UNI Council: Conflict of Interest Free?

19 February 2015

In the past few months, the University of Melbourne Council has entered long-anticipated discussions on the new Charter of Sustainability, which is part of the 2015-2020 strategic plan Growing Esteem. A significant choice looms for them, following a showdown of over a year. Fossil Free Melbourne University (FFMU), a campus activist collective, have run over a year’s worth of protests, petitions, face-to-face confrontations and other forms of lobbying. They want the Council to declare in the new Charter that the University will divest the $588 million in its Endowment Fund from the top 200 fossil fuel companies. The Council has a key decision to make, but are all members of the Council interest free?

Farrago has undertaken an investigation into Council members’ ties to the fossil fuel industry, and what effect those ties might have. Farrago has learnt that Council member Robin Batterham, a chemical engineering professor and former Chief Scientist under the Howard Government, was previously the Chief Technician of Rio Tinto. Farrago has also learnt that as of July 2015, Batterham held slightly less than $200,000 worth of shares in Rio Tinto.

Farrago’s inquiry into Council members’ ties to the fossil fuel industry was prompted by more than the ongoing debate and actions around fossil fuel divestment. There’s no doubt FFMU have had a significant presence in campus events, having deemed the drafting of the new Charter of Sustainability as the pinnacle opportunity for the success of their campaign. But, broader questions are at play. The issue of whether or not it is fair or in accordance with University policy for Council members to both have connections to the fossil fuel industry has been hotly contested.

The issue of conflicts of interest on the topic have been a hot topic since the Vice-Chancellor of Australian National University (ANU), Ian Young, excluded himself from discussions on the matter in October 2013. Ian Young declared that because at the same time as holding the position of Vice-Chancellor, he was simultaneously conducting oceanographic research for some of the largest oil and gas companies in Australia. He said he could not provide neutral judgment on ANU’s financial relationship to the fossil fuel industry. That same month, ANU became the first university to yield to the national divestment campaign. Reactions were mixed.

The campaign across university campuses is being orchestrated by the international environmental organisation, and right wing commentators have attacked it.  ANU’s move to divest sparked outrage from the affected companies and other groups within the mining and financial sector, with Greg Evans from the Australian Mineral Councils accusing ANU of “joining an activist campaign, an anti-mining campaign, an anti-business campaign” and former Treasurer Joe Hockey alleging that ANU’s divestment was “removed from the reality of what is helping to drive the Australian economy and create more employment”.

There’s no doubt tensions are high, which brings us to the call Robin Battherham has to make. Are Robin Batterham’s connections to the fossil fuel industry on par with Ian Young’s? If so, has Batterham chosen to emulate the standard that Ian Young has set for the neutrality of university councils?

Batterham’s involvement with Rio Tinto spanned 21 years. He first joined as the Group Consultant in 1988, when the organisation was still CRA (it would later merge with Rio Tinto) and departed as Group Chief Scientist in 2009. It is worth noting that in 1999 Batterham was controversially appointed as Chief Scientist by the Howard Government. This generated vast criticism from both environmental campaigners and politicians, who alleged that Batterham’s dual position constituted a blatant conflict of interest.

Of particular concern to many environmentalists was that Batterham’s policy advice and influence over research councils would be used to push his preference for Carbon Capture and Storage (CCS) technology over investment into renewable energy. CCS involves capturing carbon dioxide (CO2) emissions from power stations and storing them underground. The current scientific consensus is that CCS can only lower and not prevent CO2 emissions. In response to his opponents, the most influential of whom was then-Greens President, Senator Bob Brown, Batterham firmly dismissed any suggestion of a conflict of interest or any other inappropriate behaviour as “absolute nonsense”.

“I am very careful to separate the jobs there, and the two interests. I never make any recommendation which is specific to Rio Tinto, nor for that matter specific to the industries in which Rio Tinto is in,” he stated.  Despite these claims, in August 2004 a Senate inquiry declared that Robin Batterham had a conflict of interest and subsequently in 2005 he stepped down as Chief Scientist.

“It is hard to see how Councillor Robin Batterham will be able to make an impartial choice about the University’s investment in the industry given his links to Rio Tinto, one of the world’s biggest miners,” said Vicky Fysh, the FFMU coordinator and National Campus Divestment Coordinator, when Farrago asked her to comment on the issue. Fysh, a former UMSU Environment Officer, has been driving the campaign.

Farrago asked Robin Batterham if he could provide a reply to our findings and Vicky Fysh’s suggestion that he could not make an impartial judgement. Batterham told us he only had time to provide a “general” response: “[T]here are always perceptions of conflicts of interest. This is inevitable and is handled of course by declaration of interests and then due conduct and procedures by whoever is chairing a particular meeting. I recall that the Council meeting that considered a first pass on the sustainability strategy was not a meeting I attended.  As Chair of various endeavours I am forever having to manage conflicts and see nothing extraordinary on this. Finally, on the topic of Uni Fossil Free, I think some deep and non-emotive thinking is needed. There is a fundamental point as to why ‘fossil free’ rather than ‘low emission’.”

There are three questions lying over Batterham’s continuing involvement. Firstly, in his response, Batterham informed Farrago that he does not recall being present at the Council meeting “that considered a first pass on the sustainability strategy”. However, whether or not this means he has been present at other council meetings where the drafting of the sustainability charter and divestment has been discussed is unclear. The details of council meetings are kept opaque. Farrago requested the minutes of all 2015 meetings and was refused access by the University Secretary. The Secretary did not allow us to know if the “sustainability strategy” has been discussed at only one or several meetings or to confirm when Batterham has been absent. It is also worth pointing out that Batterham has provided Farrago with no assurance that he intends on excluding himself from future discussions on the Sustainability Charter. He has simply said he did not attend the meeting where it was first discussed.

Secondly, if Batterham only has a little under $200,000 worth of shares in Rio Tinto and the University’s endowment fund is only around $5 million, then will divestment from various fossil fuel companies really have a significant effect on Batterham’s personal financial situation? However, it’s worth noting that the aim of divestment movements is that they target prestigious institutions that are widely perceived as setting the standards and market norms that organisations conform to. Obviously, the University’s investments are not the biggest determinant of the profitability of Rio Tinto shares, as FFMU are well aware. Yet pressuring universities to divest from fossil fuel companies is likely to result in more influential financial organisations following suit. These could include banks or industry super funds for example. In the full scheme of things a domino effect of institutions divesting from fossil fuels could have an enormous effect on companies like Rio Tinto and in turn the personal financial situation of Robin Batterham.

Thirdly, it’s up for debate whether Robin Batterham has really done anything wrong outside the eyes of environmental activists. Has he actually committed a conflict of interest in relation to the University’s Conflict of Interest Policy? This is not a question that Farrago has the authority to answer. However, we have examined the extent to which the university’s conflict of interest policy is relevant to Batterham’s situation. According to the policy, the definition of a financial interest is “Any right, claim, title or legal share in something having a monetary or equivalent value. Examples of financial interest include, but are not limited to, shares, share options, and the right to receive remuneration, such as salary, consulting fees, allowances, discounts and the like”. 1.1 of the Policy states that “Where any actual or potential conflict of interest exists for a staff member and cannot be avoided, the staff member will disclose it to their supervisor as soon as is reasonably practicable after becoming aware of it.” Another perspective that some may take is that whether or not Batterham has committed a conflict of interest in accordance with the university’s policy is beside the point. Universities should strive to not only do the right thing in accordance with their own internal rules and procedures but to act in a socially and environmentally responsible way as defined by the values of the wider society around them.

Between Ian Young removing himself from discussions on divestment and the ambiguity of Batterham’s response to Farrago’s queries on his potential future involvement in divestment-discussions, it appears a line in the sand is yet to be drawn on what actually constitutes a conflict of interest within the culture of tertiary education governance. How Batterham chooses to respond in the coming months may set a precedent for the extent to which individuals of influence within universities who have connections to the fossil fuel industry are able to partake in sustainability-related decisions. This has the potential to either form or overcome a barrier to the success of both FFMU and the national university divestment campaign as a whole.

Robin Batterham was approached for comment on this article, but declined to comment in full by the deadline for the moment due to other engagements. Farrago will continue to follow this story.

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