The Truth About Adani…What Is Wrong With Our Politicians?
By Tammy Paola
After a tumultuous nine years of legal, environmental and political struggle, Australia’s largest ever coal mine finally began construction in late June. It’s the most controversial project of its kind in Australian history; the mine will release more than 4.6 billion tonnes of carbon dioxide into the atmosphere, contribute to the destruction of the Great Barrier Reef, and destroy ancestral lands and waters of First Nations peoples. The mine has been condemned by leading climate scientists and hit with multiple legal challenges, so far to no avail.
But what are the facts about Adani’s Carmichael coal mine in Queensland?
Firstly, what is Adani?
Adani Group is an Indian multinational commodity-trading company established in 1988.
The Group’s holdings include energy, resources, logistics, agribusiness, real estate, financial services, defence and aerospace, with an annual revenue of over $11 billion and operations in 50 countries. It’s India’s largest port developer and operator, with ten ports and terminals. Adani operates mines in India, Indonesia and Australia and supplies coal to Bangladesh, China, and countries in Southeast Asia.
The Carmichael mine is the largest investment by an Indian company in Australia. Its estimated peak production capacity is 60 million metric tonnes of coal per annum. Using 200km of new railway, coal will be taken from the mine to Abbot Point Port, near our precious Barrier Reef. From there the coal will be shipped to Asia, where its deadly carbon emissions will be pumped into the atmosphere.
Can Adani be trusted to operate in the Great Barrier Reef?
Fact: An Adani ship caused a massive oil spill.
In 2011, an unseaworthy Adani coal ship sank off the coast of Mumbai, causing a massive oil spill and leaking 60,054 metric tonnes of coal into the ocean. Adani did nothing to clean up the mess for five years, as the spill destroyed mangroves, polluted beaches, and caused serious damage to the local marine environment and Mumbai’s tourism industry.
In 2016 Adani and others were found liable for the spill and for failing to clean it up, and were fined the equivalent of AU $975 000 — a pathetic punishment for a company turning over $11 billion per year.
Fact: Adani dumped polluted water into the sea near the Great Barrier Reef.
In March 2017, Adani massively breached their licence at the Abbot Point coal terminal by releasing coal-laden water into the ocean.
Just before Cyclone Debbie hit Queensland, Adani scrambled for a special licence, allowing them to pollute well above normal limits during severe weather. Yet, even with a special licence to pollute, it was revealed that Adani discharged wastewater that exceeded their pollution licence by 800%.
For this significant breach, Adani was fined an inconceivable $12,900.
Horrific aerial images after Cyclone Debbie showed the adjacent Caley Valley wetlands turned black by coal dust contamination. A scientific assessment of the impact on the wetlands was not conducted until a month later, but coal was still present throughout the wetlands, and at concentrations of 10% at the point where Adani released the coal-laden floodwater.
Can Adani be trusted with Australia’s water?
Fact: Adani’s Australian CEO oversaw Zambian pollution disaster, then hid it from Australian authorities
Adani’s Australian CEO was Director of Operations at another mining company when it poisoned a Zambian river. In 2010, Adani’s Australian CEO — Jeyakumar Janakaraj — was Director of Operations at Konkola Copper Mines (‘KCM’) in Zambia. He was “responsible for overall operations” when the company caused a major pollution disaster that poisoned the Kafue River — the lifeblood for much of Zambia.
KCM discharged ‘pregnant liquor solution’ — highly acidic, metal-laden water generated from leaching in copper mining — into the river, which caused the river to change colour. Villagers who relied on the river for cooking, cleaning and bathing say that, because of the pollution, people have become sick and died, the soil is barren, and the water smells foul and is orange-coloured. 1,800 Zambian villagers have filed a lawsuit against KCM to recover damages. In November 2010, the Government of Zambia brought a successful criminal prosecution against KCM for this pollution and the harm it caused.
Adani failed to disclose this incident when applying for approvals for the Carmichael mine, as required under Australian law.
Can Adani be trusted to look after workers in Australia?
Fact: Adani have exploited and underpaid their workforce, including using child labour.
An explosive Fairfax Media investigation uncovered reports of serious exploitation of Adani’s workforce, including the use of child labour and underpaying workers, during construction of a luxury housing project in Gujarat.
Labourers were forced to live in makeshift houses with no running water and no toilets. The sanitary conditions were so dismal that there were several outbreaks of cholera from contaminated drinking water.
Adani’s workers were underpaid and overworked. Almost a quarter were paid less than the minimum wage of $4 a day. Others, Adani forced to wait months for pay, lived on a $9 a week ‘food allowance’.
A 12-year-old boy claimed he was paid roughly $2.60 a day to carry water to the labourers for 12 hours a day, six days a week.
Fact: There have been deaths, illness and injuries at Adani workplaces.
In 2016 a hot water pipeline burst at Adani’s coal fired power plant in Mundra, burning 21 workers. 7 workers died from their injuries.
There have been several reports of accidents and deaths at another Adani power plant in Tirora, strongly suggesting that safety standards are more than lax.
In September 2014 a worker was killed in a blast, and just a few months later another worker was killed after a structure collapsed while air-conditioning units were being installed.
In 2012 another labourer was killed and two others critically injured after being trapped under falling pipes.
3 workers were crushed to death when a coal heap caved in at Adani’s Dhamra port in August 2017.
Can Adani be trusted to contribute to the Australian economy?
Fact: Adani engaged in bribery and illegal exports.
Adani engaged in broad-ranging bribery to conceal the illegal export of 7.7 million tonnes of iron ore. In 2011, the Ombudsman of the Indian state of Karnataka investigated the corruption, and discovered a staggering scale of intricate bribery.
Adani bribed police, local politicians, customs officials, the State Pollution Control Board, the Port Department, the Weight and Measurement Department, in return for facilitating and hiding their illegal exports.
Also, Adani routinely accepted iron ore from traders who were not permitted to supply. The Ombudsman concluded that this scam, in which Adani was a major player, resulted in the illegal export of around 7.7 million tonnes of ore between 2006 to 2010.
Fact: ‘Black money’.
Adani are perfectly happy to screw their customers to inflate their profits. They lied about the cost of imported coal and equipment in order to evade tax and trick regulators into letting them charge Indian consumers much higher prices for their coal-fired power. Their gas supply arm was also found guilty of abusing its market power to overcharge its customers. Adani even colluded with a state power company to drive up prices in the midst of a power shortage crisis.
Six Adani Group companies are under investigation for lying about the quality and, hence value, of coal imported from Indonesia, allowing them to get away with charging higher prices, demanding public handouts, and driving up costs for Indian electricity customers.
There is solid evidence that they’ve already ripped off their customers to the tune of over $200 million AUD.
The Mauritius holding company is managed by Vinod Shantilal Adani, the older brother of Gautam Adani, and Chairman of the Adani group. Vinod is the sole director of a number of Singapore companies that own Adani subsidiaries in Australia. These companies are ultimately owned by a company registered in the Cayman Islands.
Evidence gathered suggests that the total value declared for the goods imported was Rs 9,048.8 crore ($1.7 billion AUD) whereas the actual value was Rs 3,580.8 crore; a difference of Rs 5,468 crore which has been siphoned ($1.07 billion AUD).
Fact: Mate’s rates — undue benefit from political connections.
Adani chairman Gautam Adani and Indian Prime Minister Narendra Modi are old friends. Modi even travelled in an Adani-branded private jet during his election campaign. And it turns out Adani isn’t afraid of calling in favours.
While Modi was Chief Minister of Gujarat, Adani acquired vast swathes of land from locals in Mundra at a fraction of market value. It left locals across 14 villages dispossessed, and Adani clear to start construction.
Media reports revealed that the government sold 14,305 acres of land at Mundra to Adani at between 1 and 32 rupees per square metre (between 3 and 60 cents AUD), far less than offered to companies doing comparable projects.
Further, the Comptroller and Auditor General of India found that two pieces of forest land (1,840 hectare and 168.42 hectare) had been incorrectly classified, resulting in yet another undue benefit to Adani.
Fact: Price-gouging energy customers during power shortages.
In 2013, the people of Gujarat were suffering from power shortages, while Adani colluded with the local power authority to rip people off by providing short-term power at despicably high prices.
Adani’s competitors lined up to supply the people of Gujarat cheaper, long-term electricity but their tenders were blocked by the power authority. This resulted in massive price-hikes and ensured the only energy available was the highly expensive, short-term supply provided by Adani. Adani’s competitors subsequently brought litigation against the power authority for the price-gouging.
In 2014, Adani was found guilty of using its dominant market position to impose unfair conditions on gas customers. They were ordered to change their gas supply contracts and pay $4.8 million AUD.
Fact: Adani accused of deliberately ripping off taxpayers and laundering money.
A special investigative unit of the Indian tax department (the Directorate of Revenue Intelligence) spent over a decade investigating Adani for laundering money and dodging $195 million AUD in taxes.
The overwhelming weight of evidence collected by the Directorate of Revenue Intelligence was upheld in a civil court case, although it was later dismissed when the department actually tried to make Adani pay the money back.
Can Adani be trusted to act without crime and corruption?
Fact: Adani’s Australian assets lead to tax havens.
Adani uses questionable tax havens in the Cayman Islands to hide assets and revenue. 13 of the 26 Adani subsidiaries registered in Australia are ultimately owned in the Cayman Islands — usually, companies who pay their taxes don’t register in the Caymans.
The Carmichael rail that Adani are seeking a $1 billion taxpayer loan for, is owned by an Adani entity operating out of the Caymans. This presents a clear risk that public money will be siphoned offshore with no returns for the Australian taxpayer.
The ownership of the Abbot Point coal port is so shrouded in deception and confusion that its ownership remains frighteningly unclear.
There are massive discrepancies between what Adani says in India and what it says in Australia about the ownership structure of Abbot Point. But one thing is clear — Adani is lying to someone.
Accounts lodged in India have removed Abbot Point from a publicly listed Adani company and attributed ownership of the coal port to a private Singapore company, owned by an Adani family entity in the Cayman Islands. However, Australian financial accounts suggest the listed Indian company retains ownership of Abbot Point.
The absence of truth about the ownership of Abbot Point may amount to misleading or deceptive conduct.
Fact: Dodgy financial statements.
Adani’s most recent financial report lodged with ASIC did not disclose its immediate parent company and provided no detail about the actual or potential transfer of the ownership or control of Abbot Point from an Indian based Adani entity to one based in Singapore.
Fact: Massive fraud scam.
Adani is accused of a complex $298 million fraud that cheated shareholders, tax authorities and Indian energy consumers.
An explosive Guardian investigation revealed details of how Adani allegedly siphoned hundreds of millions of dollars of borrowed money into offshore tax havens. Legal documents detail how Adani set up a front company in Dubai, ordered equipment from that company and then sold it back to themselves at massively inflated prices. They then used a complex web to hide the profits in a tax haven.
A significant amount of the money Adani allegedly siphoned was provided by Indian taxpayers. The scheme made Adani rich, while Indian citizens paid the price through inflated electricity bills.
Risks for Australia
This isn’t a company that has a chequered past, or a slightly blemished record. This is a company which has proven itself corrupt, destructive and deceitful to its core time and time again.
It has no regard for its own workers or the law, much less the environment or the local communities. It operates with a vicious mentality where human or environmental damage are par for course.
The agreements and commitments it makes appear worthless. This is a company that doesn’t hesitate before breaking the law, contract conditions or moral boundaries in its reckless pursuit of profit.
A proven track record of environmental destruction, human rights abuses, corruption and illegal dealings should sound a stern warning for any government doing business with Adani.
And with an open cut coal mine that risks precious groundwater, the habitat of endangered species and the World Heritage Great Barrier Reef, working with Adani would defy all learning and semblance of good judgement.
Adani’s atrocious track record shows it can’t be trusted with fragile natural wonders like our Great Barrier Reef. And its history of corruption and tax evasion, as well as its ongoing criminal investigations, means it definitely shouldn’t be the recipient of a $1 billion taxpayer handout.
The willingness of state and federal governments to make Adani exempt from rules, and change laws to their benefit, is a serious concern for our democracy and begs the question — what the hell is wrong with our politicians?
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Author: Tammy Paola
