Sunday, May 28, 2017

Coal, prime agricultural land, and foreign ownership

Posted by Jim on April 19, 2010

My media checks brought up on Friday the issue of foreign purchasing of Australian agricultural land under relaxed FIRB rules [Business Week].  The Australian Greens’ website contains a couple of relevant speeches by Greens Senator Scott Ludlum on the Foreign Acquisitions and Takeovers Amendment Bill in February and Bob Brown last year on BHP-Chinaco merger.

In my view, we should be rather more careful in the national interest about allowing foreign control of Australian resources. The relaxation of control of Australian interests and resources is a product of a naive mindset about free trade, deregulation, and unfettered markets that extends from the 1970s-1980s debates about tariff protection to such matters as the too-ready importation of skilled migrants at the expense of training Australians.  That provision has generated the practice of importing labour under Section 457 visas, which has produced some  examples of exploitative practices.  And it has the high potential to undermine Australian workers’ conditions and wages.  On the question of skilled migration, I applaud Bob Brown for his call to slow down the rate of skilled migration and train more workers in Australia.

The Business Week article raises some of the issues in a concern about literally flogging off the farm. It is especially of concern when the boundaries between Chinese wealthy individuals and companies and the Chinese Government are not all together clear. Agricultural land must be regarded as a resource in the same way as mining resources are, especially in the context of climate change and the population debate.  But, it is also an element of planning for climate change:  the protection of prime agricultural land must be an absolute priority.

This is not an abstract question.  It is a real issue confronting communities in the Hunter Valley, the Liverpool Plains and the Darling Downs.  In the case of Gunnedah on the Liverpool Plains,  The NSW Greens have taken up this issue: see  Shenhua Watermark Coal Pty Ltd, which is buying up prime farmland for open cut mining, is a subsidiary of China Shinhua Energy Company.  That company is the largest coalmining company in the world.  And it is 68% owned by the Chinese Government.

The idea that a company with majority ownership by a foreign government can purchase working, productive land and mine it raises for me serious questions about the protection of Australian sovereignty, let alone the environmental implications.  It is certainly a skewed view of joint ventures that the FIRB and State Governments  could allow this to happen.

It is not only a long-term question: large-scale mining where the company is two-thirds owned by a foreign government could have an impact on the price for an Australian resource commodity such as coal.  And setting aside the desirability at all of coalmining, the presence in the market of a mining company with two-thirds governmental ownership will surely lead to  undermining the price negotiations of other coal producers.

And the issue of alienating prime cropping land might come to the Mary Valley as well, if mining exploration leases are to be granted.

There needs to be tighter controls over the sale of real estate under FIRB approvals as well.  Some commentators argue that foreign ownership is pushing up real estate prices in some sectors.

Comment, Jim McDonald, Wide Bay Greens Candidate, 19 April 2009

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