Business can care about the Great Barrier Reef, too
![The Great Barrier Reef Foundation grant is the largest of its kind in Australian history.](http://web.archive.org./web/20180814154917im_/https://www.afr.com/content/dam/images/h/1/2/p/q/e/image.related.afrArticleLead.620x350.h13x44.png/1534235930947.jpg)
![Mark Ludlow AFR Woodcut](http://web.archive.org./web/20180814154917im_/https://www.afr.com/content/dam/images/g/y/z/g/6/d/image.imgtype.afrWoodcutAuthorImage.120x120.png/1507774009838.png)
The controversy about the Turnbull government's $443 million grant to the Great Barrier Reef Foundation to protect the natural wonder from the ravages of climate change seems to be underpinned by a suggestion that no one in the business world gives a stuff about the environment.
References to the reef charity and its board of directors, which includes corporate heavyweights and top scientists from across the political spectrum, is often littered with phrases such as "links to fossil fuel companies" and big banks.
But business leaders, including those involved with the foundation and its 56-member chairman's panel, as well as other conservation bodies, bristle at the suggestion only environmental groups care about protecting the environment, including the iconic Great Barrier Reef.
Reserve Bank of Australia board member and corporate philanthropist Carol Schwartz says the suggestion business people could not be bastions of the environment was baloney.
![](http://web.archive.org./web/20180814154917im_/https://www.afr.com/content/dam/images/h/1/3/y/z/k/image.imgtype.afrArticleInline.620x0.png/1534232372880.png)
"Nothing could be further from the truth. Every corporate that I've been involved with is absolutely concerned around the environment and we're all very focused on the consequences of climate change and what's happening with the environment," Schwartz tells The Australian Financial Review.
"The fact there are corporate representatives on environmental conservation groups really speaks for itself about the depth of the concern."
As environmentalists and Labor question the merits of the grant to the Brisbane-based charity, the Great Barrier Reef Foundation will have until December to outline how it is going to spend the $443 million grant from the Turnbull government to help protect the iconic tourist attraction.
There are growing fears the outrage over the record allocation could significantly dent corporate philanthropy in Australia, which has lagged behind the United States.
"Do we not want people in Australia's iconic industries to invest in something because people are going to question their motivation straight away? Is that what we have come to?," says another prominent fund-raiser, who did not want to be named.
Schwartz, who is the chairman of Creative Partnerships Australia, which helps raise funds for the arts, says the model to encourage private sector funding is a good one.
"When governments provide a conduit for private and corporate philanthropic giving by leading by example that's a model that works," she says.
One of the prime reasons Prime Minister Malcolm Turnbull and Environment Minister Josh Frydenberg chose the Great Barrier Reef Foundation was their experience in leverage funding off private sector partners for a range of projects to improve water quality, control crown-of-thorn starfish and help species living on the reef.
Over the past 18 years, the foundation has helped raise $90 million for reef projects, the bulk of which has come from the private sector. For every $1 in taxpayer's money it receives it has usually been able to leverage 2½ times in private sector funding, according to chairman and former Commonwealth Bank of Australia chairman John Schubert.
But the foundation was blind-sided in April by the Turnbull government's record offer of an almost half a billion dollars, which chief executive Anna Marsden equated with "winning the lotto".
Despite the surprise at the time, Marsden says the foundation, which was created in 2000, was well qualified to allocate the funds and vowed there would be appropriate checks and balances to monitor the spending of the taxpayer funds.
The grant funding has been parked in term deposits as the 15-person foundation develops its investment strategy. This includes developing a co-financing strategy to leverage the partnership funds with contributions from private and philanthropic donors which will be present to the Environment Department by September 30.
"The foundation is working closely with the Australian government and our network of expert advisors to establish a governance and advisory framework appropriate to the scale and nature of the partnership," she says.
"The Australian government will then have an opportunity to review and consider the plans and documents after they're submitted. Once finalised and approved, we will publish the plans on our website."
In the 92-page agreement between the Department of Environment and Energy and the Great Barrier Reef Foundation, there is a raft of guiding documents, including an investment strategy and annual work plan, as well as accounting and governance requirements on the grant.
The federal government has decreed the six-year agreement should commit $200.65 million to water quality improvements, $100 million for reef restoration and adaption activities, $57.8 million for crown-of-thorn starfish control, $40 million for reef integrated monitoring and reporting and $22.35 million for indigenous and community reef protection activities.
The agreement also allocates $22.5 million for administration and "scaling up activities" for the foundation, which has drafted in an investment adviser to help them work out how to allocate the money.
Despite its long history of working on projects to help protect the reef, the $443 million grant is a big jump up for the foundation, which has previously only received matched government funding for private donations.
But its board is packed with big hitters from the corporate and scientific world including chairman Schubert, Suncorp chief executive Michael Cameron, former Origin Energy boss Grant King, Great Barrier Reef Marine Park Authority chairman Russell Reichelt and former chief executive of the Australian Institute of Marine Science John Gunn.
Marsden has made clear it will be the scientists on the international scientific advisory committee who have the final say on where the money is spent.
The issue around the process of awarding the grant, which was announced amid much fanfare by the Turnbull government in April just before the federal budget, has been a slow burner.
It was only at Senate estimates last month it gained momentum after new Labor senator Kristina Keneally seized on the issue and made it her own.
The estimates hearings revealed the record grant had been a captain's pick by Turnbull and Frydenberg who told a "surprised" Schubert of the partnership in a meeting in April.
But the more disturbing revelation was the grant had not been through a competitive tender process.
In a bid to diffuse the issue, which has dominated question time this week, the Department of Environment and Energy Secretary Finn Pratt referred the matter to the Auditor-General Grant Hehir asking them to look at the $443 million grant "as a matter of priority".
Amid claims there had been no proper due diligence on the grant to the Great Barrier Reef Foundation, Frydenberg told Parliament he took two submissions to the expenditure review committee of cabinet in March this year.
The first stage of the due diligence conducted by his department, according to Frydenberg, looked at the foundation's governance, structure, constitution, project management, fundraising history, capacity for growth, competition and scientific expertise. It was approved by the ERC and then progressed by an interdepartmental committee.
The foundation was approached on April 9 about a potential partnership and the terms of the grant. The foundation accepted the terms in late April before it was publicly announced on April 29.
The Great Barrier Reef Foundation finalised their proposal before it was approved by Frydenberg on May 29 after a second stage of due diligence.
"The department assessed that the foundation's proposal represents value for money and is an appropriate use of Commonwealth resources," Fydenberg told Parliament.
Fydenberg says the selection of the foundation was due to its "proven track record in philanthropic support" as Australia's largest reef charity and its track record in working with the Environment Department.
According to a source close to the negotiations, if there had been a competitive tender for the $443 million grant there would have only been a few organisations that could have been qualified to bid for parts of the grant, rather than in its entirety.
"At the end of the day, the reef has only one dedicated charity," the source says.
Keneally says there are still serious concerns about how the ANAO is going to keep track of the money and how the Great Barrier Reef Foundation is going to spend it, especially if the foundation grants it to other third parties.
"I have nothing against corporate philanthropy. What I have a problem with is a bunch of corporates being handed a big pot of money and responsibility for one of our biggest and greatest public assets, the Great Barrier Reef," Kenneally told The Australian Financial Review.
"We have public sector agencies which are supposed to do this work. Now they are going to have to go cap in hand to this private foundation to get public money. It's farcical."
The Turnbull government has yet to clarify how the $443 million figure was arrived at, but a spokesman for the Environment Minister says it was "part of the budgetary process".
There's no doubt the final figure - a record investment in the Great Barrier Reef - was intended to make a big splash. Some suggest there had been some private prodding from UNESCO about more of a funding effort to avoid the reef being put on the endangered list which would have been a major embarrassment for the Turnbull government and a threat to Australia's multibillion dollar tourism industry.
Other critics say the Turnbull government - which on Tuesday pushed its National Energy Guarantee through the Coalition party room - should be focusing on the root cause of the reef's health problems - climate change - and tackle that rather than throw money at fixing up the symptoms.
After a barrage of Labor questions in Parliament on Tuesday, Frydenberg once again defended the process for selecting the Great Barrier Reef Foundation for the mega grant, saying the Coalition was putting their money where their mouth was when it came to protecting the reef. This includes the $2 billion Reef 2050 partnership with the Queensland government.
"The Labor Party is trying to cover up the fact they were absent when they were in parliament and in contrast we put money on the table. We are funding the experts and we are helping protect jobs and the reef," he says.