Victoria’s planning system has been plunged into crisis after a damning report from the state’s anti-corruption watchdog has exposed serious corruption risks in state and local planning laws.

Last week, Victoria’s Independent Broad-based Anti-Corruption Commission (IBAC) tabled its report from its from its five-year Operation Sandon Investigation.

Although the investigation focused on the Casey Council in particular (see below), the report highlighted areas where measures to prevent and detect serious corrupt conduct are inadequate across both state and local authorities.

“We found that safeguards around deciding whether to amend a planning scheme were bypassed,” IBAC Acting Commissioner Stephen Farrow said.

“The planning amendments we looked at as part of this operation reached the desks of decision makers in local and state government, without strategic reasons for their implementation.

“The investigation demonstrated how ministers, members of parliament, councillors, ministerial advisers, and electorate officers may be targeted by lobbyists, and how limitations in the current regulation of lobbyists present corruption vulnerabilities.”

The IBAC report comes after a five-year investigation into serious allegations of corrupt conduct involving councillors and property developers in the City of Casey in Melbourne’s south-eastern fringe.

Encompassing suburbs such as Berwick, Cranbourne, Clyde, Narre Warren and Tooradin, the city is one of Melbourne’s fastest growing areas and most active markets for greenfield residential development.

Between 2006 and 2022, the city’s population expanded by 72 percent to go from 220,440 to 378,472.

By 2041, its population is expected to reach more than 550,000.

As such the municipality is a critical area for new housing supply and represents a hotbed of opportunity for greenfield developers.

In particular, the investigation focused on the dealings of developer and consultant John Woodland and his clients primarily with the local council but also with state political candidates, political staff, Members of Parliament (MPs), and ministers.

Of particular focus are two Casey Councillors – Samah Aziz and Geoff Ablett – both of whom ae alleged to have received bribes in exchange for their support on planning related matters.

The investigation centered on four planning decisions.

Whilst no improper conduct was found in respect of one of the matters, the report found that serious misconduct is likely to have occurred in respect of the other three matters.

In one incident, Woodman and his associates are alleged to have made both direct payments and campaign donations to both Aziz and Ablett in exchange for their support of an amendment that was proposed by landowners to rezone land within Cranbourne West in order to increase its value.

Woodman and his associates also allegedly engaged in lobbying and/or provision of financial support for political staff, Members of Parliament (MPs), and ministers who they believed could advance the proposal – some activities being legitimate but others being improper.

Between 2014 and 2019, the Casey Council progressed this matter in various ways and voted in its favour on several occasions.

Although the amendment was rejected by the state Planning Minister in 2020, the IBAC report said that government processes were insufficient to prevent improper influence and ensure that conflicts of interest were suitably managed.

Another instance concerns the construction of an interim T intersection which would allow traffic between two housing estates. This matter was considered by the Casey Council in 2018.

Two companies held permits to build along the relevant road – one in relation to which Woodman’s son was a director and shareholder (Woodman’s son is not alleged to have acted improperly).

Woodman and his associates successfully worked to ensure that the other company paid most of the costs of the road’s construction.

This included direct payments to Aziz and Ablett and supporting a resident’s action group to ensure speedy construction.

In a third case, Woodman and his associates allegedly paid Aziz and Ablett for their support in relation to requested amendments to a development permit for the Pavilion Estate – development of which was being managed by a company of which Woodman’s son was a director and shareholder (again, Woodman’s son is not accused of wrongdoing).

The amendments would reduce costs and provide more land to develop and sell. This it proposed to do by reducing open-space requirements and the width of required road reserves. The amendment would also charge council for the cost of constructing a road.

Astoundingly, this amendment was approved by the Council without debate in 2018 despite advice from the council’s planning officers that the proposal should be rejected.

All up, the investigation made adverse findings against Woodman and some of his associates, Azize and Ablett.

In particular, it found that:

• Councillor Aziz received around $600,000 from Woodman and entities controlled by him in the form of investment returns, consultancy fees and cash for supporting his interest in planning matters.
• Councillor Ablett received more than $550,000 in payments and other benefits from Woodman in exchange for promoting his interest on the council.

The report also issued a scathing assessment of the Casey Council.

As a group, it said that councillors exhibited behaviour that did not meet standards required of them.

Aside from Ablett and Aziz, some other councillors consciously breached the standards whilst others lacked an understanding of their obligations as elected officials.

In particularly, councillors were able to be influenced through donated campaign funds, hosted fundraising events, donated prizes for fundraising, donations to causes which were important to councillors and funding councillors’ travel and participation in events.

These councillors failed to suitably declare and manage their conflicts of interest, meet their obligations and councillors and meet their reporting obligations when running for office.

In 2020, the entire Casey Council was sacked by the Victorian Government, in part due to IBAC’s investigation.

The next scheduled opportunity for residents to elect their local government representatives in that municipality is in 2024.

Beyond the specific circumstances of Casey, however, the report demonstrated serious flaws in both the local and state planning systems which are leaving open pathways for corruption to occur.

In particular, IBAC says that Operation Sandon highlighted that:

• Significant political donations can gain access to decisions makers and can compromise elected MPs.
• Candidates and political parties can actively seek donations through associated entities and through fundraising events. These can be concealed by a variety of underhanded means to conceal donations (refer report for examples).
• Developers are able to use registered lobbyists and engage in unregulated lobbying to influence planning decisions in an environment in which lobbying regulation is too narrow in scope, lacks transparency and has inadequate controls and enforcement mechanisms.
• Council processes and policies around conflict of interest are inadequate. Council codes of conduct vary unnecessarily between councils and fail to make clear what mechanisms are available to raise concerns about councillor conduct. Mechanisms to address such conduct are also slow and lacking in transparency.

In response, IBAC issued 34 recommendations.

These reforms are wide-reaching and aim to improve transparency in planning decisions, strengthen donation and lobbying regulation, improve the accountability of ministerial advisors and electorate officers, and to strengthen council governance.

In particular, IBAC recommends that:

• The Department of Premier and Cabinet establish and chair an inter-departmental taskforce to make further recommendations to address the corruption risks which are associated with windfall gains that result from changes in permissible land use.
• Development of independent planning panels for significant statutory planning matters to address integrity measures which have been identified during Operation Sandon.
• The Minister for Local Government develop and maintain a code of conduct and model governance rules that include best practice provisions to apply to all councils.
• The Local Government Act be amended to specify that councils must adopt councils must adopt both the model code of conduct and the governance rules.

Farrow said the importance of the recommendations should not be underestimated.

“IBAC has recommended that the Premier report publicly on the action taken in response to the relevant recommendations by 27 January 2025,” Farrow said.

“IBAC has also requested the minister for local government, the minister for planning and the relevant departments report to IBAC on the implementation of their relevant recommendations within 12 months.

“We will follow up with all key stakeholders to monitor adoption of these recommendations to address the risks identified in IBAC’s investigation.”

In a statement, Victorian Premier Daniel Andrews acknowledged the seriousness of the report’s findings.

Andrews says the Government will consider each of the 34 recommendations and respond in due course.