IAN DUNLOP. Climate Change: The fiduciary responsibility of politicians & bureaucrats. Part 2 of 2.

Apr 24, 2018

“Fiduciary: a person to whom power is entrusted for the benefit of another”

“Power is reposed in members of Parliament by the public for exercise in the interests of the public and not primarily for the interests of members or the parties to which they belong. The cry ‘whatever it takes’ is not consistent with the performance of fiduciary duty”  Sir Gerard Brennan AC, KBE, QC

After three decades of global inaction, none more so than in Australia, human-induced climate change is now an existential risk to humanity. That is, a risk posing large negative consequences which will be irreversible, resulting inter alia in major reductions in global and national population, species extinction, disruption of economies and social chaos, unless carbon emissions are reduced on an emergency basis. The risk is immediate in that it is being locked in today by our insistence on expanding the use of fossil fuels when the carbon budget to stay below sensible temperature increase limits is already exhausted.

At the National Press Club, Matt Canavan reacted angrily to a suggestion that the coal industry will phase out, objecting strongly to any thought of planning a transition. The mining industry will undoubtedly remain an essential part of the Australian economy, but markets for commodities come and go. Irrespective of political preferences, absent some unlikely technological breakthrough to sequester its emissions, coal will phase out, not instantaneously but relatively rapidly. Coal has been through many transitions in the past. The lesson from these disruptions is the need for thorough planning, retraining and support to avoid many people being badly hurt. Even more will be hurt, with massive climate impact, social and economic chaos, if the coal industry is expanded. It is irresponsible for the Minister to leave communities unprepared for these realities. 

Minister Canavan then turned on “well funded” environmental groups “abusing” our “robust environmental laws” to prevent or slow down major projects, such as the Adani coal mine in Queensland’s Galilee Basin. Australia’s environmental laws were developed when human impact on the environment was far less than today. As that impact has grown, far from being robust, these laws are no longer “fit for purpose”. In particular, being domestically focused, they do not take account of the greatest environmental risk of all, which is climate change. Under current UNFCCC rules, emissions from fossil fuel exports such as coal or gas are accounted for in the consuming country and are ignored by Australian courts and institutions in granting approvals for projects such as Adani. However carbon emissions have global impact; coal exports from the Galilee Basin, would have major climate and environmental implications in Australia, as well as in consuming countries such as India. Our laws must be reframed accordingly if they are to be meaningful. As for “well funded”? Vested interests pour vastly more money into supporting fossil fuel expansion than has ever been available to environmental groups.

Parliamentarians, particularly ministers seem to have lost sight of the fact that they have a fiduciary responsibility to the public, which imposes upon them a public duty and a public trust.  As former Chief Justice Sir Gerard Brennan put it: “all decisions and exercises of power should be taken in the interests of the public, and that duty cannot be subordinated to, or qualified by, the interests of the (parliamentarian/minister)”.       

It is entirely appropriate, when the legal system fails, for affected parties to take action to correct such failure, as with Adani, and with CSG projects in many parts of the country. In fact these are the only groups who are genuinely acting in the public interest.  That the Federal government is now trying to muzzle them indirectly via the proposed Foreign Donations Bill is a further breach of its fiduciary responsibility.   

The public has the right to expect that Minister Canavan take an holistic view of the Adani project and the many other fossil fuel developments he is promoting, including an honest appraisal of their climate implications for the community. That is not happening.

Similarily with Environment and Energy Minister Frydenberg, who should be proactive in changing environmental laws to include the climate impact of fossil fuel exports on Australia, rather than advocating that Adani proceed on the grounds it has met current inadequate environmental approvals. 

Minister Frydenberg, and the government generally, breach their fiduciary duty by promoting poor climate and energy policy as represented by the National Energy Guarantee, whatever that ultimately means. This lowest common denominator solution is only being considered because of the fiduciary irresponsibility of a minority group of right wing parliamentarians, inappropriately identified as the Monash Forum, who put their own self-serving ideological agenda ahead of the public interest. To claim, as the Minister did in his National Press Club speech on 11th April 2018, that: “the future of energy policy must be determined by the proper consideration of the public’s best interest not ideologically-driven predisposition”, just adds insult to injury given that the Coalition is, and has been for two decades, in total ideological denial on climate which largely explains our current policy shambles. The cost to Australia of this self-indulgence is enormous. 

The Minister also misrepresents IEA analysis of Australia’s energy policies. The IEA conducts a periodic review of individual member countries policies. The latest IEA Australian review in February 2018 was presented by Minister Frydenberg as “backing the government’s energy policies — commending Australia’s commitment to affordable, secure and clean energy”. The report itself did no such thing, being highly critical in many areas, including Australia’s continuing failure to comply with IEA membership oil stockholding obligations of 90 days net imports. We hold less than half that, thus rendering Australia incapable of contributing to IEA collective action in the event of an international oil crisis; a further major security threat to the Australia community which has not been addressed despite repeated representations over many years.       

In the light of these ingrained fiduciary failings, what of the bureaucracy, historically reverred for providing “frank and fearless advice” to the political class? It seems that analogy no longer applies. In recent policy reviews, the refusal to accept and articulate the implications of climate change on Australia shines through. 

The December 2017 Review of Climate Change Policy was one of the most dishonest reports ever published by government in the climate arena. What purported to be a comprehensive review of the climate change challenge, and responses to it, is nothing more than a re-iteration of Australia’s wholly inadequate and inconsistent policies. No discussion of the latest climate science and its implications, no preparedness to face up to the real action required. In short little more than political whitewash for public consumption, pretending to do something whilst doing little.

The 2017 Foreign Policy White Paper acknowledged that climate change will be an important influence on international affairs, particularly in our region. It then anticipated: “buoyant demand for our exports of high-quality coal and LNG — ” based on the IEA NP scenario referred to above, around which policy is presumably centred, despite the fact that demand under this scenario would be decimated by climate impact. This should be unacceptable to DFAT as our lead Paris negotiator, as it is totally inconsistent with meeting Paris objectives.  

The 2016 Defence White Paper for the first time did mention climate change in passing in one of its six key strategic drivers of Australia’s security environment to 2035 and it is understood the Department of Defence have since extended their planning to prepare for its impacts as a “threat multiplier”. This is encouraging, but far behind action being taken by the military overseas.

The overriding impression is that the Federal bureaucracy, with some notable exceptions, are not treating climate change with anywhere near the urgency it demands; whether because of political pressure to downplay the issue, or because of personal convictions, is not clear. Either way, fiduciary responsibility arises again. The Australian Public Service Impartiality Value requires advice given to government to be: “apolitical, frank, honest, timely and based on the best available evidence”. Further, it must be: “objective and non-partisan; relevant comprehensive and unaffected by fear of consquences, not withholding important facts or bad news; mindful of the context in which policy is to be implemented, the broader policy direction set by government and its implications for the longer term”. 

Henceforth, climate change will determine policy across the spectrum, encompassing national security, defence, energy, health, migration, water, agriculture, transport, urban design and much more. Given continued urgent warnings from scientists, including the government’s own experts, on the need for far more rapid action, the parlous state of our climate and energy debate and the shortcomings in policy formulation, the Federal bureaucracy is hardly meeting its own standards of fiduciary responsibility to the community.

So what can be done? Many argue that current failures are the nature of politics and we should expect little else. But when the key issues are existential, that is to consign democracy to the dustbin of history and to accept increasing social chaos. In contrast to earlier eras, the concepts of fiduciary responsibility, public interest and public trust, are clearly not understood by the incumbency, from the Prime Minister down. This has to be corrected.

A Federal Parliament with any degree of such responsibility, would recognise that climate change poses an unprecedented threat to Australia’s future prosperity, requiring emergency action. To those prepared to honour this obligation, there is ample information before parliament to warrant that conclusion. In the public interest, parliamentarians would set aside party political differences, adopting a bipartisan approach to structuring such action, with the bureaucracy in full support.

That is highly unlikely, so there remains legal action. Around the world the seriousness of the climate threat, and the inaction of governments, is prompting communities to take this step, with increasing success. The same will happen in Australia, absent an outburst of commonsense within the political class. 

Ian Dunlop was formerly an international oil, gas and coal industry executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors. He is a Member of the Club of Rome.

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