Recent allegations that two property development companies paid bribes to a local aboriginal council in an effort to secure properties worth millions of dollars on the New South Wales coast highlight perceived ongoing problems with regard to corruption in the property development industry in New South Wales.
In the latest case, a hearing for which is currently being conducted by the state’s Independent Commission Against Corruption (ICAC), former Wagonga chairperson of the Wagonga Local Aboriginal Land Council Ron Mason and former Wagonga Local Aboriginal Land Council coordinator Ken Foster are alleged to have received improper payments from Fortunato (Lucky) Gattellari, an associate of developer Ron Medich between March, 2005 and April, 2006.
It is alleged the payments were made to facilitate negotiations between Gattellari, the Council and two development companies: Ron Medich Developments Pty Ltd. and Waterview Developments Pty Ltd.
The ICAC is also investing allegations that Vanessa Mason, current Wagonga Local Aboriginal Land Council CEO, received payments from Gattellari in return for facilitating negotiations between the Council, Gattellari and Waterview between January, 2008 and April, 2010.
According to a report from Australian Associated Press (AAP), the ICAC has heard the alleged payments amounted to $130,000 and related to development applications for four properties. That report says that one of the properties in question – a 13 hectare beachfront property at Fullers Beach – would have been worth millions if re-zoned.
An ongoing problem
The latest allegations are far from a one-off event. In a recent report, Anti-Corruption Safeguards and the New South Wales Planning System, the ICAC says that since its inception in 1989, it has produced no fewer than 30 reports exposing likely or actual corrupt conduct relating to the New South Wales planning system, adding that it has also published numerous reports about the potential for corruption in the system.
In its latest report, the Commission says that there is a perception that the current planning system in the state is ‘unwieldy, overly complex and lacking in transparency.’ It says that in 2010/11, its ‘development applications and land rezoning’ work area received the second-highest number of complaints concerning possible and actual corrupt conduct, and that over the last ten years, planning and rezoning has consistently ranked in the Commission’s top five areas in which it received complaints.
A particular area of concern related to Voluntary Planning Agreements (VPAs), under which developers can agree to construct or finance construction of local infrastructure such as transport, affordable public housing or public services or amenities as part of a development proposal. The Commission notes that such agreements are seen as a solution to the funding and delivery of infrastructure issues facing councils. But it fears that with many councils facing infrastructure funding problems, developers could propose generous VPAs that provide money for local infrastructure as a means of making an otherwise non-compliant or controversial development more acceptable.
A broader area of concern relates to the level of flexibility enjoyed by authorities to approve projects which are contrary to state or local plans, and an increasing tendency to deviate from such plans in individual project decisions. While recognising the importance of flexibility, the Commission suggests it should be mandatory to consider any relevant state or local plans in all planning approval decisions and that the reasons for approving any individual projects which deviate from such plans be documented and made publicly available.
The ICAC says that the creation of a new planning system provides opportunities to incorporate and integrate corruption prevention safeguards to a greater degree than the system currently in place.
“Improving on the transparency, accountability and openness in the NSW planning system would do much to reinstate confidence in the governance of planning in NSW,” the report says.
“This, however, requires imagination and foresight to avoid the regulatory gridlock that is typically associated with controls to prevent corruption”.