Labor Joins Libs To Vote Down Probe Into Murky Ownership Of Nation's Largest Coal Mine


The Federal Labor Party has joined with the Coalition to vote down a Greens’ motion calling on the government to investigate the ownership and corporate dealings of Australia’s largest ever proposed coal development.

Indian company Adani is planning to build the Carmichael coal mine in the Galilee Basin, and the associated mega-port at Abbot Point. The company came under increased scrutiny earlier this week following a Fairfax investigation which revealed what Greens’ environment spokesperson Senator Larissa Waters described as “uncertain ownership and tax arrangements”.

Ostensibly, the projects are owned by Indian billionaire Gautam Adani, but Fairfax has suggested Gautam’s brother, Vinod, may ultimately control the “complex web of companies” linked to the Adani Group’s Australian assets.

Vinod Adani stands accused of siphoning $1 billion from three of Adani Group’s Indian ventures.

Yesterday, Waters told New Matilda it would be “reckless” of the government to allow the nearly $20 billion of projects to go ahead “without even knowing who controls them”.

But Labor has argued that such an investigation is a matter for the Australian Securities Investment Commission and voted with the coalition against the Greens’ motion.

However, Waters told New Matilda that the Environment Minister Greg Hunt “has direct obligations to be aware of any change of proponents for these projects,” because of their massive environmental consequences.

The mine will ship up to 60 million tonnes of coal per year, for 60 years or more, through the Great Barrier Reef, and will produce four times the carbon emissions of New Zealand.

In its own right, the Carmichael mine represents a roughly one-third increase of Queensland’s coal industry, but it will also pave the way for a series of other mines in the Galilee Basin.

Adani plans to develop a rail line hundreds of kilometres long to transport coal from the Galilee to the coast, and is seeking taxpayer funds to subsidise it. It will be shared with other companies.

But Waters says the project shouldn’t be going ahead at all.

“The proposals for the world’s largest coal port and the largest coal mine in the Southern Hemisphere both present extreme environmental risk, especially to the Great Barrier Reef, Queensland water resources and the world’s climate,” Waters said.

“We would obviously really like the motion to get up so that we can send a strong message to the government that Adani’s ownership arrangements need to be investigated,” she said.

She also noted that in addition to a growing list of corporate questions, Adani has already been caught out for dodgy environmental practices.

In 2013, after a High Court direction, the Indian Ministry of Environment and Forestry investigated a raft of environmental breaches committed by the company.

The committee found that Adani had illegally cleared 75 hectares of mangrove conservation area, had illegally constructed an airstrip, had violated conditions by blocking creeks, and had failed to dispose of environmental waste correctly.

The committee also found that “the public hearing procedure, which is a critical part of project clearance and helps to understand and mitigate the concerns of local people, has been bypassed on one pretext or another”.

“It is clear that the company has been less than serious about reporting on
compliance,” the report concluded.

And analysts are increasingly questioning whether this poor standard of compliance also applies to Adani’s corporate arrangements.

More than a year before Fairfax exposed Adani’s complex web of companies “extending from the low-tax regime of Singapore to the tax haven of the Cayman Islands,” the Institute for Energy Economics and Financial Analysis raised similar concerns in this report.

“This looks to us like a complicated and opaque cross-border corporate restructuring designed by lawyers and accountants for financing, tax, and political agendas rather than operational logic,” the report’s authors said.

The renewed scrutiny Adani has faced this week comes at an inconvenient time, as the company scrambles to nail down the additional $10 billion needed to reach financial close by the end of 2015.

And the threat of an inquiry has not quite disappeared yet.

“In an attempt to secure Labor’s support, we have submitted a more targeted motion referring only to Minister Hunt’s powers, for a vote on Monday March 2,” Waters said.

Any such inquiry is bad news for Adani as it tries to raise finance for the project.

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