Chapter 1Introduction and background
1.1On 22 June 2023 the Senate established the Select Committee on the Perth Mint and Commonwealth regulatory compliance (the committee), to inquire into and report on the corporate and regulatory compliance of Gold Corporation and its trading entity, the Perth Mint, with Commonwealth legislation, with particular reference to:
(a)current and historical compliance with Australian anti-money laundering regulatory requirements, specifically:
(i)the Anti-Money Laundering and Counter-Terrorism Financing Act 2006;
(ii)the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1);
(iii)the Privacy Act 1988;
(iv)the National Measurement Act 1960;
(v)the National Trade Measurement Regulations 2009; and
(vi)any other associated Commonwealth laws and regulations or instruments;
(b)events that led to the Australian Transaction Reports and Analysis Centre ordering the appointment of an external auditor to Gold Corporation under subsection 162(2) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006;
(c)events that led to the London Bullion Market Association initiating an 'Incident Review Process';
(d)matters concerning the corporate and statutory governance of GoldCorporation;
(e)the extent to which Australia's reputation as a precious metals producer, refiner and exporter may have been damaged by Gold Corporation's failure to comply with all necessary corporate and regulatory requirements; and
(f)any other related matters.
1.2The committee was required to report to the Senate by 13 December 2023. On 15 November 2023, the Senate agreed to extend the reporting date to 28March2024.
1.3Details of the inquiry are available on the committee's webpage and the committee invited organisations, key stakeholders and individuals to provide submissions.
1.4The committee has received 12 submissions to date, which are listed at Appendix 1 of this report, and has held the following public hearings:
27 July 2023, Canberra—with witnesses from Australian Government agencies;
10 August 2023, Canberra— with witnesses from Australian Government agencies; and
3 November 2023, Perth—with representatives from the WA Parliament, WA government agencies including the Gold Corporation (Gold Corp; trading as the Perth Mint), and the Australian Transaction Reports and Analysis Centre (AUSTRAC).
1.5A list of the organisations and individuals who attended these public hearings can be found in Appendix 2. The public submissions, additional information received by the committee and Hansard transcripts are available on the committee's webpage.
Acknowledgement
1.6The committee thanks all those who have contributed thus far to the inquiry by making submissions, providing additional information, and appearing at public hearings.
Interim and final reports
1.7The purpose of this interim report is to outline the current context and timeline of events relating to the Perth Mint.
1.8As the committee progresses its work, it will continue to gather evidence, examine the issues in greater detail and determine how to best implement reform in the key areas identified by this interim report—reforms which will best support transparency, compliance and strong governance.
1.9This interim report is not intended to be an exhaustive examination of the evidence received by the committee to date. The committee will provide a more detailed analysis after it has received further evidence.
1.10The committee’s final report will outline the evidence received throughout this inquiry and put forward recommendations for improving governance, compliance and transparency. The committee will consider making recommendations in areas where change can be implemented in the near future, alongside more long-term and structural changes.
Report structure
1.11This chapter briefly discusses information about the inquiry and the Perth Mint. Chapter 2 outlines key events in a recent timeline of GoldCorp matters which are relevant to the compliance and governance of the Perth Mint, and the terms of reference of this inquiry.
Notes on references
1.12References to the Committee Hansard may be references to a proof transcript. Page numbers may differ between proof and official transcripts.
About Gold Corporation
Creation of Gold Corporation
1.13The Perth Mint opened in 1899 as a subsidiary of the United Kingdom's Royal Mint, minting coins for WA and buying the majority of gold mined in WA. Ownership of the Perth Mint passed to the WA state government in 1970 with the establishment of the Western Australian Mint Act 1970 (since repealed).
1.14In 1987 the GoldCorporation Act 1987 (WA) (GC Act) created Gold Corp, a government trading enterprise (GTE) 'wholly owned by the Government of Western Australia on behalf of the people of WA'. The Perth Mint is a subsidiary of Gold Corp (along with GoldCorp Australia); The Perth Mint is the trading name of Gold Corp. The GC Act also enabled the Perth Mint to mint and market, gold, silver and platinum Australian legal tender and establish a bullion coin program.
Governance of Gold Corporation
1.15As a GTE, Gold Corp is governed by a range of state legislation including the Financial Management Act 2006 (WA) (FMA), the Corruption, Crime and Misconduct Act 2003 (WA), the Auditor General Act 2006 (WA), and the Procurement Act 2020 (WA), as well as certain Treasurer's Instructions. Each year the Chair and Board must submit a Strategic Development Plan and Statement of Corporate Intent for Gold Corp to the responsible Minister. The Perth Mint advised, 'this provides the Minister with information regarding GoldCorporation's strategic direction, as well as issues and opportunities for the enterprise'.
1.16The WA Parliament recently passed the Government Trading Enterprises Act 2023 (WA), which provides for 'stronger and more consistent Government oversight of GTEs'. It is anticipated that Gold Corp's enabling legislation will subsequently be amended in accordance with the new legislation.
1.17Gold Corp is also governed by Commonwealth legislation relating to anti‑money laundering and counter-terrorism financing, national measurements and privacy. The Commonwealth regulatory framework will be discussed in more detail in the committee's final report.
1.18Under the GC Act, Gold Corp is an agent of the Crown and all payments and all money due and payable by Gold Corp is guaranteed by the state Treasurer. As a result, parties dealing with the Perth Mint are ultimately dealing with the State of Western Australia.
Gold Corp leadership
1.19Gold Corp is governed by a Board of Directors, including a WA Department of Treasury representative. Key board membership and senior executive changes since 2015 are shown in Figure 1.1.
Figure 1.1Gold Corp key board membership and senior executive changes
Source: Committee secretariat
1.20Gold Corp is accountable to the Minister for Mines and Petroleum; Energy, Hydrogen Industry and Industrial Relations. This position was held by the HonBill Johnston MLA from March 2021. In late November 2023 he announced he would be stepping down from Cabinet in December, having foreshadowed his resignation to then Premier, the Hon Mark McGowan MLA, in 2021. On 7December it was announced that the Hon David Michael MLA would be appointed as Minister for Mines and Petroleum. Figure 1.2 illustrates changes to ministerial responsibility for Gold Corp since 2015.
Figure 1.2Changing ministerial responsibility for Gold Corp
Source: Committee secretariat
Recent performance
1.21In 2022–23 the Perth Mint recorded an annual turnover of over $23 billion, annual profit before tax of $52.67 million (up from $40.3 million the previous year) and a return to the WA Government of around $14.2 million.
1.22 Since 1994 the Perth Mint has 'provided a secure precious metals depository service for Australian and international customers to buy, sell and store gold, silver and platinum. The depository holds more than $6 billion worth of precious metal, with the high Australian dollar gold price in May 2023 pushing the value of holdings over $7 billion.
1.23Of the 150 organisations who deal in gold bullion in Australia, Gold Corp is the largest, with 79 000 customers, requiring it to 'hold a significant amount of value'.
1.24In 2022–23, the Perth Mint refined 244 tonnes of gold—almost 79per cent of Australia's newly minted gold doré. Over the same period, it sold 19.22 million coins and minted products, with 86 per cent of its products exported to leading markets in the United States and Germany.