US firm in push to oust Adani director over risks at ‘globally unpopular Carmichael Mine’
A prominent global shareholder advisory group has told investors in India’s Adani Enterprises to vote against the re-election of one of the company’s directors due to risks surrounding the controversial Carmichael coal mine in Queensland.
In a sign of lingering concerns within the global financial community about the Indian conglomerate’s Australian operations, US-based Glass Lewis recommended removing director Pranav Adani from the Adani board in light of his “failure to fulfil his duty to shareholders as a member of the risk management committee”.
Anti-Adani campaigners surround Federal Treasurer Josh Frydenberg’s Kooyong in Kooyong electorate in Melbourne, protesting the Carmichael coal mine.Credit:Justin McManus
Glass Lewis – which advises large institutional investors on how to vote on matters including executive pay and board appointments – said a recent ruling by the Queensland Supreme Court revealed business practices at Adani that “reflect poorly upon business and risk management strategies”.
The court found Adani’s port business had engaged in monopolistic business practices and ordered it to pay $107 million to four companies that used its Abbot Point coal export terminal for “unconscionable conduct”.
“We believe these matters should be concerning to shareholders in how Adani Enterprises’ board oversees risk in operations that may be associated with the globally unpopular Carmichael Mine,” Glass Lewis said.
The firm also noted there was “significant global opposition” to Adani’s Carmichael project, including the company’s plan to ship coal out through the Great Barrier Reef, which recently became a global flashpoint for the Morrison government’s climate policy.
The United Nations Educational, Scientific and Cultural Organisation (UNESCO) – whose member countries control World Heritage listings – issued in June a draft “in-danger” rating over the health of the reef, due to poor water quality and the impact of climate change.
The project is opposed by many high-profile campaigns over coal power’s significant contribution to global warming, the mine’s potential environmental damage and concerns it will spur more fossil-fuel mining in the Galilee Basin.
However, Adani’s mine is backed as a jobs-creator by both the Queensland government and by the federal Nationals party, among representatives that hold Central Queensland coal seats that will be crucial to the Morrison government in the federal election due before July next year.
Glass Lewis’s recommendation is set to fail because the Adani family controls the majority of Adani Enterprise’s shares. But the recommendation marks the latest sign of deepening investor concerns towards divisive fossil fuel projects and the risks to “reputation and of litigation”. Other top-20 shareholders in Adani Enterprises include US investment giants Blackrock and Vanguard Group.
Adani Enterprises’ Australian unit, Bravus Mining & Resources, was contacted for comment.
UNESCO said a major factor in its draft “in-danger” rating for the reef was due to Australia’s relatively modest emissions reduction policy, because global warming is causing coral bleaching that threatens survival of the reef in its current form.
World-leading environmental scientists have endorsed UNESCO’s in danger listing, which has been rejected by the federal government.
Carmichael coal will be shipped from Abbot Point coal terminal, south of Townsville, through the Great Barrier Reef. Experts say water quality would be reduced by dredging to keep the port open, chemical and oil spills, ships spilling coal cargoes that could harm the reef, as well as ships grounding which could harm corals and spill fuel into the reef.
Adani has final approval and in June struck first coal at the mine. The company said it expects to make its first export shipment by the end of the year. At full production the mine is planned to export around 10 million tonnes of thermal coal a year to India and south-east Asia.
The Carmichael mine is 320 kilometres west of Rockhampton in the Galilee Basin. Adani has rebranded its local operation Bravus. The company says Carmichael will create 1500 direct jobs.
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