Eh, mi seksek

Oz gold industry goes on trial

GV sign (AFR)
A billboard advertising Justin Parker's company, Golden Valley (Australian Financial Review)

| National Affairs Correspondent | The Australian Financial Review

SYDNEY - The lockdown has been good to gold. Since early February it has rallied more than 10% as investors predictably sought shelter in the precious metal during these uncertain economic times.

But some of that sheen has come off this rally in recent days after The Australian Financial Review revealed industry standards around ethical sourcing, or ‘conflict gold’, were hollow at best.

Now there are two inquiries under way at either ends of the world.

The Perth Mint, which has been exposed buying gold from a convicted killer whose company has openly threatened violence against its competitors, announced a review on Friday evening.

Chief executive Richard Hayes pledged to have an "independent third party review its audit processes". "We remain confident that we comply fully with all regulatory requirements," Hayes said.

He is probably right. The Mint has after all only promised to review its ‘audit process’, which is like getting one box ticker to see if another box ticker has ticked all the boxes correctly.

If you are not asking the right questions in the first place then any "review" is pointless.

The real issue for the Mint is whether buying gold from a company that sources its metal from small-scale miners in Papua New Guinea, which use child labour and toxic mercury, meets with its ethical standards.

The answer should of course be no, but reviewing the ‘audit process’ will not even ask this most basic of questions or what could be done to elevate the work practices of these small miners.

The Mint's auditor, Stephen Rogers, has already told the Financial Review he's not required to do any independent evaluation of its supply chain or make his own investigations into those it is buying from.

"I just look at the process," he said last week. "That's all that's required."

So the Mint, owned by the West Australian government, is likely to be fully compliant with the process – it's just a pathetically weak process.

Then comes the issue of that convicted killer, Justin Parker, and his company, Golden Valley.

The auditor said he was not aware of Parker or his conviction. Let me help out here.

PNG's national circuit court found that Parker killed his helicopter mechanic on 6 June 2015, after an evening out.

The court heard Parker dragged the deceased from his bed at around 4am and punched him three to four times in the face, before throwing his head against a wall.

He died in hospital two days later from a "subdural haemorrhage as a consequence of blunt force to the head", according to the court.

In May 2017, Parker was found guilty of manslaughter and sentenced to 13 years' jail. He was released on parole last year and remains active in the management of Golden Valley, according to its general manager, Luke van Boehm.

Once again the Mint's audit of its processes is unlikely to ask if Parker is the type of person it should be doing business with.

And speaking of process, why is the chief executive ordering a review into his own internal processes. Where is the Mint's chairman, Sam Walsh?

The former boss of Rio Tinto has been silent, despite it being the chairman's role to determine if management is doing its job correctly.

Not at the Mint where Hayes looks to have set the terms of reference for a review into his own handling of a highly sensitive issue.

The problem for Walsh is that Hayes and the Mint have boasted of being at the "forefront of setting the highest possible ethical standards".

That looks to be a stretch, which begs the question if Hayes can survive even if his own ‘review’ clears him.

The concurrent investigation announced on Friday by the London Bullion Market Association, the world's biggest gold exchange, is unlikely to be as narrow.

Angus Grigg
Angus Grigg - investigative journalist hot on the heels of illicit gold transfers

"We take very seriously the recent allegations relating to the Perth Mint and its sourcing from Papua New Guinea," the LBMA said.

Its 11-step incident review process has been invoked and should answer the only question which matters – can the Mint claim to be at the "forefront" of ethically sourced gold if it is buying from Parker and Golden Valley?


Feed You can follow this conversation by subscribing to the comment feed for this post.

arthur williams

How does a murderer get released in less than 3 years of his 13 years sentence?
Who arranged that?
Don't black PNG lives matter?


Many thanks to you, Angus, for a very good article on the Perth Mint and connections with Golden Valley in PNG. btw, where is the Golden Valley mine in PNG? I've learned their headquarters are in Lae. Is the mining done in the Porgera area? I notice you do not mention Porgera at all. The PNG government should put an immediate stop to all children being taken out of school to engage in artisinal mining or other types of mining. Also, a complete ban on the use of mercury needs to be put into place.
Sam Jay Kaupa, thanks to you as well for your excellent article on the theft of PNG gold over a 25 year time frame, with government officials turning a blind eye. Mining minister Johnson Tuke should be all over this. He and others need to get their butts out to Porgera and other mines and ask some tough questions.
Thank you to both of you for bringing this to the light of day.

Philip Fitzpatrick

Portraying the small scale gold miners in PNG as villians is not fair.

Mercury is a problem and should be addressed by the government but as far as I know there is no forced child labour. It is more a simple fact of children helping the adults, as they've always done in the gardens and households.

Gold mining is a very important source of income for many people in PNG and it would be a shame to jeopardize it through inaccurate reporting.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)