New inquiry probes financial sector’s treatment of resources
A new inquiry will investigate the financial sector's treatment of resources businesses as institutions steadily pull back on lending and insurance to the mining industry because of climate change.
The Trade and Investment Growth Committee - which Dawson MP George Christensen chairs - has announced the inquiry's terms of reference to examine investment decisions of major financial institutions.
"I am pleased that the resources sector will be a key focus of this inquiry that will look into recent announcements by some banks and superannuation companies that they will withdraw investment support for the coal industry," Resources Minister Keith Pitt said.
"It is of great concern to me that a legitimate industry like coal mining, which makes a significant contribution to the national economy and employs thousands of Australians, is being held back by what can only be described as corporate activism.
"I'm not just talking about the big miners, but the "mum and dad" small businesses who've told me they can't access insurance or loans simply because they have some exposure to the coal industry."
In December, Mackay's Field Engineers managing director David Hartigan said his business was forced to change insurers and had copped a 300 per cent increase in professional indemnity insurance over the past four years.
The current insurer has stipulated Field Engineers cannot have more than 40 per cent of its revenue come from thermal coal mining clients.
This is despite the fact that the business does not directly work in the thermal coal industry, but provides engineering advice to mining clients.
"Insurance is our single biggest spend on a single item each year," Mr Hartigan said.
"We spend more on insurance than we do on diesel."
Mr Pitt has urged all resources companies with an interest in the issue make a submission to the inquiry, which is expected to begin hearings next month.
Resource Industry Network general manager Dean Kirkwood said the industry association welcomed the inquiry and intended to make a submission on behalf of its member businesses.
"The ability for the resources supply chain to access insurance or loans based on the sectors they service, needs to be addressed, along with the need for an improvement in transparency of these operations," Mr Kirkwood said.
"We know of local businesses being denied insurance for servicing coal industry customers, which has them questioning the feasibility of their operations to continue.
"What is obvious is that government, insurance companies, financial institutions, and the like, need to be educated on the different types of coal produced in this country. Notably, the fact that the majority of the Bowen Basin's coal is metallurgical coal, not thermal."
Terms of reference can be found here.
Originally published as New inquiry probes financial sector's treatment of resources