NSW Resources Minister Don Harwin has declined to comment on concerns NuCoal’s American shareholders could pursue compensation under the Australia-United States Free Trade Agreement over the corrupted Doyles Creek coal mine licence cancellation.
NSW Greens MP and mining spokesperson Jeremy Buckingham questioned Mr Harwin in NSW Parliament last week over threats by US-based investors against the Australian Government after the NSW Government cancelled the Doyles Creek licence in January 2014.
“Has the Commonwealth asked the NSW Government to respond to the issue and will the government be bringing in legislation to re-issue the Doyles Creek coal exploration licence or do anything to re-issue the licence?” Mr Buckingham asked Mr Harwin on March 14.
Mr Harwin said any such action under the free trade agreement required the consent of the Australian and American Government to proceed.
It was “a matter for the Federal Government and it would be inappropriate for me to comment further at this time”, Mr Harwin said.
The exploration licence was granted to Doyles Creek Mining Pty Ltd in December, 2008 as a direct allocation by the then resources minister Ian Macdonald. The company was headed by Macdonald’s mate, former union boss John Maitland, and the allocation without public tender was against department advice. The decision was announced in a press release on Christmas Eve and an Independent Commission Against Corruption investigation was launched two years later. Mr Macdonald and Mr Maitland were later jailed over their parts in the Doyles Creek project.
NuCoal Resources acquired the company in December, 2009, including the exploration licence. In evidence to the ICAC former NuCoal managing director Glen Lewis said the company told the government it expected there was only 90 million tonnes of coal at Doyles Creek, when an estimate showed there was as much as 550 million tonnes.
Mr Lewis said the company was conservative on the tonnage because “we only wanted to indicate we had sufficient resource to justify the training mine”.
In evidence to the ICAC he then agreed with the proposition that had the original submission included the far higher coal estimate “it would have been difficult to politically justify the direct allocation” of the licence to Doyles Creek Mining without going to a public tender.
The then ICAC Commissioner David Ipp QC found the Doyles Creek licence was “so tainted by corruption” that “the slate should be wiped clean” and the licences revoked.
The ICAC did not make a finding of corruption against NuCoal but was not convinced by arguments the company was an innocent party which bought an asset with no knowledge of improper conduct by the seller.
In parliament last week Mr Harwin said the decision to cancel the Doyles Creek and Mount Penny exploration licences without compensation was not made lightly. The decision was unanimously upheld by the High Court in April, 2015.
“I am aware that NuCoal is continuing to pursue the issue of compensation for its overseas-based shareholders through Australian free trade agreements,” Mr Harwin said.
“The company has stated that these actions could take place under Australia's free trade agreements with Singapore, Hong Kong and the United States. I am advised that the Australia-United States Free Trade Agreement requires the consent of both the United States Government and the Australian Government before any action can proceed.”
In a statement after the licence was cancelled in 2014 NuCoal strongly refuted the ICAC findings that it did not acquire the licence as a bona fide purchaser for value without notice of the alleged corruption. The company would pursue “all available actions to protect the legal rights of the company and its shareholders”.
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