A global reinsurance company that was paid to cover work on the Adani Carmichael coal mine in central Queensland has ruled out any future financing of the controversial coal project.
Leaked invoices obtained by The Age and Sydney Morning Herald revealed Bermuda-based Aspen Re was one of four companies paid to underwrite early construction works on the mine.
Activists are regarding Aspen Re's commitment to not renew policies with Adani as a win. Credit: Dan Peled
The other three insurers – Liberty International Underwriters, HDI and XL Australia – said their policies would not be renewed after residual agreements expired in the coming years. Aspen Re initially refused to answer questions about which aspect of the project it had insured or whether involvement with Adani contradicted its vocal stance on climate change.
However, Aspen released a statement on Friday confirming it would not renew any insurance policy associated with the Carmichael mine.
"As a business, Aspen understands the importance of environmental, social, and governance issues and we review our underwriting approach on an ongoing basis as part of this," the company said in a statement.
"Aspen also recently joined the United Nations Global Compact (UNGC) initiative, a voluntary leadership platform for the development, implementation and disclosure of responsible business practices and has taken a number of steps to reduce our carbon footprint as a business including offsetting our emissions for 2019."
Environmental activists have spent the past two weeks sending thousands emails to the company asking for a commitment to ditch Adani as a client. Market Forces campaigner Pablo Brait said the latest development was a win but there are still unanswered questions.
"We'd like them to come clean on what contracts they currently have for the mine and the rail line? And when will their association with Adani carmichael officially end?" Mr Brait said.
Ed Hill from the Sunrise Project said he was not surprised Aspen Re's decision to distance itself from Adani as increased media scrutiny and activist pressure had made the project untouchable by many financial institutions.
"The project is just brand kryptonite for companies, it's why so many are backing out of it. It's so damaging for their reputation," Mr Hill said.
The world's largest insurance broker, Marsh McLennan, was hired by Adani in 2015 to find insurers to underwrite the project. Adani insists it has the cover it needs but Marsh has been tight-lipped on which companies have contracts with the project.
The big four Australian banks and insurers Allianz, Suncorp and QBE have ruled out financing the Adani mine as part of wider commitments to reduce exposure to thermal coal projects.
It comes as the board of the Indian parent company, Adani Power, will meet on June 22 to decide whether to delist the company.
"Privatising is all about removing it from the public domain. That means no quarterly reporting, no annual reports. All of the contracts Adani power signs are in the private domain," director of energy finance studies at the IEEFA Tim Buckley said. "Transparency from the Indian company will go down dramatically.”