Batman and Labor on Adani
In the lead-up to today’s byelection in the Melbourne seat of Batman, federal Opposition Leader Bill Shorten has been asked the same question over and over: Would a future Labor government revoke approval for Indian conglomerate Adani’s contentious Carmichael coalmine in Queensland’s Galilee Basin?
Having told the Australian Conservation Foundation in January that he would, Shorten now says he will not do anything that might create sovereign risk – the risk that a government might default on its obligations, scaring away future investment.
But the questions are actually a step ahead of the process. The mine is not yet fully, finally approved.
Despite some suggestions to the contrary, the Carmichael mine has not had its final signoff from the federal minister for environment and energy, Josh Frydenberg, on conditions that must be met before the first coal can be extracted.
Adani’s proposed mine was approved by then environment minister Greg Hunt in 2014, subject to a range of conditions being satisfied at both the state and federal level.
Queensland’s Mines Minister Anthony Lynham has said all of the state’s requirements have been met.
But senior officials from the federal Environment Department revealed during Senate estimates committee hearings recently that several key federal environmental conditions remain unaddressed.
“There is a broad range of conditions, obviously, in relation to the Adani mine, relating to everything from research plans to management plans and other requirements,” assistant secretary Greg Manning told the committee.
Manning confirmed that Adani is yet to lodge a management plan for the endangered black-throated finch, whose habitat protection forms a key condition of a final go-ahead.
He said the department was also yet to approve a management plan for ecosystems in the area dependent on groundwater.
“Both of those are required before the commencement of mining operations,” Manning said.
Under questioning from new New South Wales Labor senator and former NSW premier Kristina Keneally, Manning confirmed several other offset measures and monitoring programs had also not been approved.
Also outstanding was a research plan relating to the Doongmabulla and Mellaluka springs in the Great Artesian Basin and another outlining a research program on what is known as the Rewan Formation, a geological formation that separates the Galilee Basin from the Great Artesian Basin and restricts water flowing between the two underground aquifers.
The research has been made a condition of approval because it will add to the understanding of how that underground rock wall limits the impact on groundwater.
Manning said both plans were expected “in March this year”.
The timing of these lodgements is important.
Another condition of the mine’s approval is that the various management and research plans must each be submitted within a specified time, once the project’s overall biodiversity offset strategy has been approved.
The original deadline in Hunt’s conditions was three months after the offset strategy’s approval.
In January last year a senior Environment Department official authorised a variation, pushing the deadline out to four months, with provision to roll that over again if the strategy has to be revised and reapproved.
The officials before the Senate estimates committee last month were not specifically asked if the overall biodiversity offset strategy had been approved. They did not list it among the items outstanding.
If it has – and the department was unable to say before this paper’s deadline – the clock is ticking on the rest of the paperwork.
That time line can be pushed out again if the company is still struggling to meet it. So far, it hasn’t been.
The revelations of environmental plans still outstanding – which in turn must be submitted at least three months before mining can begin – and at least one variation in the time line for lodging them, suggests that the Carmichael mine is still a way off.
Advocates in Queensland are confident it will be a reality within the next year – that is, before the next federal election – but that it won’t be an electoral liability for the Coalition.
Stretching back five years, the approval process for the proposed Adani mine has been far from tidy.
In August 2015, the Federal Court ruled the original approval invalid, on grounds that the minister had made his decision without considering advice about two other relevant threatened species, the yakka skink and the ornamental snake.
The government withdrew the approval and then reissued it.
Announcing the renewed approval on October 15, 2015, Greg Hunt described the conditions as “rigorous” and said they were designed to protect threatened species and provide “long-term benefits for the environment” through an offset package of protective measures.
The Queensland Environmental Defenders Office criticised one change to section 33 of the approval, which allowed effective self-assessment, saying variations to management plans could be made without ministerial approval where they “would not be likely to have a new or increased impact”.
More than two years on, the mine’s proponents still haven’t fulfilled all of the conditions nor secured finance for the project. A spokeswoman for Adani said there was no undue delay and the process for producing environmental plans was the same as for any other development.
“There’s no issue with them,” she said of the plans still pending.
“They are working through the normal process. We’re 100 per cent committed to the Carmichael project and we are confident of securing finance.”
Australian banks have declined loans and some have either introduced tighter criteria for financing new coalmines generally or decided not to finance them at all.
Adani is currently negotiating a royalties agreement with the Queensland government but is yet to take possession of the land required for the proposed railway link to the coal loader at Abbot Point. It is also subject to legal challenge from native title holders.
While the process drags on, the political profile of the issue has increased dramatically.
First came last year’s re-election of the Labor government in Queensland, following a dramatic change in its attitude to a federal subsidy for the Carmichael mine.
Originally endorsing it, Queensland Premier Annastacia Palaszczuk withdrew support just before the election.
The second battleground featuring the Adani mine is way south, in Melbourne’s inner north. The Batman byelection has given the issue a new profile as Labor battled the challenge from the Greens, who remain opposed to it.
The prospect of losing Batman shifted Labor leader Bill Shorten’s position on the mine from supporting it a year ago, to opposing it, to supporting it if it “stacks up economically and environmentally”.
In Queensland, the politics have been just as complicated.
Regardless of arguments over how many jobs the $15 billion mine would create, the mine has its supporters, especially in central Queensland.
Those who want it to go ahead are increasingly frustrated at the delays. Former Queensland state Labor MP Jim Pearce is a strong backer and lost his seat last year after his government’s change of heart. He is increasingly critical of Adani for taking so long.
“They’re just not delivering,” Pearce told the ABC this week. “They were putting people like myself out there in the middle of the road to get run over by simply not delivering, not coming forward with the commencement of the project.”
Chief executive of the Queensland Resources Council and former federal resources minister Ian Macfarlane says the criticisms from the region are largely about the delay.
“I think there’s a frustration that the project hasn’t got started yet and that it’s taken so long,” Macfarlane told The Saturday Paper. “But it’s a frustration, not a change in the level of support.”
Macfarlane’s view is echoed within the federal government.
Senior government figures believe the politics of the mine are not as geographically split as the state election campaign might have suggested.
They remain confident that the mine will proceed and that the anger about it in the lead-up to the state election – which they concede had become palpable – was not related to where people lived or whether they saw it as the mine versus the Great Barrier Reef.
These government sources believe Queenslanders were angry at the prospect of a government subsidy, not the mine itself.
To fund a rail link to the mine, Adani had applied for a billion-dollar concessional loan through the Northern Australia Infrastructure Facility, which the Coalition established to drive development in Queensland, the Northern Territory and northern Western Australia.
But Palaszczuk’s election-eve decision to exercise a state government veto, provided for under the NAIF’s rules, meant that the loan could not proceed.
Although they are reluctant to concede the point directly, Coalition sources effectively admit that Palaszczuk did the federal government a huge political favour.
They say opponents of the mine had successfully elevated the issue – off the back of the proposed loan – to one of significant concern, and many Queenslanders, including Coalition supporters, were not happy about subsidising a huge private-sector project, especially one owned by “a rich Indian company”.
ReachTEL polling commissioned by The Australia Institute and conducted two weeks before the state election showed strong opposition to the loan across Queensland.
Asked if Liberal National Party Opposition Leader Tim Nicholls should emulate the premier’s promise to veto the loan, 61.3 per cent of respondents said he should.
TAI executive director Ben Oquist believes the Queensland election result changed the dynamics around the issue.
“The project started to be seen as not just politically problematic but economically toxic as well,” Oquist told The Saturday Paper.
“Adani’s contradictions started creating a mess for themselves. They said they did not need a subsidy, but pursued them relentlessly. The inflated jobs claims started backfiring as they came under more scrutiny.”
This week, the federal Opposition leader reiterated that a Labor government would not tear up the contract if it took office after all of the approvals had been finalised.
“If we form a government, if all the work is done and all the contracts, the approvals, I'll make it very clear, we're not going to enter into sovereign risk,” Shorten said on Wednesday.
He also ruled out making any changes to the Environmental Protection and Biodiversity Conservation Act to rule out the mine.
“We will not change the existing law or the existing rules,” Shorten said. “We won't change the existing goalposts for Adani or for anyone else, full stop.”
He said the question of whether a Labor government would revoke environmental approvals based on new information was hypothetical.
Oquist says the arguments about sovereign risk are “overblown”.
He says the laws “empower the minister to review that approval in light of new information”.
Labor faces a tough challenge in navigating the politics of its varying constituencies on the issue of coalmining in general, and the Adani mine in particular. Some unions are sensitive to anything that seems anti-coal. But those Labor supporters who fear the environmental impact want the mine stopped.
Labor’s next national conference is in July, where it will set its platform ahead of the next federal election.
Its existing platform vows to consider inserting a “climate change trigger” in the Environmental Protection and Biodiversity Conservation Act “or successive framework” but does not say how it would work.
Given the direction of public debate, that “trigger” proposal seems likely to remain.
What’s less evident is whether it would have more support staying focused on environmental approvals for major projects or forming part of a suite of measures right across government, with a resurrected climate change department or other centralised body overseeing the transition to a low-emissions economy.
Labor’s most immediate challenge has been trying to hold a wobbly Melbourne seat. But beyond Batman, Labor needs to work out how to make the great big mine in Queensland stack up politically – whether or not it goes ahead.
This article was first published in the print edition of The Saturday Paper on Mar 17, 2018 as "Yeah, you and whose Adani?". Subscribe here.