Posted on November 21, 2013 by

Disclosure of Political Donations under the EPA Act

Director General, Department of Planning and Infrastructure v Aston Coal 2 Pty Ltd [2013] NSWLEC 188 (Aston) is the first case dealing with a failure to disclose reportable political donations under s147 of the Environmental Planning and Assessment Act 1979 (EPA Act) and highlights the importance of knowing what a reportable political donation is and when it needs to be disclosed under that Act.

Aston pleaded guilty to two charges under s147 of the EPA Act which alleged that it ought  reasonably to have known that reportable political donations  made by two of its directors were required to be disclosed under that section.  An early plea of guilty and evidence that the non-disclosure was not dishonest or wilful led Justice Craig to the conclusion that the offences, whilst not trivial, were in the mid-range of seriousness.  Taking all of the relevant factors into consideration, Craig J imposed a fine of $10,000.00 for each of the charges.

Obligation to disclose under s147 of the EPA Act

Section 147(3) of the EPA Act requires a person who makes a ‘relevant planning application’ to the Minister or the Director-General to disclose all reportable political donations, made within the period beginning 2 years before the relevant planning application was made and ending on the day the planning application is determined.

A reportable political donation is defined under the Elections Funding, Expenditures and Disclosures Act 1981 (Disclosures Act) and relevantly meant, a political donation of or exceeding $1,000.00. There are other categories of donations such as gifts.

Disclosure is required where a person with a financial interest in the planning application makes a reportable political donation.  Disclosure is required to be made at the time the planning application is made if the donation was made before then, or otherwise within 7 days of making the donation.

A person has a financial interest in a relevant planning application if (s147(7)):

• the person is the applicant, or a person on behalf of whom the application is made,
• the person is the owner of the site or has entered into an agreement to purchase the site to which a planning application relates,
• or is a person associated with a person described in the above two points and is likely to obtain financial gain if the planning application is approved (other than gain merely  as shareholder of a publicly listed company).

Persons are associated with each other if (s147(8)):

• they carry on a business together, in connection with, or which may be affected by, the granting of a planning application;
• they are related bodies under the Corporations Act 2001; or
• they are directors of related corporations.

Facts in Aston

On 16 August 2010, the defendant lodged a major project application with the Director-General for the carrying out of the Maules Creek Coal Project. The application was a relevant planning application.

At the time, two directors of the defendant had entered into a ‘long term incentive plan’ with Aston which included an option to purchase shares in the company at a discounted price if ‘first coal’ was obtained from the Maules Creek Coal Project before August 2013.

The directors made donations to the “NSW National Party” on 15  and 22 March 2011  of $5,000.00 and $4,250.00 respectively. Around the same time, the defendant had made public statements that it was likely that the Maules Creek Coal Project would deliver first coal before August 2013.

It was clear therefore, that directors, under their ‘long term incentive plans’ would have obtained financial gain (other than gain merely  as shareholder) if the major project application was approved. It was also clear that the defendants were persons associated with the defendant.

It followed that the defendant was obliged to disclose the reportable political donations under s147 of the EPA Act.

Somewhat curiously, the donations had been disclosed under the Disclosures Act but not under the EPA Act.

The Planning Assessment Commission approved the major project application on 23 October 2012.

Sentencing Considerations

The defendant pleaded guilty.

Craig J took the following matters into consideration in imposing the sentence:

• the maximum penalty, which was a fine of $22,000.00 or imprisonment for 12 months or both,
• the potential for the defendant’s actions to undermine the legislative purpose,
• the defendant’s state of mind, and
• subjective mitigating factors.

Craig J observed that the objective of requiring disclosure of reportable political donations is to minimise any perception of undue influence. This helped to preserve the integrity of the electoral system and the transparency and accountability of the planning and assessment process.

Craig J concluded that the defendant’s conduct only had a low potential to undermine that objective because the donations were not made in secret, the Planning Assessment Commission rather than the Minister determined the major project application and information on the donations including the ‘long term incentive plans’ was provided to the Director General months before the major project application was actually determined.

Whilst the defendant ought reasonably to have known that the donations needed to have been disclosed, and the company had significant resources to obtain advice on its reporting obligations, Craig J found that the the actions were neither dishonest nor ‘contumelious‘.

The defendant had also entered an early guilty plea and showed remorse.

Having considered all the above factors, Craig J determined that the appropriate penalty should be $10,000.00 for each charge.

Conclusion

This is the first case to consider an offence under s147 of the EPA Act since its commencement on 1 October 2008. In my view, this suggests that either reportable political donations are being properly disclosed, or as in this case, are not being disclosed but going unnoticed.

It is important for all persons and entities who make relevant planning applications to recognise that the obligation is on them to disclose reportable political donations made by all persons with a financial interest in the application. This case gives a useful indication of the sentence likely to be imposed if found guilty of an offence for non-disclosure.

Public authorities may also consider whether they need to have a process for checking teh veracity of representations in applications  which state that no reportable political donations need to be disclosed.