Big Coal’s $100 million muscle machine

The muscle of the coal industry’s lobbying machine was flexed last month with the launch of the latest industry-coordinated PR campaign “Australians for Coal”, pleading the case for ongoing support of the industry in the face of a market slump and increasing community opposition. It takes considerable funds to reach both the halls of power and millions of lounge rooms at prime-time, but the release of the Minerals Council of Australia’s (MCA) Annual Report this week reveals the huge amount of money being spent to push Big Coal’s case. A best-guess estimate is that in the last two years Australia’s coal industry has spent the best part of $100 million attempting to defend its increasingly tattered social licence.

Renewable power and energy efficiency are eroding profitability in the domestic coal power sector and undermining demand in key markets such as China, but Australia’s coal lobby shows no sign of acknowledging that times have changed.

If Australians are looking for an explanation as to why coal-belt states and the federal government are bending over backwards to support the industry, despite the increasing outcry at the damage the industry does to Australia’s land and water resources, and the global climate, the single biggest reason is the sheer scale of Big Coal’s largely behind-the-scenes lobbying machine. As growing farmer and community opposition, tough market conditions and political scandals rapidly undermine its standing, the industry appears to be cranking up its PR machine.

The coal lobby’s muddy footprints litter Australia’s political landscape. Wherever there are moves to promote renewable energy, put a price on the heavy costs of carbon pollution or ensure legal protections for landowners, the coal industry’s lobbyists are there to put a stop to any changes that would threaten their protected status.

As the coal industry has grown, the coal industry lobby groups’ coffers have filled. Between them, according to their annual reports, the MCA, the New South Wales Minerals Council (NSWMC) and the Queensland Resources Council (QRC) had a combined income of over $103 million over the last two years to press the case for their members, which have increasingly been coal companies.

The biggest of all the lobby groups is the MCA, which in the last two years alone had income of over $58 million and boasts a roll call of over 39 staff. The state-based mining lobby groups contribute further political firepower and cash. In the last two years the QRC has spent $22 million while the NSW Minerals Council spent another $20 million promoting their members’ interests. In both states, coal mining is the main mining game by a big margin.

The oil and gas industry’s peak lobby group, the Australian Petroleum Production & Exploration Association (APPEA), is another major industry lobby group promoting fossil fuels. In the last two years APPEA spent $37.1 million promoting the industry’s pro-oil and gas agenda of which over $11 million went to promoting and defending coal seam gas projects in New South Wales and Queensland.

Traditionally, the coal lobby groups overwhelmingly represented the big multinational players in the global coal industry. For example, of the MCA’s 12-person Board of Directors, five directors represent companies with massive coal export interests: BHP-Billiton, Rio Tinto, Xstrata Coal Australia, Anglo American and Peabody Energy.

In recent times coal lobby groups were boosted by the arrival of new Indian, Chinese, Thai and other companies. For example, some of the QRC’s newest members are the Indian companies GVK and Adani Mining which are proposing controversial mega-mines in the Galilee Basin and associated port facilities adjoining the Great Barrier Reef. While the three big lobby groups also represent companies which mine other commodities, in the coal-belt states of NSW, Victoria and Queensland the other sectors are comparative minnows.

Like most industry lobby groups, they hire well-connected former insiders. For example, the NSWMC’s CEO Stephen Galilee formerly worked as chief of staff for the new NSW Premier Mike Baird. To bolster its in-house lobbying muscle the NSWMC has hired Premier State Consulting, a lobbying firm headed by former NSW Liberal Party powerbroker Michael Photios.

On top of tens of millions spent directly by industry lobby groups the major companies spend millions more on their own lobbying efforts and millions more still on PR, advertising campaigns and community sponsorship.

All up it is a fair bet that the Australian coal industry has spent well over $100 million in the last two years on its lobbying and PR campaigns as its seeks to smooth the way for damaging new coal projects and protect existing ones. As money spent by companies on lobbying is a tax-deductible expense, indirectly Australian taxpayers end up subsidising the coal lobby.

Despite their massive investments in PR the coal lobby must be increasingly aware of the fragility of their social licence. This was made starkly clear when the ‘Australians for Coal’ campaign not only failed to enthuse supporters to take to social media but saw regular twitter users overrun the industry’s #australiansforcoal hashtag with examples of the industry’s poor track record of environmental and social harm. Just as the asbestos and tobacco industries once enjoyed widespread public support, the coal industry would do well to remember that when the negative impacts of an industry outweigh the benefits, money alone can’t buy community support forever.

Read the published article in The Sydney Morning Herald.

Bob Burton is a Contributing Editor of CoalSwarm and a Director of the Sunrise Project. In 2013, with Guy Pearse and David McKnight, he co-authored Big Coal: Australia’s Dirtiest Habit.

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