May 1, 2014

Coal conflicts: Wallarah 2 project infected by the NSW disease

Up the road from the daily ICAC revelations, the Planning Assessment Commission is muddled in conflict over the Wallarah 2 underground coal project. Has it been infected by the NSW disease?

Paddy Manning

Crikey business editor

Under the pall cast by the sensational Independent Commission Against Corruption hearings only 600 metres away, the Planning Assessment Commission is finalising a report to the New South Wales government on the hugely controversial $800 million Wallarah 2 underground coal project on the central coast. As Crikey recapped on Wednesday, Wallarah 2 is majority-owned by South Korean steel giant Kores, which employed disgraced Liberal lobbyist Nick di Girolamo in 2012-13 and managed to get the O'Farrell government to do a spectacular backflip after the 2011 election, going from blanket opposition to the mine beforehand to entertaining it under the supposedly arms-length "State Significant Development" process which delegated approval authority to PAC. Kores insists it has never made donations and is not under investigation by ICAC although it has already emerged that di Girolamo and disgraced former energy minister and then member for Terrigal Chris Hartcher met with the Kores CEO on a $20,000 trip to South Korea in 2012, and fresh evidence will be given this afternoon by staunch Wallarah 2 opponent Alan Hayes, campaigner for the Australian Coal Alliance. Meanwhile, PAC is itself under investigation by the NSW Ombudsman, following a complaint by the Environment Defender's Office over inadequate disclosure of members pecuniary and non-pecuniary interests, and potential conflicts of interest -- actual or perceived -- as required by the PAC's code of conduct. The complaint was reported last month and PAC and the ombudsman have confirmed to Crikey it is still ongoing. Concerns raised with the ombudsman include:
  • That PAC member and former state Nationals MP Garry West had been appointed to five paid positions on coal project community consultative committees (Xstrata's Ulan, BHP's Caroona, Yancoal's Moolarben and Austar, and Vale's Integra) while he was also a member of the PAC panel assessing Modification No. 6 to Rio Tinto's controversial Warkworth mine;
  • That PAC member Bob McCotter had a paid position with EMM Consulting (which does planning work for the coal and gas industry) and was a keynote speaker at the Hunter Valley Coal Chain industry conference last year (a conference which PAC chair Gabrielle Kibble accepted an invitation to speak at, before pulling out as it was purely a coal industry conference);
  • That PAC member Paul Forward was a principal of consultancy Evans & Peck while a member of the PAC panel assessing the state-owned Cobbora coal project -- which Evans & Peck did consulting work for -- and had previously assessed Whitehaven's Tarrawonga project; and
  • That the required PAC register of members interests was not completed at all for the years 2009, 2010 and 2011. Also that the register of interests should be made available online, rather than for inspection by the public at the Sydney office.
Separately, there are concerns that Dr Neil Shepherd, who is chair of the PAC panel assessing the Wallarah 2 project, is also chair of government advisory body Coal Innovation NSW -- a position which is not disclosed on the PAC website. This concern was raised with PAC by Rod Campbell, a researcher with The Australia Institute, who received the following written response from Kibble yesterday:
"The position was discussed between Dr Shepherd and me as Chair of the PAC at the time of the proposed initial appointment to CINSW. While at the time it was considered that no conflict would exist, the appointment was noted by Dr Shepherd on the register in 2012. After 12 months in both roles it was obvious that no conflict existed and Dr Shepherd did not include it in his 2013 return."
"... the inability to see the potential or perceived conflict of interest is a reflection on the way planning processes are run in NSW ..."
Campbell also received a written response from Kibble that Forward had retired from Evans and Peck in July 2013 and has no further dealings with the firm since. Furthermore, while he was a member of the Cobbora PAC panel which sought expert advice from Steve Perrin of Evans & Peck:
"... the PAC members noted that Mr Perrin is a highly regarded expert in the field of surface water  and the PAC has previously engaged him in other projects and found his advice very balance and independent. Although it was noted at the time that Mr Forward was engaged in the same firm, he did not have much dealing with Mr Perrin as they were in totally separate division. They also noted Mr Forward forthcoming retirement from the company. Their conclusion was the potential for conflict, if any, was very minimal."
Campbell told Crikey he's concerned PAC is not addressing the perception of conflicts of interest. In Shepherd's case, assessing Wallarah 2, Campbell said: "Here is a guy who chairs an organisation that is about furthering the interest of the coal industry and is also making decisions on coal projects. I accept there may be no material conflict of interest … but the inability to see the potential or perceived conflict of interest is a reflection on the way planning processes are run in NSW and I don't think it should be a surprise to anyone watching ICAC." In a response to written questions by Crikey, PAC reiterated there was: 1) no connection between Shepherd's positions on Coal Innovation NSW and Wallarah; 2) West had retired from the Integra CCC by the time of his involvement in the Warkworth application; and 3) McCotter attended the coal chain conference in his private capacity and had not been nominated to any mining projects in PAC. PAC also explained that while it did not ask its members to provide an annual update of their interests in 2009-2011, the secretariat had an ongoing practice of asking a nominated member about any potential conflicts. In December, Kibble took the unusual step of highlighting concerns over the disclosure of members' interests right up front in her annual report to then planning minister Brad Hazzard, which is not on the PAC website, writing:
"My approach to managing conflict is to avoid the conflict in the first instance … In circumstances where a member only becomes aware of a potential conflict after the appointment to a panel … If there is a real and/or direct conflict, the member will withdraw from the project. In at least one instance, even though the conflict was remote and only a perceived one, the member withdrew from the project."
Good enough? The EDO's principal solicitor Sue Higginson certainly doesn't think so, and is hoping for much better disclosure, especially given the ICAC revelations and the rising power of PAC. She told Crikey: "When the PAC is sitting in its capacity as a PAC hearing for state significant developments this automatically removes the community's objector appeal rights, leaving no recourse to the land and environment court. "Therefore, in essence, the PAC members are exercising quasi-judicial functions because they are charged with the responsibility of hearing and assessing community objections." With Kores now under pressure at ICAC, and PAC under pressure from the ombudsman, the Wallarah 2 project looks more and more like an outbreak of NSW disease.

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3 thoughts on “Coal conflicts: Wallarah 2 project infected by the NSW disease

  1. John Cole

    Seems Qld has caught the NSW bug. Wallin’s Qcoal pays a handsome donation to the LNP and then gets the go ahead (sans EIS) for his Sonoma mine to ‘divert’ Coral Creek near Collinsville (why don’t they just say ‘rip it up’?).

    Meanwhile out on the Darling Downs New Hope coal has reportedly paid out $700 000 to the LNP in the lead up to its New Acland Mine expansion application. The Bookmakers are happy to take bets on the Coordinator Generals verdict…..

  2. 64magpies

    Just incredible. How they manage to sleep at night is beyond me.

  3. fractious

    Thanks Paddy, a great article. It won’t surprise you or your audience to know that Wallarah 2 is but the tip of a very large iceberg – anyone who’s had any substantial history dealing with environmental assessment of large projects in NSW who’s had their eyes open will know this game has been going on for well over a decade, probably more like two. Even ‘outsiders’ can trace the way successive NSW Inc governments (of both facades) have either deliberately diluted or wilfully removed environmental safeguards and facility for community consultation from both the principal legislation (EP&A Act 1979), linked Acts and subordinate regulations.

    A couple of decades back just about everyone involved in EIA knew the ‘Triple Bottom Line’ (economic, social and environmental) by rote and recited it as a matter of course. Within a few years it became ‘economy, “maaate no worries” and “ah just plant a couple of trees’, no-one who counts will know the difference”‘.

    Some day, when you’re bored or have a week or three to fill in, go look at the graft and corruption that goes into RFAs (Regional Forest Agreements) – it’ll make your eyes water.

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