The Australia InstituteFollowApr 12
In a blink and you’ll miss it move on the eve of the Federal Election, Environment Minister Melissa Price rubber stamped the groundwater management plans for Adani’s coal mine and rail project.
Adani still requires further approvals before it can proceed, but the timing of this decision is a major concern: on the cusp of caretaker mode, where major policy decisions are traditionally avoided until after the election (or done in consultation with the opposition). But not this time.
Minister Price was reportedly threatened by members of her own Government to approve the groundwater plan or face public calls for her to be sacked. The internal lobbying reportedly included Ministers Canavan and Dutton demanding answers of their colleague last week. Adani Australia CEO Lucas Dow even flew to Canberra to push the case, having recently threatened to sue for damages if any restrictions were made to coal mining in Queensland.
Given the political cloud that hangs over Minister Price’s decision, the approval could be revisited. Bill Shorten has called the threats on Minister Price “a failure of ethics in government at the highest level” and linked it with the need for a national anti-corruption body. While shadow environment minister Mark Butler said: “we will go through these reports carefully, but people will not have much confidence in the decision made in the wake of such extraordinary bullying”.
The integrity of this supposedly independent government process looks hopelessly compromised, politically and possibly legally.
There appear to be serious concerns raised about Adani’s water plan by the CSIRO and Geoscience Australia, to which Adani’s responses are unclear and certainly not transparent to the public. This includes under-predicting groundwater used by the mine and advice that the hydrological model was not suitable to make an assessment.
The Adani coal mine is a risky project environmentally and economically.
The project has long- struggled to attract finance, so three years ago the Minister for Resources Matt Canavan’s promoted a $1 billion dollar taxpayersubsidised loan to get Adani off the ground. When this fell through, the Government went offshore. Then Deputy Prime Minister, Barnaby Joyce, and Trade Minister, Steve Ciobo, wrote to the Chinese government in a bid to convince Chinese banks to fund it. Trade Minister Ciobo also changed the rules to allow an obscure government agency called Efic to finance the Adani mine, without any economic justification from his own department. The Chinese Government and banks, like all local lenders and many other foreign banks, ruled it out.
This didn’t stop the Queensland Government offering Adani a sweetheart royalty deal that could be worth hundreds of millions, on terms it is keeping secret from the public. The Queensland Government also agreed to give Adani unlimited free water, a $100 million free access road and an airport (paid for by local councils in a deal that has sparked the attention of the Queensland corruption watchdog).
And then, the jobs benefits are exaggerated. In court, under oath, Adani’s own economist told the court that the project would create just 1,464 new direct and indirect jobs, in contrast to the overblown claims made in the media. Later, Adani bragged to investors that it would automate the whole project from ‘pit to port’, further diminishing the job prospects. Meanwhile, the mine has been reduced to a quarter of the size.
A new subsidised Queensland coal mine, which has been granted free water, free access roads and its own subsidised airport also threatens jobs in Australia’s existing coal mines and for miners elsewhere in NSW and Queensland, and undermines Australia’s efforts to meet the Paris Agreement Target.
The shonky jobs claims collapsed in court like the house of cards this risky Adani Coal Project has proven to be, the failure to attract finance for the project demonstrates the weak economic case for the mine, while the mine represents a clear risk to Queensland’s water, Australia’s international reputation and the health of the Great Barrier Reef.
The compromised process leading up to Minister Price’s approval will now be subject to as much scrutiny as the project itself, thanks to the federal election, and demonstrates just how toxic this project has become politically.
Richie Merzian is Climate & Energy Program Director at the Australia Institute. @RichieMerzian