The committee investigating whether Chapman had a conflict or misled parliament about her role as the Planning Minister who vetoed the $40 million proposal on Kangaroo Island heard today from two former Kangaroo Island Plantation Timbers executives, Shauna Black and Peter Lockett.

Lockett, a onetime adviser to former Liberal premier John Olsen, told parliament there was widespread concern among Liberal ranks about the potential perception of a conflict of interest if Chapman, who hails from KI and owns property there, knocked back the port proposal.

He said he met with three Liberal MPs – Nick McBride, David Ridgway and Stephan Knoll, Chapman’s predecessor as Planning Minister – earlier this year.

He said McBride told him at that meeting that while KIPT had satisfied concerns raised about the impact of the development on a neighbouring abalone farm, it “had a problem” with KI mayor Michael Pengilly, a former Liberal MP and confidant of Chapman’s who was an avowed opponent of the Smith Bay port proposal.

“I was quite taken aback… it was obvious [at that meeting] it was going to be a problem for the government if the minister made the decision – if Vickie disallowed it, it would be a huge problem for the Government,” Lockett said.

He said “it was agreed the matter had to be raised with the Premier”, Steven Marshall – who last week told reporters he backed Chapman “100 per cent”.

Lockett said it wasn’t KIPT’s place to suggest a conflict by the minister and “the last thing the company’s ever going to do is front up to anybody and say ‘we think the minister’s got a conflict of interest’”.

“This issue was raised by other people, but not by us,” he said.

He said it was decided “a political person needed to go and raise the issue with the Premier”.

“My understand from that meeting was that David Ridgway would raise it with the Premier [and] he said he would,” Lockett said.

KIPT was receiving advice from its lobbyist Iain Evans, a former SA Liberal Party leader, who told them the matter was due to go before cabinet “for a decision”.

However, Lockett said, in August Evans informed him he understood the matter had been postponed from cabinet deliberation because Environment Minister David Speirs was on leave.

Later that same day, he said, the company was informed that Chapman had rejected the development.

Lockett was asked: “You were told by Iain Evans that he had information that it was going to be a cabinet decision, and at the last minute it got pulled because of the absence of David Speirs, and the minister exercised her authority?”

“That’s my understanding,” he replied.

“It was my understanding that was the process because a number of people had raised the issue with the Premier that it was understood this was going to be a problem.”

I cannot see how a reasonable person could doubt she had, at the very least, a perceived conflict of interest

Black, a former journalist who edited the local Islander newspaper for several years, told the committee “in terms of direct conflict there is no doubt Michael Pengilly had a conflict in regard to Smith Bay” because of the “fact” trucks would be passing by his front gate and “his unflinching opposition to the project” dating back to 2016.

She went on say of Chapman: “I cannot see how a reasonable person could doubt she had, at the very least, a perceived conflict of interest.”

Shauna Black. Photo: Sean McGowan

This, she said, was not merely because of her landholdings on the island and close relationship with Pengilly, but because both Pengilly and Chapman “along with a small cohort of farmers on the island had conflated their longheld resentment of planation forestry with the matter of the Smith Bay port”.

Black’s evidence is significant, as Chapman has relied on her previous public statements to suggest she did not have a conflict.

Black previously told a prior committee when asked about the matter that Chapman “has not said anything in public that would lead us to believe that she opposes Smith Bay”.

Asked about her earlier comments, Black said today that at the time “we still believed in the process of the assessment” and KIPT “was very clear at all times not to try to bind the minister or influence the minister in a negative way”.

“We were very conscious that the minister had the singular power over this decision – we knew the fate of our development and the company’s future rested in her hands,” she said.

Pengilly, who last week appeared before the inquiry but declined to answer several questions before walking out on the video link, has publicly declared several times that timber-laden trucks would not go past his house as part of the project’s haulage routes.

But Black said they “absolutely” would have – telling parliament the mayor had himself declared a perceived conflict to council as a local resident.

Asked why she believed Pengilly had publicly denied that haulage routes would pass by his house, Black told parliament: “I wouldn’t hope to think what goes on in Mr Pengilly’s head.”

Pengilly told InDaily today “whenever necessary I put up a perceived conflict of interest on that and other things”.

“It was not an actual conflict, because I don’t have an actual conflict,” he said.

Both former executives gave evidence that they had been asked to specify haulage routes should the project go ahead, and that the route passing Pengilly’s house was “the only way” it could proceed.

But the mayor says said an alternative route, avoiding his front gate, was “the only one that had any serious work done on it” through the planning process.

“That was the only road ever considered properly,” he said.

He noted he already had a quarry across the road that sees several trucks pass each day, saying trucks were commonplace on the island.

Asked whether he agreed he was part of a coterie with a longstanding aversion to forestry on the island, he said: “If you had a vote, over 98 per cent of the island didn’t want a port  at Smith Bay, and 98 per cent are opposed to forestry.”

He said KI had endured “seven decades of disaster” because of forestry but insists: “My opposition to Smith Bay was very, very simple: Smith bay was based around the abalone farm.”

“If there hadn’t been an abalone farm there… it would have been a different matter,” he said.

“But it makes no difference to me what goes past my drive.”

The inquiry will continue tomorrow with a senior bureaucrat, Infrastructure boss Tony Braxton-Smith, set to give evidence.