WMC's hypocrisy on greenhouse emissions


Caswell, Australian Conservation Foundation ">

WMC's hypocrisy on greenhouse emissions


On June 10, Hugh Matheson Morgan AO, chief executive of WMC Limited, was awarded a Companion of the Order of Australia for services to business, "particularly through leadership in the formation and evolution of sustainable development policy". What a joke!

Morgan and WMC (formerly Western Mining Corporation) have been tireless in their efforts to rail against the overwhelming weight of scientific opinion on climate change and to fight national and international initiatives to reduce greenhouse gas emissions.

WMC's activities span uranium, nickel, copper and gold mining, and the production of phosphate fertiliser. WMC is also a 39.25% part-owner of Alcoa Australia, which operates two aluminium smelters in Victoria and three refineries in Western Australia.

WMC was heavily involved in trying to undermine the Kyoto Protocol in the lead-up to the December 1997 conference at which the protocol was established and opened for signature and ratification. The company worked with free-market think-tanks and corporate front groups in both Australia and the US.

WMC collaborated with the Competitive Enterprise Institute, a US free-market think-tank, to organise a climate sceptics conference held in Washington DC in July, 1997. According to CEI research fellow Hugh Morley, the institute "recognised the strategic importance of Australia in the climate change gambit... if Australia sticks to its guns, there might not be a Kyoto treaty after all".

WMC was one of the sponsors of the August 1997 "Countdown to Kyoto" conference held in Canberra. The conference was organised in collaboration with Frontiers of Freedom, a US free-market think-tank, the CEI and various other climate change sceptics.


A scandal erupted in 1997-98 when it was revealed that the Australian Bureau of Agricultural and Resource Economics, which was promulgating absurdly inflated estimates of the economic impacts of the Kyoto Protocol, was receiving corporate donations in return for a place on its steering committee.

WMC is a member of the Business Council of Australia (BCA), which was one of the members of ABARE's steering committee. Alcoa Australia is a member of the Australian Aluminium Council, which was also on the steering committee.

In February 1998, the Commonwealth Ombudsman issued a report which concluded that by limiting membership of the steering committee to organisations prepared to pay $50,000, ABARE had failed to protect itself adequately from "allegations of undue influence by vested interests". Undeterred, Prime Minister John Howard awarded ABARE a special public service prize for its work on climate change in the same month.

Organisations to which WMC or Alcoa belong — such as the BCA, the Minerals Council of Australia (MCA), and the Australian Aluminium Council — lobbied for weaker federal environment laws in the late 1990s.

The MCA led the charge — its environmental policy is overseen by an "environment committee" that included Gordon Drake from WMC. The absence of a "greenhouse trigger" in the resulting Environmental Protection and Biodiversity Conservation Act 1999 was widely seen as one of its greatest flaws.

The MCA funded research by the Allen Consulting Group in 2000 which, according to academic Clive Hamilton, overestimated marginal greenhouse gas abatement costs.

Evidently there aren't enough crack-pot free-market think-tanks in Australia, hence the formation of the Lavoisier Group in 2000 — a climate sceptics organisation which, according to Professor John Quiggin, "is devoted to the proposition that basic principles of physics ... cease to apply when they come into conflict with the interests of the Australian coal industry".

WMC is one of the corporate supporters of the Lavoisier Group. Ray Evans and Ian Webber from WMC are on the board of the group. Evans is the secretary, and, as WMC notes on its web site, Morgan has addressed a number of Lavoisier Group functions.

WMC is also a member of the Australian Industry Greenhouse Network, which has vigorously worked to undermine the Kyoto Protocol and climate change abatement initiatives more generally. Another forum for WMC's climate change scepticism has been the Institute of Public Affairs (WMC has been represented on the IPA's board).

Nuclear hypocrisy

Writing in the Canberra Times on January 24, Evans stated: "Of all the political scams of the post-war period, the global warming scam ... is the most audacious."

Yet, WMC accepts the majority scientific view on anthropogenic climate change when marketing its uranium, then leaps to the dubious conclusion that only nuclear power (and WMC's uranium from Roxby Downs in South Australia) can save the planet.

WMC is one of the corporate sponsors of the Uranium Information Centre, which endlessly talks up nuclear power as a greenhouse-friendly energy source. One of the directors of the UIC — and its chairperson since June, 2001 — is James Eric Eggins, the WMC representative.

WMC is also an institutional member of the World Nuclear Association, which also argues that nuclear power is the solution to climate change.

Among the corporate sponsors of a pro-nuclear school "education" program run by the South Australian Chamber of Mines and Energy is none other than WMC.

The Australian Greenhouse Office (AGO) is "a threat to Australia's future as a sovereign nation", according to Evans in a typically hyperbolic and meaningless spray at a September 2001 Lavoisier Group conference.

Yet WMC benefits from an AGO-run greenwashing scam. Since 1997, WMC has participated in the Greenhouse Challenge Program (GCP), which involves voluntary reductions in greenhouse gas emissions.

Participants in the GCP receive generous government-funded publicity for doing little, if anything, to reduce greenhouse gas emissions. For corporate greenhouse polluters, the GCP has the additional advantage that it is advertised — by corporate polluters and their political operatives alike — as a preferable alternative to "command and control" reductions mandated by law.

The government — and at least some participating companies — has grossly overstated the benefits of the GCP. A July 1996 assessment of the program by George Wilkenfeld and Associates and Economic and Energy Analysis calculated that 83% of emissions reductions would most likely be realised in a business-as-usual scenario. The executive director of the GCP said in a Senate estimates hearing on May 3, 2001, that only one in 10 companies had met their emission reduction targets.

Details of the agreements between companies participating in the GCP and the government remain secret, so there is no way of testing WMC's "estimate" that it had achieved a 25% reduction in carbon dioxide emissions against business-as-usual projections between 1994-95 and 2000. In absolute terms, WMC's greenhouse gas emissions have risen sharply, from 1.62 million tonnes of carbon dioxide in 1994-95 to 2.99 million tonnes in 2001.

Pick and stick

WMC has been the recipient of any number of free-kicks from successive governments, a number of which have significant greenhouse implications. WMC is supplied with subsidised electricity under the secret provisions of the South Australian Roxby Downs Indenture Agreement.

In the three years from 1992-93 to 1995-96, WMC benefited by about $140 million under the Diesel Fuel Rebate Scheme. The MCA succeeded in persuading the federal government to adopt many of its proposals for tax reform in the late 1990s, including even greater subsidies for diesel fuel. Clive Hamilton said the diesel fuel credit scheme was a banned tax exemption under the terms of the Kyoto Protocol.

No doubt WMC enjoys other hefty subsidies, such as subsidised electricity to Alcoa.

The benevolence between the government and WMC isn't one way. WMC has been a generous donor to conservative political parties. WMC donated $150,000 to the federal Liberal Party in 2001, and $10,000 each to WA and SA Liberals. Morgan has been active in Liberal Party fundraising bodies, such as the Cormack Foundation. The foundation was the largest donor to the Liberal Party in 1999-2000, donating $800,000.

Even while railing against environmentalists, WMC has also been a market leader in terms of co-opting environmentalists for public relations purposes. For example, WMC's "External Advisory Group" includes well-known environmental author and lobbyist Professor Ian Lowe and Tricia Caswell, former director of the Australian Conservation Foundation.

On WMC's role in the climate change debate, the advisory group said in WMC's Sustainability Report 2001: "We would like to see WMC assuring the community that it ... is working hard to alleviate its contribution to such environmental problems as global climate change. ... Finally, we respect WMC's interest in stating its position on matters of public policy ... in regard to greenhouse gas abatement. This does not mean that members of the External Advisory Group agree with these opinions or with each other on these issues, but we acknowledge WMC's right to its opinions and to be part of the debate."

Timid stuff given WMC's appalling record on climate change. Perhaps Lowe, Caswell and other members of the advisory group have been more forthright in their reports or comments to WMC, but all that is posted on the WMC web site are snippets such as the one above.

Lowe has certainly been a vocal public critic of the Coalition government's handling of the climate change debate. As for Caswell, she thinks WMC, BHP Billiton and other corporate polluters are "serious and brave" about sustainable development. Nuff said.

From Green Left Weekly, July 17, 2002.
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