Channel 7: A New Target For Activists For Climate Change And Palestine?

Almost two years ago, David McKnight, Guy Pearse and Bob Burton wrote a book called Big Coal. It provides a brief history of, and analysis of the role of major coal companies in Australia.

McKnight has previously written a very good biography of Rupert Murdoch. Pearse is a famous whistleblower on the “Greenhouse Mafia” during the Howard government, and has written terrific analysis on climate change policy in Australia.

The book is quite good, though much of it serves to simply repeat and update arguments that Pearse has already made elsewhere. I just want to highlight some of the book’s findings here.

Our exports of coal mean that Australia helps produce more CO2 emissions than Saudi Arabia. In 1991, Australia exported 120 million tonnes of coal. By 2012, we exported 316 million tonnes. Big Coal hopes to export between 520 and 689 million tonnes of coal by 2025.

The coal industry has been dominated by the “Big Four” since the 1990s: BHP, Rio Tinto, Xstrata, and Anglo American. They dominate the industry, producing “74 per cent of total saleable production.”

The mining industry is about 80 per cent foreign owned, so “most profits eventually go offshore. Mining companies, such as Xstrata, Peabody and Anglo American are 100 per cent foreign owned, with others overwhelmingly in overseas hands (Rio Tinto 83 per cent, BHP 76 per cent)”.

The ownership of the coal industry is complex. They summarise by observing “coal companies [are]owned by banks owned by super funds owned by sovereign wealth funds owned by investment vehicles owned by other banks.”

In late 2012, the coal industry employed over 45,700 people. The national workforce is about 11 million. About one in eight of those employed in the industry are women. Treasury officials have explained that as unemployment is low, individual industries don’t create jobs, they are “simply re-distributing them”.

The authors note that the “’trickle down’ effect from corporate tax is also overstated, as in 2008-09 when the average rate of tax was just 13.9 per cent of the mining industry’s gross operating surplus”. They note that the “coal industry boasts about the coal royalties it pays”, but “in NSW and Queensland they represent approximately 3 per cent and 5 per cent respectively of state revenue. In Victoria, coal royalties are so insignificant they are not even specifically mentioned in the budget papers.”

They comment that “Australia’s coal boom is not our boom; it belongs to the barons”.

The book shows the influence bought by Big Coal. For example, BHP and Rio Tinto are among the leading coal companies supporting the right-wing think tank, the IPA. The IPA’s executive director, John Roskam, used to be a Rio Tinto executive. And he bragged that the IPA has “helped and supported just about all” of Australia’s climate change deniers in “one way or another”.

Climate change denier Ian Plimer “has been appointed to the boards of two Rinehart-owned companies – one of them a coal company”. At the University of NSW, BHP’s “coal mining partner, Mitsubishi” provided $1.1 million to fund a Research Chair in Sustainable Mining and a Centre for Sustainable Mining Practices. Rio Tinto funds scholarships at the University of Newcastle. The Australian Coal Association Research Program has $16 million in funds for tertiary research at various universities.

And Big Coal doesn’t just spend money to promote their own views. Climate change activists Rising Tide spoofed ads glorifying mining put out by the NSW Mineral Council. They responded by getting the huge corporate law firm Freehills to shut down their website for breaching copyright.

The authors recall Tony Abbott’s prediction that the carbon tax would be “absolutely catastrophic”, “wipe out jobs big-time”, create “ghost towns” and so on. Only “two months after the tax came into effect”, Abbott admitted that the “initial impact… may not be absolutely catastrophic”. The authors note that Big Coal likes to base advocacy on an “economic study” – happiness for everyone when the “preferred policy is delivered, or dire economic consequences if it isn’t.”

They note the role of a study by “ACIL Tasman, the coal lobby’s economic consultancy of choice.” ACIL Tasman issued various reports “full of dire predictions”, such as one on the effect of the carbon tax. Yet even this report wasn’t dire enough to be accurately reported on: it held that the “coal industry was likely to grow by 25 per cent in a decade, just not quite as much as it could have”.

And of course, there’s the advertising campaign run against the Mining Resources Super Profits tax, which cost tens of millions of dollars. The authors note their “devastating effect”, leading to the overthrow of Kevin Rudd, and the rise of Julia Gillard as Prime Minister.

From the start of her reign, “Gillard signalled that negotiating a peace deal with the mining industry was her highest priority”. The Minerals Council of Australia knew they had won, and suspended their ads, as a new deal was worked out between Gillard’s government, Rio Tinto, BHP Billiton and Xstrata: “Treasury officials were pointedly excluded from the negotiations.”

The point of the tax was to reap the benefits of the enormous profits being made by the coal industry, so that all of Australia benefited from its resources, not just Big Coal and the coal barons. The federal treasury expected to reap $10 billion a year from the proposed tax.

The new “Mineral Resources Rent Tax” (MRRT) had “huge loopholes”. As the authors note, it yielded, “at best, a few hundred million dollars in the first year. Rio Tinto for one, paid nothing in the first year and may never.” For a campaign that cost “just over $17.2 million”, this was a pretty good return, if a depressing illustration of modern capitalist democracy at work.

The carbon tax introduced by Gillard gave the biggest polluters $5.5 billion to get them on board with a policy that was theoretically supposed to give them financial incentives to reduce CO2 emissions.

Similarly, in 2012, the government considered “axing the mining industry’s generous diesel fuel rebate. Once more, the MCA launched an advertising campaign, and the next day the government capitulated.”

In 2013, when it was clear how little money had been gained from the MRRT, some Labor MPs considered “tweaks” to the tax. Big Coal launched “another round of ads aimed at the government”. They folded.

In three years, Big Coal picked three fights with the federal Labor government, and they won all of them, relying on “big budget advertising blitzes to turbocharge their behind-the-scenes lobbying campaigns”.

The authors observed that Big Coal conservatively spends over $40 million a year on its “boutique industry of lobby groups”, with five at its core. The authors estimate fossil fuel subsidies at between $9 and $12 billion. Not a bad return. Perhaps if poor people spent millions of dollars in defence of their welfare rights, they would get a more generous safety net.

The authors observe that whilst a “coal export phase-out would involve challenges for NSW and Queensland, they are survivable”. They would just involve gradual adjustments in their budgets, “in the same way they have already had to do when faced with falling coal prices”.

The authors document the revolving door of politicians leaving government for lucrative jobs in the coal industry, and then working to lobby politicians for coal companies. They comment that “no matter who is in government, the power of the industry ensures that ministers haven an open-door policy for the coal industry, and that, more often than not, the people who visit have previously worked with the minister, his advisers, or the government. When governments change, one set of doors for former ministers and their advisers closes while another opens”.

The book notes the attempt by Gina Rinehart to take over Fairfax, which is well-known. Yet the book documented a similar issue which, to my knowledge, has gotten far less media coverage, and is very important.

The authors note that most Australians probably think of Channel 7 as owned by a media company. Kerry Stokes owns 67 per cent of Seven Group Holdings (SGH). SGH was formed by a merger of WesTrac and Seven Network Limited in 2010.  SGH “owns the WesTrac business which provides the franchise for Caterpillar, the world’s largest provider of mining equipment”.

SGH “also has close to $250 million invested in the Agricultural Bank of China, the world’s fifth largest financier of coal-fired power companies (€1.5 billion since 2005) and 15th biggest financier of coal mining (over €1 billion since 2005).” In 2012, WesTrac earned $387.1 million before interest and tax – whilst SGH’s media investments generated less than a third of that: $116.1 million. That is, SGH’s interests in WesTrac are a lot bigger than their interest in their media investments. The authors observe that Channel 7’s news might not inform viewers that their company and Stoke’s $2.79 billion fortune “depends to a large degree on the continued expansion of coal mining, both in Australia and China”.

WesTrac notes on its website that “WesTrac Group is an authorised Caterpillar dealer in its Western Australia and New South Wales/ACT Service Territories and in its North Eastern China Service Territory… Caterpillar is the leading global construction and mining equipment provider.

WesTrac Group is one of Caterpillar's top five (by sales value) dealers globally (out of 182 dealers).” Those interested can chase up Caterpillar’s dealers around Australia. One is in Holroyd, a few minutes away from a Max Brenner in Parramatta, which was picketed because its parent company is alleged to provide care packages to Israeli soldiers.

The authors don’t spell this out, but Caterpillar is well-known to observers of the Israeli-Palestinian conflict. In 2004, Human Rights Watch wrote that Caterpillar “should immediately suspend sales of its powerful D9 bulldozer to the Israeli army”. It observed that “In Gaza and the West Bank, they are the main tool and vehicle the IDF uses to destroy homes, raze agricultural land and demolish infrastructure used by the civilian population.”

Sarah Leah Whitson noted: “Until Israel stops these practices, Caterpillar’s continued sales will make the company complicit in human rights abuses.” Amnesty International commented similarly.

In June last year, the Presbyterian Church in the United States voted to divest from three companies operating unethically in the occupied territories. One of the companies it divested from was Caterpillar. The Presbyterian Church specifically stated in its motion that it supported Israel’s right to exist, supported a two-state agreement, and distanced itself from BDS.

This divestment was well timed: in July, Israel began its barbaric assault on Gaza. Israel’s use of a modified form of Caterpillar’s D9 bulldozers  which was, in the words of Jamie Stern-Weiner, the “star” of Israel’s attack on Gaza. Israeli organisation Breaking the Silence released a report, compiling the testimonies of over 60 Israeli soldiers on what they had seen and done in attacking Gaza. Stern-Weiner provided a useful and accessible guide to what the report shows about the D9’s role in Gaza.

To give a sample from the report, one soldier noted, “By the time we got out of there, it was all like a sandbox. Every house we left – and we went through three or four houses – a D9 (armoured bulldozer) came over and flattened it… The D9 was an important working tool. It was working nearly non-stop.”

Or another: “Most of it was D9s (armoured bulldozers). They just took down all the orchards. Not a single tree left. They worked on it for three weeks. When they didn’t have a specific job like leading our way or opening up a specific route for us or some other mission, they just went and flattened things. I don’t know what their specific order was, but they were on a deliberate mission to leave the area razed, flattened… The D9s destroyed lots of houses.”

Or another soldier: “There are also agricultural fields there, the D9 rips them all up.” Or another: “The D9s, they were operating constantly.” Or another: “One of the high ranking commanders, he really liked the D9s. He was a real proponent of flattening things. He put them to good use. Let’s just say that after every time he was somewhere, all the infrastructure around the buildings was totally destroyed, almost every house had gotten a shell through it.”

Or another: “It was total destruction in there – the photos online are child’s play compared to what we saw there in reality. It wasn’t so much razing there – it was havoc, mostly: wrecked houses, collapsed balconies, exposed living rooms, destroyed stores. That’s what we saw. I never saw anything like it, not even in Lebanon. There was destruction there, too – but never in my life did I see anything like this.”

Now remember. WesTrac is one of Caterpillar’s top five dealers globally. Caterpillar is “the world’s largest provider of mining equipment”. And Seven Group Holdings makes a lot more money from WesTrac than it does from news on Channel 7.

Like many left-wing types, I chuckled at the jokes and memes about the dire effect on Fairfax and the “Sydney Mining Herald” if Gina Rinehart took over. Yet one of the biggest media companies in Australia has some major interests that one might suspect would colour their coverage of the Israeli-Palestinian conflict, and climate change. 

If activists on climate change and Palestine solidarity want to pick a fight – well, this would be a formidable enemy to make. And yet, picketing Channel 7 could be as easy as not watching their channel anymore.