Political donations and the resources sector’s influence
New analysis of political donations given in Australia over the past two decades has laid bare the extent to which the resources sector has sought to dominate the nation’s politics.
The report by the Centre for Public Integrity (CPI), released this week, crunched the numbers on donations disclosed between 1999 and 2019 in an effort to track the biggest donors in Australia by industry.
The mining and resources sector, it found, was by far the most active, depositing $136.8 million into the pockets of politicians and political parties – outstripping the donations from its closest competitor, the property industry.
Among these donations was the record $83 million paid by Clive Palmer to his own party, the United Australia Party, in 2019.
It remains the single largest political donation in Australian history, and saw the miner employ his companies as a de facto “super PAC” – an American legal entity used to funnel vast sums of money to campaigns in order to favour a particular candidate or deny them a win.
After Palmer, the next largest corporate donors were Woodside Energy, the largest oil and gas producer in the country, which parted with $2 million, and Santos, Australia’s second-largest oil producer, which donated $1.5 million.
Setting aside Palmer’s donations to his own party, the lion’s share of corporate political donations over the past two decades, according to the CPI’s analysis, went to the Liberal Party, which received $13.3 million – more than double the $4.9 million to Labor.
Anthony Whealy, QC, former New South Wales Court of Appeal judge and the CPI’s chair, says the total corporate donations made is likely to be much higher, as only amounts more than $13,800 must be disclosed under Australia’s campaign finance laws.
“You might say to me, so what?” says Whealy. “What it really demonstrates is that Australian democracy and the political system in Australia is by no means a level playing field.
“That means in practical terms that you or I, we can’t really have much of a chance at getting an audience with senior politicians or being able to influence them. Whereas the mining and resources industry is able to secure meetings itself, and then it has political campaigners that are able to secure meetings where it can’t do so directly.”
Some companies maintain strict policies against making direct political donations, while others may be concerned about “optics” – but for both, third-party groups that can lobby on their behalf are seen as increasingly vital.
CPI’s report found many companies were no longer donating directly to political parties at all, but instead gave a total of $39.7 million to groups such as the Business Council of Australia, the Construction, Forestry, Maritime, Mining and Energy Union, and the Minerals Council of Australia (MCA).
Founded in 1995, the MCA has become the lobby group of choice for “Big Mining” in Australia. Perhaps the best example of the council’s power, often wielded behind closed doors, came in 2010 with its very public campaign against Kevin Rudd’s mineral resource rent tax, which ultimately cost Rudd the prime ministership. The campaign’s success changed the trajectory of Australian politics and secured the MCA’s reputation as a fearsome and effective lobby group.
The CPI found the top corporate contributors to these third-party organisations were all in the resources sector: Rio Tinto donated $4.6 million; Glencore, $4.1 million; and BHP, $3.6 million. If the donations made by BHP’s subsidiaries were combined, though, they would total $10.5 million, making it the largest contributor of all.
“It’s pay-to-play politics,” says Dan Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility. He says his organisation speaks regularly to listed companies about their political contributions. Some agreed to stop, but many refused. “We’ve had conversations with some of these companies and they see it as the price of access to Liberal and Labor party business forums,” he says.
“For the price they pay, they’ll get access to x number of meetings, or x number of events where these politicians have been attending. The most obvious example of that currently is talk about the ‘gas-fired recovery’.”
The gas-fired recovery is a plan by the Coalition government to massively expand the production of natural gas to combat the economic problems left in the wake of the pandemic.
Although the plan was opposed by 25 of the nation’s leading climate scientists in an open letter published in August last year, industry lobbyists have sought to position natural gas – a fossil fuel – as a “transitional fuel” that can help “bridge” to a zero-carbon economy.
“It’s a pretty straight line from these kind of donations to that policy outcome,” Gocher says.
It’s not just donations. Today the “revolving door” between industry and government has seen the prime minister’s office staffed with figures who either worked in or around the resources sector.
Before joining Scott Morrison’s office as chief of staff, Dr John Kunkel served as the former head of government relations at Rio Tinto and the former deputy chief executive of the Minerals Council of Australia.
Yaron Finkelstein, principal private secretary to the prime minister, is the former chief of Crosby Textor, a political consultancy favoured by conservative parties. He oversaw the firm when it ran Project Caesar, a campaign bankrolled by Australia’s biggest coalminer, Glencore, designed to attack the renewable energy sector and build support for the coal industry.
Coal may be giving way to natural gas as the fossil fuel of preference, but science and technology writer Ketan Joshi says Australians continue to be “sold out” by their elected leaders.
“These political donations are serving a very specific purpose: to facilitate changes in regulation that … benefit these companies,” Joshi says.
“I see a good analogue in the tobacco industry, where political parties used to accept millions but now won’t touch them. Note in the [CPI] report that fossil fuel companies are funnelling cash through lobby groups – a sign they’re already trying to bury the flow of this money from public scrutiny.”
A separate report, released by the climate action group 350 Perth in November last year, illustrated how influence translates into outcomes by tracking the access given to oil and gas companies or their industry groups in Western Australia.
The group found the state’s Labor premier, Mark McGowan, and three senior ministers had 132 meetings with representatives from the oil and gas industry between 2017, when McGowan came to power, and 2019.
Comparing these meetings with political donation data, 350 Perth found donations were often made soon after these meetings took place.
In March 2019, the WA Environmental Protection Authority (EPA) reported that the state’s greenhouse gas emissions had risen 27 per cent between 2000 and 2016 – the only state to experience such an increase. In response, the agency proposed tightening the way carbon emissions were measured on oil and gas projects.
This would mean the emissions on new projects would be monitored more closely, while companies with projects that released more than 100,000 tonnes of carbon dioxide would be forced to come up with new ways to lower or offset their emissions.
Within days of the announcement, the resources sector sprang into action, beginning a relentless campaign claiming the industry had not been properly consulted and that the stricter measures would eat into the profitability of their projects.
The backlash was immediate, and fierce, so much so that McGowan refused to endorse the policy the very week it was announced. By December last year, the EPA had watered down the proposal after “consultations”. The move, the agency said, was not a backdown.
University of Sydney professor John Keane, director of the Sydney Democracy Network, says campaign finance reform is needed in Australia and suggests the country should model its approach on Canada.
While the rules vary by province and territory, Canada’s campaign finance laws are far stricter than ours, with donations from corporations, unions and foreign entities banned – and contributions from individuals strictly capped, with any donation more than $100 required to be disclosed. “We have no equivalent here,” Keane says.
The Centre for Public Integrity is calling for the annual donation limits to be lowered to $2000 for individual politicians and $5000 for parties. It is also calling for the disclosure threshold for donations to be lowered to $1000. Whealy says the risk of failing to reform the system represents a threat to the future of Australian democracy.
“The fundamental aspect of democracy is, in theory, we should all have equal access to government. You, I, every person in Australia. Of course, most of us don’t have the time, or perhaps the interest, but we ought to have the opportunity,” says Whealy.
“When money of this dimension is poured into political donations and political campaigns, it means most Australians are denied access to government, whereas the very wealthy have an escalator straight into the corridors of power.
“Money corrupts and a plentiful amount of money corrupts plentifully.”
This article was first published in the print edition of The Saturday Paper on Jan 23, 2021 as "Amenable, venal, mineral".
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