Murray Irrigation Limited 2017 board collapse: what drove it?

Mystery has surrounded the bitter division that led to the 2017 collapse of the MIL board. Now new details have come to light.

Former Murray Irrigation Limited director Chris Brooks was party to a proposed 100,000-megalitre deal with Snowy Hydro Limited. Picture: Simon Dallinger

Details surrounding the bitter 2017 implosion of NSW’s largest irrigation corporation board have finally come to light.

They show investigators held concerns former Murray Irrigation Limited director Chris Brooks had been involved in potential breaches of confidentiality and detailing his involvement in a failed 100,000-megalitre deal with Snowy Hydro Limited.

However Mr Brooks said multiple investigations determined there was no confidentiality or directors’ duties breaches.

Evidence has emerged Mr Brooks, in partnership with fellow irrigator Graeme Pyle, tried to broker a February 2017 deal to buy up to 100,000 megalitres of Murrumbidgee water, which was selling for as little as $4 a megalitre at the end of the 2016-17 season.

Under the deal Snowy Hydro would agree to park the cheap Murrumbidgee water in its storages, to then be tipped into the NSW Murray irrigation system at the start of 2017-18 season, where prices opened at about $100/ML.

The Weekly Times is not suggesting Mr Brooks or Mr Pyle intended to profit from the proposed deal.

Mr Pyle has previously told the media: “I had various water traders ready to begin the process of procuring water for this deal and various people were involved in financing it”.

Mr Brooks involvement has only just come to light, after The Weekly Times saw an extract of a confidential 2017 Deloitte investigation into the MIL board’s governance, which raised concerns that the former director potentially breached board confidentiality.

“We identified 28 emails which appear to support the suggestion of a potential breach of confidentiality by Mr Brooks,” Deloitte reported.

Mr Brooks said “the dissemination of extracts to media outlets by individuals in breach of their own duty of confidentiality, is a clear example of the lengths that some people will go, to undermine the progress being made in challenging water administration in the Murray Darling Basin”.

Mr Brooks told The Weekly Times both MIL and Deloitte investigations determined “I had not breached any duties of confidentiality or any other directors’ duty”.

Yet the 2017 Deloitte report extract states it was unable to get Mr Brooks to respond to questions over breaching board confidentiality as an MIL director.

It appears that a central issue is whether any obligation of confidentiality existed at the time information was shared.

“We made several attempts to contact Mr Brooks by telephone and email to arrange an interview,” Deloitte reported.

“However, Mr Brooks declined our requests, and stated that he was “not interested in responding or talking to you (i.e. Deloitte)”, and that “under no circumstances (sic) will i (sic) be meeting with you or anybody else from Deloittes (sic) again!”

One of the emails Deloitte flagged as a potential breach of confidentiality appears to relate to Mr Brooks urging Mr Pyle to get Snowy Hydro to sign a memorandum of understanding as part of the Snowy Hydro carryover deal.

On Wednesday February 22, 2017 Mr Brooks sent an email to Mr Pyle, titled Parking of Carryover, which stated: “Read from bottom. Pressure is on you for Friday! Must get an in principal MOU – exclusive. Pls (sic) delete this and do not fwd (sic) anywhere.”

Months later when rumours of the SHL deal started circulating, Mr Pyle wrote a letter to the Southern Riverina News, stating he had entered negotiations with Snowy Hydro and got them to sign a confidentiality agreement “on February 24”, 2017 — three days after Mr Brooks’ email.

The Weekly Times has been made aware that in early 2017 Mr Pyle, who at the time was Southern Riverina Irrigators chairman, and Mr Brooks met Snowy Hydro Limited staff in Cooma to broker the carryover parking deal.

A Snowy Hydro negotiator said they had “multiple” phone calls with both men, had “kind-of” agreed to maintain confidentiality and assumed they were dealing with MIL, given Mr Brooks was a director.

Asked if any agreement had been signed by SHL, the negotiator said “there was no deal, and no formal instrument executed between any parties”.

However later that year My Pyle, in his letter to the Southern Riverina News, stated “the deal was discussed with Snowy Hydro from February 24, 2017 until April, when it appeared to have been finalised”.

But a negotiator at Snowy Hydro told The Weekly Times the deal was regarded as a bit “wacky”, given it could not have gone ahead without Murray Darling Basin Authority, NSW and Victorian government approval.

It does appears Mr Pyle attempted to bring MIL management and the board in on the deal, telling the Southern Riverina News in November 2017 that earlier in the year he had “requested signatures on this (confidentiality) agreement from Murray Irrigation Ltd, but this was declined”.

Mr Pyle said he had “further concerns over this matter with MIL, so subsequently had no further discussions about the proposal with them”.

The Weekly Times has confirmed Mr Pyle approached MIL in early 2017, but those involved said they were given no detail, until approached by one of the Snowy Hydro negotiators at a NSW Irrigators Council meeting on March 1.

However Mr Brooks told The Weekly Times this week “MIL was made aware of all negotiations” with Snowy Hydro, which were “commercial in confidence”.

Tensions over the findings of the Deloitte report eventually led to the resignation of the Murray Irrigation Limited board on November 28, 2017, following what the public were told were conflicts among its directors and a vote of no confidence in Mr Brooks and fellow director James Sides.

At the time the board issued a release stating: “an independent, two-part report highlighted poor behaviour and dysfunction built up over many years and which ultimately led to a vote of no confidence in directors Chris Brooks and James Sides.

There is no evidence Mr Sides was involved in the Snowy Hydro deal or suggestions of potential breaches of confidentiality.

Mr Pyle failed to respond to questions on the Snowy Hydro deal.

Snowy Hydro has refused to answer questions on the deal, simply stating it would “not be providing a response on this occasion”.

An MIL spokesman confirmed that “in 2017 the Board was provided with an independent external investigation report in connection with various governance matters.

“Successive Boards have confirmed they will not release the report and this remains the case.

Murray Irrigation has no other comments in response to the questions raised.