Parties to the Galilee Basin shell game: The Greens

by empathiser

When The Australia Institute became the first entity of any kind to acknowledge that Matt Canavan placed the name of the Adani rail project – that was in line for the 1 billion NAIF loan – on the public record in February 2017, I was sent into a flurry of activity to find senate estimates hearings with NAIF and ONA staff to see what had been said by Greens senators Scott Ludlam and Larissa Waters at two key senate estimates hearings that both followed revelations of the Adani rail project name via answers to questions on notice arising from previous hearings. I was also compelled to review the senate NAIF inquiry transcripts to see how Janet Rice and Richard Di Natale allowed the NAIF inquiry hearing to pass without any mention of Matt Canavan’s revelations from February and May.

To me it was understandable that Labor and LNP senators would have an interest in helping mask details of the rail corridor from scrutiny, but not the Greens. Surely the Greens would have an interest in exposing Matt Canavan breaching his own standards of “commercial-in-confidence”, and allowing the public the opportunity to have the fullest possible knowledge of developments in the Galilee Basin to help inform their choices.

The first of these hearings was on March 2, 2017, two weeks after Matt Canavan had issued his answer to a Question On Notice from Larissa Waters from October 2016. I found no actual reference to QoN SI.36 by Scott Ludlam during the March 2 senate estimates hearing, but I found an exchange in which Ludlam, Canavan, and NAIF CEO Laurie Walker failed to acknowledge the communication placed on record by Matt Canavan in February 2017. While the bureaucrat Walker can hide behind protocol, and Matt Canavan can say in his defence “what’s an entity?”, Ludlam was perfectly free to acknowledge the very clear response from Matt Canavan to his colleague’s question on notice. Scott Ludlam had every opportunity to put it to the NAIF CEO and Matt Canavan that Adani Mining Pty Ltd were the likely proponent since they are the proponent for the mine and rail projects listed with the Queensland Department of State Development who are charged with coordinating the mine, rail, and water projects for the Carmichael mine/Galilee Basin coal complex.

Senator LUDLAM: On notice if you need to, can anybody at the table please shed some light on which particular Adani entity has applied for the loan? I understand it is quite a complex corporate structure and there are various shell entities and goodness knows what else. Which particular entity is it that has lodged the request for assistance?
Senator Canavan: I am not aware.
Senator LUDLAM: I will maybe put that to Ms Walker.
Ms Walker: The NAIF has a protocol that it treats all its business dealings as commercial in confidence.
Senator LUDLAM: The minister announced one of them last December, so that is not working out super well.
Ms Walker: There are very limited exceptions for information that is able to be disclosed publicly; it is agreed with some of the proponents.
Senator LUDLAM: Are you heading towards not being able to tell us which particular Adani entity you are dealing with?
Ms Walker: Yes, because from a financing perspective, which the NAIF is, we regard it as very important to maintain the commercial in confidence information.

Link: Senate Hansard March 2, 2017 

Another exchange caught my eye due to the suggestion by Labor’s Chris Ketter that NAIF protocol may have been breached by the release of unspecified information. The NAIF CEO Walker said that her organisation did not breach protocol and the Office of Northern Australia – Head, Mark Coffey said that the protocol had recently changed. Matt Canavan indicated that he had made public comment about the Adani rail project loan application, but did not specify the type of public comment. Matt Canavan indicated that he spoke to the “proponent” before making public comments to ensure they were “comfortable” with the information he was sharing. From the below exchange we can assume that the information Matt Canavan had sought permission to share is an exception to the “commercial-in-confidence” arrangements often presented by Matt Canavan, his office, and NAIF and Office of Northern Australia staff.

Senator KETTER: Ms Walker, could you give us a breakdown of the four projects that are in the due diligence stage, in the same way that you have done with the inquiry stage? How would you characterise those? I think we know that one is a pipeline.
Ms Walker: I have given you a breakdown at the very high level, because we obviously want to be as transparent as we can with the pipeline. But I think to break down four deals that are in due diligence would be revealing information about those transactions, and our protocol would be that we maintain commercial-in-confidence of what those projects are.
Senator KETTER: I am sorry; I said pipeline before. I think you told us that one of those four projects is a rail link.
Ms Walker: Yes.
Senator KETTER: So we know that.
Ms Walker: As I said, we have a protocol that has a very limited exception as to information that we can disclose, and we can on that one under our protocol. But I am not at liberty to reveal the others at this moment.
Senator KETTER: I am a bit confused as to why we can know one of those four but not the other three.
Ms Walker: As I said, our general protocol is that we regard all business information in relation to proponents—whether or not a proponent has approached us—as information that is commercial-in-confidence that can give signals to the market that are valuable. Perhaps when I respond on that other question—the question on notice—about why we wish to maintain commercial-in-confidence, that would be the way I would like to handle it.
Senator KETTER: Has there been a breach of protocol in relation to the rail link project?
Ms Walker: NAIF have not breached a protocol.
Mr Coffey: Senator, maybe I can answer that. Last year in estimates I answered that question and at the time that high-level information was released through my office and there was not a breach of protocol at that time. NAIF have a policy now that they treat that information as commercial-in-confidence and they will maintain that.
Senator KETTER: So there has been a change in policy?
Ms Walker: As clarification: on that particular deal, we had the consent of the proponent to acknowledge that they have expressed interest in approaching the NAIF. That is the information that I have made public.
Senator Canavan: While I am obviously not party to the protocols and policies of the Northern Australia Infrastructure Facility—and it is a matter for them—I only commented publicly on that particular project after speaking to the proponent and ensuring that they were comfortable with that. I have not sought to do the same with other projects, because there simply is not the same level of public interest. That is of course a judgement call on my behalf, but I am trying to be as open as I can. In fairness to Adani, while I am not here to talk to them, they have not tried to hide anything either. They are being completely open and upfront about their project. There will certainly be a lot of commentary on it and a lot of interest in it.

Link: Senate Hansard March 2, 2017

QoN AI.70 is a set of written questions by Larissa Waters, submitted after the March 2 estimates hearing and directed to Matt Canavan’s office. Question 3 reads:

3. When the Minister publicly announced in early December last year that the NAIF is looking into the Adani rail proposal did he discuss that with you or your office before he let the media know? a. If yes how was it communicated – phone or email?

The answer to Question 3 was published a little over a week before the June 1, 2017 senate estimates hearing and contains the second revelation of the Adani-NAIF project name. Waters made no mention of this or the previous revelation in her extensive questioning of NAIF and ONA staff on June 1, 2017.

3. As the Minister stated at Senate Estimates there has been no public formal announcement from Government.
The NAIF had informed the Minister via email that Adani had consented to disclose the following:
‘Adani has expressed interest in accessing the NAIF facility, for the purposes of supporting the North Galilee Basin Railway Project.’

Download link: QoN SI.36

Download link: QoN AI.70

Waters and Ludlam had been sidelined by the time the first and only hearing in the senate NAIF inquiry took place. Senators Rice and Di Natale were in attendance for the Greens and did not mention the two answers to questions on notice that explicitly named the North Galilee Basin Rail Project as the Adani project in line for the NAIF loan. They did not seize on Australian Conservation Foundation and Environmental Justice Australia lawyer David Barnden’s mention of the North Galilee Basin Rail Project and the December 2016 Courier mail article which broke the news.

Senator IAN MACDONALD: Mr Barnden, could you just assist us by giving me on notice the reference to where in Hansard you say the NAIF board spoke about Adani and what processes they were proceeding with at NAIF on the Adani application?
Mr Barnden: Yes, we can take that on notice.
Senator IAN MACDONALD: You’ve said that the NAIF board have discussed it, and I just wish you to—
Mr Barnden: I believe there’s a Senate estimates answer to question on notice SI-35, 20 October 2016, which states that Adani and NAIF have been in discussions. There was also a Courier Mail article in early December 2016 which—
Senator IAN MACDONALD: Not everything that’s in the Courier Mail—
Mr Barnden: Yes, but there’s been no public response by NAIF refuting that.
Senator IAN MACDONALD: But you’re suggestion NAIF are going through the process. I just want the reference to that because I know that’s not true and I’d like to see the reference.
Mr Barnden: If you can tell us any more about NAIF not analysing the Adani proposal, we’d be welcome to hear it.
Senator IAN MACDONALD: No, no. This is the point: your submission and those of the previous witnesses are based entirely upon Adani, and yet—
Senator RICE: The minister acknowledges it.

Senator DI NATALE: The minister has acknowledged it. Don’t expect the witness to refute what is patently false.
CHAIR: Senator Macdonald, the witness has agreed to take your question on notice, so have you got another question?
Senator IAN MACDONALD: Yes. I am asking: do you have any evidence at all—real evidence—that Adani have made application and put in the necessary applications, and, if so, what is that evidence?
Senator DI NATALE: If you’d paid more attention at Senate estimates you would have seen that NAIF confirmed that Adani had applied for the loan.

Download link: NAIF inquiry hearing August 11, 2017

As I outlined in my blog post Confirmation that the North Galilee Basin Rail Project is the Adani rail project being considered by the Northern Australia Infrastructure Facility, Tom Swann had seen QoN SI.36 as early as July 2017 and acknowledged to me on twitter that he was aware of it coming into the inquiry and claimed he couldn’t recall on the day. When he was asked by Janet Rice to provide details, examples and time lines he stopped at a January 18 response from the NAIF to an FOI request. Janet Rice does not encourage him to continue the time line or press him to provide more concrete details, but she did come to some agreement stating “So the NAIF, Adani and the statements from the government all seem to be intersecting and influencing each other quite inappropriately.”

Tom Swann knew full well that QoN SI.36 and QoN AI.70 superseded the Renee Veilaris exclusive from December 2016 in terms of primary sources and yet he seemed to raise doubts about the sources for the article pointing out that the NAIF did not appear to be a source. Janet Rice had every opportunity during her time with Mr Swann to press him to reveal the very specific revelations of the 2 offending QoNs, but did not.

Senator RICE: Thank you, Mr Swann and Mr Campbell. There are very clear recommendations in your submissions about how the NAIF could operate and how it is currently operating. I want to focus on your concerns regarding political interference with the NAIF, which you mentioned in your submission and in your testimony just then, and the contradictory statements made by Adani in terms of their relationship with the NAIF. Can you talk us through in more detail your concerns with political interference—including, if you have some details, time lines and specific examples?
Mr Swann: Sure. The NAIF was announced in the ’15-’16 budget and was actually set up in the ’16-’17 budget. There were media reports that Adani had applied quite early on, but the controversy really took off on 3 December when there was a front page Courier-Mail story. Interestingly, the NAIF itself was no part of this story, and it was not clear where the story came from. On 5 December, a couple of days later, the Adani spokesperson boasted that the loan was not critical. We have obviously applied because it is available. It doesn’t mean it’s make or break for the project. Interestingly, at the same time, Minister Canavan promoted the project and promoted the loan, and emphasised that it will be a multiuser rail line. On 6 December I had some correspondence with the NAIF in which they refused to acknowledge that the proposal even existed. On 18 January, in response to an FOI request, the NAIF refused to say that it had any documents containing the words ‘Adani’ or ‘Galilee’ or ‘Carmichael’—
Senator IAN MACDONALD: But that doesn’t worry you at all—
Mr Swann: on the basis that it would breach confidence—
Senator IAN MACDONALD: You still assume—
Mr Swann: It wasn’t that there were no documents but rather that to even consider whether there were documents or not would prejudice their decision-making. So how could it be that an independent agency that was assessing a proposal was bound to confidentiality while the minister could essentially run national PR for the proposal?
Senator RICE: Yes. Indeed. Then ongoing from that—other issues in terms of that?
Mr Swann: There was another example of the issue around Adani’s boast that the loan was not critical for it to go ahead. On 4 May, Adani announced that it had promised to buy steel from Arrium, from the steelworks in Whyalla, and this was touted as a lifeline for the Whyalla Steelworks, despite the fact that it represented less than two per cent of the steelworks’ capacity for about 2½ years. So it really was quite small, as the Whyalla Steelworks spokesperson acknowledged at the Adani press conference. But, at the same time, Adani said that it would go ahead with this order, regardless of whether it got the NAIF loan. So again there are real questions about why the NAIF didn’t, at that point, dismiss the application. And then, on 7 June, suddenly Adani changed its mind: the day after having given the investment proposal the so-called green light, it said that the funding was critical, and that subsequent requirements from state and Commonwealth to make the rail project an open-access common-user line increased costs. But, as I said, it has always been a multiuser rail line. The word ‘multiuser’ is in the first sentence of Adani’s 2013 environmental impact statement.
Senator RICE: So the NAIF, Adani and the statements from the government all seem to be intersecting and influencing each other quite inappropriately.
Mr Swann: Absolutely. And that raises real concerns. The NAIF has made a lot of noise about its confidentiality, and much more noise about its confidentiality than the projects that it is assessing. If we accept what the NAIF has said—that that’s really important—it raises incredibly big concerns about the way that the minister and the proponent have been allowed to promote their project in the national media in the intervening period.

Download link: NAIF inquiry hearing August 11, 2017

Ian MacDonald pressed Tom Swann for what Murray Watt called “real evidence”. The committee secretariat presented the chair (Chris Ketter) with the text of QoN SI.35 which was mentioned earlier in the hearing by David Barnden. That text does not go as far as QoN SI.36 in confirming that Adani are indeed “in discussions” with the NAIF over a rail project as it does not expressly name the rail project while strongly suggesting the likely rail project. It’s clear that in this exchange was another opportunity missed for senators Rice and Di Natale. They would have seen all the responses to Larissa Waters’ questions on notice and would have known that QoNs SI.36 and AI.70 were a more appropriate and powerful response to questions about primary sources.

Senator IAN MACDONALD: You acknowledged to Senator Hume that NAIF have said something publicly about Genex, because Genex apparently gave them approval to do it. Do you have any real evidence at all of Adani making an application, whether the facts and figures have gone in or whether NAIF has actually been investigating it? Do you have any evidence at all?
Mr Swann: The proponent has repeatedly discussed its application. This is a quote I read out before: ‘We have applied for it because it’s available.’ That was 5 December. The minister wrote an opinion piece about why it was a good idea to provide this loan and, again, promoting that it was multiuser. That was on 8 December. I cannot refer to it, I’ll have to take it on notice, but I do remember seeing a note on Hansard in which the NAIF acknowledged that the Adani proposal was one of the proposals they were considering, yes.
Senator IAN MACDONALD: I’ve asked previous witnesses for that. Give me that Hansard.
Senator WATT: It sound like real evidence.
Mr Swann: In the last week, or maybe this week, the Australian CEO of Adani was in the media discussing how big a loan might be required from the NAIF by Adani and expressing that there was some uncertainty around that. So there have certainly been repeated references.
Senator IAN MACDONALD: Can you on notice refer me to that? Which paper was that in?
Mr Swann: Um—
Senator IAN MACDONALD: Doesn’t matter.
CHAIR: Senator Macdonald, in the interests of the record here, you have asked questions about this a couple of times. The secretariat has pointed out to me that in answer to question on notice at supplementary budget estimates on 20 October last year, the NAIF said:
I can confirm that discussions have occurred between Adani Australia representatives and the Northern Australia Infrastructure Facility in respect of their rail project in the north Galilee Basin. These discussion are commercial in confidence and we are unable to provide further information.

Download link: NAIF inquiry hearing August 11, 2017

 

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