AUSTRALIA | Unjust management of debts for supply of electricity and water to members of Aboriginal community of Coober Pedy

The South Australian (SA) Ombudsman, Mr Wayne Lines, has concluded an investigation of the District Council of Coober Pedy (the council).

The investigation was prompted by contact from the Aboriginal Legal Rights Movement (ALRM) on behalf of a significant number of members of Coober Pedy’s Aboriginal community. 

The Ombudsman interviewed Aboriginal community members in order to hear their experiences first hand. The investigation also reviewed the council’s records relating to each community member. 

ALRM and the community members told the Ombudsman that:

• the council had not been complying with the conditions of its Electricity Retail and Distribution Licence and Water Industry Retail Licence;
  
  
• the council had not been properly applying its Hardship Policies, which are designed for customers experiencing financial hardship and who may have difficulty making payments towards an electricity or water debt;
  
  
• community members had accumulated significant debts of electricity and water, without a clear understanding of how those debts had accumulated;
  
  
• community members felt pressured by the council to enter payment agreements with the council to pay off their debts that left them with little money for day-to-day living, or face disconnection of their electricity and water;
  
  
• community members felt pressured by the council to have family members and other third parties join financial arrangements with the council to contribute towards electricity and water debts;
  
  
• community members felt pressured by the council to seek emergency payments from a Native Title trust fund.

In his investigation report, the Ombudsman explained: “At the core of this investigation is the very serious concern that Aboriginal community members of Coober Pedy have been allowed to accumulate considerable debts in relation to their electricity and/or water accounts. This in turn has had a significant impact on their quality of life. These debts appear to have accumulated over several years until the council determined that action needed to be taken to recover the amounts owed and any ongoing usage of customers.”

The Ombudsman SA was troubled that many community members felt pressured to seek Native Title payments to contribute towards their electricity and water debt. The Ombudsman noted that previous council employees had amended hardship templates to include reference to Native Title payments as a matter of standard practice. While not making a conclusive determination about this particular issue, the Ombudsman commented: “… I make it abundantly clear that I do not consider it is appropriate for a council to in any way suggest that a rate payer should seek financial assistance from a Native Title body as a means to managing a council debt or to have a necessary resource, such as a connection to electricity or water, reconnected.”

As part of the investigation, the Ombudsman wrote to the relevant regulator of electricity and water licensing in South Australia, ESCOSA. ESCOSA has assisted the council to implement change and make significant improvements to the council’s practices, policies and application of the Electricity Retail and Distribution Licence and Water Industry Retail Licence.

The Ombudsman observed that the investigation occurred during a turbulent period for the council and at completion of the investigation, the council remains in administration. Many of the alleged actions of the council occurred under a different council administration, and the current administration has expressed a commitment to implementing the six recommendations that have been made by the Ombudsman to the council.

The Ombudsman also recommended that the State Government review whether there are alternative options for the supply of electricity and water in Coober Pedy that would place less of an administrative and financial burden on the council.

The State Government has advised that it has been working with the council to address the financial and operational challenges facing the council, including exploring options relating to the future provision of water and electricity services to the community. 

Please find the full press release and the Ombudsman's final report further down below.

Source: Office of the Ombudsman SA, Australia