Barnaby Joyce has condemned the Queensland government’s refusal to process a commonwealth loan for Adani’s coal project, while suggesting it could still go ahead despite legal questions about a direct federal handout.
The deputy prime minister declined to say whether the government was looking at legal changes to the Northern Australia Infrastructure Facility to enable a $900m loan for an Adani rail line.
But he told ABC there was a “big, big issue there” with state Labor, in response to pressure from its dominant left faction, firming in its stance of not providing active taxpayer support for Australia’s largest proposed coal project.
Joyce also said there would be an investigation of alleged conflicts of interest for board members of Naif and its advisory body, the Export Finance and Insurance Corporation (Efic), who have been linked to Adani and the coal industry.
The Palaszczuk government announced on Saturday it would not act as “middle man” for the Naif loan to Adani, its cabinet ruling this was in line with an election promise not to give taxpayer support to the miner.
Environmental lawyers argue this move leaves the commonwealth legally unable to lend directly to the miner. David Barnden of Environmental Justice Australia said a master facility agreement between state and federal government meant the money had to flow through the states.
He cited the Queensland treasurer, Curtis Pitt, who told state parliament in November that “under the commonwealth’s existing constitutional powers, it is unable to provide financial assistance directly to proponents within a restricted geographic area”.
But Pitt has played down the prospect it was an effective veto for a loan to Adani.
He said that “any project financing approved by the independent Naif board will flow between the federal government and a project proponent”.
“We will not stand in the way of those arrangements. In the case of the Carmichael mine, any funds will pass directly from the federal government to Adani.”
Joyce, when asked by the ABC on Monday about the federal government’s confidence in its legal position, said it was “not unusual” for it to directly fund “a whole range of things, like building roads, if you want to get highways done”.
He declined to say whether the government would look at changing laws to enable direct lending to Adani, instead saying “we have to make sure that Queensland understands that they better start standing up for Queensland”.
Asked again if that meant the federal government needed to change rules around Naif to enable a loan to Adani, Joyce, said: “There is a big, big issue there.”
“You know what the big issue is? Jackie Trad [the Queensland deputy premier].”
It was Trad’s left faction that forced a last-minute tightening of royalties payback conditions for Adani, as well as the move not to facilitate the Naif loan.
Asked if the Queensland government had to change its mind for the loan to be approved, Joyce said: “There’s no doubt about it, we want Queensland to be consistent.”
He said “we haven’t got a problem” if Pitt and the premier, Annastacia Palaszczuk, who have publicly supported the mine, were to be believed.
“If we start believing the deputy premier, then I suppose there are issues there”, Joyce said.
“The big issue for the Labor party is to work out who’s running the show, Annastacia Palaszczuk and Curtis Pitt, or Trad and [progressive lobby group] GetUp.
“If you want the country run by GetUp, well you’re going to get up and go broke.”
Environmental Justice Australia has raised possible conflicts of interest regarding Naif board member Karla Way-McPhail and Efic board member Annabelle Chaplain.
Way-McPhail is the chief executive of two companies involved in the Queensland coal industry, and Chaplain is an independent director of Downer EDI, which has a commercial relationship with Adani.
Environmental Justice Australia has written to Naif and Efic asking whether Way-McPhail and Chaplain had disclosed “relevant personal interests” and were “planning to recuse themselves” from any decision on Adani and another Galilee basin rail proposal by Aurizon.
Joyce said that “in any corporation you’ve got to note conflicts of interest, especially in government organisations, so that one will be investigated”.
“If there’s a claim that there’s a conflict of interest and the conflict of interest is against the law, then of course we’re going to check that out.”
An Adani spokesman said: “It’s not an issue that was raised with us. It’s an issue that was raised by the state and then by [the federal resources] minister [Matt] Canavan.
“So between those two parties they’ll find the way through one way or another. I really can’t comment on those deliberations. Whether there’s a firm constitutional requirement [for state involvement] or not, it’s not something I’m particularly engaged in.”
