A Bylong mine proponent to be investigated by NSW resources regulator over overseas allegations

Former senior Newcastle police officer and NSW resources regulator chief compliance officer Lee Shearer told a parliamentary Budget estimates committee on Friday that Korean state-owned KEPCO was already the subject of an investigation by her office.

But after questioning from Labor Shadow energy spokesman Adam Searle, Ms Shearer said her office would “absolutely look at” international allegations involving Kepco, including allegations that prompted a New York Securities Exchange investigation.

It came three months after Bylong Valley Protection Alliance spokesperson Warwick Pearse wrote to Minister for Resources Don Harwin asking for an investigation into whether KEPCO was fit and proper to hold a NSW mining licence.

This followed a major Korean investigation of widespread corruption and bribery in KEPCO’s nuclear power supply chain in Korea in 2013. More than 100 people were charged and power stations were closed due to safety concerns. In 2015 KEPCO was again rocked by scandal after American regulators investigated kickbacks paid by US companies to KEPCO officials.

 “Are you aware of complaints and allegations of criminality and corruption levelled at the Korea Electric Power Corporation [KEPCO] and its officials in Korea, including the forging of nuclear safety certificates and other matters?” Mr Searle asked Ms Shearer during a Budget estimates hearing on Friday.

Ms Shearer said she was aware of the allegations.

“So they have a bit of form here in NSW already for not necessarily playing by the rules, is that correct?” Mr Searle said.

Ms Shearer confirmed KEPCO had already been investigated in NSW and charged with furnishing false or misleading information after Bylong property owner Craig Shaw complained that photos of flat paddocks were supplied by the company to support a drilling application on his property. He produced photographs of the actual sites showing steep, rocky terrain that KEPCO had already conceded might require helicopter access for drilling to proceed.

The NSW Government was slammed after it dropped the prosecution and accepted an “enforceable undertaking” from KEPCO, allowing the company to avoid a court hearing and possible $110,000 fine.

On Monday Mr Searle said it was important the government fostered the “absolute highest standards of integrity in our resources industry”, which was why the resources minister had such sweeping powers under the Mining Act.

“Only those of good repute have access to our precious resources. The allegations against KEPCO overseas are legion and raise enormously important questions about the probity and integrity of that company’s corporate culture and corporate behaviour,” Mr Searle said.

“When I met with representatives from KEPCO in 2016 they refused to discuss these matters with me, and I have not been able to find out where the various investigations overseas have proceeded to. They’re longstanding matters between 2012 and 2015 involving forged undertakings on nuclear safety, allegations of kickbacks and price fixing of coal contracts.

“If these issues have all been satisfactorily resolved that is something we need to know so there can be public confidence in the assessment process while KEPCO is seeking to mine the Bylong valley.”

Mr Searle said the NSW Government should not allow any mining or licence approval relating to KEPCO and the Bylong mine proposal until the overseas probity issues were investigated.

Lock the Gate Alliance Hunter spokesperson Steve Phillips said the government had a responsibility to “uphold basic standards of decency and integrity and make it clear to KEPCO that its poor track record makes it unfit to operate in this state”.

KEPCO Bylong chief executive Bill Vatovec said there would be no comment on the parliamentary questions or any investigations involving the company.