Deputy Premier Vickie Chapman had a conflict of interest, QC tells inquiry into KI seaport decision

Deputy Premier Vickie Chapman’s decision to reject a KI seaport was a “significant departure from proper governance practices”, a QC has told a parliamentary inquiry.

Attorney-General Vickie Chapman was in a position of “actual conflict” in refusing a proposal to build a seaport on Kangaroo Island and her conduct should be referred to the state ombudsman for further investigation, a QC has told a parliamentary inquiry.

Premier Steven Marshall’s role and responsibility in relation to the decision to refuse the port should also be considered by the ombudsman, counsel assisting the inquiry Rachael Gray QC said.

The explosive closing statement of an inquiry into Ms Chapman’s conduct in rejecting a Kangaroo Island Plantation Timbers proposal to build a seaport at Smith Bay was handed down on Monday. The committee will deliver its report to parliament on Thursday.

Dr Gray said the inquiry revealed a “significant departure from proper governance practices”.

She recommended that the matter be referred to the ombudsman for further investigation into whether Ms Chapman’s conduct amounted to misconduct or maladministration; if she had a conflict of interest; and whether she breached the ministerial code of conduct.

The ombudsman has greater powers than the parliamentary committee to inquire into these matters.

Ms Chapman has consistently denied any wrongdoing. “I reiterate I had no conflict of interest – actual or perceived – in this matter, nor did I mislead the Parliament,” she said after Monday’s hearing.

Deputy Premier Vickie Chapman appears before the inquiry on November 3. Picture: Keryn Stevens

In her submissions, Dr Gray also recommended that the role any other public officer played in relation to the decision over the port “including the role and responsibility of the Premier, departmental chief executives and other public officers including crown law officers” be investigated by the ombudsman.

She said Mr Marshall had a responsibility to ensure his ministers acted in accordance with the ministerial code of conduct.

Mr Marshall on Monday morning said he backed Ms Chapman 100 per cent.

Dr Gray told the hearing Ms Chapman refused KIPT’s proposal “in circumstances where ... the Attorney-General was in a position of not just perceived conflict but actual conflict”.

“It would be open for the committee to find that when considering the 2020 assessment report, the Attorney-General was in a position of conflict,” she said.

“That conflict became even more acute upon the lodgement of KIPT’s second addendum which formed the basis for the 2021 assessment report.”

Kangaroo Island Plantation Timber's revised plans for the Smith Bay seaport.

The inquiry had previously heard this second addendum included a map showing that a property owned by Ms Chapman, which was leased as a private rental, was across the road from a forest where haulage trucks would collect timber to take to the seaport.

The committee on Monday heard that the existence of a conflict could result in a court appeal.

“It’s arguable that the Attorney-General’s conduct has the potential to breach any fiduciary duty owed to KIPT thereby exposing the state to the risk of litigation and a significant claim for equitable damages,” Dr Gray said.

Furthermore, Dr Gray told the hearing that evidence suggested some statements Ms Chapman made to parliament were false.

She said this included a statement in which Ms Chapman told parliament that she had no pecuniary interest in KIPT or its properties and that neither she nor any family member owned land near KIPT’s forests or the proposed port.

Counsel assisting the committee Rachael Gray QC. Picture: Naomi Jellicoe

“Whilst there is some evidence that suggests that (the statement) is at least partially accurate, the clear weight of the evidence is that this statement is false,” Dr Gray said.

“It is open for the committee to find that the Attorney-General knew that (the statement) was false at the time it was made. The weight of the evidence supports that finding.”

Dr Gray also recommended that some of the factual matters determined by the inquiry be referred to the parliament for consideration.

“Ministers of the Crown ... hold a great deal of discretionary power. Ministers are responsible for decisions which can markedly affect an individual, groups of individuals, organisations, companies, local communities and all South Australians,” she said.

“For these reasons ministers must accept standards of conduct of the highest order.”

South Australian Premier Steven Marshall watches his deputy Vickie Chapman speaking during Question Time at Parliament House. Picture: NCA NewsWire / Naomi Jellicoe

It comes Mr Marshall earlier on Monday defiantly declared he would not sack Ms Chapman even if parliament passed a no-confidence motion.

Mr Marshall cited a precedent of former Labor premier Jay Weatherill in 2016 refusing to sack his water minister, Ian Hunter, after three no-confidence motions were passed by the upper house.

It is understood the legal power to hire and fire ministers rests entirely with the Premier.

Mr Marshall said he had been “crystal clear since day one” that he had 100 per cent confidence in Ms Chapman’s decision-making ability.

“If you’re referring to the kangaroo court, the very expensive kangaroo court, which has occurred down in Parliament House in recent days, I doubt there is a single piece of evidence that would move my decision to 100 per cent support the Deputy Premier,” Mr Marshall said.

Opposition Leader Peter Malinauskas called on Ms Chapman to resign or be sacked.

“If Steven Marshall does not act, it may set a dangerous precedent whereby ministers may have an actual or perceived conflict of interest, fail to declare it and there be no consequence,” he said.