Newcastle Council to divest from fossil fuels but takes coal cash

Newcastle City Council accepted money from a coal services company before voting to turn its back on fossil fuels.

Newcastle Liberal councillor Brad Luke, at the Port Waratah coal facility, voted against the divestment motion. Picture: Britta Campion

Newcastle City Council accepted a multi-million-dollar payment from a coal services company looking to build a $4.8 billion coal terminal at the city’s port weeks before it voted to turn its back on fossil fuels in favour of “environmentally and socially responsible” investments.

The Australian has learned the council accepted a $12 million offer from Port Waratah Coal Services as part of plans to build a fourth coal terminal in the Port of Newcastle, which will have the capacity to export up to 70 million tonnes each year.

The coal terminal needs state government permission, however the council gave its tacit approval for the project with its decision to enter the $12m voluntary planning agreement with Port Waratah.

The council, led by Labor Lord Mayor Nuatali Nelmes, yesterday came under a second day of fire for its decision to switch most of its $270m portfolio out of the big four banks over investments in fossil fuel projects, if comparable or better investments could be found.

The federal government warned the decision could risk investment. Tony Abbott told The Australian: “Why is a coal city saying ‘no’ to coal investment and why is the Labor Party saying ‘no’ to coal jobs?”

Industry Minister Ian Macfarlane said he was “just bewildered” by the decision, and added that Labor voters would feel “absolutely betrayed”.

He said the decision would undermine confidence among people who worked and invested in the industry and called on Bill Shorten to condemn Newcastle Council.

Ms Nelmes moved the motion to approve the planning agreement, which was seconded by Liberal councillor Brad Luke, last month and stated the decision-making body in charge of approving the terminal project, be advised of this decision.

Greens councillors Therese Doyle and Michael Osborne were the only dissenters to the planning agreement vote, objecting on the grounds that Port Waratah should pay more under the deal. The decision was published in the council’s minutes from July 28, which were listed on the agenda at the meeting on Tuesday evening, when council voted to amend its investment policy to divest from fossil fuels.

The divestment motion, which was cheered this week by anti-coal groups, was put forward by 23-year-old councillor Declan Clausen. It committed the council to favouring “socially responsible” investments where the rate of return on the investment was equivalent or better, when term deposits came up for renewals.

A decision on the terminal, which will take Port Waratah Coal Services’ loading capacity from 144 million tonnes a year to more than 200 million tonnes, is expected within the next four to six weeks. The council said yesterday the planning agreement amounted to a “developer contribution for improvements to local infrastructure that will be impacted by the development”.

Ms Nelmes said the $12m would contribute to the infrastructure and amenity available to the Newcastle community.

“As we continue to grow our industry base we must also continue to grow our community infrastructure,” Ms Nelmes said.

Mr Luke said yesterday the council risked being accused of “hypocrisy” and the divestment motion could be construed as a publicity stunt. “Saying we want to enter an agreement to get $12m from the coal industry and then criticising them through this motion where we say we won’t support a bank that supports the coal industry ... it is clearly hypocritical,” he said.

“There are things like this that get put up and sometimes you wonder if the only reason is for publicity ... The Greens didn’t support the $12m payment because they wanted ... 1 per cent of the $4.8bn. It does make you wonder, the price for the Green councillors must be a little bit north of $12m.”

Mr Luke, who this week described the decision to review the council’s investments as “surprising” and “stupid”, added it was support from a lord mayor, who understood the ramifications, that was “incredible”.

“It’s an attack on her own unions,” Mr Luke said.

“You’ve got a Labor mayor in a city like Newcastle attacking the coal industry and attacking anybody who dares to support the coal industry.”

Hunter Business Chamber chief executive Kristen Keegan said the council had a responsibility to explain its investment decisions and ensure they provide the best return for the community.

“Yet to say that the coal industry has no future in the Hunter region is a comment born from a complete lack of understanding of the vital nature of this industry and its reach across the state,” Ms Keegan said.

“The social and economic benefits of the coal industry are enormous and it is astonishing that the elected representatives who take this view are so disconnected from the very working people they represent,” she said.

Minerals Council of Australia executive ­director coal Greg Evans said: “Coal remains well-supported, with banks continuing to lend to new and existing projects.”

ADDITIONAL REPORTING: SID MAHER