The independence of a controversial report for the Murray Darling Basin Authority has been called into question in light of a connection between the report’s author and an Authority member.

One of the most sensitive reports released by the Authority last week was The potential effects of changes to water allocation policy on financing the agricultural sector and businesses in the  Murray Darling Basin. It was written by Adrian Rizza, a former executive at Babcock and Brown, where he was involved in wind power. Before that he was at Shell, where one of his gigs was ‘oil products finance’ and mergers and acquisition work, also at Shell.

But since the collapse of Babcock and Brown Rizza has been working at Australasian Capital GPR, a point picked up in an excellent piece by Fairfax online columnist Michael Pascoe yesterday. As Pascoe pointed out: “A quick Google search finds he’s also a director of solar energy hopeful, Mid West Energy Pty Ltd, and part of Australasian Capital GPR which ‘provides a wide range of services and independent advice to companies seeking to navigate the myriad complex issues involved in cross boarder transactions between Australia and Asia’.”

As Pascoe noted, the Australian Financial Review picked up on the more controversial aspects of Rizza’s report, including the possibility of pre-emptive foreclosure by banks. The rest of the media followed, and so did the Coalition, which yesterday used question time to demand of Wayne Swan whether he had asked the banks to rule out foreclosure. The question was redundant, given the banks had all said they had no intention of changing current lending practices and would only consider it when the shape of the final plan was clear.

That wasn’t before the report had scared the daylights out of farmers and irrigators and heightened the hysteria seen at some MDBA meetings.

The media was too busy working up scare stories about farmers being kicked off their land to probe the background of Rizza. But Crikey can reveal he works at the same investment bank where a part-time director of the Authority is also a director.

As the ‘People’ section of the Australasian Capital GRP website makes clear, both Green and Rizza work at Australasian Capital GRP. Rizza’s entry there mentions his Babcock and Brown involvement; Green’s doesn’t. Rizza was a wind expert at B&B; Green was, according to his Linkedin entry, a “foundation member of the global water team at Babcock and Brown”. While Rizza’s role at Babock and Brown is mentioned in his CV at the end of the report, his role at Australasian Capital GRP isn’t.

How independent does that make Rizza’s report? And did Australasian Capital GPR receive anything from his commission fee? Was the Authority aware of Green’s shared history with Rizza when it commissioned the latter?

While Rizza has plenty of experience in the field, the Authority might have been better off commissioning a genuinely independent consultant with a reputation to protect, like Access Economics, rather than someone associated with Babcock and Brown. Rizza’s report turned out to be the touchstone for a great deal of the anger last week and over the weekend. It is untested and anecdotal.

As Pascoe wrote: “A key reason the Rizza report received the attention it did is that it states that all the banks were interviewed on a no-names-no-pack-drill basis in its compilation. It’s not hard to imagine the sort of hypothetical discussions about the impact various water policies might have on lending policies. Bankers talking their book and running various scenarios off the record are as loose as any of us.” Pascoe found senior bankers dismissive of the report, including one who claimed divorce was a greater threat to farm viability.

Unlike many of his colleagues in business journalism and the commentariat, Pascoe isn’t prepared to uncritically run whatever is put in front of him in an ‘independent report’. He applies a test too few in the mainstream media administer — the bullsh-t test — and tries to identify when self-interest is talking.

Meantime, the Authority has some questions to answer about the report. Authority members were attending an Estimates hearing this morning. Its media area did not provide a response by deadline.

PS: The Australasian Capital GPR website reveals two more interesting names: Greg Rudd and Lachlan Rudd. Yes, they are related to that Rudd; Greg is his brother, Lachlan is Greg’s son. They run the China end of the venture.

Peter Fray

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