Monday 29 June 2009

Industry giants face hot air investigation

Herald Sun
Saturday 20/6/2009 Page: 85

SOME of the nation's biggest companies are being investigated by the competition watchdog over whether comments they made about emissions trading were misleading and led to them receiving free carbon permits. The Australian Competition and Consumer Commission confirmed yesterday it will assess if a full inquiry is warranted into allegations made in a report commissioned by the Australian Conservation Foundation and a group of lawyers called the Australian Climate Justice Program.

And yesterday, climate change adviser Professor Ross Garnaut threw his weight behind the push to call some resource companies to account over allegations they exaggerated the business risk of a carbon price. In the 200-page report, the ACF alleges that BlueScope Steel, Rio Tinto, Xstrata, Woodside Petroleum, Boral and Caltex had overplayed the likely effects of a carbon price on their Australian operations in order to gain free polluting permits, while playing down the risks to shareholders.

An ACCC spokeswoman told BusinessDaily the watchdog was "assessing to see if there had been any breaches of the Trade Practices Act". Boral chief executive Rod Pearse has denied the allegations made by the ACF and the ACJP. Before the ACCC probe was announced, Prof Garnaut told BusinessDaily the corporate world had "got itself into a very worrying position if senior business leaders are saying one thing in the politics of the debate and another thing to their investors".

"It's a very serious situation and if there have been allegations that that has happened, then those allegations need to be investigated," the academic said after addressing a forum in Melbourne on climate change risks for superannuation funds. The organisers of the forum, the Climate Institute Australia, Australian Institute of Superannuation Trustees and the Investor Group on Climate Change, yesterday called on politicians to stop stalling the passage of the carbon pollution reduction scheme.

"The CPRS could be strengthened directing future carbon permit revenues to additional investments into clean energy solutions here and in neighbouring developing economies," Climate Institute Australia chief executive John Connor said. The question of how permit revenues should be spent has been at the heart of the climate change policy debate, with big polluting companies scoring large concessions from the Federal Government compared to the allocation of funds for measures to speed up carbon cuts.

The latest drive to increase subsidies to fossil fuelled power generators frustrated Prof Garnaut, who said "assistance had already gone further than was justified". He said the electricity producers would pass on a large part of the carbon price to customers, so there was no justification for more aid that would essentially deliver a windfall gain to power companies, as happened in Europe when it introduced an emissions trading scheme.

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