Australia’s “Big Four” banks are being targeted by a new, internet-based campaign calling on them to rule out funding the expansion of a coal port near the Great Barrier Reef – a project to accommodate exports from what would be one of the world’s biggest coalmines in Queensland’s Galilee Basin.
The campaign, launched on Monday by the Australian Youth Climate Coalition, follows a swift rebuke of Australia’s federal government from the UN World Heritage Committee, for its approval of the Abbot Point expansion, which would involve the dumping of three million cubic tonnes of dredge spoil in the marine park area, around 20 kilometres from the reef.
“We are concerned that not only Canberra is handing over environmental approval powers to the Queensland State Government on a matter of such high national and international relevance, but also other measures that have been taken that can deteriorate the health of the reef even more,” said José Filipe Mendes Moraes Cabral of the UN Committee’s Portugese delegation, last week.
It also follows recent pledges from global banking giants Deutsche, HSBC, RBS, and Barclays, ruling out any financing of the coal port expansion.
“As there is clearly no consensus between the Australian government and UNESCO regarding the impacts of the Abbot Point expansion on the Reef we will not consider financial applications for an expansion of Abbot Point,” said Deutsche co-chair Juergen Fitschen in May.
This sentiment was echoed by HSBC CEO Stuart Gulliver the following day, when he said it would be “extraordinarily unlikely” the bank would go anywhere near the project. But unlike the international banks, says AYCC national co-director, Lucy Manne, the big four Australian banks are yet to make a public announcement ruling the project in or out.
“Following the World Heritage Committee’s strong statement last week, we are optimistic that Australian banks will do the right thing – which is why we have launched this video and petition asking them to make their position clear,” Manne said in a statement on Tuedsay.
The AYCC campaign’s video, a satire depicting two fictional characters attempting to convince unsuspecting, ordinary people to fund the Abbot Point coal port, draws from the frighteningly un-ironical views of the Abbott government; that there could be nothing worse for Australia’s future than leaving its remaining coal resource in the ground.
But the potential damage to the banks’ reputations as good global citizens – played out in the responses from people in the video: “I don’t think you’ll find anyone willing to fund that” – is not the biggest risk they would face in funding the Abbot Point project.
For many months now, serious doubt has been cast over the multi-billion dollar plans to develop the Galilee coal mines, amid claims the project is “uneconomical” in the current shaky global coal market, and the major developer may not have the balance sheet to fund the project.
Late last year, a report commissioned by Greenpeace found that the Indian coal conglomerate behind Abbot Point, Adani Group, was carrying $12 billion of debt and needed billions more to develop the project.
The report also warned that the Galilee project was uneconomic – “a high cost coal product in a low priced coal market with an uncertain future.”
This week, new reports have emerged suggesting there is a real risk the Abbot Point project will not proceed if dredging does not occur between March 1 and June 30.
“Adani will… suffer at least one year’s worth of losses associated with not having cargo moving through the export port,” Sandeep Mehta, chief executive of Adani Australia Coal Terminal, told Queensland’s Minister of Environmentsaid in an affidavit.
This would increase Adani’s already hefty debt which, as independent financial analyst Tim Buckley noted recently, was not necessarily a bad thing, as long as you’re making money. Debt when you’re not making money, he stressed, is a problem.
“We estimate the external debt of the Adani Group at $US12 billion. So it is a very financially leveraged group of companies. And that’s before funding the majority of the $10 billion to be invested in Australia,” Buckley told ABC TV’s Lateline program in May.
According to a 2013 report by Market Forces, Australia’s big four banks have collectively lent almost $4 billion to coal and gas projects in the Great Barrier Reef World Heritage Area since 2008.
But the growing trend for some of the world’s biggest banks and super funds has been towards divesting themselves of fossil fuel projects and investments, to avoid being landed with stranded assets when the carbon bubble bursts.
