Twiggy (27 page)

The Marysville leader, who worked closely with Forrest, says the billionaire’s efforts were impressive, but they were relatively minor in a reconstruction operation that ended up costing more than $1 billion. “Twiggy’s a very complicated
individual,” he says. “He’s not just all show – he is motivated by good values. But he doesn’t have the self-awareness to understand the impact of his actions.”

Since the Victorian and Queensland disasters, Forrest’s philanthropy has gone into overdrive. Nicola became chief executive of the Australian Children’s Trust in 2010 and, in effect, the driving force behind Forrest’s image as a humanitarian.
Barely a month goes by without a new announcement. The couple have donated millions of dollars to the Salvation Army and St Vincent de Paul and Forrest has slept rough several times as part of the latter group’s annual CEO Sleepout. The family’s money has also been poured into dozens of charities, including Mission Australia, a Christian organisation that helps needy Australians; YouthCare,
a multi-denominational group that provides chaplains in schools; and Fairbridge, a charity working with young offenders.

In 2011, Forrest gave $3 million in Fortescue shares to the Art Gallery of Western Australia and another $3.7 million worth of stock to be divided among the state’s four big performing arts companies. Later that year, he gave $1.3 million in Fortescue shares to Murdoch
University’s Institute for Immunology and Infectious Diseases – the biggest personal contribution in the university’s history.

Suddenly, Fortescue shareholders included arts aficionados and academics who might not normally study the ups and downs of the resources sector. The organisations, of course, were free to sell the shares immediately and take the cash. But in Forrest’s eyes, they would
be smarter to hold on to the shares, take the annual dividends and watch the value of the investment grow. “They [the shares] are dividend-creating, they are proudly Western Australian,” he said. “The [recipients] can sell them whenever they wish, but if they want to see them grow in value then they can grow along with the Western Australian industry.”

Forrest’s next philanthropic mission
was much bigger in scope and ambition than anything he had attempted previously. So big, in fact, that some of his close friends rolled their eyes at its sheer grandiosity. In 2012, Forrest announced that he wanted to end the curse of global slavery and was forming an organisation, Walk Free, to tackle the problem. Finally, this was the issue that would put him on the world map for philanthropy,
potentially touching the lives of millions of people and bringing him closer to Bill Gates, whose own evolution from business magnate to humanitarian had earned him popular acclaim. Forrest has met Gates several times in recent years to discuss global issues and appears to have modelled himself on the Microsoft founder.

Warren Mundine, who was running Forrest’s GenerationOne at the time,
recalls his shock when his friend told him about the anti-slavery venture. “I laughed and said, ‘Mate, you’re just not satisfied with fixing the Aboriginal issue – now you want to save the world,’” he says. “But I love that about him.”

Forrest’s interest in abolishing global slavery was sparked by a trip his eldest daughter, Grace, had made to an orphanage in Nepal a few years earlier when
she was still at school. When the Forrests returned to the orphanage a year later, they found that none of the children were still there and suspected they had been sold into forced labour. Forrest managed to have the orphanage shut down, but he knew he also needed to do something about the broader problem. His own investigations revealed that an estimated 21 million people around the world were
living in slavery, a practice either tacitly supported or actively encouraged by governments and major companies.

Grace Forrest went on to study international politics at university in Perth and helped convince her father to set up Walk Free. In 2012, Forrest took a big step by hiring Nick Grono to run the organisation in Perth. Grono had an impeccable pedigree, having worked as chief of
staff to Howard government attorney-general Daryl Williams before moving to Brussels to take a senior role at the International Crisis Group
,
which was led by former Labor foreign affairs minister Gareth Evans. Forrest knew he needed someone of Grono’s stature to run the new group
,
and at one stage he even flew to Greece, where Grono was holidaying with his family, to persuade him to return to
his former home town of Perth.

Grono accepts that it is highly unusual for an organisation dedicated to a global cause to operate from a relative outpost like Perth. But he says this is not such a big issue because Walk Free is using Facebook and other social media to build an awareness campaign around the issue. By the middle of 2013, Walk Free had signed up 2 million “supporters” through
its website and was on track to have 4 million by the end of the year, prompting Grono to speculate that it may be the “fastest-growing global online movement ever”. Grono says Walk Free wants to sign up thousands of companies to pledge to end modern slavery by eradicating any forced labour in their operations and supply chains. Walk Free is planning to launch a global slavery index, which will
be the first systematic effort to measure the prevalence of slavery and analyse countries’ responses to the issue. It also plans to create a global fund backed by major donors.

But exposing the evils of slavery won’t make Forrest too many friends among those companies around the world that have grown rich from the practice. Already, Walk Free has come into conflict with companies such as
Spanish fashion chain Zara, US retailer Target and Japanese electronics manufacturer Nintendo. That doesn’t appear to faze Forrest, who thinks big business is more likely to act when targeted personally by him rather than by a run-of-the-mill non-government organisation. “We’re able to reach into the most influential families of the world and discuss with them candidly that the world has a problem,”
Forrest said.

For Forrest, a breakthrough of sorts came in March 2013, when then prime minister Julia Gillard – who had come to despise the businessman in the wake of the mining tax furore – publicly praised Andrew and Nicola’s “amazing leadership” on fighting slavery and promised that the Australian government would take a bigger role in the campaign. Forrest had put $8 million of his own
money into establishing Walk Free in 2012 and was on track to tip in a further $12 million by the end of 2013. This generosity presumably involved Forrest dipping into the $210 million in dividends he has received from Fortescue since 2011. Grono says his boss is highly dedicated to the cause, spending time in the group’s Perth office but also meeting government and business leaders whenever he
is overseas.

Forrest nominates his most inspiring historical figure as William Wilberforce, the politician and philanthropist who played a central role in abolishing the slave trade in the British Empire in the nineteenth century. In what may be a template for Forrest’s own ambitions, Wilberforce was also an evangelical Christian who believed that a career in politics was the best way he
could serve God. Forrest’s favourite book is
A Man for All Seasons
by Robert Bolt, the 1960 play about Sir Thomas More, the deeply religious statesman whose adherence to principle led to his death at the hand of Henry VIII.

The rise of Andrew Forrest as the nation’s greatest philanthropist culminated in 2013, when he and Nicola became the first Australians to sign the Giving Pledge, the
movement established by Gates and Buffett in the United States. By signing the pledge, the Forrests promised to give away “the vast majority” of their fortune, either during their lifetime or when they die. In a letter explaining their actions, Forrest called on other wealthy Australians to give more to charity. “With laughter we read on a physio’s wall a caption, ‘Those with the most toys when they
die, still die.’ How true,” the letter said. “Guided by the same principles of the book which inspired the successful leadership of our companies, the New Testament, we chose to help those least fortunate. In our country, this is our first Australians, and globally, those suffering the unbearable yoke of modern slavery and forced labour.”

Forrest has so far given away almost $300 million
of his fortune. But his signing of the Giving Pledge also raises the question: how can he possibly give away most of his wealth when almost all of it is still tied up in Fortescue shares? Forrest has given away small amounts of shares as donations in recent years, but he has shown no desire to significantly reduce his controlling 33 per cent stake, which affords him the ultimate say in Fortescue’s
corporate strategy. It’s also unclear just how much money Forrest will ultimately be able to give away. The value of his Fortescue stake has fluctuated between $2 billion and $13 billion since 2008, meaning the commitment he and Nicola have made under the Giving Pledge will always be subject to extreme volatility. While Forrest could easily be worth several billion dollars by 2020, his net worth
could just as easily have plummeted.

What is driving Andrew Forrest’s quest to become a philanthropist on a global scale? There are several theories. His religious faith is evidently central to his belief in trying to help those less fortunate than himself. But in recent years, his generosity has been spurred by the attacks on his so-called greed that were led by Wayne Swan in the wake of
the mining tax brawl. Swan was one of the few people unmoved by Forrest’s philanthropy. “Charity is not a substitute for paying tax,” the then treasurer said. Swan’s repeated public denigrations may have prompted Forrest to boost his charity work in a bid to win the PR battle against a Labor government he believed was intent on starting a class war.

Another theory is that Forrest desperately
wants to rub shoulders with global business and government leaders like Gates, and philanthropy is a useful means of winning respect among the world’s powerful elite. Such is his standing in the eyes of the establishment these days that Forrest was invited to speak on his philanthropic work before a VIP audience, including Queen Elizabeth II, at the 2012 Commonwealth Day ceremony at London’s Westminster
Abbey.

A former Fortescue senior executive says that while Forrest genuinely believes in the various causes he champions, he also realises that they aid his ability to cosy up to politicians and advance his own commercial interests. “He’s not unaware of how philanthropic issues open doors, particularly with politicians,” says the former executive. “Andrew learned very early on that if you
could set up a meeting with a politician, he’d always take your meeting with you on your desire to help indigenous people. And after that little chat was over, Andrew could say, ‘Now I’ve got these other points I’d like to talk to you about as well.’”

Perhaps there is also some “billionaire guilt” at play. Under this theory, the mega-wealthy in society experience acute pangs of guilt whenever
they step out of their five-star hotels or private jets and glimpse people who are really struggling. For Forrest, this feeling of guilt, and his desire to do good, may be amplified by a win-at-all-costs approach to making money.

Warwick Grigor subscribes to this latter theory when analysing his old business partner’s bid to reinvent himself as a philanthropist. Although he once believed
Forrest had ulterior motives, especially after the Leaping Joey controversy, Grigor has come to admire his growing social conscience, seeing it as an important progression in his character. “I genuinely believe he wants to do good. In essence, he’s got a good heart,” Grigor says. But Grigor also sees a conscience that needs assuaging: “He does have to contend with a sense of guilt; you can’t be a
good Christian, do all that he’s done and not want to recompense for that. It’s only logical.”

Another former business associate told the
Sydney Morning Herald
that Forrest was a man haunted by his past, particularly the mess he left behind at Anaconda Nickel. “He does not want people to think he is a bad man. That’s what drives him. I don’t think he ever intended to let people down with
Anaconda. It went the wrong way for him as CEO and he has wanted to make it up to the universe ever since.”

Investment banker John Poynton, who is at the forefront of encouraging Perth’s wealthy to become involved in philanthropy, prefers to take a sanguine view of Forrest’s motives, comparing his vision to that of Gates. “I think he is going to be one of the world’s greatest philanthropists,”
Poynton says. Poynton notes, however, that Forrest’s enemies will always point to his colourful record in business to seek to downplay his good deeds, which he believes is unfair. “Like any entrepreneur, like any leader, like any alpha character, there will always be attributes about them personally that might grate with some people,” Poynton says. “But at the end of the day, you’ve got to look
at his track record. He hasn’t cashed out, he hasn’t made a quick quid and moved on. He fervently believes in what he’s doing, and now he’s parlaying what he’s made on paper into something globally significant with his philanthropy.”

I honestly think he can be prime minister.

—MARK CARUSO, Perth mining identity

Andrew Forrest tries desperately to project an image of being an ordinary, knockabout Aussie bloke whose wealth hasn’t changed him. That may have been true once, but it’s a much more difficult argument to mount these days.

After making his first $2
billion in 2007, Forrest said: “I still walk around barefoot with my kids on the weekend, I drive a car old enough to vote [a 1986 Mercedes], I don’t gloat.” A year later, when his fortune was approaching $10 billion, he continued to insist that money wasn’t overly important. “Once you can look after your own needs, it becomes superfluous,” he said.

But Forrest has gone to great lengths
to look after those needs. In fact, he has spent tens of millions of dollars acquiring some of the trappings of wealth favoured by billionaires the world over. The beaten-up Mercedes he used to boast about is long gone from Forrest’s seven-car garage in Cottesloe. In its place is a luxury Lexus hybrid, parked alongside Nicola’s Lexus SUV. The Forrest home, perched at the peak of John Street near picture-perfect
Cottesloe Beach, is suitably magnificent, even if slightly modest when compared with the narcissistic monuments favoured by many of Perth’s other mega-wealthy residents.

Forrest has spent millions of dollars restoring the interior of the house, a sprawling dwelling built in 1895 by retail magnate Frank Zimpel. From a grand turret at the front flies the Australian flag – the only clue beyond
the Norfolk Island pines lining the street that this is the domain of a patriotic mining tycoon. Those who have been inside are impressed by Forrest’s underground humidified cellar and its hundreds of bottles of fine wine. There are few outward shows of pretension, however. On a normal evening, Nicola will be cooking dinner while the kids and their friends will be hanging around the kitchen or
watching television – unless they’re taking a dip in the heated swimming pool or playing on the floodlit tennis court.

Forrest also owns a penthouse apartment on Sydney’s Circular Quay that features floor-to-ceiling windows with sweeping views of the Opera House and the Harbour Bridge on one side and the Botanic Gardens on the other. The apartment, which doubles as his Sydney office, was
bought for $6 million in 2006. And he appears to enjoy the frills of owning one of Sydney’s glitziest residences. When Sydney journalist Elizabeth Knight interviewed Forrest about his philanthropic work over lunch in the penthouse, they dined on quail, foie gras, grilled figs and rosella gastrique, washed down with a fine oaked chardonnay.

According to property records, Forrest also paid
$1.4 million in 2007 for a property in the historic NSW village of Berrima. The splurge continued in 2010 and 2011, when Forrest bought three apartments in his own beachside suburb of Cottesloe for a total of $2.5 million. The family also has a forty-hectare retreat near Byford, in the Perth foothills, for weekend horseriding expeditions.

As his wealth rose with Fortescue’s early success,
Forrest began talking about upgrading his fifteen-metre boat,
Geordie Girl
, for a flash 26-metre launch that cost $10 million. He took his father, Don, to a boat show to look at the shiny new craft he coveted. Don recalled: “I said to him, ‘I don’t like it, you have a perfectly good boat and you don’t need a bigger one.’” Forrest took the parental advice and decided to stick with his old boat.

But in late 2008, his wish for a more luxurious boat was granted when he bailed out a friend, Perth stockbroker Andrew Frazer, who had run up big losses during the global financial crisis. Forrest took a mortgage over Frazer’s century-old mansion in the riverfront suburb of Peppermint Grove. He also helped out by buying his mate’s 21-metre boat and beachfront property in Gracetown, which is
close to the vineyards of Margaret River. At last, he had a motor launch he could proudly show off and the obligatory holiday house in the wine region of the south-west, the playground of Perth’s rich and powerful.

Forrest still lacked the ultimate symbol of corporate success: a private jet. There was a time when he regarded business people who criss-crossed the continent on their own planes
as self-indulgent and removed from everyday life. “He always said, ‘Shoot me if I ever get a private jet,’” says one old friend. Something must have changed in Forrest’s attitude. In early 2011 he arranged for Fortescue to take delivery of a $53-million Bombardier Global Express to whiz him across the nation and, increasingly, around the world. Even after he stepped down as chief executive later
that year to become chairman, he continued to be a regular user of the sixteen-seat plane.

Forrest now had the Cottesloe beachside family home, the Sydney penthouse apartment, the Gracetown coastal holiday house, the Byford rural retreat, the investment properties, the luxury boat and the Fortescue corporate jet. All this for a man who claimed to eschew the accoutrements of wealth.

His good friend Rodney Adler says Forrest was once driven by the desire to become super-rich, but believes he has now moved beyond that. “When I first met him at Jacksons, all the way up to the founding of Fortescue, he was motivated by wealth,” Adler says. “There’s no question about that. But after you go past a certain point – and for Andrew I don’t know which billion it was – the motivation is no
longer wealth. Because you have so much, you can’t spend it in your lifetime.”

The real jewel in Forrest’s empire is Minderoo, the 280,000-hectare cattle station in the Pilbara that served as the family seat for four generations until Don was forced to sell in 1998. Forrest was shattered by his father’s forced sale of their ancestral land, vowing to buy it back one day if he ever had the
money. Ten years later, when his bank balance was much healthier, he began calling Minderoo’s owners – Kalgoorlie mining identities Peter Bartlett, Gary Connell, Graeme Smith and Ron Harken – to ask them to sell. The owners demanded $30 million for the station, which Twiggy refused to pay. But when the property was put up for auction in 2009, Forrest sent in two private bidders and bought Minderoo
for $12 million. After eleven agonising years, the family name was back on the mailbox.

Forrest has since spent millions of dollars restoring the main homestead to its former glory and refurbishing more than a dozen other buildings on the property. In 2012, he invited several journalists – including the author – to fly to the Pilbara and stay at Minderoo. During a tour of the station, Forrest
showed the old two-way radio he used for School of the Air lessons and, while strolling through the shearing quarters, recalled the boyhood thrill when his father and the head shearer would give him a sip from their beer bottles at the end of the day. For the cameras, he also put on a display of his jackerooing skills, helping to push a herd of Red Angus cattle through the stockyards.

That
night, at the end of a sticky day in the red dust, Forrest pulled on his board shorts, walked across the homestead’s superbly manicured lawns and jumped into the soothing water of the man-made lake. Later, he produced bottles of red wine from his cellar and chatted for hours. It was proof that Forrest, when he turns on the charm, is good company. Next morning, he was up early cooking fillet steak
for his guests’ breakfast.

When Forrest bought Minderoo, he believed he was righting a historical wrong. For his parents and siblings, it had been distressing to have the station out of the family’s hands for so long. “To see the look on my brother’s face, to hear the voice of my sister and to look into my father’s eyes and my mother’s eyes and see their joy is something I will never forget,”
he said of buying back the property. “The place we had put so much heart into and so much blood, sweat and tears, was now back in the family and in the hands of the people who loved it. If you work hard, Australia affords you the opportunity to literally buy back the farm.”

To spend time with Forrest at Minderoo is to glimpse a man who views himself as much a pastoralist as a mining magnate
or a philanthropist. He sees the station as a money-making venture, even if cattle breeding these days is a thin-margin business. After taking possession of Minderoo, Forrest employed one of Australia’s best cattlemen, Phil Clark from Alice Springs, and slashed the herd from 11,000 to 3500 to ease pressure on the land.

Forrest’s intense familial attachment to Minderoo may explain his bizarre
attempts to keep other mining companies off the land. Like other pastoral stations in Western Australia, Minderoo is rich with minerals buried beneath it. But pastoral leases are all on Crown land, leaving pastoralists with little room to object to mining and exploration permits. In this region of wide open spaces, pastoralists and miners usually coexist quite happily.

As a miner, Forrest
has taken full advantage of his rights. Fortescue’s Cloudbreak and Christmas Creek mines in the Pilbara were built across three active pastoral leases, including Gina Rinehart’s Mulga Downs station. Despite some objections from pastoralists in the early days about the huge scale of the project, Fortescue was able to carve its mines, railways, roads and an accommodation village that it once described
as “the size of a small town” out of the pastoral land. The company went on to lock up a total of 85,000 square kilometres of prime land across the Pilbara.

But in 2010, the shoe was on the other foot for Forrest when a small private company called Yarri Mining lodged an application to conduct sand mining at Minderoo. The Minderoo lease is more than twice the size of New York City and is
so vast that fully grown cattle are often brought in during a muster that have never been in the yards. Yarri applied for two mining leases covering only 141 hectares – or about 0.05 per cent of the total area. In response, Forrest’s private company, Forrest & Forrest, lodged multiple objections to the grant of the mining leases, arguing in the Warden’s Court that the noise from any mining operation
would frighten the cattle and threaten the survival of a rare mammal called the mulgara.

In a judgment handed down in January 2013, Magistrate Stephen Wilson took only a few sentences to sum up what he thought of Forrest’s central arguments. It was difficult to fathom, he said, how two mining leases covering such a small area could cause any financial or environmental impact to Minderoo.
But Wilson saved his real disdain for Forrest & Forrest’s “dictatorial” application to the court to impose a condition that Yarri must pay Forrest an annual performance guarantee of at least $200,000 if mining went ahead. “In my opinion this proposed condition by Forrest is outrageous,” he said. “The proposed condition appears to be an attempt to create some form of dictatorial power that allows
it to act as the investigator, prosecutor, judge and enforcer of the provisions of the Mining Act when it has no power or right to do so.”

Later, Andrew Forrest also opposed an application by Perth mining identity Tony Sage to explore for uranium on Minderoo. Sage, who had spent years working closely with Pilbara station owners, was shocked that a man who had championed the junior end of
the mining sector could object to the use of pastoral land by an explorer. “We are disappointed that someone so prominent in the Australian mining industry, and who … has purportedly ‘fought’ for junior exploration companies, has taken such a bewildering stance,” Sage said.

This wasn’t the first time his fellow miners had accused Forrest of hypocrisy. When he created Fortescue, Forrest promised
repeatedly that his railways would be open to other Pilbara miners and this would help unlock the huge potential of the region for anyone with a stranded deposit. This open-access regime was also a critical part of the mining agreement he signed with the WA government in 2004. Forrest’s mantra was that BHP Billiton and Rio Tinto had failed the nation by refusing access to their infrastructure,
but he would be its saviour. When he opened Fortescue’s Pilbara operations in 2008, Forrest declared with typical hyperbole: “These ports and lines will have lives way beyond ours. These are the arteries which will see hundreds of other projects grow.”

Years later, however, Fortescue’s rail lines remained as closed to other companies as those of BHP and Rio. By 2013, it was painfully clear
to the up-and-coming miners in the Pilbara that Fortescue would not allow them rail access without attempting to extract a heavy price. Fortescue did reach an agreement in 2011 to transport ore for one company, BC Iron, but only after driving a hard bargain that involved it securing a 50 per cent equity stake in BC Iron’s mine.

Another junior miner, Brockman Mining, became so frustrated
with Fortescue’s attitude that it applied to the WA government, using an unused part of the railways access code to try to force the company to give it access to part of its 280-kilometre line. Fortescue demanded up to $576 million a year – a massive price – from Brockman to use the railway. It later said it would not have any spare capacity on its line for twenty years, and that the Chinese-owned
Brockman would need to pay for an expansion of the railway if it wanted to use it. Fortescue argued in submissions to the WA Economic Regulation Authority that allowing Brockman’s trains on its railway would create “material inefficiencies” in its train scheduling and maintenance. The claim echoed those made by BHP Billiton and Rio Tinto in the 2000s, when they successfully fought Fortescue’s own
efforts for third-party access.

And therein lie the contradictions at the heart of Forrest and the mining empire he has built in the Pilbara dirt. This is a man for whom life is a sequence of ambiguities and paradoxes. He wants to be seen as an everyman who took on powerful mining giants and triumphed for the benefit of all Australians, yet he regularly conflates the national interest with
his own commercial interests. He is an elitist who craves the respect of the establishment but wants to be loved by ordinary people. An honest bloke found by several courts sometimes to have trouble with the truth. A devout Christian who does business with morally dubious characters. A philanthropist who will do anything for a dollar. A supporter of Aboriginal people except those who stand in the
way of his mines.