A Great Barrier Reef charity handed $443.3 million by Josh Frydenberg promoted a “reef bond” scheme with Malcolm Turnbull’s old investment bank, Goldman Sachs, which was killed off by the Gillard government on the advice of environment bureaucrats.
The Great Barrier Reef Foundation proposed the green bonds scheme in 2010 as a “unique financing approach” to support projects to help the reef to adapt to climate change. Foundation board member and former Goldman Sachs executive Stephen Fitzgerald is a managing partner in a London-based financial company that bills itself as “the world’s first dedicated green and impact bond fund management company”.
The 2010 initiative, which aimed to raise $100m, was supported by the Clinton Global Initiative, with pro-bono partners Goldman Sachs and KPMG. Green bonds are used to raise funds for environmental projects while paying a small return to investors. There are about $US335 billion ($457bn) on issue worldwide.
“The benefit of this financing approach is the delivery of substantial, upfront research funding to commission this urgent body of research,” the foundation’s then-chief executive Judith Stewart said.
But Labor’s Tony Burke, who knocked back the proposal as environment minister, told The Australian the Department of Environment had been sceptical.
“When the foundation asked for support on the reef bond proposal, I consulted closely with my department and took my department’s advice, the exact opposite of what the government did with its reef giveaway,” Mr Burke said.
The foundation said reef bonds were not being considered under its $443.3m partnership with the federal government, which requires the charity to use taxpayers’ funds to lever private sector donations.
“The reef bond was one of a number of options GBRF proposed to fund reef projects, but required government approval. At that time, the government of the day chose to directly fund the foundation’s Resilient Reefs Successfully Adapting to Climate Change portfolio of reef projects, rather than pursue a reef bond mechanism. At this stage, a bond is not being actively pursued,” a spokeswoman said.
The foundation, a small charity with just six full-time staff, was awarded the grant in the last federal budget without a tender process. It had not asked for the funding, which was awarded just 11 days after a decision by cabinet’s expenditure review committee to seek a commercial partner for the government’s Great Barrier Reef plan.
Mr Frydenberg, the new Treasurer and deputy Liberal leader, recommended the grant without a tender process, saying there had been “extensive due diligence” by his department. In his role as treasurer, Scott Morrison told parliament last month he fully endorsed the decision.
“This government makes no apologies for investing in the reef and for doing it in partnership. That was the proposal, that was the deal. That is what we put in the budget,” he said.
The CSIRO raised the alarm over the creation of “layers and layers” of bureaucracy as a result of the grant, amid the duplication of key scientific and administrative roles.
Source The Australian