your point of view in working
with posts, such as the post of Chief Scientist.

The committee also found that, on one occasion, Dr
Batterham did use unpublished and unverified data,
which was supplied by Rio Tinto, in a meeting of
Commonwealth and state energy ministers and failed
to declare the source of that information. That created
the appearance of a real conflict of interest. The report
went on to say:

The same data subsequently appeared in a high profile report
prepared by a PMSEIC working group. It appears that the
working group was not aware Rio Tinto had commissioned
information attributed to a private company, Roam Consulting.
37 However, the committee finds that the Chief Scientist
is not responsible for this oversight because he was not directly
involved in preparing the presentation to PMSEIC and
did not present it to the working group. The committee concludes
that this case has contributed to a perception of conflict
of interest which risks eroding public confidence in the
independence of advice provided to Government by the
Chief Scientist.

This is no small matter here, because the figures that
went through to the Prime Minister’s scientific advisory
group were extraordinarily influential in terms of
the outcomes for this nation.

They presented a very low-cost option for geosequestration.

They actually came from Rio Tinto and its consulting company.

That ought to have been acknowledged, but it was not.

If you are going to have the presentation of verifiable
information to such extraordinarily influential advisory
organisations as the Prime Minister’s scientific advisory
group then they need to know the source of that
information.

The committee was unable to find anybody
else on the planet who had such low costings for
the potential of geosequestration.

Nobody else was able to present such low costings,

and therefore present such a favourable view of the

potential for unproven technology to take carbon

dioxide out of the exudates from coal-fired power

stations and put them underground.

This is unproven technology. It was presented
as the lowest cost option without the information being
identified as coming at the behest of the coal company
for whom the Chief Scientist is the chief technologist-
that is, Rio Tinto.

Of course, this has the mark of a conflict of public
interest written all over it. Such a circumstance should
not be allowed to recur. Those who are competing for
government moneys, those who are promoting solar
power, wind power, biofuels, energy efficiency, wave
power and geothermal power all have a right to feel
aggrieved that such an important committee as that
advising the Prime Minister could use figures which
were not corroborated by other scientific sources but
which came from the company itself. I seek leave to
continue my remarks later.