Senate Estimates confirmed last month that BG Group’s gas bonanza has delivered diddly-squat to Australia in tax – despite claims it would contribute “more than $1 billion”.
Whistleblower, Simone Marsh, investigates the crony capitalism behind the Gladstone debacle; the history of how politicians kowtowed to the Duke of York-led British BG Group by pulling strings, shifting guidelines and ignoring public opinion to unlock prime farmland for fracking. Marsh also raises new questions about the timing of the spill of former Prime Minister Kevin Rudd.
BG Group starts commercial operations from QCLNG Train 2 in Australia (Image via www.flickr.com)
OCTOBER’S SENATE Estimates hearings confirmed a paltry amount of tax has been paid in Australia by Britain’s BG Group of companies behind the controversial Queensland Curtis coal seam gas to liquefied natural gas export development. Greens Senator Larissa Waters queried the Tax Commissioner on what had become of the “more than $1 billion in tax a year after 2014” promised, on the business pages of The Australian, by then CEO Catherine Tanna in 2011.
At the time, Tanna was executive vice-president of BG Group and captain of subsidiary Queensland Gas Company (QGC). Royal Dutch Shell acquired BG/QGC and its $US20.4 billion QCLNG business in 2016. In 2016, Shell Australia Pty Ltd reported it paid US$21.7 million in tax to Australia for all company business, including the North West Shelf and QGC.
Tax Office Deputy Commissioner Jeremy Hirschhorn revealed that, while amassing a gross income of $6.3 billion in 2015-16, BG International (Aust) Pty Ltd paid zero income tax. A second company in the group, BGC Australia Pty Ltd, contributed $35 million. A third, BG International Ltd, also paid no income tax in Australia that year. By comparison, BG Group made tax payments of US$406.4 million to Her Majesty’s Revenue and Customs in the UK, from its global operations in 2015.
Tanna is a board member of the Reserve Bank of Australia and the Business Council of Australia. BCA president Grant King had commandeered APLNG, the last of the methane-monster Gladstone triplets, birthed alongside QCLNG. It is unknown how RBA matters may have conflicted with Tanna’s business interests over the years, or how such conflicts have been managed.
The well-connected Ms Tanna is the daughter of R.G. Tanna of Gladstone Port Authority and coal terminal notoriety in international fossil fuel shipping circles. LNG ship Methane Mickie Harper bears the names of her offspring. Her career in oil and gas includes stints at BHP and Royal Dutch Shell (as executive vice president of gas and power, with responsibility for LNG, gas transmission and power generation in Africa) and involves engagements in China, America and Russia — including a JV with the soviet’s Gazprom.
Tanna now heads EnergyAustralia Holdings Limited, the gas and electricity company owned by Hong Kong-listed China Light and Power. An investigation by michaelwest.com.au, based on data published by the Australian Tax Office, found EA paid no income tax in Australia over the three financial years 2013-14, 2014-15 and 2015-16 — despite raking in a total income of $23.9 billion. EA has interests in expansion of coal seam gas — including with Santos in NSW, where the community has been fighting a long-standing battle against gas field invasion.
By Royal Disappointment
When the British Royal Family visits these shores, Australians roll out the red carpet. But how about when a British corporation takes advantage of our royal ties to roll out experimental gas fields on our prime farmland? History shows our leaders rolled over; unlocking eastern Australia for a gas cartel to take hold of our Parliament, land, energy and financial resources. Our leaders acted contrary to the expressed wishes of their electors; and to our environmental and socio-economic detriment too.
Before establishing legal authority to take our resources, BG used the Duke of York to sell Australia’s gas to a Chinese government owned corporation — with the assistance of a member of Australia’s Parliament, resources minister Martin Ferguson. Ferguson departed parliament and soon landed in a seat on BG’s board.
The Daily Mail made this point in a cartoon titled “By Royal Disappointment” on 14 March 2011:
To what extent have 21st century Australians been used as cannon fodder to uphold British trade and power? Were the four Royal visits to Queensland between March 2011 and April 2014 an orchestrated public relations exercise to coincide with construction of British gas mining fields? This period stands as an anomaly in the history of visits by our monarchs.
The tax coup of 2010
In March 2010, the BG Group pulled off one of Australia’s biggest sales of LNG to China (see below). After the sale, treasurer Wayne Swan participated in the June coup that toppled the nation’s Prime Minister, Kevin Rudd. The coup prevented a scheduled meeting in Canberra with BG’s London chief about the Resource Super Profits tax Rudd was seeking for Australia. The coup also resulted in Wayne Swan becoming Deputy Prime Minister.
According to The Australian, BG’s Frank Chapman had arrived in Brisbane on the corporate jet on Monday 21 June, anticipating collection of QCLNG’s signed EIS evaluation report from Queensland Premier Anna Bligh.
The coup in Canberra occurred the same night BG’s project was signed off in Brisbane: Wednesday 23 June 2010. Queensland’s coordinator-general (CG) had been instructed to sign off BG’s QCLNG EIS evaluation report that evening. I can confirm this, as I had been called in that morning to write the greenhouse gas chapter by mid-afternoon.
When I objected on the grounds of unreasonable time to read material (omitted from the EIS) the department’s project director replied the CG wanted a copy of the report “in his bag” that evening. When I asked to speak to the CG, the project director responded “The Coordinator-General’s been told”. This was highly unusual as the CG was not under legislated timeframes, nor obliged to take such directions.
FOI documents reveal the State’s treasurer had received an email on 12 May 2010 from the former director of UK Trade and Investment, Ian Fletcher. In London, Fletcher had also worked as principal private secretary to Sir Andrew Turnbull — UK Cabinet secretary and head of the Home Civil Service during the Blair Government and the Iraq war. Mysteriously in 2009, Fletcher became director-general of DEEDI, the Queensland department that granted gas-mining leases.
Fletcher’s email informed the Treasurer that BG wanted their approval within weeks: “the drop dead date really is the June board meeting”. Regarding the Rudd government’s proposed resources super profits tax, Fletcher informs: “the company is quietly confident that their negotiations with Federal Treasury are going to yield fruit”.
Fletcher selects the intriguing terms “Constitutional innovation” and a “Court of star chamber” to describe a means by which BG proposed to front a cabinet sub-committee, to circumvent environmental requirements and gain unlawful EIS sign-off. We can only assume that Queensland’s cabinet, ignoring separation of powers, morphed into a medieval Star Chamber soon after.
By Friday 25 June, Kevin Rudd was delivering his farewell speech on national television.
Australia’s LNP government remains paralysed, incapable of responding to what has occurred. The Labor opposition, plugged in at the highest levels, is complicit.
Federal Labor president Wayne Swan, whilst performing the role of Australia’s Treasurer, participated in the Rudd coup. Swan subsequently appointed BG’s Catherine Tanna, to the Reserve Bank board.
Manager of Opposition Business, Tony Burke MP, signed off QCLNG at the federal level in October 2010. Burke’s predecessor, Peter Garrett MP, refused to approve the proposal after unambiguous advice from Geosciences Australia. Garrett notes in his memoir that Ferguson and Swan had been “acutely focused” on the decision.
Federal environmental laws required protection of groundwater-dependent listed species and ecological communities, and other matters of national environmental significance (MNES). Burke has not explained how MNES were evaluated without information such as maps of thousands of kilometres of gathering pipeline networks, creek crossings, hydraulic fracturing locations and baseline studies. Australians have not seen the government’s cost-benefit analysis, hence can only assume it does not exist.
There appeared to be no objection from Labor when, on 17 September 2013, Queensland’s LNP Attorney-General appointed David Thomas (a solicitor and senior partner at law firm Minter Ellison, with foreign gas industry connections) as Judge of the Supreme Court and president of the Queensland Civil and Administrative Tribunal. QCAT reviews decisions made by government agencies. The timing of his appointment is questionable. Justice Thomas was only the fourth solicitor to be appointed to the Supreme Court in 152 years.
There is no suggestion of wrongdoing by Justice Thomas. However political appointments and judicial appointments require scrutiny. Justice David Thomas is the brother of Queensland-Texas diplomat Geoffrey Thomas, a former Labor Premier Peter Beattie’s special commissioner to North America and “honorary Texan” of George W. Bush.
David Thomas has had a lead role on the board of the Queensland Ballet, where BG group subsidiary QGC has been principal partner. The Governor of Queensland is patron of the Queensland Ballet. Anna Marsden performed the role of CEO the Queensland Ballet from 2010-16 and worked for lobbying firm Rowland prior to her current role as managing director of the controversial Great Barrier Reef Foundation. In April this year, the GBRF received a surprising $444 million package from the Turnbull government without a tender process.
Anna Marsden is married to Ben Myers. Ben Myers worked as chief of staff in the office of Premier Campbell Newman when, in February 2013, the State’s Crime and Misconduct Commission received complaints regarding the approval process for the QGC and Santos CSG-LNG projects.
The timing of Justice Thomas’s Queensland judicial appointment is noteworthy.
Gas prices have trebled as a result of government failure
The CMC claimed via a media release: “there is no evidence of official misconduct”. A retired central Queensland judge, Stanley Jones AO, contracted in May 2013 to assess the complaints, had apparently found “no grounds” to warrant an official inquiry. No signed report has surfaced. Attempts to access the report under Queensland’s Right to Information Act have failed, as the material is classified exempt information.
The Hon David Thomas has presided over the Royal Agricultural and Industrial Association of Queensland since 2011, after serving on its council for nine years. The Governor of Queensland is patron of the RNA. HRH the Princess Royal is president of the Royal Agricultural Society of the Commonwealth.
In June 2017, Attorney-General of Australia and LNP Senator for Queensland George Brandis QC appointed The Hon David Thomas as President of the Administrative Appeals Tribunal and, as a judge of the Federal Court of Australia, the AAT reviews decisions made by the Australian Government. Brandis became Australia’s High Commissioner to the UK in 2018, replacing Alexander Downer.
State and federal approvals for Queensland CSG-LNG export effectively removed the shield that had protected eastern Australia’s gas price from the international oil-linked price, thereby exposing our economy.
Meanwhile, our domestic gas price has trebled, as the cartel recovered their export project losses from Australia’s economy. Our electricity prices have soared as a result of gas price increases. Queensland gas reservation discussed in 2009 remains unimplemented, and the supply “trigger” of 2017 remains un-pulled.
Federal tax projections and State royalty figures were significantly overcooked in documents published prior to CSG-LNG approvals. Taxpayers’ money was used to fund the uncontrolled gas experiment via a range of direct and indirect subsidies — yet to be totalled. The ongoing costs of managing gargantuan volumes of contaminated CSG waste are unknown.
Contrary to other first-world jurisdictions, Australia’s Parliament is yet to ban hydraulic fracturing. Of the States and Territories, only Victoria’s Labor Premier Daniel Andrews has a permanent ban on fracking. The ban, announced on 30 August 2016, includes exploration and development of all onshore unconventional gas in Victoria, including hydraulic fracturing (“fracking”) and coal seam gas.
Meanwhile, our federal government has enabled the gas cartel to underestimate alarming fugitive methane contributions, ignored Kyoto and Paris obligations and failed to embed an effective emissions policy. In 2014 NASA reported methane plumes over active coal-bed methane (CSG) areas of the United States. The methane “hot spot” had persisted over the decade of NASA’s study. As a result, glaciers melt and our World Heritage Great Barrier Reef deteriorates at high speed.
The human costs to families and communities living on the land affected, or land adjacent to “target” coal seams, are unaccounted for. Lives and livelihoods continue to be ruined. Queensland’s multinational gas cartel used the term “collateral damage” to describe these impacts in 2010. Their language and omissions speak to the value they placed on human life versus the value they put on financial profits.
The gas cartel has taken full advantage of the absence of a bill of rights in Australia. Meanwhile government has been in no hurry to provide one, and calls for a Royal Commission remain ignored.
Simone Marsh was an environment specialist and regulator of mining activities in both public and private sectors for over a decade. In 2010 she was called in to draft sections of the Queensland Coordinator-General’s EIS evaluation report for the world’s first onshore unconventional gas to LNG projects. After becoming a whistleblower, she has investigated and reported on political appointments, donations, lobbying and other events surrounding the project approvals and the resultant socio-economic and environmental impacts.
First published at Michael West.com. Tuesday 6 October 2018.