While the dealings of the government's Northern Australia Infrastructure Facility remain shrouded in secrecy, pressure mounts over funding for the Adani rail line.
While federal politicians shouted and shivered through the last subzero sitting week of this parliamentary session in Canberra, arguing among other things about how best to keep on the nation's lights and heaters, another cohort with a keen interest in energy policy was gathering in warmer climes to the north.
Among those addressing the annual Developing Northern Australia conference, held this year in Cairns, was Sharon Warburton, the chairwoman of the somewhat opaque Northern Australia Infrastructure Facility, known as the NAIF.
The NAIF is a $5 billion-government-owned lender, set up to make concessionary loans to companies planning infrastructure projects in northern Australia that are of demonstrated public benefit and would not otherwise be able to proceed.
For its purposes, the area defined as northern Australia reaches below the Tropic of Capricorn, from south of Carnarvon in the west, across the whole Northern Territory, to just south of Gladstone in Queensland.
In its first year of operation, the NAIF has developed a reputation for secrecy, relying heavily on commercial-in-confidence to refuse to reveal beyond the most basic detail who has applied, for how much and how assessments are progressing.
The NAIF has not yet lent any money. But Warburton is hinting that it's close to a decision on at least one application, the one that's attracted the most controversy and has become an open secret: the request from Indian mining conglomerate Adani for $1 billion to fund a railway line to support its proposed Carmichael coalmine in Queensland's Galilee Basin.
"We know there is a lot of interest in NAIF and the Adani rail project," Warburton told the conference on Monday. "I can confirm we are in our due diligence phase on that project."
That translates as the final stage of assessment, with three other applications apparently also reaching finality. But, Warburton said, she could not say any more about Adani than that.
BRENDAN PEARSON WELCOMED WHAT HE SAYS IS A MOVE TOWARDS "A MORE RATIONAL DEBATE ON THE ROLE THAT COAL CAN PLAY"."Put yourself in that position," she explained. "Would you expect people you were negotiating with to discuss publicly any of those details?"
Opponents of what would be oneof the world's biggest thermal coalmines are answering her rhetorical question with a "yes".
The proposed Adani Carmichael mine development has struck repeated setbacks, not least that it has struggled to secure financial backing. All of Australia's biggest banks have declined to invest, most recently Westpac, whose decision prompted Adani to accuse it of "choosing to bow to environmental activists".
More than a dozen other banks abroad have also shunned the project, on the grounds that low coal prices and an increasing focus on sustainable energy sources make coal an unattractive investment.
But Adani's Australian spokesman, Ron Watson, says the company is currently in "negotiations and discussions" with a potential overseas financier.
"The length of those discussions will take as long as they're going to take," Watson said.
He said the company was prepared for the NAIF to also take as long as it needed.
"If we have to wait, we have to wait. Patience, grasshopper, so to speak."
Resources and Northern Australia Minister Matt Canavan lashed out again this week at what he suggested was ideological prejudice against coal.
"There is a whole, in my view, ignorant and ill-informed campaign against fossil fuels and mining more generally across our country, and that puts at great risk our wealth because so much of our wealth comes from our natural resources," Canavan told Sky News on Thursday.
This week, the government reaffirmed its desire to build a "high energy, low emissions", or HELE, coal-fired power station to address future baseload power issues, accepting all but one of the recommendations in the recent energy report by Chief Scientist Alan Finkel.
The recommendation not accepted in its current form was the central one, the adoption of a clean energy target that would reward non-polluting forms of energy, but which Finkel recommended setting at an emissions threshold that would rule out even HELE coal-fired plants.
The Minerals Council of Australia chief executive Brendan Pearson welcomed what he says is a move towards "a more rational debate on the role that coal can play".
"Let the best energy source win," Pearson said.
Greens senator Larissa Waters said clean coal was "a lie".
"This is straight from the big tobacco playbook," Waters said. "Remember 'light' cigarettes? To meet the commitment under the Paris Agreement to keep global warming to safe levels, we need to reach zero pollution in the electricity sector transitioning away from coal. Building more coal-fired power stations is simply incompatible with the science."
Environmental activists continue to mount a strenuous campaign against any kind of coal-fired power and the Adani mine development in particular, on the grounds that it represents an investment in a backwards-looking energy source that will add to Australia's greenhouse gas emissions and damage the Great Barrier Reef.
The mine's backers argue it will provide a much-needed economic boost to central Queensland and – most importantly – jobs, although the company's original estimate of 10,000 has now been scaled back to about 1400.
Adani also has investments in massive solar farms in India and has proposed investing in solar energy in Australia, in both Queensland's Bowen Basin and in South Australia.
The company has sent mixed messages on whether it needs the NAIF loan to proceed, initially saying it wasn't essential and then saying it was, a distinction crucial to NAIF's considerations.
Details of any NAIF decision will only be published after it has been finalised and within 30 days of being taken.
Larissa Waters and Labor senator Murray Watt succeeded last week in establishing a senate inquiry into the NAIF, and Waters is pushing to have Adani called before it.
In recent senate budget estimates committee hearings, Labor and the Greens attempted to extract information on the status of the NAIF's deliberations in general and the fate of Adani's bid in particular.
As part of its processes, the NAIF must consult with Infrastructure Australia on projects it proposes to fund.
Greens leader Richard Di Natale asked Infrastructure Australia chief executive Philip Davies whether it had received a submission on the Adani rail line, as per the requirement that it must assess all projects seeking more than $100 million.
Davies said it had not.
Di Natale asked if the rail line was on IA's list of infrastructure priorities.
"That is not something that we have currently identified, no," Davies said, confirming that it had not conducted any cost–benefit analysis of the project.
Davies said neither the NAIF nor the Export Finance and Insurance Corporation, which acts on its behalf, had consulted with IA about the Adani project, nor any project in detail.
Adani faces local competition for a NAIF loan to build a rail line. Australian rail freight giant Aurizon has also applied.
Watt has been demanding information on how the NAIF will make its assessments.
"Regional Australia desperately needs new projects and new jobs, so we support the NAIF," Watt told The Saturday Paper. "But people need to have confidence that $5 billion in taxpayers' money will be spent independently and impartially."
In his sights in particular is NAIF director Karla Way-McPhail, who is chief executive of two companies that service the mining industry.
Minister Matt Canavan confirmed to a senate estimates hearing this month that Way-McPhail, who has spoken out in support of opening up the Galilee, was a friend whom he had recommended for the board.
"She is a successful businesswoman in my area of the world," Canavan said, noting both lived in Yeppoon. "… She is a very well-regarded individual in the community and brings a lot of business expertise, particularly from Northern Australia, to the board."
NAIF chief executive Laurie Walker declined to tell the senate estimates committee whether Way-McPhail or any other NAIF director had recused themselves from any discussions on the grounds of a potential conflict of interest. Walker said that was "not information that I think is appropriate to disclose".
She said more than six conflicts had been declared.
"All I can say is that I am comfortable that the board members understand their obligations and have complied with them," she told the senators.
Deputy Prime Minister Barnaby Joyce said recently that he would investigate any alleged conflicts of interest. But Canavan said he was unaware of any such investigation.
Karla Way-McPhail was one of two of the seven NAIF directors who did not attend this week's Cairns conference.
The Greens' main focus has been on the suitability of the loan applicant rather than the assessors.
Larissa Waters wants the government to insert a "suitable person" test into the NAIF's process for assessing loan bids, arguing she believes it would rule out Adani.
The Greens also want the environmental history test strengthened within environmental law and are calling for Adani's approvals for the Carmichael project to be reviewed on the basis of "revelations about their environmental and corporate history" in activities overseas.
Waters has produced a private member's bill to reflect the concerns but the government is not obliged to bring it forward for a vote.
The Queensland Resources Council insists that, notwithstanding the NAIF decision, the development can and should now go ahead.
"There is a high degree of confidence that the Adani mine will now proceed with the resolution of the native title issues," the council's chief executive and former federal minister Ian Macfarlane told The Saturday Paper.
But despite Adani having announced with flourish recently that it had taken the final decision to proceed, others argue there are still obstacles to be cleared.
Tim Buckley, a director at the Institute for Energy Economics and Financial Analysis, believes it is not viable without massive taxpayer subsidies.
"The green light that Adani made such a fuss about a couple of weeks ago was actually just a sham," Buckley told The Saturday Paper.
He has written a paper suggesting "defer, delay and pray" appear to be the company's unspoken watchwords.
Adani's Ron Watson said the project was absolutely viable.
"If it's not viable, what is [Buckley] worried about?" Watson asked. "We will go away. We will slip away into the darkness."
But he said far from doing that, Adani had already invested $3.3 billion in Australia alongside $40 billion in integrated baseload and solar investments across Asia. Adani was aiming to become Australia's biggest solar producer within a decade and to invest in agribusiness too.
While the Queensland government has promised a royalties concession if the development goes ahead, it has also decided not to process the NAIF loan if approved – something that may require federal legislation to circumvent.
And for the Carmichael mine to proceed, the company must have concluded an Indigenous land use agreement, or ILUA, with the area's native title holders.
Last week, the federal government and Labor combined to pass legislation to reverse a Federal Court ruling that all members of a registered native title claimant group in any relevant area were required to sign an ILUA for it to have force.
The move affected agreements well beyond the Adani ILUA and was welcomed by some Indigenous groups and opposed by others.
That followed Prime Minister Malcolm Turnbull's promise to Adani owner Gautam Adani during a meeting in India earlier this year that he would fix the native title problems that were preventing the development from proceeding,
But the Wangan and Jagalingou traditional owners are challenging the ILUA on three other grounds. The court hearing has been set down for next year.
OPPONENTS OF THE MINE ARE GEARING UP TO ARGUE THAT SUCH GLOBAL BAD PUBLICITY SHOULD BE GROUNDS FOR REFUSAL.Originally, Adani had said it expected to achieve financial close on its Carmichael project by December this year. But recently that date was revised to March – the same month the court is due to hear the ILUA challenge.
What is not clear is whether there is a NAIF deadline by which an applicant must prove it has fulfilled all requirements, or whether an application can remain live for as long as that takes.
This week, Adani announced a new jobs portal for anyone interested in working on the project once it proceeds and is hiring senior executives, with plans to begin surveying and pre-construction in September.
"Adani has said that they are seeking to make financial close by later this year or early next year, and that would be the timing of any NAIF loan," Matt Canavan said.
In the latest public criticism of the whole proposal, an international group of high-profile conservationists wrote to Malcolm Turnbull late this week urging the government not to proceed.
The Ocean Elders, which include ocean explorer Jean-Michel Cousteau, marine biologist Dr Sylvia Earle, businessman Richard Branson and Jordan's Queen Noor, wrote that the mine would worsen damage to the Great Barrier Reef that Australia, as its custodian, had a global obligation to protect.
The group's spokeswoman, marine biologist Earle, told ABC Radio that Australia should reject fossil fuels and hence the Carmichael mine, despite its advanced state of official approval.
"It's never too late as long as the people and as long as rational individuals with power can change course, now that we know what we know," Earle said.
A prime ministerial spokesman declined to comment on the letter.
One of the conditions of the NAIF approving a loan is that it must not be likely to "cause damage to the Commonwealth Government's reputation or that of a relevant State or Territory government".
Opponents of the mine are gearing up to argue that such global bad publicity should be grounds for refusal.
In her speech to the Cairns conference, Sharon Warburton said the NAIF must both reflect government policy and be independent of it.
"First NAIF must align with Commonwealth policy, and that is a whole-of-government position, remembering it is taxpayer funds we are deploying," Warburton said. "Secondly – importantly – we cannot lend funds if all regulation at both a Commonwealth and state level are not in place.
"The other tremendously important parameter under which we operate is that it was set up to be an independent body making decisions independently of all outside influence."
Given the attempts at influence being made on all sides of the argument, that may prove to be a challenge.
Links
- 'Ocean Elders' Urge Malcolm Turnbull To Reject Adani Coalmine
- Adani's 'Green Light' On Carmichael Coal Mine More Mirage Than Reality
- Adani Announces 'Green Light' For Carmichael Mega Coal Mine
- Queensland Says It Won't Play Any Role In Funding For Adani Project
- Federal Labor Feels The Heat Over Adani, And Coalition Is Sweating Too
- New Coalmines Will Worsen Poverty And Escalate Climate Change, Report Finds
- Just 7 Per Cent Of Voters Want The Government To Invest In Adani Mine: Poll
- Queensland Government Offers Adani Mining Group A 'Royalties Holiday' That Could Cost State $320 Million
- This Is Not Rhetoric: Approving The Adani Coal Mine Will Kill People
- Climate Council: Climate, Health And Economics Are Against Carmichael Mine
- Adani May Face Fine Over Sediment Released In Floodwaters After Cyclone Debbie
No comments:
Post a Comment