Home » Canavan » Transcripts » Interview with ABC Radio's Country Hour

Interview with ABC Radio's Country Hour

22 December 2016

Interviewer: 
Craig Zonca

Subject: Adani Carmichael Coal project; Australia-Singapore Comprehensive Strategic Partnership; Queensland water infrastructure

E&OE

CRAIG ZONCA:

I want to start with this though: should the Indian mining company Adani get access to a $1 billion taxpayer-subsidised loan through the Northern Australia Infrastructure Facility? That question is in focus today following the ABC's reporting that Adani companies are under investigation in India over fraud allegations. It also comes amid further revelations about Adani's complex corporate structure that, for the rail project component of the Carmichael Mine, ends up with a private company based in the tax-haven, the Cayman Islands. The minister who will sign off on any loan will be Matt Canavan, the Minister for Resources and Northern Australia. You may have heard him refer to the ABC reports as fake news on AM this morning. He joined me a short time ago in our Rockhampton studios.

MINISTER CANAVAN:

Well I'm very confident that the Northern Australia Infrastructure Facility, when assessing the proposal from Adani and from the Queensland Labor Government to invest in a rail line to link the Galilee Basin to Abbot Point, I'm very confident they'll look at all relevant factors. We obviously are giving environmental approvals to Adani, the corporate structure has been a relevant item of interest, that's been assessed by both the Queensland and Federal Governments. The entities here that will be running Adani are Australian-based and they'll be paying Australian taxes. Of course, they have, like most large companies, parent companies overseas and what have you.

CRAIG ZONCA:

But does it concern you that the corporate structure of Adani seems to lead ultimately to the Cayman Islands?

MINISTER CANAVAN:

Well the corporate structure of Adani is not particularly unusual, and I've had advice from my department on it; it seems perfectly consistent with Australian law. I know the ABC seems to be reporting it as a particularly complex structure. Indeed, I saw [an ABC] video of it with some scary music over the top.

CRAIG ZONCA:

But it does seem to be a web of companies that are involved.

MINISTER CANAVAN:

No it doesn't actually Craig. I mean, most large companies, certainly large mining companies - Rio Tinto and BHP, largely Australian-based companies - they have very complex corporate structures because they have operations all around the world. One thing we've got to remember with Adani, which Australian listeners in particular probably won't appreciate, is that they're not really a mining company. They're an infrastructure company. They have power stations and ports in India, they've got a very complicated business.

CRAIG ZONCA:

But they are about to become a big miner in Australia.

MINISTER CANAVAN:

Yes, to supply their own power stations – largely to supply their own power stations. They want to be vertically integrated, but they're not a trading company in the sense that some of those other companies are that primarily mine commodities and play the spot market, so to speak.

CRAIG ZONCA:

So if we go back to this loan that's under consideration by the Northern Australia Infrastructure [Facility], has it been aware of these allegations of fraud under investigation in India?

MINISTER CANAVAN:

Well look, that's a matter for the Northern Australia Infrastructure Facility. Certainly, my department has been aware of them, there are ongoing …

CRAIG ZONCA:

…has been aware of them?

MINISTER CANAVAN:

Well I've spoken to Adani myself about it. They say they've complied with the Indian authorities, they are very confident they'll be cleared. I think, from my assessment and what I've been advised Craig, the spin that was put on it by the ABC, if I can say, is a little exaggerated, calling it money laundering and these things. Those are terms I haven't previously seen in the advice I've been provided on them.

CRAIG ZONCA:

Does that concern you if it is money laundering? If these allegations …

MINISTER CANAVAN:

…Look, if I get advice on that I will take the appropriate course of action. But as I have said today, I don't particularly put a lot of weight on ABC reports into Adani, particularly those emanating from Sydney. There seems to be a certain set against the project. There are numerous examples of, in my view, one-sided reporting on this project. That's a matter for the ABC, but I don't put a lot of weight in their reports given they often take comment from people away from North Queensland who have got particular issues with the project and don't present them as such.

CRAIG ZONCA:

But Matt Canavan, you are the responsible minister for the Northern Australia Infrastructure [Facility]. Effectively, you will sign off on these loans. Given what has been reported over the past 24 hours, are you comfortable with where that loan is sitting in the assessment process, and understanding of these allegations that are against Adani companies in India?

MINISTER CANAVAN:

I'm very comfortable in the advice I'm receiving both from my department and the Northern Australia Infrastructure Facility. We've established the NAIF as an independent skills-based board. It's appropriate that they use their expertise to assess these and other matters and report back to me, and I'll be putting a lot more weight in their advice than news reports, be it from the ABC or others.

CRAIG ZONCA:

Which particular Adani company has applied for the loan under NAIF?

MINISTER CANAVAN:

Well look, that's a matter for the NAIF. I don't have those details Craig. There's no decision before the Government right now, and I have not been provided with any more information other than that the Northern Australia Infrastructure Facility is considering the matter and doing due diligence on it.

CRAIG ZONCA:

And at what stage is that assessment up to?

MINISTER CANAVAN:

So they've commenced discussions with Adani, as I've said. The Queensland Labor Government proposed it earlier this year. Adani have put forward a proposal. The Northern Australia Infrastructure Facility has decided to take it to their next stage of doing, if you like, well, a strategic assessment procedure in their terms, but a due diligence-type investigation. The current timeline we expect is sometime next year, possibly around mid-next year that these negotiations and other decisions by Adani related to the project will come to a conclusion.

CRAIG ZONCA:

You talk about NAIF needing to do their due diligence on any loan that comes before them, and potential loan. How can NAIF actually conduct that proper due diligence for the loan, when Adani companies in Australia, established for the rail project, are ultimately owned by a private company based in the Cayman Islands, which is a secretive tax-haven?

MINISTER CANAVAN:

I don't see it as all that particularly difficult, Craig. As I've said, this company's structure is not unusual, and that's the advice I've got. I don't see it as all that difficult. But look, if there's other advice to the contrary I'll happily look at it, but as I say I'll be taking my advice from the experts that we've put on the board and we have in the NAIF.

CRAIG ZONCA:

So the advice that you have at this stage from your department and from those involved are not ringing alarm bells about these allegations in India or the corporate structure that Adani has in place?

MINISTER CANAVAN:

Well look, they're your words. Nothing at this stage concerns me about this project, but I will stress that the Federal Government's made no decision on funding of the rail line for Adani. That's a matter for the independent expert board. I'll let them make their decision; it would be inappropriate for me to direct them in a particular way, so I'm not going to be pejorative about it. They are set up to do their job and I'll let them do their job and consider it when they provide their final advice.

CRAIG ZONCA:

Senator Matt Canavan is with me on The Country Hour. He is the Minister for Resources and Northern Australia. Adani is just one of the subjects you've been talking about through 2016, Minister, and I want to touch on a few more before you leave us today. Of recent news, there's been that about graziers just to the north of where we are in Rockhampton, and more near Charters Towers, they’re facing a bit of an uncertain future – their properties have been earmarked for expanded military training areas. Some could be forced off land that has been in their families for a century or more. Will they lose their properties, Matt Canavan?

MINISTER CANAVAN:

Well, the Federal Government hasn't made a final decision on this matter. These are difficult issues to tackle. We have an obligation as the Federal Government to protect our country and advice that we receive from Defence is very important, of course, in decisions we make in that regard.

CRAIG ZONCA:

Do you think that those expanded military training areas are needed?

MINISTER CANAVAN:

Well, look, I think this project's an excellent opportunity for our country, to protect our country. I can only go on the advice of Defence in terms of what they need. I'm not the expert there…

CRAIG ZONCA:

What do you say then to the graziers who could face that prospect of losing their land?

MINISTER CANAVAN:

Well, what I say is we are genuinely listening, and that's why we're engaging in this process. There have been examples in the past where new training facilities have been built where Defence have made a decision and said that's what we want, we're coming in, we'll get it. No discussion entered into. I want to pay credit to the Defence Minister Marise Payne in particular and Defence, who have decided that's not the approach they want to take in this instance, that they have come out with a consultation process. They've indicated to people the broad outlines of what they're thinking, and they don't have a particular area at this stage. They want to assess what areas can be voluntarily sold.

CRAIG ZONCA:

Well, I was going to say, has Defence handled this well? Because they sent out all these letters to graziers effectively saying you could be affected by this, but then not a lot of other information where that leads to a lot of sleepless nights, rather than knowing or not knowing actually what prospect you face.

MINISTER CANAVAN:

Look, I think it's a particularly difficult policy challenge for any organisation, so I'm not going to sit here and pass judgment on Defence. I don't know all of the facts myself, I'm not the responsible Minister. But I do give credit that they are out there listening; in my view, they are listening. I think it's unfair to say they've done nothing other than send letters. They've been up to this part of the world a couple of times, and likewise to Townsville over there two weeks in a row, and I was there as well, sort of shadowing them, almost. Two weeks in a row, not up there for Defence in particular, but I met with some of the concerned landowners in Townsville, and I met with some additional landowners in Charters Towers, and the council, and they have raised some very interesting and important issues.

CRAIG ZONCA:

Including suggestions of other land that might be more appropriate…

MINISTER CANAVAN:

That's right. So I think it's something that should be welcomed, that Defence announced that they'll look at the Pentland option, as it's termed, which is some land that's up for sale about 100 kilometres west of their current training grounds. They'd obviously have a preference, I think, to have contiguous areas, to be able to expand their existing Townsville training field area. That would be easier, obviously, from a logistical perspective. But they are, they've assured me, seriously considering that option.

CRAIG ZONCA:

Let me just throw a number at you that AgForce are talking about, as far as these two parcels of land are concerned in total. If they were lost to say, cattle production in Queensland, that would be equivalent to losing about 100,000 head of cattle from the Queensland cattle sector. That seems to be a pretty significant figure.

MINISTER CANAVAN:

Yeah, and that's also why Defence will be doing a socio-economic impact study of these purchases. It'll be done by one of the big four accounting firms, I just don't have the name on the tip of my tongue. So that will part of all this process where those kinds of things will be looked at, as will the potential development opportunities on the Burdekin that I mentioned. These are very important things that we'll have to consider. We haven't made a final decision. I hope over next year that Defence will be able to provide us a business case, and the Government will be able to give some certainty to landowners, but do so after we've listened to them first.

CRAIG ZONCA:

Senator Canavan, water infrastructure was a key point during the election campaign, the Coalition promising millions of dollars for dams, whether that be in Queensland or elsewhere, including here in Central Queensland. Has anything actually happened since? Has that money started to flow?

MINISTER CANAVAN:

Well, unfortunately, and I don't want to be too partisan or political Craig, but the Labor Party have dragged their feet here. During the election campaign, the Federal Labor Party said they wanted to slash that dam's fund that we have, the $500 million fund, by half, and the Queensland Labor Government are not exactly hastening fast to get these projects out the door. They have signed now- seven of the 14 projects we've announced have been signed up, and so the money's flowing to those.

CRAIG ZONCA:

Because the State Government had raised an issue with me, was that the Federal Government money was there, but only on almost a reimbursement basis, that the State Government [would pay] and then send the bill to the feds, rather than the feds stumping up with the money to actually get something happening.

MINISTER CANAVAN:

I understand that issue well, Craig, given the complaints that they raised. Actually, they'd signed up to the water National Partnerships Agreement which had that structure in place. The Queensland Government had signed it last year. It's how we provide funding from the Federal Government for a range of infrastructure. Not just water, roads as well. It's not unusual. We've since got past that, and the Queensland Government have accepted our point of view that this is the way it should proceed, so they've accepted that. I don't know if it was a delaying tactic or what it was from the Queensland Government. It was a bit of a strange point to make, but we've moved on from that. We've now signed seven of the 14 up, which is great. We need those other seven.

CRAIG ZONCA:

When it comes to Rookwood Weir, which is pretty much quite close to where you call home now, around Central Queensland, is it ever going to happen?

MINISTER CANAVAN:

Well, as I say, ultimately we need the State Government on board. It's ready to go now. I know it's ready to go. It's been approved by the Queensland State Government …

CRAIG ZONCA:

But you said that the funding for building, the actual construction of the dam, is contingent on the business case stacking up…

MINISTER CANAVAN:

No, no. That's not the case for us. No, that's what the Queensland Government's saying. So one of those seven projects is the Rookwood Weir. The money for the business case will flow to the Queensland Government. They're saying they want to do another business case. We're saying we're happy that- I mean, the EIS for the project had a benefit-cost ratio of nearly four. So that means its benefits were four times the costs. It stacks up. It's going to drought-proof Rocky and Gladstone. It can double agricultural production in this area. Let's just get on and make decisions in Government. We can't just study things time and time again. We have to make a decision. [We have to make] an informed decision; we've got all the reports sitting there. But meanwhile down in Brisbane, down in Brisbane …

CRAIG ZONCA:

[Interrupts] But you're waiting for another report….

MINISTER CANAVAN:

… well, meanwhile in Brisbane, the State Government have no problem committing $5 billion to a Cross River Rail, which you'll report on next year very closely, Craig, I'm sure. But $5 billion to a Cross River Rail project without a business case, before they had a business case. They have one now. But before they had a business case, they committed the money.

CRAIG ZONCA:

But then, why don't you just say here's the Federal Government funding for it; don't worry about the business case, we're just wanting it to go ahead because we've seen enough studies. We know that it stacks up, and this is the money to do it, whereas the money is contingent on the business case being done and stacking up.

MINISTER CANAVAN:

No.

CRAIG ZONCA:

That's my understanding?

MINISTER CANAVAN:

No, that's not the Australian Government's view. That's not our view. We committed in the election for this $130 million, and we want it to happen now, and Barnaby and the Prime Minister have been up here recently saying that.

CRAIG ZONCA:

Senator Matt Canavan, the Minister for Resources and Northern Australia, talking about a number of things: water infrastructure, graziers facing that battle with the Defence Department just to the north of Rockhampton and also near Charters Towers, and Adani.