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Published: Monday, 14 April 2025 14:00
The February issue of depaNews was, as we expected, a revelation to just about everyone working in the industry and, as we’ve discovered subsequently, also to some councillors alarmed about issues of governance and the role of LGNSW directors.
The only negative feedback came from circulating depaNews to the other LGS Shareholders, drawing a response from the LGEA shareholder representative, their president Bede Spandangle, “could you please remove my email from further correspondence regarding this matter.” Probably not. While ever depa remains a shareholder we will communicate with the other shareholders whenever we think it appropriate.
The LGS story gets worse.
On 18 March 2025, Justice O’Callaghan of the Federal Court concluded his role, having already found LGS/Active guilty of greenwashing, by fining Active $10.5 million. In the last issue we dealt with what we regarded as an inadequate response by Active in the hearing in December over penalties, and our expectation that Active’s lawyers, having humiliated the fund and all its members by describing LGS as “a very poorly-resourced entity”. As if the SMH describing LGS as the “disgraced superannuation fund” on multiple occasions, having been found “to have misled and deceived investors”.
The Judge was clearly disappointed at the lack of contrition evident from the LGS/Active defence of their position during the hearing of the case and this continued in the sentencing hearing.
The Orders issued by the Federal Court on 18 March rejected the flawed arguments presented on 17 December and took LGS’s apology to task. He noted “some contrition for its contravening conduct” but the contrition and the apology came in the sentencing hearing rather than before. “Although Ms Heffernan made that apology, it must be seen in light of the response of LGSS when it was confronted by ASIC with allegations of the contraventions and in particular the contentions it made at trial in its defence... Many of the submissions that it pressed in its defence at the liability hearing were contrived”. He listed eight submissions in particular, using terms like “threadbare” and “indefensible”.
And while he accepted LGSS/Active cooperated with the regulator/prosecutor “by attending voluntary conferences with ASIC, but again, such cooperation must be seen in light of the way that LGSS chose to run its case at the liability hearing”, for Justice O’Callaghan it was clearly not enough.
Strategic decisions made by LGS, always explained as based on legal advice, whether it be initially with ASIC, the trial itself, its reluctance to accept responsibility, its failure to disclose to members, and it’s crying poor at the sentencing hearing, were all bad decisions.
Justice O’Callaghan made it clear in his Reasons for Judgement that were it not for Active disappearing into Vision, and the potential that a more significant fine would also penalise the other party in the takeover, then the fine would have been higher than the $10.5 million.
The Orders also provide for an Adverse Publicity Order, in the form pressed by ASIC which will provide the details that were not disclosed to members during the course of this legal action. Even on this issue, the Judge’s disdain was evident:
“LGS asserted, without evidence, that there may be practical difficulties with an order that the text of the adverse publicity order remain available on relevant webpages after the merger is effected. But in my view, an order substantially in the form sought by ASIC is appropriate…”
And finally, the Court rejected the argument from LGS that they pay 90% of ASIC’s costs, to order “that LGSS pay ASIC’s costs of the proceeding.” All of it.
The parties had three weeks from 18 March in which to file any appeal, that three weeks has expired. There has been no advice to members or anyone else about the $10.5 million fine, the implications of the costs order, and there is no Adverse Publicity Order on the Active site, nor on the Vision site.
Clearly there will be more to this story.
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Published: Monday, 14 April 2025 14:00
Bega Valley has removed an on-call arrangement for EHOs responding out of hours to high impact environmental accidents. A roster had existed for more than a decade until the Council thought there were insufficient callouts to justify spending $11,000 a year to provide a guaranteed response from environmental health officers.
The first observation is that seems bugger all in the scheme of things. Many of the South Coast’s most wonderful oysters are at risk from effluent and sewerage from flooding or from failures in the Council’s own infrastructure, boats overturning or washing up on rocks and breaking up, fuel spills on council roads, the lot.
Historically there were two rosters, one for Rangers who need to be on call to deal with a multitude of sins, but when the Rangers find that it is an environmental problem beyond their expertise, they will no longer have EHOs or other professionals to refer it to them.
We’ve been politely engaging with the Council - first, with an acting Director in a discussion involving LGNSW that while a council could phone employees who were disconnected, there is no obligation on the employee to pick up. The Right to Disconnect in the 2023 Award was a significant step protecting employees out of working hours, many of whom were expected to pick up and answer, or else.
The employer’s right to call, when employees have the right not to answer, isn’t a reliable system. It doesn’t help an environmental disaster for the destruction of oyster leases, for example, so why bother.
We were in a stand-off with the Council, but the return of the Director Community, Environment and Planning took us back to square one.
Her attitude is to have “the team, ensure they understand the situation, and implement a call tree” so that the poor Rangers, or anyone else wanting to report a significant environmental problem, would start at the bottom of the tree, and getting no one picking up on that number, would move up the tree. And be under no illusions, having the team “understand the situation” means we are going to pursue you to do it, because you work for us and you owe it to the community.
The problem is that the Executive decided to remove the on-call arrangement, but won’t accept it is the Council’s responsibility to have an on-call system that’s reliable, and who will want the employees to forfeit their right to disconnect. And some councillors are only too ready to make it the employee’s responsibility if oyster leases are compromised and not the Council’s for failing to have a reliable on-call arrangement.
There are some councillors quite happy to bag staff publicly, which is a breach of the Code of Conduct, but when employees raise the breach with the GM, they have been told to think about it, because it would cost the Council $25,000 to conduct an investigation, which might get a councillor disciplined, but the Council would see that as a waste of money that could be better spent. “$25K to receive a possible apology” as the GM says, is a significant step protecting employees against attacks by councillors. Particularly in a Council where the GM says he can tell employees what to do, but he can’t tell councillors.
Yes he can, it’s his job.
Bega also has history on attempting to override Award entitlements to annual salary increments. In June 2021 we nailed the GM and Executive for proposing a “pause” on progression because “employee expenses are one of our largest costs. While we needed to find savings in the budget, the priority was to maintain our current staffing level and continue to deliver services for our community.” It did not proceed.
Clearly the new GM and Executive haven’t learned from that. This is a risky and potentially unlawful strategy, even though it may only be $11,000 saved, which is currently available in the division’s budget. No wonder they have trouble recruiting to fill numerous vacancies.
As this issue of depaNews is distributed, we await a response from the Director Community, Environment and Planning on both these issues. Patience is a virtue, time is running out.
