MAC: Mines and Communities

Australia: Indigenous group hid more than $2m in payments from Adani mining giant

Published by MAC on 2018-06-28
Source: Guardian, ABC, Market Forces

Indigenous group hid more than $2m in payments from Adani mining giant

Exclusive: directors were paid cash for invalidated cultural assessments of Abbot Point

Ben Smee

21 June 2018

A north Queensland Indigenous organisation kept secret more than $2m in payments by the Adani mining company, federal court documents show.

Guardian Australia has obtained court documents that show the Kyburra Munda Yalga Aboriginal Corporation did not account for payments by Adani, then paid its own directors up to $1,000 a day cash-in-hand to conduct now-invalidated cultural heritage assessments for the Indian mining company.

The federal court last month delivered a ruling that may void the assessments, which are required to protect sacred sites from development.

It ruled that another Indigenous business, Juru Enterprises Limited, was the proper “nominated body” to represent traditional owners on a land-use agreement with Adani.

The impact of the decision could be wide-ranging. Traditional owners from near Bowen say they are “hugely worried” Adani has conducted work at its Abbot Point port based on improper or conflicted advice from the cultural assessment surveys.

Juru Enterprises could now demand Adani “redesign or reconfigure” any plans or works near sacred sites.

The court case has also exposed how Adani funding was central to alleged rorts conducted by Kyburra board members. Guardian Australia has seen letters, minutes of meetings, police reports, auditors reports and sworn affidavits that detail how Kyburra kept money paid by Adani off the books and then funnelled it to directors through “fees” and “loans”.

Kyburra declared only $50,000 total income in consecutive years: 2014/2015 and 2015/16. About $2m was paid to the organisation by Adani in 2014 and 2015, including an estimated $800,000 for cultural assessments. But none of it showed up in Kyburra’s annual financial statements.

Traditional owners said in a 2016 complaint letter they were suspicious about “secret payments by Adani”.

The issue before the federal court was whether Kyburra validly appointed itself as the Juru nominated body to represent traditional owners on a land-use agreement with Adani. The Indian company filed a notice submitting to any order the court might make, except as to costs.

Adani has rejected suggestions it should have been aware of mismanagement at Kyburra and alleged rorts by directors, and there is no suggestion the payments themselves were improper. The company said it was only made aware of “financial matters” through the court proceedings.

Guardian Australia can reveal that both the Office of the Registrar of Indigenous Corporations (Oric) and the Australian federal police were aware of concerns about Kyburra in 2015 and 2016.

A Juru traditional owner and a member of the native title claim group, Andrew Morrell, wrote in a 2015 letter to Oric that Kyburra directors had denied his application for membership, and had refused to engage in traditional decision-making processes when dealing with Adani. That letter was submitted to the court as evidence in the proceedings but not tendered at hearing.

“By abandoning this decision-making process (Kyburra) are effectually not acting in the best interests of the Juru common law holders as by holding meetings in multiple places over multiple days, how can the traditional decision-making processes be upheld, seeing as the first step in the process is to call a meeting for all families [claim group] to attend,” Morrell wrote.

Other traditional owners complained that Kyburra did not provide adequate notice for meetings.

In 2016, a lawyer representing disgruntled members of Kyburra wrote to Oric asking for an investigation into the organisation. The letter was also submitted to the court in the proceedings but not tendered at hearing.

It outlined what Oric later confirmed in an audit – that Kyburra failed to declare significant income each year from land-use agreements, including the lucrative deal with Adani. By declaring only $50,000 annual income, the organisation was exempted from having to provide audited financial statements. Money from Adani, notionally “for the benefit and use of the Juru people”, was not accounted for.

“In our submission Kyburra actually received monies from Adani Mining Pty Ltd ... in the amount of $1,225,000. In addition ... Adani transferred $825,000 to Kyburra for cultural heritage survey activities,” the letter says.

“Further, our clients advise that the surveys are conducted by directors alone – about six directors would be present at any survey – with a daily rate of approximately $1,000 paid individually to them.

“Our clients are suspicious of similar secret payments by Adani on behalf of Kyburra.”

About the same time, the AFP started to investigate Kyburra. An agent from the AFP’s organised crime and cyber division wrote to Oric in April 2016 recommending further action and outlining how significant “payments from Adani mining” had not been declared by Kyburra.

“It is ... alleged that Kyburra chairperson Angelina Akee, and (others) are diverting Kyburra funds for their personal gain. It is suspected that the remaining directors are complicit in these activities and may also be deriving personal benefits”.

Akee spoke briefly to Guardian Australia and was invited to comment on the case, but did not call back. Attempts have been made to seek comment from other directors, but they have been uncontactable.

Oric placed Kyburra in special administration in October last year. It is expected the corporation will be wound up.

Morrell told Guardian Australia on Monday he could not explain why Kyburra moved in 2015 to replace Juru Enterprises as the “nominated body” representing the Juru people on a land use agreement with Adani. He also questioned why Adani had simply accepted the switch.

“I really could not tell you that one. That one really has me baffled.”

He said the court ruling meant any work carried out by Kyburra for Adani had “not been carried out under the agreements” and was voided.

“We’re happy to do the work again. Kyburra and Adani have never forwarded or allowed anyone to see any of the work being carried out, any of the reports on the work being carried out. That’s left all the Juru people wondering what was going on.

“We’ll work with them, but everything that has been done will need to be revised and reviewed and we haven’t had the opportunity to do that yet.

“We’re hugely worried. Throughout the state development area at Abbot Point alone there’s numerous places where we have burial sites, rock art, rock carvings, sacred sites. If any of those areas are being impacted they need to have that impact removed from that area.

“As an example, if the rail line goes through or too close to significant rock art. During the review if we say ‘no that’s too close’ or ‘no you can’t go there’ Adani then has to redesign or reconfigure.”

Guardian Australia asked a lengthy series of questions to Adani, raising the allegations contained in the documents regarding “secret” payments. Adani said it fully accepted and supported the court’s ruling.

“Adani Australia had no oversight, and no authority for oversight, of Kyburra Munda Yalga [Aboriginal] Corporation’s financial matters. Along with the public we were made aware of details of those financial matters through the recent legal proceedings.

“The Australian Securities and Investment Commission is the relevant authority to investigate appropriateness of accounting or other practices.

“Adani Australia is required under the registered Indigenous land use agreements to make payments to the Kyburra Munda Yalga Corporation.

“We will continue to work collaboratively with all Juru traditional owners, including under guidance of the Indigenous land use agreements and the cultural heritage management plans which are currently in place, as we have since 2014.”

The company did not respond to specific questions about whether it took steps to ensure the cultural assessments were carried out by appropriate Juru traditional owners, or whether it would support a Juru-led review of those assessments in light of the court ruling.

Adani plans to protect desert springs are worthless, water experts say

By national environment, science and technology reporter Michael Slezak

19 June 2018

Key points:

Adani's proposed protections for some of the world's last unspoiled desert oases near its proposed coal mine in Queensland won't work at all and are "all about protecting Adani from prosecution", according to the authors of two reports.

The Australian Conservation Foundation, which has campaigned against the controversial project, gathered and commissioned the reviews by environmental law and water experts.

They looked at Adani's draft plans to protect the Doongmabulla Springs and Mellaluka Springs from the impacts of the proposed Carmichael coal mine.

In response to these criticisms, Adani told the ABC its draft management plan was "targeted and specific", and part of a "robust, multi-layered approach" to monitoring the impacts of its mine.

The reviews come just months after an independent scientific study found Adani's mine could "permanently drain" the springs, since the source of springs remains in doubt, and Adani has not proposed further work to pinpoint the source.

The Doongmabulla Springs have the country's highest level of legal protection, listed as "endangered ecological communities", and are home to several endemic and threatened species, which are themselves afforded legal protection.

Each are considered "matters of national environmental significance".

But Adani plans to extract up to 12 billion litres of water a year from the Great Artesian Basin and other nearby water sources, and is not strictly limited to any specific volume of take so could extract more than that.

When Adani's mine received environmental approvals from the federal and state governments, details of how it would protect the springs and their associated species and ecosystems were put off, awaiting future management plans.

Key among those plans is the Groundwater Dependent Ecosystem Management Plan, a copy of which is dated "January 2018" was submitted to the Queensland Department of Environment and Science.

In draft form, it currently stands at 197 pages, and outlines how the mine's operations intend to be compliant with its approval conditions.

'It's about Adani protecting themselves'

Tom Crothers, a water policy expert, said that plan was virtually worthless, and would not save the springs or the species that rely on them.

"It doesn't protect them at all," said Mr Crothers, a consultant who has worked in natural resource management for more than three decades and was previously general manager of the Water Allocation and Planning Group in the Queensland Government.

In his review, Mr Crothers found the plan completely ignored damage that could be caused by noise and vibration, and contains no plans to protect some parts of the sensitive ecosystems.
Planning Australia's biggest mine
Step through the key events in the planning of Australia's biggest mining project, the Carmichael coal mine in remote central Queensland.

Overall, he noted the almost 200-page plan proposed only three corrective actions if damage was caused to the springs, with almost all damage simply triggering investigations.

"All the way through the document, you see them say 'we'll do an investigation to see if Adani is the cause of the impact, then we'll do more investigations and analysis.' It's about Adani protecting themselves," Mr Crothers said.

Rebecca Nelson, a water lawyer at the University of Melbourne, found those investigations would not be of much use since Adani won't be required to provide all the underlying data to back-up their conclusions.

Dr Nelson is conducting a larger research project on the legal protections for Sydney's water catchment.

She said similarly relaxed provisions there had led to coal mines having significant impacts on Sydney's drinking water.

In that case, Dr Nelson said WaterNSW has concluded that "independently engaged studies produce remarkably different results to those engaged by mining proponents".

Dr Nelson and Mr Crothers point to a string of other weaknesses in the draft plan including:

Plan part of a robust, multi-layered approach: Adani

Adani told the ABC it would publish the plan after it was finalised.

"The Draft Groundwater Dependent Ecosystem Management Plan is just one part of a robust, multi-layered approach to manage and monitor groundwater-related activities and impacts for the Carmichael Project," a spokeswoman for Adani Australia said.

"It is a targeted and specific plan to monitor and manage approved impacts to groundwater-dependent springs and plants in the vicinity of the project."

She also said the mine's impacts on groundwater and associated ecosystems were already approved by the state and federal governments, and had been reviewed by the Land Court of Queensland in 2015.

Both those approvals defer to this plan for specific protections of the ecosystems around the springs, and the Land Court of Queensland in 2015 noted the importance of the details of management plans like this.

Australian Conservation Foundation campaign director Paul Sinclair called on the Queensland Government to reject the plan.

"Adani's groundwater management plan contains holes that are so big you could drive a coal train through them," he said.

A spokeswoman for the Federal Department of Environment said they were yet to receive a final version of the plan.

"The department continues to work with Adani and Queensland agencies to ensure that this and other plans meet the strict conditions of the Carmichael mine's approval," the spokeswoman said.

Editor's note (19/06/18): A previous version of this story incorrectly noted Adani planned to take "21 billion litres of water a year from the Great Artesian Basin". The figure is 12 billion.

Adani says 450% bigger Carmichael dam does not need new review

Mining giant says dam and pipeline plan is covered by previous environmental impact statement

Lisa Cox

Guardian -

13 June 2018

The Indian mining company Adani has sought federal approval to expand a dam by 450% and build a pipeline for its Carmichael coalmine, without an assessment under national environment laws.

In an application to the environment and energy department, Adani said it did not believe an environmental impact statement was needed because assessments had been done under previous applications for other parts of the mining project.

The project, which it calls the north Galilee water scheme, would increase an existing 2.2bn-litre dam to 10bn litres and build associated infrastructure, including 110km of pipeline, in three sections, to transport water from the Suttor river and Burdekin basin.

The company has argued its proposal did not require review under the Environment Protection and Biodiversity Conservation Act for impacts on threatened species, or under the water trigger, a component of the act that mandates coalmining and coal seam gas projects that have significant impacts on water resources must undergo national environmental assessment.

In its application, Adani said the water trigger applied only to projects associated with extraction. It said the pipeline was a piece of associated infrastructure and a separate project that therefore did not trigger assessment for impacts on water.

“It’s an incredibly narrow reading of the EPBC act,” said Christian Slattery, an Australian Conservation Foundation Stop Adani campaigner.

“Clearly it’s a project connected with coalmining.

“If this interpretation is accepted by the minister it further demonstrates the weaknesses of the EPBC act and the need for a new generation of environmental laws.”

In its application, Adani said there was also potential for its dam and pipeline to supply water for other coalmining projects in the Galilee basin, such as the China Stone coal project.

A spokeswoman for the environment and energy department said the proposal was open to public comment until 25 June, after which a decision would be made “on whether the proposal requires further detailed assessment under national environment law”.

An Adani spokeswoman said the company already had approvals from the Queensland government for its water licence, water storage and a portion of the water pipeline.

“Adani Australia has now submitted a referral for the construction of a 61km water supply pipeline for the Carmichael mine,” she said.

“This referral relates only to how we protect the environment during construction of the pipeline, in consideration of approvals already received.”

Labor’s environment spokesman, Tony Burke, said the government should ensure a thorough and rigorous environmental assessment was conducted.

“Is Adani arguing that the use of this water is completely unrelated to the fact that they want to dig a mine, or that this particular mine is not large?” he said. “Or are they claiming that they are now engaged in a completely different business?

“Adani cannot evade the scrutiny of the expert independent scientific committee, and the minister for the environment should not be facilitating an opportunity for Adani to avoid scientific scrutiny on its use of water.”

Adani: No customers, no finance, but still a threat

July 2018

Adani has gone relatively quiet recently about their central Queensland Carmichael coal mine and rail project. With no financiers, no major customers and continued opposition by community and traditional owners, the Carmichael project is looking more unlikely now than it ever has in the past eight years.

Yet some avenues remain open for Adani to find the money to build the mine and railway line. Here we take a look at where Adani is at right now and how it could still get the project off the ground.

2017 ends badly for Adani

Adani’s cancellation of the “official launch” of the Carmichael mine project in October 2017 due to “rain” (it was never rescheduled), set the tone for the last two months of 2017, which brought an avalanche of bad news for Adani.

Bowing to public pressure, Qld Premier Palaszczuk vetoed the proposed taxpayer-funded loan to Adani that was to be provided through the Northern Australia Infrastructure Facility (NAIF). Then, in early December, four large Chinese banks ruled out lending to Adani. The Chinese embassy in Australia also declared that Chinese money would not fund the Carmichael mine. This cut off the last obvious source of capital for Adani and brought the total to 28 major banks that won’t touch the project.

One week before Christmas 2017, Adani’s mine construction partner, Downer, cancelled their non-binding agreement, walking away from the project. While Adani tried to spin Downer’s actions as a decision it took to bring the mine construction in-house, the Australian Financial Review reported that Downer had requested the cancellation. Adani was now without funders or an experienced mining services partner.

Against this backdrop, it was no surprise that Adani missed the latest of its deadlines to reach financial close on 31 March 2018. It has refused to set a new deadline.

Despite these setbacks Adani claims to be “100% committed” to the Carmichael coal project, and while developments appear to have slowed in 2018, there are a few key areas to watch.

Areas to watch

1. Export Finance and Insurance Corporation (Efic) keeps taxpayer funding option open

Efic is a Federal Government body that finances Australian companies which export or wish to export. In 2012, the Productivity Commission recommended Efic stop supporting large corporations. As a result, the Abbott Government Trade Minister Andrew Robb changed Efic’s rules so it could no longer finance onshore mining projects.

This new rule was removed by Turnbull Government Trade Minister Steven Ciobo in September 2017. He claimed it was because major banks and other private financiers were unwilling to fund coal due to public opposition to these projects.

Take action: Tell Efic to rule out financing the Adani Carmichael coal project

This rule change had the intended effect of opening up another avenue for taxpayer funding of the Carmichael project. Efic later revealed they had considered financing three separate Adani suppliers, and that one had been approved, although that deal later fell through.

Efic testified in Senate Estimates on 1 June 2018 that it is not currently considering any applications from Adani or Adani suppliers. This is good news. However, Efic remains a potential financier of the Adani coal mine.

2. Adani refinances Abbot Point coal port debt while trying to sell some of it

Another potential source of funds for Adani’s Carmichael project is to sell down its stake in the proposed mine and/or the Abbot Point coal port, which Adani has owned since 2011.

Reports from 2014 and 2016 show that Adani has been unsuccessfully trying to sell a stake in the port for years. In 2018 they appointed investment bank Rothschild to advise on the sale. Adani’s inability to find a buyer could be linked to the gloomy economic outlook for Abbot Point port, with the amount of coal contracted to be shipped via take-or-pay contracts predicted to fall rapidly from 2020.

While Adani hasn’t yet found anyone foolish enough to buy a stake in Abbot Point, it has been successful in refinancing part of the debt linked to its purchase.

Adani owes around $2 billion with a large tranche of this due to mature in November 2018. After a desperate almost year-long search Korean asset manager Mirae Asset Daewoo bought $330 million worth of debt, with the aim of on-selling it to Korean insurance companies and other investors.

Take action: Warn Korean investors that buying Adani’s Abbot Point debt is a big risk

While the refinancing does shore up Adani’s financial position with Abbot Point, the fact that it took 11 months to finalise and failed to attract any top-tier (or even mid-tier) banks says a lot about how toxic Adani and their Australian coal export plans have become.

3. Adani still looking for potential markets

Despite working on the Adani Carmichael project for around eight years, Adani still doesn’t have any confirmed major customers for the coal it intends to dig up. It’s even had help from the Australian Government, which brought an Adani representative along as part of a trade delegation to Vietnam in May 2018.

The coal plant that was supposed to be a major customer, the massive (~4000MW) Mundra power station in India, has had most of its generating units switched off, with the Adani subsidiary that owns the plant considering declaring bankruptcy. Mundra’s reliance on relatively expensive imported coal meant it was running at a loss. Adani is also looking to build the 1600MW Godda power station, which will sell expensive electricity to Bangladesh. Adani Australia’s CEO said in March 2018 that the coal for this power station would come from Carmichael despite the plant being in India’s most coal-rich state. Construction has yet to begin for this project, with Adani facing fierce resistance from local landholders whose lands are being compulsorily acquired. Godda power station could end up as a destination for some of Adani’s Australian coal, but the project remains speculative.

So, Adani’s plans to get the Carmichael coal project off the ground appear more fanciful than ever. After years of trying Adani still doesn’t have financial partners to fund the project or customers for their coal. It has been unable to sell a stake in its Abbot Point coal port and had to scrape the bottom of the barrel to refinance its debt.

Some of Adani’s political backers are also losing patience. It still faces strong resistance to its plans from the Wangan and Jagalingou traditional owners who have refused to give their consent. Adani’s trouble with the Carmichael project is now impacting upon the rest of its business too, with institutional investors abandoning the company.

However, the situation could quickly change. Adani still has a means for accessing Australian taxpayer funds via Efic, and strong support from major political parties in India and Australia. The most recent example is the supposedly “free market” LNP party in Queensland voting in July 2018 for the Australian Government to build and run the railway line between the Galilee coal basin (where Carmichael would be) and the Abbot Point port in the Great Barrier Reef World Heritage Area (this motion is not binding on the LNP parliamentary wing). While it’s hard to imagine any company or individual being foolish enough to risk their money on the Carmichael project, until the project is stopped by an act of government or by Adani finally abandoning it, the fight against it will continue.


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