20 October 2019
After another week of news and protest over rail haulers and contracts for the Carmichael rail line, who is on track in the campaign to #stopadani?
The working week ended with what looked, at first glance, like a blow to the campaign to prevent Adani’s destructive Carmichael coal project from going ahead. Several media outlets ran a story that Adani had signed an agreement with Martinus Rail to build the 200 kilometre rail line connecting the planned Carmichael mine with the existing rail network.
But on closer examination, this wasn’t the major setback it first appeared to be.
The contract is worth $100 million, nowhere near the amount that would be needed to build the entire 200 km rail line. Martinus Rail’s area of speciality is in track laying, which means this contract would only be one of many Adani would need to secure. And this work would need to take place in the context of other companies designing and manufacturing the rail tracks and sleepers, and still more required to conduct the infrastructure construction work to enable the tracks to be laid.
In fact, this news is another example of how Adani has had to resort to pursuing its coal mine and rail project the hard way. Instead of securing a major engineering and construction firm to handle project coordination and subcontracting, the success of the Stop Adani campaign has kept many likely companies at bay. As a result, Adani is having to slowly piece together a complex and convoluted puzzle in order to inch its Carmichael coal project slowly forward. A key question is whether the pieces can fall into place before too many companies have simply walked away from Adani for Carmichael to proceed?
Friday’s news amounts to minuscule progress for a project that this week once again showed is a bucket-load of reputational risk for any company working on Carmichael.
Bad as this news is, let’s get real here. $100 mil does not buy you 200km of rail.— Market Forces (@market_forces) October 18, 2019
This is one tiny piece in a multi-billion $ puzzle Adani is still a long way from completing for its dirty Carmichael #coal project. Plenty more to do to #stopadani!https://t.co/Vme6IOX8rG
The previous day, Aurizon held its annual general meeting in Brisbane. About 200 people gathered to greet arriving shareholders and the media, calling for Aurizon to do no more than it was legally obliged to in enabling Adani to access the Queensland rail network.
Inside the AGM and the sentiment was much the same, with question after question from shareholders being hurled at Chairman Tim Poole and Managing Director Andrew Harding. Very little was given away, though Poole said it was the company’s current position to only do as much with Adani as it was legally obliged to.
That was clearly not enough for some, as about 40 protesters interrupted the meeting to demand Aurizon rule out paying for any upgrades to the existing rail line for Adani, or hauling coal from the Carmichael mine.
It wasn’t just mum and dad shareholders pressing Aurizon to stay away from the Carmichael project. One investor that until recently held a nearly 5% stake in Aurizon – Perpetual – was revealed to have had reservations about the Carmichael project and the reputational risk it brings to Aurizon. At its AGM, Perpetual’s Chairman Tony D’Aloisio said the investor would be prepared to take a hard line with Aurizon over reputational risks such as those Adani brings to business.
Mr D’Aloisio referred to this news piece from the ABC, which revealed more than how Perpetual had joined the likes of UniSuper to raise, as major investors, concerns over the potential of working on the Carmichael project with Aurizon, only to have later sold down their stake.
The story also talked about how Pacific National would be prepared to talk to Adani over a potential rail haulage agreement. In the company’s response to the ABC, it said:
“We wouldn’t rule out dealing with Adani or any other mining company that had the necessary approvals”
This is a concerning development, bringing us back to the present moment and the question: what next to stop Adani?
Status update, October 2019
This week was an important reminder that, while Adani might make a little progress here and there, it still lacks some of the most important elements necessary to build its massive Carmichael coal mine and rail project, and open up the Galilee Coal basin.
As of October 2019 Adani still needs finance, along with engineering and construction partners to enable the Carmichael project to go ahead. Within those two areas lie critical aspects such as insurance and coal haulage. Neither are going to be easy for Adani and, if the #stopadani campaign chooses to, both could be made impossible, literally halting this project in its tracks.
As this piece has focused on rail haulage so far, here’s a quick recap of where this part of the campaign is at. Unless Adani wants to take on the job of hauling its own coal (a move that would cost in the hundreds of millions of dollars), there are three companies in Australia with the capacity to enter into a contract to haul the coal from the Carmichael mine to Abbot Point. These are:
- Pacific National
Genesee & Wyoming
The last line has been struck out because Genesee & Wyoming have already ruled themselves out of working with Adani, confirmed in this ABC story from August 2019.
There are good reasons to take both Pacific National and Aurizon seriously as threats. Even though it has been reported that Adani has not put out a tender for coal haulage, that doesn’t prevent it talking privately to both companies. Given a) Aurizon’s reluctance to rule Carmichael out and b) Pacific National’s positive attitude towards the project, both clearly need a lot more convincing.
The other area where the Stop Adani campaign has been achieving success lately is insurance. In early October 2019, Axis and Canopius, two insurers operating as part of the Lloyds marketplace, pulled out of talks to insure Adani, while AIG remains under pressure from campaigns in Australia and New Zealand.
As of October 2019, 16 insurers have ruled out covering the risks of Adani’s coal project either through a direct statement or a policy. Many of these are some of Australia’s and the world’s best known companies such as QBE and Suncorp, Allianz, AXA, Munich Re and Zurich.
For 7 weeks in a row and counting, the legends at @adani_stop have been speaking to @AIGinsurance staff and others outside the AIG Melbourne office.— Market Forces (@market_forces) October 9, 2019
They are calling on AIG to come clean on its relationship with the #climate-wrecking Adani Carmichael #coal project.#StopAdani pic.twitter.com/bZ7zDxR4aT
But a smaller pool of insurers doesn’t eliminate Adani’s options altogether. The Lloyds marketplace contains many more insurers and Lloyds itself needs to take a position opposing companies operating under its name covering the risks of the Carmichael coal mine and rail project. The same goes for Marsh, which continues to act as Adani’s insurance broker while AIG, which had a policy covering Adani until the end of September needs to come clean on whether it has renewed that policy and if not, whether it will rule out further support for Adani.
More broadly, Adani faces new challenges among current and prospective engineering and construction partners. Long gone are the days when Downer EDI was going to construct the mine and this year, Adani lost a partner that was already providing it services at the Abbot Point coal export terminal: Aurecon.
A week ago, Cardno, another engineer that had been working with Adani, revealed at its AGM that it was no longer working with Adani, in part due to a lot of concern raised internally within the company and from its customers, providing further evidence of the toxic influence of associating with Adani and the Carmichael project (see video).
Now, its long-standing relationship with engineering and construction company GHD is under immense pressure, while other engineers such as BMD are already feeling the heat from community protest, and a recent series of coordinated actions around the country called on Fletcher Building to stop supplying Adani with essential building materials.
This is what success looks like
Campaigners and activists working on the campaign to Stop Adani’s Carmichael coal project need to realise that, as complicated and challenging as the current situation is, it is a product of the campaign’s success so far. Adani’s claim that it will self-finance the project is a reflection of the fact that it has failed to secure any external funding. Similarly, the fact that it is celebrating one contract to one small company to work on part of a rail line that it doesn’t even have permission to connect to the existing rail network yet, and moving its project forward in such as piecemeal manner is the result of communities around Australia making it perfectly understood in big business that Adani’s Carmichael project is reputationally toxic.
This is exactly the moment for organisations and community groups to ratchet up this campaign. If it means taking a project into a hundred pieces and making that a thousand pieces, then so be it. The push to stop Adani’s Carmichael mine is kicking goals – let’s keep it that way and prevent this environmentally and socially reckless project from being built.