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Transparency International Australia says particular corruption risk in regard toinfrastructure approvals in Qld and WA
A report says warns the under-regulated system of political donationscan allow special interest groups to attempt to influence policy-making at all levels of government. Photograph: DavidGray/Reuters
04.39 EDT 05.42 EDT
A new report shines a critical light on the links between miningcompanies, lobbyists and politicians, pointing to the Indian mining giant Adani as an example of how a company with a questionable recordoverseas can still gain mining approval in Australia.
It warns the political mining complex in Australia’s two biggestmining states, Western Australian and Queensland, is “susceptible to corruption” due to key weaknesses in theirapprovals regimes, including inadequate due diligence investigation into the companies and individuals applying for mining leases.
It also criticises the “revolving doors” of personnel betweengovernment and industry broadly, and political donations regimes.
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The report, published by Transparency International Australia (TIA),Corruption Risks: Mining Approvals in Australia, was released on Wednesday.
Its authors conducted 47 interviews with experts from government,industry, civil society, academics, Indigenous traditional owners and consultants in Perth and Brisbane to gather its evidence. Its list ofkey weaknesses in the mining approvals regimes is long.
The researchers says “industry influence” is a corruption risk inAustralia, particularly with regard to large infrastructure project approvals in Queensland and WA.
It notes the mining industry has disclosed donations of $16.6m to majorpolitical parties over the past 10 years (2006-07 to 2015-16), and warns the under-regulated system of political donations can allowspecial interest groups to attempt to influence policy-making at all levels of government.
It highlights the “revolving doors” of personnel between governmentan industry as a risk in Australia generally.
It points out 191 of 538 lobbyists (35.5%) registered by the Departmentof the Prime Minister and Cabinet, as of September 2016, were former government representatives.
The researchers also warn government departments involved in the miningapprovals process in Queensland and WA do not undertake adequate due diligence into the character and integrity of applicants for miningleases, including companies’ track records overseas, and investigations of their financial capacity do not involve anexamination of beneficial ownership to understand who the real owners are.
In Queensland, even though mining proponents are required to providedetails of their environmental record, there is no requirement to report non-compliance with environmental law or breaches outsideAustralia.
The researchers warn that this creates the risk that companies with ahistory of non-compliance, criminal or corrupt behaviour, a record of environmental damage, or other poor business conduct, such as humanrights violations, can operate in Australia.
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“A number of these factors have arguably been at play in the case ofAdani’s Carmichael coalmine,” the report says.
“In the environmental impact assessment for the Carmichael coalmine,February 2013, the proponent Adani Mining, an Indian multinational corporation, stated that it ‘has not beensubject to any proceedings under a commonwealth, state or territory law for the protection of the environment or the conservation andsustainable use of natural resources’. Yet there is evidence that Adani has failed to comply with laws and environmental permits inIndia.
“An investigation in December 2010 by officials from the Indian Ministryof Environment Protection and Forests into the Mundra port and special economic zone operated by Adani Ports found destruction ofmangroves, creek systems and natural seawater flow by reclamation, and development of a township, airport and hospital without theproper environmental records.”
Guardian Australia reported last month that Adani had been accused in India of fraudulently siphoninghundreds of millions of dollars of borrowed money into overseas tax havens, by inflating invoices for an electricity project in India.
The Directorate of Revenue Intelligence (DRI) file, compiled in 2014, mapped out a complex money trail from India throughSouth Korea and Dubai, and eventually to an offshore company in Mauritius allegedly controlled by Vinod Adani, the older brother ofthe billionaire Adani Group chief executive, Gautam Adani.
Vinod Adani is the director of four companies proposing to build a railwayline and expand a coal port attached to Queensland’s vast Carmichael mine project.
The Adani Group said in a statement to the Guardian on behalf of itself,its subsidiaries and Vinod Adani that it “strongly denies the allegations of overvaluation”.
This week, the ABC’s Four Corners program highlighted Adani’s troubling environmental record in India.
The Institute for Energy Economics and Financial Analysis also warnedthis week that Adani’s ambitions in Queensland faced a new risk, with the company having to refinance more than $2bn in debt on theAbbot Point coal terminal – more than it paid for the port in 2011.
“While Australia has systems of transparency an accountability in place,more needs to be done to address transparency of negotiation processes and agreements, including native title parties,” SerenaLillywite, the chief executive of Transparency International Australia, said.