By Phillip Coorey and Mark Ludlow
Federal Labor has all but resolved to oppose the $16.5 billion Adani coal mine in Queensland’s Galilee Basin but is grappling to come up with a rationale to avoid increasing Australia’s sovereign risk or exposing the Commonwealth to a compensation claim.
Sources have told The Australian Financial Review that while the shadow cabinet is not split on the issue, there are differing views about how to reach a position of outright opposition given the mine proposal has cleared all state and federal approvals, environmental and otherwise.
It is struggling to secure finance with no major Australian bank interested and the Queensland Labor government vetoing the prospect of Adani securing a $1 billion loan from the federal government’s Northern Australia Infrastructure Fund to help build a rail line linking the mine to a port.
Last week, Labor leader Bill Shorten dramatically hardened Labor’s position against the mine while announcing former ACTU president Ged Kearney as Labor’s candidate for the Batman byelection. Batman, caused by the resignation of David Feeney due to dual citizenship, is at real risk of falling to the Greens.
The government says Labor’s policy shift is a naked attempt to stop the Greens winning Batman, at the expense of jobs in Queensland.
“Ged Kearney is now writing the Labor Party’s policy,” Environment Minister Josh Frydenberg told Parliament.
“The Kearneyistas are in control of the Labor Party.”
Shadow cabinet discussed the issue Monday night and it is understood several shadow minsters urged caution in rushing to a final position so as to avoid “unintended consequences”.
“It needs to be more than a thought bubble,” said one source, adding that trying to block the mine when it had approvals could raise issues of sovereign risk and compensation.
Another said the mine was broadly unpopular around Australia, including in inner-Brisbane seats, which Labor needs to win back at the election.
Mr Shorten hinged Labor’s new position on an allegation Adani submitted an altered laboratory report while appealing a fine by the Queensland Department of Environment for contamination of sensitive wetlands near the Great Barrier Reef.
On Tuesday, he expressed doubt the mine would ever go ahead.
“I think there is increasing scepticism as to whether or not the mine will go ahead. It would appear that Adani hasn’t managed to convince a single Australian bank to help finance this operation,” he said.
“There’s also been reports from people who operate in coal mining elsewhere, that they are concerned that this mine would jeopardise the job security of existing coal miners.
“I also believe that we need to make sure that all scientific approvals have been diligently researched.”
Environmental Justice Australia chief executive Brendan Sydes said there was a legal pathway available for a future Labor government to kill off the mine, despite having all the approvals.
Mr Sydes said there were historical examples of incoming federal governments finding legal avenues to implement election commitments to protect environmental values. These include the Whitlam government using its power to regulate exports to require an environmental impact assessment of sand mining on Fraser Island. Eventually new environmental laws and the Customs Act lead to the end of sand mining on the island.
Former Labor prime minister Bob Hawke’s intervention in 1983 to prevent the Franklin Dam proceeding in Tasmania – with the subsequent High Court case confirming the breadth of Commonwealth legislative powers to intervene in issues previously under state control – was another.
Finally, the Gillard government in 2012 intervened to introduce a permanent ban on super trawlers in Australian waters. The intervention occurred when Labor’s current environment spokesman Tony Burke was minister.
A more controversial option, would be a future Labor government to ban coal exports from the Galilee Basin, on environmental grounds.
“In the case of the Adani mine, suspending or cancelling approvals already granted under legislation is not straightforward, but pathways do exist,” Mr Sydes said.
He said last year Environmental Justice Australia had written to Mr Frydenberg, on behalf of renowned coral scientist Dr Charlie Veron, asking the minister to use this power under section 145 of the Act to revoke an approval for Adani’s mine on the basis of new information about the impact of climate change on the Great Barrier Reef.
“These provisions are complex and rarely used, so interpreting them and working out how they might be employed by a future environment minister to stop a project like the Adani mine is not straightforward,” he said.
“From a legal perspective, it may be unwise for the ALP to be too specific in its commitment to use these powers. A very specific election commitment may be viewed as having brought a ‘closed mind’ to a matter of legislative discretion and may leave the decision vulnerable to future legal challenge.”
Queensland Premier Annastacia Palaszczuk played down speculation of a rift with Mr Shorten when it came to Adani, saying the ball was in the Indian company’s court to find the funds to finance the project.
“In the discussions I have personally had with him, we both share the same views that the finances of the company need to stack up,” Ms Palaszczuk said on Tuesday.
“The company has an obligation just like every other company in this state does to stick to his obligations.”
Published by the Australian Financial Review on 7 February 2018