Clive Palmer rejected warnings of pipeline oil spill risks

Clive Palmer was warned in 2015 that a maintenance delay to Queensland Nickel’s pipeline could be risky, now it may have leaked oil.

Former federal MP Clive Palmer in Brisbane.

Clive Palmer, under his alias Terry Smith, defied warnings in 2015 about potential oil leaks from his Queensland Nickel ­refinery’s fuel pipeline, now under investigation over a spill last month.

Queensland’s environmental authorities are investigating whether the pipeline is responsible for the oil spill, that has contaminated a 20m stretch of ground between the mothballed refinery and the Port of Townsville in north Queensland. Mr Palmer insists he and his corporate empire have no responsibility for the pipeline, or the leak, which authorities ­believe is “low viscosity bulk fuel oil”.

The Australian has obtained emails from Mr Palmer’s nephew Martin Brewster — then Queensland Nickel’s procurement director — to Mr Palmer’s “Terry Smith” email address on September 10, 2015, urging the then federal MP to authorise an immed­iate ­inspection of the pipeline. Three hours later Mr Palmer ­replied: “Not approved I want ­extend the times gap for surveys by 12 months there really pointless, Clive (sic)”.

Mr Brewster wrote back to warn any delay in maintenance was “risky”, and raised the potential of leaks from the pipeline, which carried oil from the port for the processing of nickel ore.

“Clive these surveys were done 2 yearly and you extended it to 3 years which has expired,” Mr Brewster wrote.

“By now extending to 4 years is risky. There were concerns with (pipeline) wall thickness 3 years ago. Any oil leak would be very costly and has happened before with pumping ceased for 3 months I believe with some millions for clean up.”

Mr Palmer, who was not registered with corporate regulators as a director of Queensland Nickel at the time and has claimed he was not involved in the day-to-day running of the business, again rejected an inspection and ­ordered surveys be conducted every four years. Other emails ­appear to show the last inspection of the pipeline was in 2012.

Queensland Nickel collapsed in January 2016 and administrators were appointed, with their ­investigations of the company ­revealing the maintenance budget had been slashed and the ­refinery had fallen into disrepair. Nearly 800 workers lost their jobs when the company failed.

An April 2016 report by ­administrators reported that over the three years to December 31, 2015, annual spending on maintenance at Mr Palmer’s refinery had ­“reduced significantly” to about $39 million, down from $80m a year in the last three years of BHP’s ownership of the facility.

The pipeline runs on land ­belonging to Queensland Rail. QR claims the leak is not connected to its operations. There is uncertainty about who currently owns the pipeline and is legally responsible for maintenance.

Mr Palmer says it is not him or his companies, though he sent ­refinery staff to the leak site to help contain the spill when heavy rain swamped the area in recent weeks.

When contacted by The Australian, Mr Palmer denied turning down Mr Brewster’s request for an inspection of the pipeline in late 2015. “Not true,” he said.

But when shown the Terry Smith email chain, Mr Palmer said: “Good judgment. No leaks while we owned it 2016. All clear. Great result.”

Asked whether he had any concerns the current leak was the result of an apparent lack of maintenance under Queensland Nickel’s watch, Mr Palmer said: “No not at all we (have) had nothing to do with it for over 2 years.”