Climate change groups urge Australia probe

By Peter Smith in Sydney
Published: June 15 2009 13:13

The Australian Competition and Consumer Commission has been asked to launch an investigation into alleged “misleading and deceptive conduct” by a group of companies over public statements on the impact of Australia’s proposed Carbon Pollution Reduction Scheme.
The call has been made by the Australian Conservation Foundation and the Australian Climate Justice Program, which have named six companies in their complaint to the ACCC. The list comprises miners Rio Tinto and Xstrata, petroleum groups Woodside and Caltex, as well as Boral, the building products group, and Bluescope Steel.

The competition commission said it had received a letter from the ACF and was considering its contents before deciding whether it would take action.
A number of Australian companies have been vocal in their criticism of the country’s proposed CPRS legislation, complaining about about likely job losses, rising costs and disparities with companies in other jurisdictions which are not subject to similar laws. There have also been claims that energy and mining projects would be less competitive if Australia introduced laws ahead of other nations.
The ACF complaint sets out 14 instances where company statements are alleged to be “exaggerated and contradictory” when compared with disclosures made to shareholders, and independent analysis.
Don Henry, ACF executive director, said he wanted the competition commission to examine whether Australia’s Trade Practices Act has been breached.
“Some of Australia’s biggest corporate polluters appear to be presenting the worst case to government and the public in an effort to gain excessive free permits while presenting the best case to investors in order to keep their share prices up.
“We are asking the ACCC to investigate whether our politicians, policymakers and the public have been deceived,” he said.
RiskMetrics, the corporate governance adviser, estimates that the value of free permits Canberra has agreed to make to the country’s six heaviest polluting industries will reach A$12.6bn in the first five years after CPRS is introduced.
The complaint from the conservation group comes as Australia’s Labor government prepares to introduce its CPRS legislation to the country’s upper house, the Senate, next week. The introduction of the scheme has already been delayed and the government faces an uphill battle to get the bills passed into law.
Woodside said the ACF’s claims had “no substance,” adding that: “The ACF makes specific allegations against Woodside of no apparent disclosure, yet overlooks a series of relevant disclosures made to the Australian Securities Exchange over many months.“
Rio said it had made three major submissions to the Australian government on the issue but said it would be inappropriate to make a statement to its shareholders until the CPRS legislation was passed into law.
It added that the chances of the legislation being passed in its current form appeared remote.
Copyright The Financial Times Limited 2009