Funding Climate Destruction And Human Rights Abuses: Efic Australia Abroad


Banks are walking away from mining projects that harm our planet, and our people. But one Australian Government organisation still isn’t getting the message, writes Lucy Manne from ActionAid Australia.

Westpac’s recent decision to rule out the Adani coal mine is rightly being celebrated by those who would see the Great Barrier Reef and our climate protected from enormous new coal mines. But if Senator Matt Canavan’s furious reaction – calling Westpac “wimps” for bringing in a new environmental policy more in line with global action on climate change and public opinion – is anything to go by, the war is far from won.

The risk is that as coal projects increasingly fall out of favour with commercial banks and investors, more and more of our taxpayer money will be sunk into projects that no commercial bank will touch. In the case of the Adani mine, the Government has already signaled its eagerness to mobilise the murky $5 billion Northern Australia Infrastructure Fund (NAIF).

Despite what supposedly free-market loving politicians on both sides of the aisle will tell you, subsidies for fossil fuels are nothing new for Australia. We already sink billions of dollars into propping up fossil fuel mining: according to Oil Change International, this is to the tune of approximately $5 billion every year. And it’s not just coal mines in Australia – we also sink huge amounts into projects with Australian connections in low income countries abroad, where frequent human rights violations can be added to the list of reasons why these subsidies are a bad idea.

If you think that any taxpayer funded investments in controversial new coal mines will have to pass rigorous due diligence, think again. As a case study, let’s look at the secretive government agency that both hands out millions to Australian companies for mining projects in low income countries, and has also, interestingly, been chosen by the Government to manage the NAIF.

Between 2013 and 2014, Efic, Australia’s export credit agency, handed out a total of $317 million to fossil fuel projects – some in Australia, but many in low income countries. And some of these have been unmitigated disasters, such as the PNG-LNG project. According to Jubilee Australia, who have been tracking the project for many years, “Efic was grossly incompetent at assessing social, economic and political risks related to this project and must bear some responsibility for a downturn in the PNG economy and the current conflict in Hela Province.”

The US$19 billion PNG LNG project is operated by ExxonMobil and includes gas production and processing facilities that extend from Hela, Southern Highlands, Western and Gulf provinces to Port Moresby in Central Province.

But for anyone wondering how a Government agency came to subsidise civil unrest in our region, you will be left in the dark, as one of the many strange quirks that applies to Efic is that it’s exempt from the Freedom of Information Act.

And Efic’s support for these projects shows no sign of slowing. Right now, Efic is quietly considering a taxpayer backed loan of up to $50 million for the Boikarabelo coal mine, a proposed mine in the Waterberg district of Limpopo province, South Africa.

Boikarabelo means “to be responsible” in the local language. This is a dubious claim for an Australian mining company in a country where Australian mining operations caused 242 deaths between 2004 and 2015, and the coal industry has regularly been responsible for human rights violations and terrible impacts for local communities, and especially women, such as black lung disease, the fouling of water supplies, increases in violence, and severe air pollution.

Recently ActionAid South Africa and partners published a new report outlining the history and impacts of coal mining on women in South Africa. The list of human rights violations recorded in the report is long and harrowing: contaminated water, land grabs, polluted air, poisoned land, black lung disease in mine workers, and social breakdown in affected communities.

At ActionAid, we have been working with the local women in Limpopo who are standing up to the company behind the proposal, Resgen, for many years. Francina Nkosi, a local leader in the community, has interviewed many of those who have come into contact with Resgen as they try to get their mine off the ground. She recently lodged a formal complaint with Efic, alleging that Resgen has already violated the rights of the community. She says the fresh water promised never arrived, the community’s cemetery was fenced off and locked down, the school was never built, vulnerable community members were told they ought to move, and when consultation got tricky, the community forum that she was part of was dissolved.

Efic’s response? To paraphrase: trust us, we are doing our due diligence. It’s understandable that Ms Nkosi might find it difficult to trust a Government agency that has funded disastrous fossil fuel projects in the past, and is exempt from disclosing any details of their due diligence in relation to this project.

The Westpac news is good news, a triumph of logic over ideology. But the fight to ensure we have a stable climate – that our Government doesn’t use taxpayers money to prop up projects our banks won’t touch, and that women in low income countries do not face further human rights abuses at the hands of Australian companies – is still to be waged.

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Lucy Manne is the Head of Campaigns at ActionAid Australia.