NAIF could make a decision regarding funding infrastructure for the Carmichael mine as soon as this week.
New evidence has come to light about the guiding principles which all investment decisions for NAIF must adhere to.
Specifically, the Investment Mandate of NAIF states that:
“The Facility must not act in a way that is likely to cause damage to the Commonwealth Government’s reputation, or that of a relevant State or Territory government.” (Section 16)
And, “The Facility must have regard to Australian best practice government governance principles, and Australian best practice corporate governance for Commercial Financiers, when performing its functions, including developing and annually reviewing policies with regard to:
(a) environmental issues;
(b) social issues; and
(c) governance issues”. (Section 17)
Given the NAIF’s responsibility to not act in a way that is “likely to cause damage,” this effectively forbids any such loans to finance coal mines and their associated infrastructure (1).
Additionally, the Queensland Government's recent announcement of a no royalty holiday for Adani means, according to Environmental Justice Australia, that the Commonwealth could not legally fund projects through NAIF without the provision of the states (2).
If the NAIF board ended up providing a green light for infrastructure to support this mine, this would provide a green light to 60 years of unabated increases in Australia’s emissions. If the Galilee Basin (location of proposed coal mine) were a country on its own, it would emit more than 1.3 times Australia’s current annual emissions from all sources and rank in the top 15 emitting countries in the world. New coal mines are fundamentally at odds with global efforts to tackle climate change effectively and protect Australians from worsening extreme weather.
Moreover, the potential impact of the Carmichael mine on the adjacent Great Barrier Reef which has just experienced two back to back years of coral bleaching, is huge. The only way to protect the reef is to rapidly phase out fossil fuels, and actively pursue the uptake of cheap, clean and efficient renewables and energy storage technologies.
Significantly, the Australian government has committed to the Paris climate agreement of limiting warming to 2 degrees C or less. The best available science estimates that over 90% of Australia’s existing coal reserves, including the coal of the Galilee Basin, must stay in the ground if this target is to be achieved. Thus, a decision to approve the mine, would directly oppose the Australian government’s Paris commitments.
This means if the NAIF board should approve the Adani loan it will be contravening its own charter. The conditions of Section 16 are clear - a decision to approve the Carmichael mine will be undeniably 'likely to cause damage'.
- Renew Economy, Reputation Clause May Scupper Government Loan Deal for Adani, 5 June 2017, http://reneweconomy.com.au/reputation-clause-may-scupper-government-loan-deal-for-adani-77287/
- ABC News, Adani coal mine in doubt over Queensland Government refusal to facilitate federal loan, 27 May 2017, http://www.abc.net.au/news/2017-05-27/adani-coal-m...
- Image Credit: Greenpeace Australia Pacific