BMD, a major private engineering company, said a total ban on the coal mining industry had swept non-mining-related businesses in the name of tackling climate change.
The company’s CEO, Scott Power, tells Parliamentary Commission that despite being an engineering company, he involves transporting coal and commodities for mining projects, so his company finds insurance for two infrastructure projects. He said he couldn’t.
Employing 17,000 workers and 10,000 contractors, BMD is building a railroad linking the Carmichael Coal Mine in the Galilee Basin in western Queensland to Abbott Point Port in eastern Queensland. BMD is also upgrading the stormwater system in the port’s coal terminal.
The federal and state governments support both projects, but BMD could not find a company that was willing to continue to insure both projects.
“The project itself does not specifically include mining or coal mining, but ultimately it is related to the transportation of such goods and does not include the handling of coal,” Power said. I told the committee.
“I was advised that I couldn’t get public liability insurance, environmental protection insurance, director and executive insurance,” he added, adding that the company had no problem with insurance for all other projects.
“This is the first time we have encountered this situation after more than 40 years of business.”
The Joint Standing Committee on Trade and Investment Growth is investigating the careful regulation of investment in Australia’s export industry.
Inquiries from several mining companies indicate that the industry is gradually being restricted by financial institutions: banks, insurance companies and aging companies due to the withdrawal of important insurance and loan services essential to mining projects. is.
For example, the Resource Industry Network (RIN), an affiliated organization based in central Queensland, which is rich in coal, says professional liability insurance has skyrocketed.
David Hartigan, General Manager of RIN’s Field, said: The engineer answered the question.
“To give you a perspective: our insurance is now our biggest single cost other than wages.”
The Commission noted that Australian financial institutions are responding to global climate change movements, forcing local businesses to avoid industries that are considered a major source of emissions.
In fact, the Australian Insurance Council stated in its submission:pdf) In 2006, 62 investment firms (managing over US $ 6.5 trillion in assets) called on companies to incorporate environmental, social and governance (ESG) issues into their decisions, in a UN-backed Principles for Responsible Investment. I signed it. Creation — Includes climate change measures.
By April 2018, more than 1,715 companies (managing US $ 81.7 trillion) controlling 70% of the country’s insurance market, including Australia’s “Big 4” insurers Allianz, IAG, QBE and Suncorp, have signed. ..
Australian financial regulators and aging companies are also pressured companies to do more to mitigate the risk of climate change.
“Australian company directors and investors have a legal obligation to consider climate change in assessing financial risk and manage this risk in decision making,” said CEO of the Australian Council of Aging Investors. Louise Davidson said. Country.
“The expected damage to the Australian economy from leaving climate change risk unchecked is a 6% reduction in GDP by 2070, which is worth $ 3.4 trillion (US $ 2.6 trillion) in present value. It is estimated that 880,000 jobs will be lost. ”ACSI submission (pdf).
The insurance council also cited a series of natural disasters, including cyclone debbie, Oswald and palm, as examples of climate risks that could cause costly damage.
However, power has challenged the characterization of this risk.
“One of the bigger issues I mention is the fact that the position taken here doesn’t seem to be about risk,” he answered the question.
“When we are trying to insure our work, we are trying to insure the civil infrastructure we provide. The risks associated with the implementation of that project are the commodities that may be carried by rail. I don’t know why it’s important to. “
He pointed out another project recently undertaken by BMD in the same range as the Carmichael Railroad, a 1,700km inland railroad that runs from Brisbane to Melbourne.
“I was able to get all the insurance I needed there,” he said. “Therefore, it is suggested that it is a risk-based worldview, but it is not clear to me that those risks are fundamentally different in terms of project and infrastructure delivery.
The Commission has broken the possibility of the federal government intervening and supporting the mining industry in light of the failure of the free market.
In May, the government announced a $ 10 billion guarantee to help reduce premiums across northern Australia in response to rising costs for residents and businesses. The area is seasonally hit by cyclones and floods.