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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2025-05-15 Daily Xml
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Whyalla Steel Works (Port of Whyalla) Amendment Bill

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (17:23): I move:

That this bill be now read a second time.

This bill seeks to clarify matters regarding parcels of land for which OneSteel is the registered proprietor for the purposes of operating the Port of Whyalla. It amends the Whyalla Steel Works Act 1958, formerly the Broken Hill Proprietary Company's Steelworks Indenture Act 1958, which approves and ratifies an indenture between the State of South Australia and OneSteel relating to the operation of its steelworks in Whyalla.

The importance of port operations is a key feature of the act and indentures that apply to OneSteel. The indentures require consent of the state for the transfer of rights, obligations, powers, benefits and privileges conferred on OneSteel by the indenture. The state has never granted a consent to OneSteel to enter into a release or any other form of unregistered interest with any party relating to the land housing the Port of Whyalla.

OneSteel is currently in voluntary administration, with KordaMentha appointed the voluntary administrators. The administrators have advised the state of a purported lease agreement granted by OneSteel to Whyalla Ports. The bill has been drafted out of an abundance of caution to clarify the fact that such a purported lease that was entered into without the state's consent is void, and to make it clear that the purported lease agreement granted by OneSteel to Whyalla Ports never had legal effect from the beginning, with the effect that that and any other unregistered interests in the prescribed land entered into without the state's consent are extinguished.

The Port of Whyalla is essential for the Whyalla Steelworks' operations. Iron ore mined by OneSteel is exported via the port and OneSteel receives key supply shipments from the port, including coking coal, dolomite and limestone—all required for steel production.

The bill also clarifies that the creation of an interest in the tramways, railway and other infrastructure constructed on the port facility other than by and for OneSteel is void and that the infrastructure forms part of the land and is not personal property. This reflects the terms of the indentures which vest in OneSteel alone the rights to construct tramways and other infrastructure at the Port of Whyalla. Nothing in the bill prevents OneSteel or any other prospective purchaser from entering into contractual agreements with respect to the Port of Whyalla in the future, subject to the indentures and relevant consent requirements.

It has become necessary to deal with this matter due to advice received that the consideration of this bill by parliament may be used to delay an existing court process. It is not the intention of the parliament for the delay of court processes; therefore, it has become clear that the expediated consideration of this bill by parliament is warranted.

The Hon. T.A. FRANKS (17:26): I rise briefly to support this important bill. It is not normal parliamentary process to have such a speedy passage of legislation, but I think this issue is incredibly important to give certainty and decisiveness of what we know will be upheld. With that, it is a pleasure to support it.

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (17:27): I rise to speak on the Whyalla Steel Works (Port of Whyalla) Amendment Bill 2025. At the outset, I wish to make it clear that the Liberal opposition will not be opposing this bill. We understand the government's intent to bring clarity and certainty to the legal and operational frameworks surrounding the Whyalla Steelworks at a time of commercial instability. The steelworks are a major employer and a critical part of Whyalla's economic and social fabric. The community deserves stability and so does the industry; however, this bill does raise significant concerns that must not be brushed aside in the name of expediency.

I just want to provide some background on that. The Whyalla Steel Works Act 1958, and its associated indenture agreement, form a unique governance framework that links the mine, the steelworks and the port, and it mandates state consent for key decisions, including the leasing or assignment of assets. Earlier this year, OneSteel Manufacturing Pty Limited was placed into administration, with KordaMentha appointed as administrators.

A major issue at hand is the purported lease made in 2018 between OneSteel and Whyalla Ports Pty Limited, an entity within the GFG Alliance. The government asserts that this purported lease was made without the required ministerial consent and is therefore invalid under the indenture. Rather than await the outcome of ongoing proceedings in the Federal Court, the government seeks to resolve the matter through this piece of legislation, hence the bill before us today.

I will now address the substance of the bill. The bill would declare any lease or assignment under the indenture made without ministerial consent void from the beginning. It further provides that no compensation will be payable to any affected party. It reclassifies key infrastructure, rail lines, jetties and the like as fixtures to the land rather than personal property. The Registrar-General will be given the power to amend land titles accordingly, and it provides for new regulations to manage transitional or case-specific matters.

But while this may seem tidy on paper, the implications in practice have the potential to be anything but. Let's take the case of Golding Contractors, a wholly owned subsidiary of NRW Holdings. Golding has delivered mining services in Whyalla since 2019 and currently employs over 350 people locally.

In 2024, Golding negotiated a first ranking security interest over assets held by Whyalla Ports, including infrastructure situated on the disputed lease. They are currently owed more than $113 million. Understandably, they have expressed public concern that this bill could extinguish their security interest without compensation. Golding has rightly asked why not let the courts deal with the issue. The matter is already before the Federal Court and due to be heard next month.

Further, there is real concern that this bill mirrors arguments put forward by KordaMentha in that very court case. If parliament pre-empts the outcome, we risk undermining judicial independence and setting a dangerous precedent. More broadly, this bill raises questions about investor confidence. What messaging are we sending if parliament retroactively deactivates commercial agreements and removes established property rights without compensation? This risks painting South Australia as a jurisdiction where the rules can change at short notice to the detriment of investors, to creditors and contractors alike.

So we must ask: has the government obtained legal advice on the constitutional or administrative law risks of this bill? What consideration has been given to sovereign risk and its implications for future investment? Could this legislation open the state to further legal challenges? There are also practical concerns: how many land titles will need to be amended? What is the cost and the timeframe of this process? Will there be conflict with other legislation, such as the railways act?

In closing, the opposition absolutely understands the imperative of securing Whyalla's future as a steelmaking centre, but this must be done fairly with regard to legal process and commercial certainty. We urge the government to proceed with caution. We do not oppose this bill but we do expect that stakeholder concerns will be heard, that legal rights will be respected and that the parliament will not be used as a substitute for the courts.

The Hon. F. PANGALLO (17:32): I rise to say that I will be supporting this piece of legislation and point out that it seems to be another calculated move by the Malinauskas government to ensure the survival and future of Whyalla, and that should not be lost on any of us in this place or in South Australia. The Whyalla Steelworks must survive and must be put in a position where it will be an attractive proposition for any future owners.

Last time we did this in this place, where a piece of legislation arrived and we had to make a quick decision, I think I likened it at the time to a Corleone-esque hit on OneSteel and its owner, Sanjeev Gupta, but it was one that was necessary to get the desired result that we find ourselves in today. If I am to draw another Godfather analogy, it is like eliminating Moe Greene and taking over Las Vegas. I am not suggesting anything criminal is happening here, of course.

Members interjecting:

The Hon. F. PANGALLO: Well, I have to be a little bit cynical about what is happening, but nonetheless I see that it is necessary so that the operations involving Whyalla Ports, the rail and tram network, are unimpeded. I note that Mr Gupta is not happy with what is going on at the moment, in fact saying that he prefers the government waits for a court decision. Whyalla does not have the time to wait for a court decision at all.

Certainly, Mr Gupta wasted a hell of a lot of time in his tenure in Whyalla with a lot of vacuous promises. We know that the administrator, Mark Mentha, when he went into the steelworks, found it in such a dilapidated state that it would have fallen over and into such disrepair that it would not have been an attractive proposition to anybody had the government not intervened in the way it did. I am pleased to hear that, since the appointment of Mr Mentha, productivity has increased. They are actually starting to generate income. They do have some problems, I gather, getting gas supplies at a reasonable cost; however, I am sure that things will go well under the current situation.

I just want to acknowledge the honourable Leader of the Opposition's concerns about the mining company Golding. I know that they have concerns that they have a debt owing to them of about $130 million, and they would like to know how that is going to happen, rather than having to write that off. I understand there is a bit of urgency here so I am just saying that I will be supporting it wholeheartedly, and congratulations to the minister.

The Hon. C. BONAROS (17:36): I rise to echo the sentiments of other honourable members by indicating my support for this bill which, as we have heard, is overwhelmingly aimed at providing clarity, stability and certainty. That is what I—and I know others—are focused on, and in the absence of this bill that certainty we are all seeking is not only lacking, it is compromised.

That is not a position any of us should want for the future of our steelworks, for the future of Whyalla and, indeed, for the future of South Australia as a whole. I have taken it upon myself to get a detailed briefing today and have had discussions in the lead-up to this, and I am satisfied with the information and responses that have been provided to me via the minister's office. It is on that basis and, again, overwhelmingly on the basis of that clarity, stability and certainty that we all want for Whyalla, that I indicate my full support for this bill.

The Hon. J.S. LEE (17:37): I rise to speak briefly in support of the Whyalla Steel Works (Port of Whyalla) Amendment Bill 2025. I note that the bill has been brought into this house and the other place in a very unconventional and unusual way, but in the interests of clarity and certainty for Whyalla. I understand that this bill is designed to rectify an error in its operation; namely, rectifying the illegal lease on the parcel of land for which OneSteel is the registered proprietor for the purpose of operating the Port of Whyalla.

I also understand from the briefing I had—an urgent briefing at 4pm—with the minister's office, that this bill seeks to clarify matters regarding the parcel for land for which OneSteel is the registered proprietor for the purpose of operating the Port of Whyalla. I want to thank the minister's office advisers for providing the report of the select committee.

It gives me comfort that the membership of the select committee consists of the Hon. Tom Koutsantonis, the Minister for Infrastructure and Transport; the Hon. Dan Cregan; Mr Stephen Patterson; Mr Lee Odenwalder; and Ms Nadia Clancy. It seems that the report that has been given does satisfy my inquiry, as well as the purpose of understanding this particular bill more. With those remarks, I support the bill.

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (17:38): I thank honourable members for their contributions on the second reading, and I particularly thank honourable members for their willingness to act in the best interests of South Australia, as we have done previously in relation to legislation dealing with the Whyalla Steelworks.

I think there were a number of matters raised, but particularly the Leader of the Opposition inquired as to whether we had taken advice in relation to administrative law or constitutional issues surrounding this legislation. I can inform the honourable member that, yes, we have. Indeed, I think we have had the benefit of the state's second highest law officer, the Solicitor-General, providing advice to make sure we are doing everything that we possibly can to protect the interests of South Australia.

I think the honourable member also raised the issue of sovereign risk. I can advise that the way we are going about this in relation to legal proceedings that are on foot is to make sure we are doing the very best we can to protect the interests of South Australia, taking into account all factors, including sovereign risk factors.

In relation to any implications for future investment, these are, of course, factors that the government takes into account. We think this is the best course of action to protect the interests of South Australia, taking all things into account.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. N.J. CENTOFANTI: Can the Attorney—because I am not sure he addressed this third question in his response to my second reading speech—advise whether this piece of legislation can open up the state to future legal challenges?

The Hon. K.J. MAHER: I thank the honourable member for her question. I am advised that significant advice has been sought, as I have said, from the Solicitor-General and also from the Crown Solicitor's Office and from private solicitors and barristers who are experts in the field. All that advice has been taken into account when formulating this legislation to make sure it is as robust as possible.

The Hon. N.J. CENTOFANTI: I am not sure that answered my question, but can the minister talk through the lease that is the subject of this piece of legislation? What did that lease entail? Why does it need to be voided, and why wasn't it voided at the time?

The Hon. K.J. MAHER: I am advised that it is understood, based on information filed with the Federal Court, that the purported lease was apparently executed on 29 June 2018. The initial term of the purported lease was stated to be 1 January 2012 to 31 December 2018. I am advised that the purported lease contained a 99-year extension clause. No evidence has been forthcoming that that purported extension of the purported lease has been exercised.

I am advised that Whyalla Ports Pty Ltd claims to be holding over, under the purported lease. A party seeking to terminate the purported lease during the holding over period must give two years' notice under the purported lease. The purported lease, in an alternative provision, provides for a termination on six months' notice.

My advice is that the required ministerial consent was never sought and was never given; therefore, it is our view that the lease never existed. It was a purported lease that never existed because our consent was not given.

The Hon. N.J. Centofanti interjecting:

The Hon. K.J. MAHER: My advice is that the entering into the lease itself required ministerial consent, which was never given, so it is the government's view that the lease has never existed.

The Hon. N.J. CENTOFANTI: Can I ask the Attorney then: what is the need to bypass the judicial process currently underway in the courts if the government has been provided with the advice that there is no lease?

The Hon. K.J. MAHER: My advice is, for avoidance of doubt, to clarify our position that our contention has always been the position. So it is to avoid any doubt and make sure the state's interests are protected. As I have said, it is the state's view that there never has been a lease because that permission was not sought but if there is any doubt whatsoever this is to make that abundantly clear.

The Hon. N.J. CENTOFANTI: Has the government undertaken any consultation with any external stakeholders prior to introducing this bill?

The Hon. K.J. MAHER: My advice is that, particularly in relation to the administrator, we are acting at arms-length from KordaMentha. The purpose of this bill is to protect the state's interests in arrangements that we say have always existed and that the lease has never existed.

The Hon. N.J. CENTOFANTI: Does the government acknowledge that the provisions of this bill mirror the relief sought by KordaMentha in the Federal Court and, if so, is this effectively the parliament pre-determining the court case outcome?

The Hon. K.J. MAHER: As I said, my advice is that we have acted at arms-length from KordaMentha and that we are just asserting the position we say has always been the case.

The Hon. N.J. CENTOFANTI: Does the government have a potential buyer lined up, and is that contingent on all three components: that is, the mine, the steelworks and the port?

The Hon. K.J. MAHER: My advice is that the reason for this legislation is not that there has been a buyer identified but to make sure that the steelworks is able to be presented in the best possible position for a potential buyer. As we say, it is our view that a lease was never entered into.

The Hon. N.J. CENTOFANTI: Is the government aware that NRW Holdings could be forced to impair $113.3 million as a result of this bill, and is the Attorney-General concerned that that may have reputational and financial implications for South Australia as an investment destination?

The Hon. K.J. MAHER: My advice is that it is the state's view that this does not affect anyone's interests because of the position that we say that there was never a lease.

The Hon. C. BONAROS: Can the Attorney just confirm, off the back of some questions that were asked, that there are in fact a number of issues that are the subject of proceedings that are on foot at the moment, and it is not exclusively related to this one issue?

The Hon. K.J. MAHER: My advice is that is correct and this bill will not resolve all the issues that are before the court.

The Hon. N.J. CENTOFANTI: I think that segues nicely into my next question. What effect will this piece of legislation have on ongoing court proceedings?

The Hon. K.J. MAHER: My advice is that there are other issues that are not the subject or are not remedied by this bill that will be ongoing.

The Hon. N.J. CENTOFANTI: But will this piece of legislation jeopardise any precedent for courts to adjudicate on laws established by parliament?

The Hon. K.J. MAHER: My advice is that the passing of this legislation will clarify some of the issues that are in dispute, but the reason for this legislation is to make sure that the administrator can properly bundle up the offering that is the steelworks in the best possible way.

The Hon. C. BONAROS: By the same token, can the Attorney just clarify that it would, of course, be open to this parliament to deal with the issue subsequent to the proceedings that the Leader of the Opposition refers to in the event that we were not here debating this bill now?

The Hon. K.J. MAHER: My advice is that would be possible, but a very undesirable outcome. As the honourable member being legally trained herself knows, court proceedings, particularly complex ones, are not always particularly efficient and fast run. We want to make sure that the interests of South Australia are protected as much as possible and, as I have said, that the administrator can get on with the process of in the future identifying a buyer and selling the steelworks and making sure the people of Whyalla and the town of Whyalla that depend on those steelworks can continue.

The Hon. N.J. CENTOFANTI: Did KordaMentha request the government to pass this piece of legislation through parliament?

The Hon. K.J. MAHER: My advice is no.

The Hon. N.J. CENTOFANTI: Appreciating that he is not the minister in charge, can the Attorney inform the chamber as to whether there was any consideration or what consideration was given to delaying commencement until after the court proceedings had concluded?

The Hon. K.J. MAHER: Whilst I will not, as is always the case, divulge the legal advice, I can say I am confident that what we are doing is acting on the legal advice about what is the best way to protect the interests of South Australia considering the court proceedings that are on foot at the moment.

The Hon. N.J. CENTOFANTI: Finally on clause 1, what assessment has been made of the impact on the 355 Golding employees at Whyalla and the broader supply chain should that company's security be voided and financial losses crystalised?

The Hon. K.J. MAHER: Again, I am not the minister responsible, but my advice is that what we are doing is acting in the way that we think protects in the best possible way the jobs at the steelworks and the jobs that rely on the steelworks.

Clause passed.

Clause 2 passed.

Clause 3.

The Hon. N.J. CENTOFANTI: I just have some questions on the insertions of sections 6A and 6B. Are there any other instances over the life of the indenture act 1937 where consent was not given for the assignment of a right or a lease?

The Hon. K.J. MAHER: My advice is that there had been instances where consent was sought, in effect, to split off the mining from the steelworks and that, when consent for that had been requested in the past, it was not given. For absolute clarity, my advice is that in the past a request had been made, essentially, to split the mining operations to another company to step away from the steelworks.

It is true that consent had not been given, but my advice is that a final answer had not been given. There was not a decision to not give consent; there was not a decision to give consent, either. It had been requested but had not been finalised—a decision one way or another. A request had been made but no consent had been given, but it was not an active no consent—a decision had not been made one way or another.

The Hon. N.J. CENTOFANTI: Can the Attorney outline to the chamber what the effect of making the lease void will have on Golding, which has allegedly used the Port of Whyalla as security against what they are owed by GFG Alliance?

The Hon. K.J. MAHER: My advice is—and it is similar to an answer I gave before—it is the state's view that there was never a lease. What we are doing is not changing the position of what already existed but putting beyond doubt the fact that consent was not given, so therefore there was never a lease.

The Hon. N.J. CENTOFANTI: Is the Attorney suggesting that it will not have any effect on Golding in terms of security against what they are owed by GFG Alliance?

The Hon. K.J. MAHER: My advice is that it is the state's position that this does not affect Golding's rights for the very fact that we say there was never a lease.

The Hon. N.J. CENTOFANTI: How much is Golding owed by GFG Alliance and their subsidiaries?

The Hon. K.J. MAHER: My advice is that there is a claim for about $113 million, but that is a claim. The state is not in a position to say that this is an amount that is a debt or owed. There is a process for companies or people that put in a claim. That is a claim that is being made but that is not for us to adjudicate.

The Hon. N.J. CENTOFANTI: What communications has the government had with NRW Holdings or Golding Contractors regarding their security over Whyalla Ports and the potential for legislative intervention?

The Hon. K.J. MAHER: I do not have information on who the government has or has not had communications with in relation to those individual companies, but I am happy to go away to see if any information can be provided.

The Hon. N.J. CENTOFANTI: Thank you. That would be greatly appreciated because I think that is an important question. Clause 3 excludes certain assignments via regulation. Can the Attorney confirm what classes of assignment the government intends to exclude via regulation and whether any exclusions are already planned?

The Hon. K.J. MAHER: My advice is that there is not anything particularly anticipated, but this is in an abundance of caution in case anything becomes apparent.

The Hon. N.J. CENTOFANTI: Why was it necessary to legislate a blanket exclusion of compensation in section 6B instead of allowing the courts to determine this?

The Hon. K.J. MAHER: My advice is that once again we are clarifying what we say is the state of affairs, that is, that there was no lease because there was no consent given; therefore, there is no compensation.

The Hon. N.J. CENTOFANTI: Whilst I appreciate that, my question to the Attorney is: does that not potentially place risk that financiers or creditors could suffer loss or initiate legal proceedings due to this retrospective invalidation?

The Hon. K.J. MAHER: In relation to that, given that it is our position that there was never a lease because consent was never given, it is not retrospectively invalidating a lease because the lease never existed.

Clause passed.

Clause 4 passed.

Clause 5.

The Hon. N.J. CENTOFANTI: If sections 6A and 6B are required, can the Attorney answer why then does the government need to specifically insert schedule 4 for the Port of Whyalla?

The Hon. K.J. MAHER: My advice is that this is again out of an abundance of caution in the way that this has been drafted. The earlier provisions go directly to leases entered into and this legislation reflects the state of affairs that there was no consent given so that they are void. The schedule does specifically name the purported lease that we say is void because no consent was given. The schedule is the specific that we are aware of, but it is a backup in earlier part 2, 6A and 6B, for an abundance of caution if there were other purported leases that we do not know about that were entered into without consent to be void as well.

The Hon. N.J. CENTOFANTI: In that case, if it turns out that the lease was valid in a court of law, would this piece of legislation void the lease anyway?

The Hon. K.J. MAHER: As I said, it is a similar answer to before. It is the position that the leases are void—they never existed—because no consent was given. It is our position there cannot be a valid lease.

The Hon. N.J. CENTOFANTI: In schedule 4(5), it seems to override the existing railways act. Does this cause issues with any future interaction with this act?

The Hon. K.J. MAHER: My advice is that what that section does is make sure that the railway is a fixture to the land, so that in dealings it travels with the land. What was the—

The Hon. N.J. CENTOFANTI: Will there be issues with future interactions with the railway?

The Hon. K.J. MAHER: My advice is that what this does is make sure that the railway is counted as a fixture to the land.

The Hon. N.J. CENTOFANTI: In doing so, would it cause any issues with future interactions with the act or not?

The Hon. K.J. MAHER: My advice is that it will not create any difficulties with that act.

The Hon. N.J. CENTOFANTI: When was the government provided with a copy of the purported lease?

The Hon. K.J. MAHER: My advice is that public sector officials were first made aware of the existence of a purported lease—but as we say there was no consent given—in around June 2021.

The Hon. N.J. CENTOFANTI: The lease in question had an option to extend for 99 years, which was not enacted; however, it allegedly remains in place until a formal termination is provided. I appreciate that is not the government's view, but that is what has been alleged. If the government has known about this since 2021, are there any legal grounds to say that the lease was recognised by the government?

The Hon. K.J. MAHER: My advice is quite simply no.

The Hon. C. BONAROS: Can the minister just confirm also that we were talking about a public official within government who was aware of the lease and not the minister?

The Hon. K.J. MAHER: My advice is that is correct, it was at an officer level, but my further advice is that it still would have required actual consent from a minister, not just knowledge that it existed. But my advice is that it was at an officer level.

The Hon. C. BONAROS: Therein lies my next question. That purported lease that was in existence that became the subject of knowledge of a public servant did not have the consent of the minister at that time or any time thereafter?

The Hon. K.J. MAHER: That is my advice; that is correct.

The Hon. N.J. CENTOFANTI: Could this clause retrospectively alter rights registered with the national Personal Property Securities Register?

The Hon. K.J. MAHER: My advice is that there may be some rights under the Personal Property Securities Act that are affected by this legislation, but my advice is that they are rights that are within the indenture in any event.

The Hon. N.J. CENTOFANTI: Has the Registrar-General provided an estimate of how many instruments of titles will need to be amended and what the timeframe is for this to occur?

The Hon. K.J. MAHER: My advice is no, but we do not anticipate that that will be a very detailed or difficult task.

Clause passed.

Title passed.

Bill reported without amendment.

Third Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (18:13): I move:

That this bill be now read a third time.

Bill read a third time and passed.


At 18:14 the council adjourned until Tuesday 3 June 2025 at 14:15.

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