Queensland Racing Commission of Inquiry The Honourable Margaret White AO February 2014 Queensland Racing Commission of Inquiry www.racinginquiry.qld.gov.au ©Queensland Racing Commission of Inquiry 2014 The Queensland Racing Commission of Inquiry supports and encourages the dissemination and exchange of information. However, copyright protects material in this report. The Commission has no objection to this material being reproduced but asserts its right to be recognised as author of its original material and the right to have its material remain unaltered. Queensland Racing Commission of Inquiry 7 February 2014 The Honourable Campbell Newman MP Premier of Queensland PO Box 15185 CITY EAST QLD 4002 Dear Premier In accordance with Commissions of Inquiry Order (No. 1) 2013, as amended, I present the report of the Queensland Racing Commission of Inquiry. Yours sincerely The Hon Margaret White AO Commissioner Queensland Racing Commission of Inquiry PO Box 12369 George Street QLD 4003 Telephone 1300 763 087 Email [email protected] Table of Contents 1. Introduction ............................................................................................................................................................................6 2. Executive Summary and Recommendations ..............................................................................................................11 3. Procurement, Contract Management and Financial Accountability – Term of Reference 3(a) ................... 23 3.1 Introduction ......................................................................................................................................................................24 3.2 Outline of infrastructure projects during the relevant period ...........................................................................26 3.3 A note concerning Contour, Mr Tuttle and Mr Brennan .................................................................................... 29 3.4 Procurement policy – statutory framework .......................................................................................................... 30 3.5 Content and development of QRL/RQL Purchasing Policy ..............................................................................33 3.6 Evidence on compliance with the Purchasing Policy (pre-Addendum)........................................................ 38 3.7 Non-compliance with the Purchasing Policy ....................................................................................................... 42 3.8 Explanations for non-compliance ............................................................................................................................ 44 3.9 Addendum to the Purchasing Policy ...................................................................................................................... 56 3.10 Contract management, payment and financial accountability .......................................................................67 3.11 Synthetic tracks ...............................................................................................................................................................75 3.12 Conclusions ..................................................................................................................................................................... 80 4. Management and Culture – Term of Reference 3(b) .............................................................................................. 82 4.1 Introduction ..................................................................................................................................................................... 83 4.2 Organisational and management structure .......................................................................................................... 84 4.3 Adherence to management policies, processes and guidelines ..................................................................... 88 4.4 Workplace culture and board involvement in executive functions ...............................................................122 4.5 Conclusions ................................................................................................................................................................... 128 5. RQL Corporate Governance – Term of Reference 3(c) .........................................................................................130 5.1 Introduction ....................................................................................................................................................................131 5.2 Background ...................................................................................................................................................................132 5.3 Integrity and best interests ........................................................................................................................................135 5.4 Legislation and policies ..............................................................................................................................................149 5.5 Conflicts of interest .....................................................................................................................................................149 5.6 Employment contracts and restraint provision....................................................................................................162 5.7 Conclusions ....................................................................................................................................................................165 6. Government Oversight – Term of Reference 3(d) .................................................................................................. 167 6.1 Introduction ................................................................................................................................................................... 168 6.2 Some definitions .......................................................................................................................................................... 168 6.3 The Ministers ..................................................................................................................................................................169 6.4 The Public Service ........................................................................................................................................................173 6.5 Monitoring the control bodies under the Racing Act ........................................................................................178 6.6 Application by QRL in 2008 to amend its constitution .................................................................................... 189 6.7 Director selection process for QRL’s 2009 annual general meeting ........................................................... 201 6.8 Should the government have used its investigatory powers in relation to these issues? ......................203 6.9 Amalgamation of control bodies and approval of RQL’s constitution .........................................................204 6.10 QRL/RQL’s Purchasing Policy................................................................................................................................... 218 6.11 Response to equine influenza outbreak August 2007 ...................................................................................... 219 6.12 Conclusions ....................................................................................................................................................................221 6.13 Recommendations ...................................................................................................................................................... 223 7. Employment Contracts of Executives – Term of Reference 3(e) ........................................................................225 7.1 Background ...................................................................................................................................................................226 7.2 The original proposal ................................................................................................................................................. 233 7.3 The renegotiation of the RQL contracts .............................................................................................................. 235 7.4 The resignations and payouts .................................................................................................................................258 7.5 QAO audit ......................................................................................................................................................................261 7.6 Responsibilities, duties and legal obligations of the directors ....................................................................... 262 7.7 Responsibilities, duties and legal obligations of the executives ....................................................................266 7.8 Did the directors act consistently with their responsibilities, duties and legal obligations? .................269 7.9 Did the executives act consistently with their responsibilities, duties and legal obligations? .............. 283 Page 4 Queensland Racing Commission of Inquiry 2014 7.10 Part 2D.2 – Restrictions on termination payments ..........................................................................................289