Companies responsible for testing the quality of Australian coal altered “40-50 per cent of the certificates” to make dirty coal look cleaner than it was and sell substandard products for higher profits to Australia’s export partners and underplay carbon emissions.
Those involved in fossil fuels industries can be a rather cheeky lot. Heavily subsidised in countries with natural resources, its smug and assured captains of industry have gotten greedy and rather unscrupulous over the years. Hubris has set in, even as water levels rise and the earth stews in consequential rises of temperature.
Such hubris, however, is being challenged. Australian Federal Independent MP Andrew Wilkie is again showing himself to be a treasure by doing the work major party parliamentarians, straitjacketed by such dictates as discipline and conformity, do not: expose the dubious workings and practices of big, and often spoiled industry. His latest contribution are claims, based on documents obtained via whistleblowing, that a number of entities have been responsible for efforts to make Australian coal seem cleaner to buyers than it is.
The Member for Denison’s November 21 speech also praised the role of whistleblowing, which he has stoutly defended during the course of his entire parliamentary career. An honour roll of sorts was cited: Allan Kessing, for exposing poor security standards at Sydney airport; nurse Toni Hoffman, who exposed the murderous predations of Dr. Patel in Bundaberg; Witness K and Bernard Collaery, who revealed unlawful bugging by the Australian intelligence services in the East Timor scandal. The list went on to include Troy Stolz (ClubsNSW), Richard Boyle (the Australian Tax Office), and David McBride (Australian war crimes).
Before fellow parliamentarians, Wilkie added another whistleblower to the honours list, an understandably unnamed executive from the Australian coal industry who had furnished him “with thousands of documents that prove Australian companies have been lying for years about the quality of our coal.” Such entities had used “fraudulent quality reports for their exports, and paying bribes to representatives of their overseas customers to keep the whole scam secret.” The enterprise enabled companies to “claim, for years, that Australian coal is cleaner than it is in order to boost profits and prevent rejection of shipments at their destination.”
Several countries had been the recipients of such poor quality coal: Japan, South Korea, China and India. Those behind the venture were companies such as Terracom, Anglo American, Glencore, Peabody and Macquarie Bank. One can almost sense the sniggering of those behind the process, the delight of a confidence trickster at work.
The misconduct in question was aided by the dubious quality testing practices of the Brisbane-based ALS company and the Swiss multinational SGS. The former had already conceded to the Australian Stock Exchange that “approximately 40-50 per cent of the certificates of analysis were manually amended without justification.” The doctoring in question took place at labs in Newcastle, Mackay, Gladstone and Emeralds over 13 years. “No evidence of bribery or third-party payments involving ALS staff has been found or indicated,” the company statement states with little assurance.
For its part, SGS assessed a coal sample in a draft report as having 16.7 per cent, only to amend the total to a more flattering 15.9 per cent in the final version. This is significant, as Wilkie reminds his colleagues, because a lower moisture content makes the burning process that much cleaner. “And that represents hundreds of thousands of dollars in extra profit from the relatively small shipment to Japan and ensured it wouldn’t be rejected on arrival.”
Apart from showing itself to be a shonky partner in the coal export market, Australia may have also played a consequential role in another respect. Gavan McFadzean, who heads the Australian Conservation Foundation’s climate program, makes the point that the countries receiving the coal would have overestimated their emission target reductions “assuming a certain moisture content in their coal… so it’s likely that our major trading partners like Japan, South Korea, China and India have been underestimating their emissions.” The ecological spread-sheeters and crunchers have been put on notice.
The coal whistleblower also provides another grim illustration of the inertia that grips bodies with various degrees of oversight when faced with an alleged record of misconduct by the big and the powerful. Wilkie informs us that the allegations of this coal fudging exercise had been previously put to the Australian Federal Police, the New South Wales Police, the Australian Securities and Investment Commission, the Department of Industry, Science, Energy and Resources, and even the previous Morrison government. This ensemble of snubbing and indifference is almost terrifying.
McFadzean sees Wilkie’s request for an inquiry into such arrangements as fundamental. It would have “to look into the behaviour and potential culpability of the very agencies that are supposed to be regulating this market and the agencies called on to investigate in the past.”
While an inquiry seems eminently logical, if not sensible, there are broader implications that go to the nature of how such misconduct is exposed. The current Attorney General Mark Dreyfus has promised to make changes to the markedly inadequate public disclosure regime which remains limited and inadequate. Wilkie even goes so far as to recommend the establishment of a Whistleblower Commission, in addition to adding further protections to the Public Disclosure Act 2013 (Cth).
For the followers of integrity and accountability, this can only be encouraged. But given that the current government persists in prosecuting such whistleblowers as Bride and Boyle, one should not be too optimistic. The coal giants, and their accomplices, may well get away with it.
Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne.
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