A former Gumala Enterprises Pty Ltd (GEPL) Director has said Gumala Aboriginal Corporation (GAC) refused to support the board’s plans for financial recovery.

The board of the mining services and contracting company was dismissed by GAC earlier this week.

In a statement, GAC said the GAC board acted on Monday to remove the entire board of GEPL, a wholly-owned subsidiary of GAC.

“When the restrictions from the COVID-19 pandemic came into place, GEPL, along with other civil businesses working in the mining sector, experienced a loss in the pipeline of work available, making it very difficult to manage the business and plan for the future,” said GAC in a statement on Thursday.

“This, in addition to the fact that it is uncertain when the COVID-19 situation will be completely under control, has resulted in GAC stepping in to reduce costs and to restructure GEPL’s business in a way that secures the interest of the Gumala people.”

Based in Tom Price, GAC represents the Yinhawangka, Banjima and Nyiyaparli language groups in WA’s Pilbara region.

Established in 1997, GEPL is the commercial arm of GAC and engages in contracting and mining services as well as tourism and hospitality.

GEPL also owns the popular Karijini Eco Retreat located in the heart of Karijini National Park.

Although GEPL was struggling financially, former Deputy Chair and Independent Director of GEPL, Bart Boelen, said GEPL had work ready to go in the pipeline come September.

“We had a very clear view of the pipeline of work, and we knew exactly how to manage the business,” Boelen said.

“We had a plan for the future, on how to get through the next six months, but our parent company [GAC] refused to support the plan.”

Boelen said the dismissal of the GEPL board as a cost reduction was untrue.

“There’s a whole lot of protection [from COVID-19 impacts] the Federal Government has been giving GAC … the wages of the board in particular,” he said.

The former Deputy Chair said GEPL Directors’ wages were being paid by JobKeeper—not GAC.

“Everyone they dismissed was being paid by someone else.”

Boelen also highlighted GEPL struggled earlier on in the year with the advent of two cyclones previous to the impact of COVID-19. The cyclones wiped out one of GEPL’s main sources of income—the Karijini Eco Retreat.

“The press release ignores the impact of the two cyclones,” he said.

As a solution to their struggles, the board asked GAC for a cash loan to tide them over until future contracts began.

“What we asked them to do was provide us either with a parent guarantee or a loan of cash,” Boelen said.

“We’d paid them dividends over the couple of years in excess of what we were asking for back.

“[GAC] has full transparency of this [financial struggle] right when the first cyclone struck at the beginning of the year.”

Boelen said Rio Tinto, one of GEPL’s main partners, had also tried to negotiate preferred partner status for GEPL—a lucrative deal that would see GEPL become the go-to Pilbara Aboriginal business for mining and civil works.

These negotiations were ongoing as recently as last week, however Rio Tinto and GEPL needed support from GAC to proceed.

“Rio wanted GAC to say yes but they didn’t,” Boelen said.

With efforts made to keep the company viable being rejected, the GEPL board informed GAC they planned to place GEPL under special administration.

“They only acted here [dismissing the board] because we insisted they provide support or sack us [as Directors],” Boelen said.

“They removed us because they refused to accept our advice.”

GAC Chair, Gloria Smith, said the GAC board felt it “needed to move quickly and efficiently to resolve the situation”.

“While we work through this, it will be business as usual, and we look forward to returning to a full board once the restructuring has been completed,” Smith said in the GAC statement Thursday.

NIT’s requests for comment from GAC board members remain unanswered by GAC.

By Hannah Cross

 

*Editor’s note: This article was updated July 17.