Snowy Hydro performance shrouded in secrecy. The three-step trick.

Snowy Hydro 2.0 keeps being delayed and keeps costing taxpayers more money. Yet, finding out how much and what the billions are being spent on is difficult. Rex Patrick on his fight for information.

Last financial year the Australian Government spent $100 billion of taxpayers’ money buying and building stuff. But Ministers and bureaucrats don’t like scrutiny of how that money’s spent. My fight to get access to Snowy 2.0 project performance information, evidence and argument has exposed how the Government puts a secrecy shroud over all major projects.

The refusal of the Australian Government to disclose project performance reports for the troubled Snowy 2.0 project can only be offensive to the average Australian.

Snowy Hydro Limited, the builder of Snowy 2.0, is a 100% Commonwealth-owned corporation. Snowy 2.0 is being funded by a $4B taxpayer equity injection, a further $4.5B taxpayer loan and from Snowy Hydro’s dividends that would otherwise be paid to Treasury. Summary – you’re paying for it, all of it.

And yet, as the project has gone from $2B to $6B and now to $12B, a secrecy blanket has been pulled across the project.

Dear Ministers – why do costs and timelines for Snowy 2.0 keep shifting yet are so readily approved?

It’s a secrecy blanket supported by its shareholder ministers, Finance Minister Katy Gallagher and Climate Change and Energy Minister Chris Bowen, the Department of Climate Change, Energy, the Environment and Water (DCCEEW – the Department that oversees the Corporation) and Snowy Hydro itself.

I can say they’re all opposed to transparency and scrutiny because they were all parties in the Administrative Appeals Tribunal (AAT) fighting to stop the release of project performance information in response to an MWM Freedom of Information request.

Having just spent three days in a hotly contested AAT hearing, it’s only now I can legally reveal the way in which the Government and Snowy Hydro seek to protect themselves from scrutiny.

A Three-Step Trick

The secrecy blanket is woven through a simple three-step process.

Step One: Agree by way of contract that everything that is communicated between Snowy Hydro and the Government that is marked “confidential” is to be treated as confidential.

 

Step Two: Mark everything “confidential”. It doesn’t matter if the information is actually confidential, as long as it’s marked “confidential”, then everything’s OK.

Step Three: When a member of the public makes an FOI request for information related to project performance, simply claim that the release of the information would constitute a ‘breach of contract’.

Boom! Scrutiny killed!

Under cross-examination, Leonie Horrocks, the head of DCCEEW’s Energy Enablers Branch, admitted that she never pushed back when documents arrived marked as “confidential”. Apparently, in DCEEW’s view, it’s up to the originator (Snowy Hydro) to determine the classification of the material.

I took Ms Horrocks, the FOI decision maker, to a document that was claimed to be confidential and exempt from access.  The document in question was titled “Dennis Barnes Bio” (the new CEO of Snowy Hydro) and asked her how his biography, which is available on the corporation’s website, could be confidential. No answer was forthcoming.

The Tribunal has now adjourned the matter for six weeks, ordering the Government to provide an argument as to why Snowy Hydro should not be considered part of “the Commonwealth”, a classification that would, for legal reasons, kill their opportunity to claim ‘breach of contract’.

Along with other arguments pressed by me in the Tribunal, there is a possibility that the Tribunal will lift the secrecy blanket on Snowy Hydro 2.0.

A Very Small Win

If the Tribunal does open up Snowy 2.0 to scrutiny, it will be a small but significant win.

Last year the Government spent $100B on procurement. $67B of that was on projects that were for more than $20M.

Because these larger projects likely involved tailored contracts, the three-step trick will likely be built into them.

 

I say that with some certainty. Earlier this year I lost an access case to documents related to the cancelled $90B Attack Class (French) submarine project. I lost on the same grounds – disclosure of how that taxpayer project he’d been performing would be a breach of contract.

Overriding the Will of Parliament

The Parliament granted all Australians a right of access to Government documents. The FOI Act does provide protections for truly harmful information under two separate business-related exemptions.

The separate ‘breach of confidence’ exemption was never intended for business information (as expressed in the Government’s explanatory notes to the original bill) but has now become the ‘go to’ exemption for any documents related to major projects.

The Parliament wanted scrutiny over these contract activities, but officials have taken the view that they can override the will of the Parliament just by signing a contract that says “everything is confidential”.

Let’s hope the AAT agrees that Snowy Hydro is part of the Commonwealth, but more particularly that the way in which the FOI Act is being used in inconsistent with the terms of the FOI legislation.

Transparency Must Be Restored

It’s ironic that one of the documents that I did unmask in the course of the AAT hearings revealed that government are acutely aware that Snowy 2.0 still has a lot of risk involved (we see they have now had to buy a 4th tunnel boring machine) and transparency was essential. This was stated in a letter from Minister Bowen and Gallagher to the Chair of the Snowy Hydro Board.

29 March 2023 Letter from Minister Bowen and Gallagher to the Snowy Hydro Chair (Source: FOI)

But the letter only commanded transparency between Snowy Hydro and the Minister, not the public at large. And we all know how little Government ministers are inclined to share information with the people that pay their salaries.

I don’t know how much the AAT proceedings have cost the Government (that means you), but there have been at least 8 lawyers and 2 barristers involved. The fight in the AAT has occurred despite Ministers Bowen and Gallagher criticising the secrecy of the Morrison Government about Snowy 2.0 and promising “to provide full and transparent updates”. When it comes to secrecy, I’m finding it difficult to distinguish between the Morrison and Albanese Governments.

#Tip: The Auditor-General is conducting a review into how a $282K government legal services contract with law firm King & Wood Mallesons grew to $3.53M.👇This email👇 serves as a tip to the Auditor on the sort of thing to look for. #8LawyersVsRex #FOI #GravyTrain #auspol pic.twitter.com/GkQKC0bP24

— Rex Patrick (@MrRexPatrick) June 29, 2024