Australia's Partnership With an Indian Mining Giant Could Destroy the Great Barrier Reef

The Port of Abbot Point in northeast Australia will be one of the biggest coal terminals in the world when its expansion is complete. The sprawling 15-square-mile industrial site will cost $14.4 billion to develop and ultimately be capable of exporting 60 million tons of coal per year.

Abbot Point is located about 15 miles northwest of Bowen on the coast of Queensland — right next to the Great Barrier Reef. The fragile marine habitat contains the world's largest coral reef system, and environmental activists have warned that dredging from the port construction and the resulting shipping activity will do irreparable damage to the coral and the diverse array of species that inhabit it.

Worse, the exported coal is expected to create new carbon emissions — an estimated 3.7 billion tons worth of greenhouse gas — that will hasten climate change and destroy the reef in the long-term. In the past 30 years, the reef has already lost half of its coral. Australia's environment minister, Greg Hunt, nevertheless approved a dredging plan for Abbot Point in late 2013, saying it will be subject to the "highest environmental standards and conditions."

Australia is counting on the Indian-owned mining giant Adani to uphold those high standards. The company is responsible for building and operating Abbot Point. To gauge Adani's commitment to protecting the environment, it's worth looking at the small Indian fishing community of Mundra, where the company began.

Joe Athialy, the South Asia coordinator for the Bank Information Center, an international financial industry watchdog, recently travelled to Mundra to document the impact of Adani and other energy companies on the coastal inlet at the northwest tip of India, near the border with Pakistan. He told VICE News that Adani's development there has devastated the local fishing economy.

"Before they were so busy. They were fishing at night, preparing their nets during the day, the whole family involved — even the little children — in mending the nets and drying the fish," Athialy said. "Now we are seeing them just sitting around doing nothing. There's a large number of unemployed people."

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Adani built its empire on the back of its development at Mundra. It erected a power station there in 2001 and was granted "special economic zone" status by the Indian government in 2003. From this base, Adani grew into a business with $8.7 billion in annual revenue by 2013. Mundra is set to become India's biggest port within the next two years, which enabled the opening of a second coal-fired power plant in 2012 owned by Tata Power.

For centuries before Adani arrived, the bay provided a livelihood for migrant fishermen from India's Muslim minority. Until recently, the fishermen harvested bountiful catches off the shores of Mundra, which is their home for eight months of the year. Now the fishermen are finding it impossible to fill their nets.

"The lobsters, crabs, and other fish that are particularly sensitive to environmental changes, they were the first to go — and they are also what fetch them the most money," Athialy said. "Yesterday, in fact, I had a call from the community, and they're saying there are certain fishing harbors with absolutely no fish in them this season."

For Debi Goenka, founder of the Conservation Action Trust (CAT), Mundra is an example of the devastating impact that coal has on poor communities across India.

"The fishing communities in Mundra have lost 80 percent of their livelihood because of the damage done to biodiversity and fish resources," Goenka told VICE News. "The pollution impact is affecting the whole community: coal dust, noise pollution, water pollution, skin problems, breathing problems.… They can't harvest from the saltpan because the salt is covered in coal dust. When the fishermen dry their fish by the shore, it will be covered in coal dust."

In Australia, the Great Barrier Reef is already under siege from environmental pressures. The natural wonder is the largest structure created by living organisms on earth, with coral formations spanning an area the combined size of Britain and Ireland. More than 1,500 species of fish, a third of the world's soft coral, and thousands of other species live there.

"The last comprehensive study in 2012 found a 50.7 percent reduction in coral coverage, just since 1985," Selina Ward, a specialist in coral reef ecology at the University of Queensland, told VICE News.

Ward is one of many in the scientific community who say the reef — already under enormous strain from climate change, pests, and disease — cannot bear a mass industrial development like Abbot Point.

The expansion of Adani's coal port, adjacent to the reef, will involve the dredging of 3 million tons of sediment from the seabed. It's a process that Adani and the Australian government promise is perfectly safe.

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The office of Deputy Queensland Premier Jeff Seeney said in a statement to VICE News that North Queensland Bulk Ports (NQBP) — a government-owned corporation — is responsible for several ports along the North Queensland coast, including Abbot Point. "Since 2002, NQBP has undertaken 22 dredging campaigns successfully, with no long term or unpredicted impacts," Seeney's office said.

NQBP declined to comment for this story. Australia's federal Department of Environment did not respond to repeated inquiries from VICE News.

An Adani spokesperson in Australia told VICE News that "dredging is a well-managed, well-understood, well-regulated process in Queensland. The port at Abbot Point, which has operated safely and without incident for 30 years, has already been the subject of several well-managed dredging efforts in the past."

Ward disagrees, arguing that dredging will be hazardous. "The dredging creates plumes in the water that can travel vast distances," she said.

"One problem is this dredging is taking place on a site that has been an industrial port for 30 years, so those sediments won't be clean, they'll be full of all sorts of toxic materials and nitrogen and phosphorous," Ward went on. "We know, for example, that a whole lot of paint waste was dumped there, and that will be in the sediment."

Athialy called Adani "a mysterious company," and alleged that its remarkable growth over the past 15 years was based on "illegal and unethical means."

A Forbes report published in March detailed the cozy relationship between Gautam Adani, the company's billionaire industrialist owner, and Indian Prime Minister Narendra Modi, formerly the chief minister of Gujarat, the state where Mundra is located. Adani leased 7,350 hectares of land in Mundra, largely under Modi's watch. The land was purchased for as little as a cent per square meter on 30-year renewable leases, and then subleased to other companies — including the state-owned Indian Oil. Co. — for as much as $11 per square meter. Another 1,200 hectares of cattle grazing land in the area was reportedly taken away from villagers and handed over to Adani.

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Adani used the cheap land to build the port, as well as a 4,620-megawatt coal-fired power plant. If all goes according to plan, that plant will eventually be fueled by Australian coal shipped through Abbot Point.

In 2011, the High Court in Gujarat found Adani illegally constructed a water intake channel at Mundra on private and government land. In 2012, the same court found Adani was completing construction on developments inside the special economic zone without any environmental approvals. Then, in April 2013, the Indian Ministry of Environment and Forests found the company built an airstrip and aerodrome without any environmental clearance. The government said Adani's port project destroyed mangroves, filled creeks, and degraded the land and water by dumping fly ash.

Gautam Adani dismissed criticism of his political connections in an interview with Reuters this year. "If you are, basically, working closely with the government, that doesn't mean it's crony capitalism," he said.

But Goenka, the CAT founder, thinks Adani's associations are worth examining.

"During the election this year, when Modi was campaigning for the post around the country, he was travelling around on Adani's helicopter and private jet, with their logo on it," Goenka said. "Everybody knows that Mr. Modi and Mr. Adani are close."

Adani India could not be reached for comment about the use of company assets during Modi's campaign, and its environmental record in India.

The Abbot Point development near the Great Barrier Reef will open up access to Adani's mine development in Australia's unexploited Galilee Basin, from which they'll extract an estimated four billion tons of coal. All of it will travel to Mundra at a rate of 60 million tons per year, where it will be distributed across India and burned.

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While the environmental impact on Australia's Great Barrier Reef is hotly contested, the effect of the development on India has received far less attention.

"Eighty-five thousand people die every year in India, minimum, because of pollution in the atmosphere," Goenka said. "We do not know exactly where this coal will be burnt by which power stations, so it is hard to judge what the impact of this coal will be. But it will contribute to the number, certainly."

Goenka has launched a court challenge in Australia against Adani's coal mining proposals. It is the first time an international party has launched action against a domestic Australian coal project.

Goenka plans to argue that the projects are not in the public's best interest. He also intends to tell the court that Adani's track record of non-compliance with environmental statutes in India contributes to these concerns.

The matter will be heard in front of the Land Court of Queensland in March next year, but the court's findings only take the form of advice passed onto ministers in the Queensland government. They can still approve the project, even if the court agrees with Goenka.

"Under those circumstances, I don't think the decision of the court will make much difference," Goenka admitted.

Adani Australia dismissed Goenka's claims. A spokesperson told VICE News that "anti-coal activists such as Debi Goenka, in effect, seek to not only export the 10,000 jobs, $22 billion in taxes and royalties, and opportunities for local supply opportunities this creates from well-regulated jurisdictions such as Australia with its strict environmental protections — they seek to deny tens of millions of Indians the basics that affordable energy helps provide."

In response, Goenka alleged that Adani is running "a misinformation campaign," and that impoverished Indians don't stand to benefit from the billionaire's coal projects. He said 360 million Indians currently have no access to electricity and no prospect for change in the near future.

"They are living on less than 50 cents a day; they have no capacity to pay for electricity; they will not buy any electrical appliance within their lifetime if the current situation in India continues," Goenka said. "So all this about benefiting poor people of India, it is not reality. And, when you think that renewable energy is competitive with fossil fuel at this point, you have to ask why are India and Australia making these same mistakes as in the past when so much is at stake."

According to Seeney's office in Queensland, the dredging operation at Abbot Point will commence in March.

Adani's developments still face major opposition, with a coalition of NGOs opposing the company at every turn. The Rainforest Action Network, based in San Fransisco, has already managed to secure promises from Goldman Sachs, JP Morgan Chase, and Citigroup that they will not provide funding for the Abbot Point port expansion, adding to promises from Deutsche Bank, RBS, HSBC, and Credit Agricole not to provide investment. Adani says they never sought funding from the banks, and the pledges are irrelevant.

But the project still has the allies it needs to go ahead. After meeting with Modi at the G20, Queensland premier Campbell Newman announced that taxpayers would assist Adani. The local government will contribute funds to Adani's rail link between the company's mining interests and Abbot Point. No figure was announced, but the cost could be several hundred million dollars.

"It's pure madness to be investing taxpayer money into coal infrastructure on the Great Barrier Reef when the world's largest banks aren't even willing to touch it," Greenpeace Australia said in a statement.

Reuters reported this week that Adani is holding out hope of obtaining investment from the US government's Export-Import Bank. The bank's mission is to invest in ventures that will create export business for American industry. Since the beginning of Barack Obama's administration, the bank has invested more than $27 billion in fossil fuel projects, while lending less than $2 billion to clean energy projects. But whether the bank will support such a politically divisive project is unclear.

Modi recently traveled to the Australian capital, Canberra, revealing ambitions for a free trade agreement between the two countries to be signed by the end of next year. Modi said during his speech to the parliament that his ambition is to use "clean coal and gas, renewable energy, [and] fuel for nuclear power" to create "cities that are more sustainable and liveable. Villages that offer opportunities."

The people of Mundra are still awaiting those opportunities.

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Follow Scott Mitchell on Twitter: @s_mitchell