123

SPORTS, ARTS, CULTURE & COMMUNITY SERVICES COMMITTEE 9 23 OCTOBER 2008

DUYFKEN 1606 REPLICA FOUNDATION – RESPONSE TO COUNCIL REQUEST FOR ADDITIONAL INFORMATION

Ian Lowth IL/ht: 10/25/1-05: #1857218

RECOMMENDATION:

That Council note: a) the additional information provided by the Chair of the Duyfken 1606 Replica Foundation in relation to Council's request for additional information stemming from its consideration of the Foundation’s Report for the period to June 2008; and b) the intent of officers to monitor outstanding matters as identified in the report.

INTRODUCTION:

The Chair of the Duyfken 1606 Replica Foundation has provided a response to matters raised following Council consideration of the Foundation Report to Council for the period to June 2008.

BACKGROUND:

The Foundation report was considered at its SACCS meeting of 21 August 2008.

Council requested additional information from the Foundation in relation to a number of matters. Specifically it requested:

• more specific data to be included in future reports to Council, for example the number of visitors across the reporting period; individuals vs. organised groups; a list of the organised groups; log of sailing events for the period; details of passenger numbers; details of specific charters, etc; • submission of a firm schedule for the ship’s activities for the period July to December 2008 cross referenced to the contract's generic annual program; • a response to the suggestion that a Councillor to be appointed to the Board of the Duyfken; • an economic analysis of the benefit to the Cairns economy of the investment in the three year project; • strategy to avoid future operating losses as have occurred over the last two financial years.

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 124

A further request was submitted to the Foundation seeking details of the status of the audit of the Foundation’s financial statements and of its efforts to prepare a marketing/business plan.

COMMENT:

The Foundation Board met in Cairns on 9 October 2008. Board members were present either in person or by telephone. The General Manager Community and Cultural Services was invited to attend as an observer.

The response to Council's request for additional information has been received after this Board Meeting (refer Attachment A).

Based on the responses, there are three issues that Council will continue to monitor closely:

1. A major issue is the non-completion of the Audit of the financial statements. The Chair of the Foundation attributes the delays to the very poor state of the financial records transferred from to the Cairns Office. However, it was observed at the 9 October 2008 Foundation Board meeting that the Foundation Treasurer, Mr Bruce Peden, was ready for the accounts to be audited. The Board provided the approval for the audit to proceed.

2. The composition of the Board and the arrangements between Cairns and Fremantle based members is not yet settled. The Board agreed that a Fremantle Board member would visit Cairns within the next month to resolve differences. The matter of Council representation on the Board will be addressed after this.

3. The marketing of the activities and programs of the Duyfken has proved problematic for the current staff of the Foundation. The absence of an adopted marketing plan and the lack of marketing capabilities among the paid staff of the Foundation have not assisted. The Foundation has relied heavily on volunteer assistance. The Chair has committed to submitting a copy of the Foundation's marketing plan to Council when it is adopted.

CONSIDERATIONS:

Corporate and Operational Plans:

The contract between the Council and the Duyfken Foundation is captured in Council's Operational Plan under the Cultural Services and Facilities Branch.

Statutory:

There are no statutory obligations.

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 125

Policy:

Cairns City Council agreed to support the project in June 2007, in partnership with the State Government and the Cairns Port Authority, on the basis that it offered the potential to be a significant educational and tourist attraction for the City.

Financial and Risk:

The Duyfken Foundation is supported financially as follows:

Support provided by : Period of Agreement Annual Grant (ex GST) Cairns Regional Council 1 July 2007 to 30 June 2010 $150,000 x 3 years Department of Premier and 1 July 2007 to 30 June 2010 $100,000 x 3 years Cabinet Cairns Port Authority $50,000 (in kind)

Under the Grant Agreement, Council is required to pay instalments of $75,000 ex GST, on the Foundation delivering six monthly milestone deliverables to the satisfaction of Council.

Milestone Deliverable/ Due Date Date Paid by Council Supply to be provided to Council 1. Arrival Cairns 01/07/07 01/08/07 2. Mid-term 07-08 generic 01/01/08 07/04/08 program 3. Completion of 07-08 generic 01/07/08 /09/08 program 4. Mid term 08-09 generic 01/01/09 - program 5. Completion of 08-09 generic 01/07/09 - program 6. Mid term 09-10 generic 01/01/10 - program

Sustainability:

No matters arising.

CONSULTATION:

The Foundation Board, Chair and Shore Manager

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 126

OPTIONS:

That Council:

1. Note the report as provided and the intent to monitor outstanding matters as identified in the report; or

2. Note the report as submitted and request additional information from the Board; or

3. Reject the report as submitted and request a replacement based on a specification to be provided by Council.

CONCLUSION:

It is recommended that Council note the report as provided and the intent of officers to monitor outstanding matters as identified in the report.

ATTACHMENTS:

Attachment A – Email from Chair of the Duyfken 1606 Replica Foundation 14 Oct 2008 Attachment B – Email form Chair of the Duyfken 1606 Replica Foundation 29 Aug 2008

Ian Lowth General Manager Community and Cultural Services

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 127

Attachment A

Email received from the Chair of the Duyfken 1606 Replica Foundation 14/10/08

From: Kevin Byrne Sent: Tuesday, 14 October 2008 1:56 PM To: Lowth Ian Cc: Cian Pereira Subject: DUYFKEN Dear Ian,

As I do not have the luxury of secretarial support please accept this email as my response to the issues raised by the CRC in relation to the above. Before I respond specifically, I need to go over a bit of history so that everyone is across the facts and the background. This email should be read along with my previous correspondence regarding this matter. [REFER ATTACHMENT B TO THIS REPORT]

Some background. When the DUYFKEN was doing it’s around sail in 2006 I was contacted by Mr John Longley, Foundation Member, to visit the ship and to specifically discuss whether the ship could be home based In Cairns for a period. Longley left before I could meet him but I went down the wharf to meet with the Captain Gary Wilson. At that meeting was a Captain Kasper Kuiper, the resident Dutch Consul in Brisbane and also well known Brisbane maritime identity and soon to become a member of the Duyfken Foundation. It became quickly obvious that the future of the ship in Australia was problematic if it returned to Fremantle at the end of it’s round Australia voyage and that the Dutch Government was eyeing it’s purchase from the Foundation. I returned to my office and began to make some enquiries as to whether the CPA and the State Govt would be interested in a tripartite arrangement to have the ship return to Cairns for a period of three years to establish whether it would be a viable concern here. It was obvious that the Freemantle based Duyfken Foundation saw more opportunities for the ship on the eastern seaboard of Australia than in and rightly held the view that it’s connection to Australia is more appropriately represented by it’s location in Cairns. Remember that the original DUYFKEN made landfall at the Pennyfarther River just north of .

With this background in mind I went to with Mike Burgess in late 2006 to meet with John Longley to discuss future options and for Mike Burgess to give me an idea on the general state of the ship. At the meeting John Longley again reiterated the importance of the ship becoming “viable” and relevant to our historical past otherwise it would suffer an uncertain future. It was his view that there was a better chance for this to occur on the east rather than the west coast of Australia. Following the visit to Sydney, I contacted the member for Cairns, The Honorable Desley Boyle and the Chairman of the CPA, Mr Clive Skarrot to seek their support for the tripartite arrangement. I commenced negotiations with the Premiers Office via a Mr Peter Henneken which took some 3 months. Once this was achieved a report was prepared for Council and the financial aspects of the relocation were agreed. All this was done with the assistance of my staff at the CCC.

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 128

The Duyfken at this time was back in Sydney on it’s way north. The ship entertained the Crown Prince and Princess of Norway in Sydney before sailing for Cairns. During this time I was in contact with the Mayor of Fremantle, Peter Tagliaferri regarding the transfer of the assets to Cairns and the details of how the transfer would be effected to enable the smooth operation of the vessel. It was verbally agreed that I would replace Peter Tagliaferri as Chair of the Foundation and that Fremantle members would resign and be replaced by Cairns members. I assumed at the time, incorrectly, that this arrangement would occur without raising an issue and that a line would be drawn under the books of account and a new dawn in Cairns would begin. The treasurer Mr Charles La Marchia visited Cairns to hand the ship over when DUYFKEN arrived and spoke at the official arrival reception at Trinity Wharf.

In order the following has occured:

A. The books of account were not current. They did not arrive immediately the ship arrived but months later. Mr Bruce Peden, with the support of Ms Yasmin Graffin, one of the Duyken crew, has only recently got the books in order to the point that we can confidently have them audited. This is important not only from a fudicial perspective but the Foundation has been prevented from applying for government funding assistance because of a lack of completed audits of previously allocated funding. This was a serious oversight of the previous management;

B. There were a number of attempts in Fremantle to officially deal with the issue of transferring the Foundation Trust to Cairns. The following personnel were duly appointed to the Board—Kevin Byrne (22 Aug 07) and John Powell ( Comalco) and Kasper Kuiper on 1 Apr 08. These two would transfer to the Cairns Board. Other members of the Cairns Board were to be appointed later. I was appointed to Chair the Board on 22 Aug 07 at a meeting held in the office of the Mayor of Fremantle;

C. A further meeting was planned for the 9th September in the office of the Mayor of Fremantle. I attended via teleconference. There are no records of that meeting as no member in Fremantle took minutes. I recall Mayor Tagliaferri resigning as Chair and it was agreed that an AGM would be held to formalise the handover;

D. The AGM did not take place. I offered to attend via teleconference;

E. As the AGM to formalise the handover had not occurred, the formal aspects of the Foundation management were paralysed. The Cairns group were powerless to formally act in any definitive way other than to maintain a day to day operation. We could not do any concerted planning or agree to any operational issues as we did not have the authority. Decisions at any meeting were meaningless;

F. A further meeting occurred in Fremantle on 1 April 08. At that meeting it was resolved that Messrs Kerby, Young, Cocks, Leach and Masten would remain on the Board. This situation is TOTALLY at odds with what was generally agreed between myself, Tagliaferri and Longley;

G. A meeting was held on 30Th June 08 at the CRG ( in the absence of any formal AGM handover ). I treated that meeting as the first for the new Cairns Foundation Board in line with my understanding going back to the initial discussions held with John Longley. The minutes of that meeting have been circulated to Council. This meeting was convened to establish some momentum and give some direction to the crew of Duyfken and at least get the ball rolling re some issues; and

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 129

H. At a recent teleconference meeting chaired by myself on Thu 9 Oct 08 at the CRG there was general discussion that the foundation would remain in Fremantle and that the day to day management of the Duyfken operations would be done via a contract to a “Cairns Committee”. The Freemantle Board members hold the view that the meeting that was convened on 30 June 08 was “unconstitutional” . Technically the Fremantle group may very well be correct but the situation in which we find ourselves is completely unacceptable and is due entirely to the unsatisfactory arrangements made by the previous Fremantle Board to put in place a smooth handover. Commitments have not been met. It was agreed that Paul Marsten would fly to Cairns to work through the details. It was claimed by the Fremantle Foundation membership that they remain Foundation members except for those who have formally resigned and that meetings held in Cairns cannot be recognised as constitutional. Whilst this matter is not affecting for the moment the day to day management issues it certainly does have other ramifications. This completely contradicts the proposal put to both the City of Cairns and the State Government by John Longley and Peter Tagliaferri which in effect argued for a Foundation to be established in Cairns and the ship and it’s operations transferred to the new Foundation.

I would like now to address the issues of Council requiring response from “current” Cairns based Board. They are:

I. The performance data you requested in your email of 22 Aug 08 will be attended to just as quickly as Ms Jasmin Graffin can collate it. I apologise for the delay. She has been busy with Bruce Peden, Treasurer in sorting the books in preparation for audit. This is not an attempt at procrastination but rather an issue of resourcing;

J. We are presently negotiating a suitable time to slip the ship prior to it’s voyage south in December. This trip will open additional opportunities to make some money as it will be able to attend some planned activities in various ports on the way south as well as being in situ in Brisbane/ Gold Coast during the festive season. A firmer schedule as best as we can manage will be provided within 2 weeks. In the meantime the ship continues with some day sails and is available for viewing alongside;

K. We would welcome any number of councillors to attend the meetings as observers. Dependant on the outcome of the Marsten visit we are happy to have a Councillor/Officer appointed to the Foundation Board. This would be my preferred position;

L. As previously advised no economic analysis was done prior to agreements being signed. That fact is known by the Councillors of the previous council; and

M. It is not our intention to run the Foundation at a loss. There are a number of options available to the Foundation and this matter is under constant review.

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 130

If I could now turn my attention to the role of Mr O’Flaherty. Mr O’Flaherty contacted the CRC/Duyfken via Cr Robert Pyne. Whilst I do not doubt his “concern” regarding his perceptions of the poorly performing marketing and promotion of the ship much of what he is saying is incorrect. A marketing plan was completed in late 07 and a copy will be provided to you. It was not formally adopted for reasons explained above as it involved some expenditure.

I met with Mr O’Flaherty along with Cian Periera on 3 October. At that meeting I advised O’Flaherty of the history outlined above and generally agreed with his comments about the need to do more. I invited him to the Board meeting to be held on 9 Oct 08 so that he could put his strongly held views to the meeting. I asked him to prepare a proposal for the Board’s consideration. He agreed to do this. He did not turn up. I advised him that we did not have the budget to employ a person full time on marketing/promotion and we appreciated his work thus far in supporting Duyfken. This is important as I was reminded on a number of occasions by him that he could not afford to continue his involvement without payment. I asked him to submit a proposal with this understanding in mind ie a part time role. He has not done so rather resorting to attacking Cian Pereira and to a lesser degree myself. Most of his suggestions are fine, workable and achievable and much is commonsense and has been suggested in the previous plan. They will take time to implement and we will work our way through them. Mr O’Flaherty has demonstrated that he cannot be trusted to be objective in dealing with either Cian Pereira or myself.

The Minutes of the meeting of 9 Oct 08 are presently being compiled and will be forwarded to you this week ( They will be DRAFT at this stage) along with the previous Marketing Plan.

Please contact me should you require anything else. Cheers KB.

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 131

Attachment B

Email received from the Chair of the Duyfken 1606 Replica Foundation 29/08/08

From: Kevin Byrne Sent: Friday, 29 August 2008 11:19 AM To: Lowth Ian; Briggs Noel Cc: Cian Pereira; Dennis A Crossley; Dennis Quick; Kasper Kuiper; Jon Smith; Bruce Peden Subject: DUYFKEN Ian, Thank you for the email of 22 August re the above. Would you please be so kind as to circulate this email to all councilors. This is an immediate response to address the concerns of the Council as reported by yourself and also more broadly in the media. You correspondence will be more formally considered at the next Board meeting and a formal response provided once we get formal notification of CRC concerns.

A. DATA. This point will be attended to and addressed as requested;

B. FIRMER SCHEDULE. Some councilors should be aware of how these sorts of projects operate. Whilst every was made at the outset to provide a practical program to satisfy the initial submission to have the DUYFKEN base in Cairns and broadly in this was an indicative program. As with all programs involving variables such as weather and a ship, changes are and will continue to be inevitable. The Board has a twin obligation here. One being to keep as best to an agreed sailing schedule and the other to maximize financial and marketing opportunities. For example we need to respond to the opportunities of filming. They are spontaneous and are good income. Also we need to be able to respond to the opportunities of charter when they arise. In any event sailing programmes are always dictated to by weather. What needs to be understood is that sailing programmes are indicative. The DUYFKEN”S presence in Cairns is preferred however it was always anticipated that there are other opportunities for it one of which is historical. Part of the discussions with the Queensland Govt centered around an annual sail along the Queensland coast. The Board is currently examining the opportunity to embark on a sponsored expedition ( History Channel/ Geographic ) to the eastern Indonesian islands and being crewed by Cairns kids. In addition we are about to talk to Chalco to use the ship in some promotion in Weipa when they commence operations there. The Council needs to understand that the Board cannot go racing off to Council seeking an approval for a variation to the sailing program. Variations to the program will be approved after considering a variety of interests. How do we justify it “in terms of the Cairns economy” when the antagonism towards the DUYFKEN is being driven by one or two councilors who have been against the project from the outset because of costs to Council. I am confused to be frank. Would you please clarify;

C. COUNCILLOR ON BOARD. This matter will be raised at the next meeting. On the face of it I don’t have an issue with this it is quite logical. We are not about hiding anything. In fact the CRC can take over the project should they wish?.

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609 132

D. ECONOMIC ANALYSIS. Was an analysis done. NO. Is there scope to do one?. NO. If the CRC wants it done then by all means go ahead and do it. What needs to be understood is the previous Council agreed to this project. The reasons they agreed to do it is contained in the original reports to Council. Should this Council wish to back away from the deal before the contract period expires then say so. If you are unhappy with the composition of the Board the say so. The facts are in essence that the city was given a unique opportunity to acquire a piece of Australia’s maritime history for a pittance. An opportunity to keep a national asset here in Australia and not have it sold to Dutch interests. An opportunity to create another community asset here for the enjoyment of the locals and visitors alike. An opportunity to the Council to demonstrate that it is interested in the retention and sponsorship of regional history and finally an opportunity to have in the city the world’s most complete and accurate ship’s replica;

E. ECONOMIC PLANS. Of course the Board does not plan to keep incurring future losses. Please read and understand the latest comprehensive report. It is only in the past 4 months that the current Executive have had any ability to exercise any operational control of the ship.

It is regrettable that some have seen fit to publically denigrate this worthwhile project unfairly. The fact that I am chairing the Trust is because of my interest in this ship and it’s part in the history of our region and the opportunities it creates for our kids (Schools love it) and the city. Should you prefer that the interests of the CRC would be best served by my departure from the Trust then say so. Don’t slam the project because of some political vendetta. The Trust members are volunteers of good intent and have the interests of the ship and the city at heart. We are obviously thankful for all our revenue streams as we start up. As Chair I will now look at new options of funding with a view to enabling the Trust to continue it’s operations in Cairns post the current contact period free of it’s reliance on CRC money.

KB.

Agenda – Sports, Arts, Culture & Community Services Committee – 23/10/08 - #1855609