Wilkie calls out Australia “clean coal scam” that puts country’s reputation at stake

An alleged “scam” by the coal industry inflating the “cleanliness” of its coal could trash Australia’s reputation with its major trading partners.

Independent MP Andrew Wilkie in parliament on Monday made allegations that major coal players, an investment bank, a global accounting firm and two multinational testing companies were implicated in efforts to make Australia’s coal appear to buyers as cleaner than it is.

Wilkie alleged in Parliament that coal industry players including Terracom, Anglo American, Glencore, Peabody and Macquarie Bank lied about the moisture content in export coal for “years”, saying it was drier and therefore burned cleaner than it actually did, and paid bribes to overseas parties to maintain secrecy.

He said his sources are thousands of documents and a coal industry insider-turned-whistleblower.

“Coal companies operating in Australia are using fraudulent quality reports for their exports, and paying bribes to representatives of their overseas customers to keep the whole scam secret,” Wilkie told parliament.

“And this has allowed them to claim, for years, that Australian coal is cleaner than it is in order to boost profits and prevent rejection of shipments at their destination.”

Australian Conservation Foundation’s climate program head Gavan McFadzean said the allegations suggest that Australia’s major trading partners may have been overestimating claimed emissions reductions as a result.

“They would have done so assuming a certain moisture content of their coal… so it’s likely that our major trading partners like Japan, South Korea, China and India have been underestimating their emissions.”

Testers enabled fraud

Wilkie named Brisbane-headquartered multinational ALS and Swiss giant SGS as being involved.

In a document tabled in Parliament, Wilkie said SGS gave a moisture content of 16.7 per cent to a coal sample in a draft report and changed it to 15.9 per cent in the final version.

In a statement to the ASX in 2020, ALS told the market that 45-50 per cent of certificates generated by a business it had acquired were “manually amended without justification”.

It said the amendments took place in labs in Newcastle, Mackay, Gladstone and Emeralds over a period of 13 years. “No evidence of bribery or other third-party payments involving ALS staff has been found or indicated,” it said in that statement.

Climate Energy Finance director Tim Buckley, who has studied the allegations over the last two years, said it was a significant issue for Australia, and could affect exports in the hundreds of billions of dollars. He said the allegations of corruption made by Wilkie were politically embarrassing for Australia.

Time for an inquiry

Wilkie is demanding an inquiry into the allegations.

To date the Australian Federal Police, the New South Wales Police, ASIC, the Department of Industry, Science, Energy and Resources, and the former federal government have declined to act on allegations that have been raised before at a Parliamentary level by Wilkie and the Greens.

ACF’s McFadzean says the allegations need to be taken seriously.

“This is why we need an inquiry to look into the behaviour and potential culpability of the very agencies that are supposed to be regulating this market and the agencies called on to investigate in the past,” he told RenewEconomy.

The fact that it remained uninvestigated was a “testament to the power of the coal industry” and the “muscle that the Australian coal industry can exert to avoid scrutiny”.