Corporate activists a bigger economic threat than China

Beijing is a secondary threat compared to our own propensity for self-harm. The enemy within wants to nobble our industries, and agriculture is next.

Red Rebels from activist group Extinction Rebellion blocked roads leading to Parliament House. Picture: NCA NewsWire / Gary Ramage

The argument about budget discipline and fiscal rectitude effectively has been cast aside as a partisan debate for a decade or two. A fight between Labor and Liberal over budget repair and debt retirement strategies is suddenly redundant — they might as well squabble over VHS versus Beta.

The battle over economic ­security — and partisan economic supremacy — will be fought elsewhere. Given the challenges ahead, a good place to start might be for governments and corporate interests to support rather than hinder our export industries.

In our understandably fractious discussions about Chinese foreign investment and asset ownership, the main worry must be economic. China cannot remove the Port of Darwin, for instance, or shift water rights from a Queensland cotton farm to the Yangtze Delta, but its companies could make decisions in the operations of those assets that hurt our economy and favour China.

Whether the risk is exaggerated in the current climate or not, it is feasible that the communist superpower might seek to nobble some of our export industries. We only need look at the punitive trade sanctions imposed over the past year to see that Beijing might want to do us harm.

But what if there was a greater danger within?

What if government and/or corporate decisions made freely within our borders delivered the same outcome? What if Beijing was a secondary threat compared to our own propensity for self-harm?

Take the Port of Newcastle. One of the most crucial pieces of export infrastructure in the country, it is the largest coal export terminal in the world, servicing our second-largest export industry. Should we be most worried that it is 50 per cent owned by a Chinese company, or that ANZ withdrew finance last year for reasons of ­climate virtue-signalling, and now NAB is imposing strict environmental and social conditions on its loans.

Our financial and insurance institutions are leading the charge in corporate decisions that constrain and threaten, rather than encourage, some of our export industries. Coal is at the forefront now, but gas is starting to receive attention — and agriculture might eventually be in for the toughest time of all because small businesses as well as large operations could suffer.

Take Warroo Game Meats, a kangaroo-processing business in the outback Queensland town of Surat. It produces meat for human consumption as well as pet food, and it used to export kangaroo skins to the US for use in football boots and other products. Indigenous business advocate and former ALP national president Warren Mundine has championed this business, which was started by the Mickelbourghs, a proud Gunggari family, as a classic example of job creation in the bush. The Mickelbourghs employ about 30 people (Indigenous and non-Indigenous) making their company a crucial employer and success story for more than 20 years in this tiny town.

Activists are still trying to kill the kangaroo industry; they do it with films and campaigns spreading misinformation globally, making absurd claims about kangaroos being on the brink of extinction. The campaign has been supported by Greens politicians and animal rights activists here, who had a great win when they had kangaroo products banned by California, eliminating the largest market.

So an export market was closed, and an Indigenous business and outback employer was put under real financial pressure — without there being any environmental benefit because the kangaroo cull goes ahead under scientific quotas regardless of what happens to the carcasses. “It is just nuts,” summarises Mundine. “What would we know? We have only been eating kangaroos for 60,000 years.”

If you were a communist superpower or any other strategic rival to this country and you wanted to do us economic harm, you could not do better than what the ANZ did to the Port of Newcastle or former Greens senator Lee Rhiannon and the animal activists did to Warroo Game Meats — undercut the finance or take away the markets of our export industries. The port and the meatworks have survived for now, but this is a battle that has only just begun.

Former Greens Senator Lee Rhiannon in the Senate chamber.

There is a long list of major financial, insurance and investment institutions pledging to disavow the coal industry and threatening to do the same to gas. Soon the shareholder activists will turn their sights on agriculture.

These issues are the subject of an important but, so far, low-key parliamentary inquiry by the Joint Standing Committee on Trade and Investment Growth into the prudential regulation of investment in the nation’s export industries. More than 60 submissions have been received from businesses, industry bodies, climate groups and unions; some of them have been reported in this newspaper by chief political correspondent Geoff Chambers.

This inquiry is vital because, in essence, it asks whether the financial institutions, insurers and other corporates are acting against the national interest. It will examine whether they are imperilling the nation’s export industries in order to appease activists pursuing policy outcomes that are best ­designed and implemented by governments.

The argument against killing off our coal industry is put neatly by the submission from Adani, which says that by “withdrawing services” from the thermal coal sector “the finance and insurance sectors are exporting Australian livelihoods offshore”. The Indian giant says Australian coal would only be replaced by “poorer quality” supplies from other nations: “The end result being that Australians are disadvantaged and the world sees increased emissions on the back of poorer quality coals ­replacing Australian high-quality coals.”

Major banks, super funds and other corporate players are not, of course, deliberately seeking to harm our nation’s economic performance. So why are they ostracising coal and pushing other environmental social and corporate governance goals?

The answers are complex and were explored in Janet Albrechtsen’s illuminating interview with David Murray in Inquirer last weekend, in which the corporate heavyweight and former Commonwealth Bank boss spoke of the folly of listed companies trying to second-guess community expectations. “They should not be imagined and imposed on companies by interest groups going around the back door,” Murray said, explaining that government should dictate the rules and companies should look after their shareholders’ interests (with an acknowledged eye always to the company’s reputation).

Murray is right. We have an established and constantly evolving parliamentary democracy that is charged with responding to community expectations on the full range of issues — from foreign, fiscal and family to social, environmental, judicial and more. This is not the role of the corporate sector.

Yet while governments grapple with climate and energy policy and how to reduce greenhouse emissions to various targets, we now see banks and others deciding it is their role not to accept the policy and regulation of government, but to impose their own targets on themselves and their customers as dictated by environmental groups, the United Nations or perhaps Greta Thunberg and her ilk.

This dynamic is often driven by activists who buy minimum shareholdings so they can attend annual general meetings and ask provocative questions of directors — and boards often bend to their demands at the expense of the silent majority of shareholders, rather than continue to face the confrontation and humiliation.

Virtue signalling at the board table often takes precedence over the bottom line, shareholder returns, or rational responses.

Added to this dynamic is the progressive stand of some institutional investors, including industry super funds that are effectively controlled by union interests, throwing around considerable financial clout. The ­future prospects of export industries, especially the fossil fuel sector, are reliant upon much more complex and less-rational forces than mere supply and demand.

The people likely to pay a price, aside from shareholders, are working families in regional areas, far removed from the cities where the activist/board interactions occur. The Greens protesters who ran into a bristling reality in central Queensland during their anti-Adani convoy during the 2019 election campaign are more at home chanting slogans at CBD AGMs than they are in the bush.

This all helps to explain why one of the most sensible submissions to the parliamentary inquiry has come from a pragmatic element of the labour movement, the Australian Workers Union. “Contrary to the claims of some shareholder activists, gas will remain necessary as part of the Australian and global energy mix into the future — this position is confirmed by Australia’s former chief scientist Alan Finkel,” the AWU submission says.

“Fossil fuel power stations provide an important ballast to the grid, ramping up and down as more variable energy supplies fluctuate,” the submission explains, highlighting the crucial role of gas in firming and transition.

“The AWU urges the committee to acknowledge the complex and damaging impacts that investor responses to activism can have on the availability of finance for gas projects, with consequences for Australian workers across many industries.”

When it comes to underpinning the future of our export industries, it is clear that large elements of corporate Australia are way to the woke left of the ­sensible elements of the union movement. And they pose a far more insidious risk to our economic prospects than Chinese ownership of our assets.