4 November 2022
Austbrokers parent company AUB Group trotted out several classic fossil fuel industry talking points at its annual general meeting (AGM) in Sydney yesterday, in an attempt to justify its work arranging insurance for the climate-wrecking Adani/Bravus Carmichael coal project.
Under questioning from shareholder proxies, AUB Chairman David Clarke admitted that Adani was a client, and that discussions as to whether to accept Adani’s business had been held at the highest levels of the company. Despite extreme weather fueled by the climate crisis seriously impacting the insurance industry and many of the clients of its brokers (as stated by the Chairman), Austbrokers decided fueling that extreme weather by providing an essential service to a new thermal coal project was OK.
This work for Adani now presents a clear risk to Austbrokers’ reputation, and therefore, to its partners that use the Austbrokers brand.
Lack of Free, Prior and Informed Consent
The first question asked was by Wangan and Jagalingou (W&J) Cultural Custodian Coedie McAvoy, who recorded it at Waddananggu, the ceremonial camp where he has spent over 14 months resisting the Adani Carmichael coal mine and fighting against its destruction of W&J land and culture.
“Now that you know that Adani is destroying my homelands without the free prior and informed consent of Wangan and Jagalingou people, will AUB cease any further involvement with the Carmichael mine, Carmichael Rail Network, the Bowen Rail Company and NQXT port?”
AUB Group responded by saying that while one group may think the Carmichael project should go ahead, others, like the Queensland Government, disagreed. “Just because one group says it’s not legitimate, does not necessarily mean that that’s a veto on the whole thing”, said the AUB Chairman, displaying a lack of understanding that the commitment to Free, Prior and Informed Consent means exactly that – a right of veto on projects by Traditional Owners on their land.
Using excuses straight out of the fossil fuel PR playbook
Further questioning by shareholder proxies covered the reputational risk arising from Austrbrokers being linked to a controversial new thermal coal mine project; its refusal to join the 113 major companies that have ruled out any further work for Adani Carmichael; and Austbrokers’ approach to coal mining in general, highlighted by its purchase of SRS Broking in July 2022 increased its exposure to that industry.
The answers were a long list of the usual baseless straw man arguments and red herrings we hear all the time from companies that want to justify support for new fossil fuel projects in the face of ever-worsening floods, bushfires and heatwaves. We have briefly addressed them below. Before going into the details, it is worth reiterating that in order to keep global warming to a maximum of 1.5 degrees Celsius, and align with the goals of the Paris Agreement and the net zero emissions by 2050 target, no new coal, oil or gas projects or expansions can be built. The Adani Carmichael coal project is not only a massive new thermal coal mine, but it is the first mine in the Galilee Basin, thereby making it easier for other new coal mines to be established there.
|Austbrokers’ spin||Why it’s wrong|
|You can’t turn off coal overnight (AUB’s version of this was you “cannot flip a switch” to a clean energy economy)||This is a classic straw man argument. No one has ever asked for the fossil fuel economy to be switched off overnight. However, the science is clear that a transition needs to occur as fast as humanly possible. As a first step, this means not building NEW coal, oil or gas projects. By supporting a new thermal coal mine project, Austbrokers is delaying the transition to clean energy, undermining any chance of limiting global heating to 1.5C.|
|We “make sure the people we are dealing with are also…on an appropriate path to a renewable future”||The Adani Group is pouring billions of dollars into new coal mines and coal-burning power stations. Adani plans to make the Carmichael mine the biggest coal mine in Australia and has plans for new coal-burning plants that will give it more coal power generation capacity than the entire Australian economy. Austbrokers’ client, Adani, is on a rapid expansion path in all directions, with a massive commitment to new fossil fuel projects.|
|Russia’s invasion of Ukraine has changed things||AUB Group ambiguously implied that the Ukraine war had changed “views globally” on the transition and the use of coal and gas. This is the opposite lesson to be learned from Russia’s invasion, which has highlighted just how dangerous it is for countries to rely on fossil fuels, and how energy security requires a decoupling of economies from coal, oil and gas markets and a shift to locally produced clean energy.|
According to the International Energy Agency, the Ukraine war has accelerated the transition away from fossil fuels.
|“Where do you draw the line?”||This was a rhetorical question posed by both the Chairman and the CEO and Managing Director of AUB Group, Mike Emmett, implying that Austrbokers’ work for Adani’s rail line and coal port was somehow different to helping mine coal and ruling those out was a slippery slope. It’s not that complicated, you draw the line at new or expanding fossil fuel projects.|
As the Adani/Bravus Carmichael project includes a new thermal coal mine, any assistance to any essential piece of infrastructure linked to the project (such as the rail line, which does nothing other than transport Carmichael coal, or the NQXT port, which does nothing other than transport coal) is not acceptable and undermines global climate action.
|Coal is only a small proportion of our business||At the AGM, AUB Group Chairman claimed that Adani’s coal infrastructure was only a small part of its business, less than 1%. The CEO later said work related directly to coal mining was 0.2-0.3% of revenue. However, when shareholders pointed out that this meant it could easily give up this part of its business in order to salvage its reputation, the Chairman said its business was “made up of a lot of one percents” and therefore, they were not going to give up coal.|
Coal being a small part of AUB’s business is irrelevant. What is important is the real-world impact of that business. In the case of Adani/Bravus’ Carmichael project, Austbrokers is providing an essential service to a new thermal coal project, helping it operate and possibly expand. It may not be a big part of Austbrokers’ business, but it is a big deal for the climate and the ecological, social and economic systems that require a stable climate to survive and thrive.
Austbrokers’ work for the Adani Carmichael coal project has now been exposed publicly. To be known as arranging insurance for the essential infrastructure of a massive new coal mine, while millions around the world suffer the impacts of the climate crisis is a significant reputational risk. It is the main reason why 45 major insurers have vowed never to go near the Carmichael project.
If not for the sake of those suffering from floods and fires, then for its shareholders and business partners, AUB Group must commit to no further work for Adani Carmichael coal.