Coal scandals and controversies

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This article is part of the CoalSwarm coverage of Coal scandals and controversies
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Coal scandals




Coal scandals and controversies

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Country Scandal name Nature of the scandal
Australia Doyles Creek Mining exploration licence In August 2013 the NSW Independent Commission Against Corruption (ICAC) found that former New South Wales (NSW) Minister for Mineral Resources, Ian Macdonald, “engaged in corrupt conduct” in granting a coal exploration licence to Doyles Creek Mining Pty Ltd (DCM).[1] ICAC recommended charges be brought against Macdonald.
Australia NSW coal licence allocations In October 2013 a report by NSW Independent Commission Against Corruption found that the administration of coal policy in New South Wales was so defective that “it was almost inevitable that corruption would occur at some point.” ICAC recommended a raft of changes to the procedure for the allocation of coal licences.[2]
China Corruption investigation of National Energy Administration official and energy companies In May 2014 it was reported that Xu Yongsheng, the deputy administrator of the National Energy Administration had been "taken away" as a part of a corruption investigation. Xu's arrest followed on from the arrest of Wei Pengyuan, one of his subordinates. Wei was the deputy director of the National Energy Administration’s coal department and was found to have US$16 million in cash at one of his houses.[3]
India The contract for the Pakri Bawadih coal mine In November 2013 it was revealed that the the decision by the National Thermal Power Corporation to award a mining contract for the controversial Pakri Bawadih coal mine in Jharkhand state was being scrutinised by India's Central Bureau of Investigation. The mining consortium which won the contract comprises Minecs Finvest (a company controlled by the brother of a former coal minister), and a subsidiary of Thiess, an Australian construction company.[4]
India Former Indian Coal Secretary released on bail pending corruption charges The former Coal secretary HC Gupta, two current senior public servants and two executives from Kamal Sponge Steel and Power Limited (KSSPL) have been granted bail pending a hearing on charges against them over the allocation of the Thesgora-B/ Rudrapuri coal block in Madhya Pradesh. Gupta is facing charges under the Prevention of Corruption Act while all five are accused of criminal conspiracy, breach of trust by a public servant and cheating. The case centres on KSSPL inflating its asset value on application forms for the allocation of the coal block.[5] [6]
Indonesia Bribery charges against the mayor of Banjarmasin over coal land zoning The South Kalimantan Prosecutors Office is proceeding with bribery charges against the mayor of Banjarmasin, the provincial capital, and a former local government official. It is alleged that the mayor, who is a shareholder in coal company PT Binuang Jaya Mulia, offered a US$264,000 bribe to the official in an attempt to have coal-bearing land zoned as being within an adjoining local government district [7]
Indonesia Alstom's Tarahan power station contract bribery scandal The Jakarta Corruption Court has delayed the sentencing of Indonesian Democratic Party of Struggle (PDI-P) politician, Izedrik Emir Moeis, on charges of accepting US$423,985 from the French power and engineering company Alstom. Emir was a member of a House of Representatives committee which oversaw the tender process for the construction of a coal-fired power plant in Tarahan, Lampung, in 2004.[8]
Mongolia Prime Minister's aide investigated for embezzlement of coal funds In 2014 an aide to Prime Minister Norov Altankhuyag was investigated over allegations that money was embezzled from a fund earmarked to subsidise household coal. The controversy over this, and the rapidly deteriorating finances of the country due in part to falling coal prices, resulted in Mongolia’s Parliament voting 36-30 in early November 2014 to dismiss Altankhuyag as Prime Minister.[9][10]
Myanmar Myanmar MP, Yan Win, owns the A1 company which is seeking government approval for a new coal plant in Aeyeywady Region Yan Win, is a member in the regional parliament from the ruling Union Solidarity and Development and the owner and the Chairman of the A1 group. At a September 14, 2014 public meeting to discuss a coal plant proposed by Tata Power, Yan Win, revealed that his company had also proposed another coal-fired power station.[11] [12]
North Korea Execution of senior power broker over control over coal & other resources trade Jang Song-thaek was the uncle and political advisor to North Korean leader Kim Jong-Un, the supreme leader of North Korea. In December 2013 Jang Song-thaek was stripped of his roles and on December 12 executed. It was later reported that the falling out between the two was over control of coal and fisheries exports.[13]
Scotland Unfunded rehabilitation at sites of gift-giving companies It was revealed that East Ayrshire councillors had received a range of minor gifts and hospitality from Scottish Coal and ATH Resources, both of which had later collapsed leaving substantial unfunded mine rehabilitation work on their minesites. [14] The council sacked its former chief planner over the shortfall. [15]
Sri Lanka Sri Lankan government investigates coal import fraud The Sri Lankan Minister of Power and Energy, Pavithra Wanniarachchi, has told parliament that the loss of US$1.1 million by the Ceylon Electricity Board on coal imports in 2012 is being investigated by the Criminal Investigation Department. Low calorific coal was substituted for higher quality coal for use in the controversial Norochcholai coal power plant.[16]
United States Employee of Appalachian Laboratories admits faking coal water quality reports An employee of Appalachian Laboratories, a company which does water testing for over 100 mine sites in West Virginia, has pleaded guilty to conspiring to violate the US Clean Water Act by altering water samples used to ensure permit compliance. The employee admitted that between 2008 and 2013 he diluted coal mine water discharge samples and substituted clean water for polluted water. An investigation into the company by the Federal Bureau of Investigation and the US Environmental Protection Agency continues.[17]
United States State Democratic state legislature member charged with bribing Kentucky mine inspector A Democratic Party member of Kentucky state legislature, W. Keith Hall, has been charged with paying US$46,343 to Kelly Shortridge, a Kentucky mine inspector, to ignore safety and environmental violations at Pike County coal mines run by Hall’s company. Hall and Shortridge are scheduled to appear in court in Pikeville on November 5.[18]
United States Frasure Creek Mining recycles water data A coalition of environmental groups found that Frasure Creek Mining – one of the largest coal companies in Kentucky – had cut and pasted pollutions monitoring data across a range of reports from December 2008 and January 2009 required to demonstrate its compliance with the Clean Water Act. The resolution of legal claims are still before the courts. In November 2014 the groups filed a new legal notice that the practice of using falsified data had resumed resulting in more than 28,000 breaches of the Clean Water Act. The groups notice says that 40 per cent of water test results the company submitted in the first quarter of 2014 were the same as results submitted in 2013.[19]
United States Former Massey Energy boss indicted over mine disaster In November 2014 the former CEO and Chairman of Massey Energy, Don Blankenship, was indicted by a grand jury on charges including conspiracy, fraud and making false statements to the US Securities and Exchange Commission. The indictment includes allegations that Massey Energy had a system for tipping off mine employees of inspections in sufficient time to cover up safety deficiencies. The charges follow an investigation into the April 5, 2010 explosion at the company’s Upper Big Branch mine in which 29 coal miners died.[20]

Coal scandals and controversies

Coal scandals and controversies include:

  • August 2013: Australia: Former New South Wales (NSW) Minister for Mineral Resources, Ian Macdonald, “engaged in corrupt conduct” in granting a coal exploration licence to Doyles Creek Mining Pty Ltd (DCM), the NSW Independent Commission Against Corruption (ICAC) has found. [21] In November 2014 ICAC announced that Macdonald will be prosecuted for misconduct over the granting of a coal exploration licence to Doyles Creek Mining. ICAC is also prosecuting the former Chairman of Doyles Creek Mining, John Maitland, for aiding and abetting Macdonald’s offences and providing false and misleading evidence to the Commission.[22] (See Ian Macdonald and the Doyles Creek Mining exploration licence scandal for further details).
  • October 2013: Australia: A report by NSW Independent Commission Against Corruption found that the administration of coal policy in New South Wales was so defective that “it was almost inevitable that corruption would occur at some point.” [23] The report, which was prompted by complaints over the allocation of lucrative coal areas in the Hunter Valley, has prompted the Lock the Gate Alliance to call on the state government to exclude ‘no-go areas’ from being included in exploration licences.[24] (See The NSW Independent Commission Against Corruption and the NSW coal licence allocations scandal for further details).
  • February 2014: Scotland: It was revealed that East Ayrshire councillors had received a range of minor gifts and hospitality from Scottish Coal and ATH Resources, both of which had later collapsed leaving substantial unfunded mine rehabilitation work on their minesites.[27] The council sacked its former chief planner over the shortfall. [28] In July 2014 the liquidators of Scottish Coal reported that one of the company’s closed mines is likely to flood and overflow into the surrounding countryside while there is a “growing risk of an incident” at another mine site. Following the collapse of Scottish Coal and ATH Resources it was revealed that the East Ayrshire Council faced a US$225 million shortfall between bonds posted by the company and actual rehabilitation costs. The council sacked its former chief planner over the shortfall.[29] [30] (See Massive mine rehabilitation liability after collapse of gift-giving companies, Scotland.)
  • March 2014: Indonesia: The South Kalimantan Prosecutors Office is proceeding with bribery charges against the mayor of Banjarmasin, the provincial capital, and a former local government official. It is alleged that the mayor, who is a shareholder in coal company PT Binuang Jaya Mulia, offered a US$264,000 bribe to the official in an attempt to have coal-bearing land zoned as being within an adjoining local government district [31] (See Bribery charges against Muhidin, the mayor of Banjarmasin, Indonesia.)
  • April 2014: Indonesia: The Jakarta Corruption Court has delayed the sentencing of Indonesian Democratic Party of Struggle (PDI-P) politician, Izedrik Emir Moeis, on charges of accepting US$423,985 from the French power and engineering company Alstom. Emir was a member of a House of Representatives committee which oversaw the tender process for the construction of a coal-fired power plant in Tarahan, Lampung, in 2004.[32] Alstom was a part of consortium with Marubeni bidding on a $118 million contract in 2004 for part of the Tarahan power station at Lampung in Sumatra.[33] (See Alstom's Tarahan power station contract bribery scandal, Indonesia.)
  • May 2014: China: In May 2014 it was reported that Xu Yongsheng, the deputy administrator of the National Energy Administration (NEA) had been "taken away" as a part of a corruption investigation. Xu's arrest followed on from the arrest of Wei Pengyuan, one of his subordinates. Wei was the deputy director of the National Energy Administration’s coal department and was found to have US$16 million in cash at one of his houses. In 2013 Liu Tienan, the former head of the NEA and deputy chief of the powerful National Development and Reform Commission (NDRC) had also been arrested while Hao Weiping, the director of the NEA's nuclear energy department had been arrested in April 2014. That same month the South China Morning Post reported that China Resources group chairman Song Lin had been sacked last month and was "the focus of an internal Communist Party inquiry." In May 2014 Wang Shuaiting, the chairman of China Travel Service (Hong Kong) and a former head of China Resources Power was also arrested.[34]
  • September 2014: Myanmar: Yan Win, is a member in the regional parliament from the ruling Union Solidarity and Development and the owner and the Chairman of the A1 group. At a September 14, 2014 public meeting to discuss a coal plant proposed by Tata Power, Yan Win revealed that his company had also proposed another coal-fired power station.[35] [36] (See The proposed A1 coal plant controversy, Myanmar for more details.)
  • October 2014: United States: An employee of Appalachian Laboratories, a company which does water testing for over 100 mine sites in West Virginia, has pleaded guilty to conspiring to violate the US Clean Water Act by altering water samples used to ensure permit compliance. The employee, John W. Shelton, admitted that between 2008 and 2013 he diluted coal mine water discharge samples and substituted clean water for polluted water. An investigation into the company by the Federal Bureau of Investigation and the US Environmental Protection Agency continues.[37] (See Appalachian Laboratories employee admits faking coal water test results, West Virginia.)
  • 2010-2014: United States: In 2010 a coalition of environmental groups filed legal notice of their intent to sue Frasure Creek Mining – one of the largest coal companies in Kentucky – over the use of falsified data in discharge monitoring reports submitted to the Kentucky Energy and Environment Cabinet, the Kentucky government regulator. The groups found that between January 2008 and December 2009 Frasure Creek Mining had submitted monitoring data which had been copied verbatim from one report to another. The Kentucky government hadn't noticed the duplication and then subsequently proposed a series of sweetheart deals.[39] The resolution of those cases is still before the courts. In November 2014 the groups filed legal notice of their intent to sue Frasure Creek Mining over its filing of further false compliance reports. The groups allege the false reports resulted in more than 28,000 breaches of the Clean Water Act during 2013 and 2014. The groups notice says that 40 per cent of water test results the company submitted in the first quarter of 2014 were the same as results submitted in 2013.[40] (See Frasure Creek Mining submits falsified pollution data to regulators, United States.)

Map of recent coal scandals and controversies

Approximate locations of areas referred to in coal mining scandals are:

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Articles and resources

References

  1. ↑ NSW Independent Commission Against Corruption, “ICAC finds corrupt conduct in relation to Doyles Creek coal exploration licence”, Media Release, August 30, 2013.
  2. ↑ “ICAC recommends tighter controls to minimise coal mining corruption “ICAC recommends tighter controls to minimise coal mining corruption”, Media Release, October 30, 2013.
  3. ↑ Stephen Chen and Tiffany Ap, "Top National Energy Administration official held in widening graft probe", South China Morning Post, May 14, 2014.
  4. ↑ Richard Baker, Nick McKenzie and Ben Doherty, “Leighton faces graft inquiry in India”, Sydney Morning Herald, November 2, 2013.
  5. ↑ "Coalgate: Ex-coal secretary HC Gupta, 4 others get bail", Times of India, November 1, 2014.
  6. ↑ "Ex-coal secretary HC Gupta, two govt officials get bail in coal block allocation scam case", Economic Times, October 31, 2014.
  7. ↑ “Dossier of Banjarmasin mayor submitted”, Jakarta Post, March 14 2014.
  8. ↑ "Court delays verdict for PDI-P politician, again", The Jakarta Post, April 08 2014.
  9. ↑ "Mongolia parliament votes out PM Norov Altankhuyag", BBC, November 6, 2014.
  10. ↑ "Mongolian parliament ousts PM Norov Altankhuyag amid slump", South China Morning Post, November 5, 2014.
  11. ↑ "Govt accused of blocking debate over MP’s coal-fired plant", Eleven, September 25, 2014.
  12. ↑ "Irrawaddy Division Residents Concerned After Officials Discuss Coal Plant", Irrawaddy, September 16, 2014.
  13. ↑ Choe Sang-Hun and David E. Sanger, "Korea Execution Is Tied to Clash Over Businesses", New York Times, December 23, 2013.
  14. ↑ “East Ayrshire councillors accepted gifts from mine firms”, BBC, February 6, 2014.
  15. ↑ “East Ayrshire sacks planning chief over a £132m mine shortfall”, ‘’BBC’’, July 17, 2014.
  16. ↑ "Importing substandard coal: Losses would be recovered from those responsible", News.lk, October 23, 2014.
  17. ↑ Ken Ward Jr., “Lab official admits faking coal water quality reports”, West Virginia Gazette, October 9, 2014.
  18. ↑ John Cheves, "State Rep. Keith Hall indicted on bribery charge", Kentucky.com, October 23, 2014.
  19. ↑ Appalachian Voices, Kentucky Riverkeeper, Kentuckians For The Commonwealth and the Waterkeeper Alliance, "Citizen Groups File Legal Action Against Frasure Creek Mining For Falsifying Pollution Reports", Media Release, November 17 2014.
  20. ↑ Trip Gabriel, "Ex-Executive Donald Blankenship Is Indicted in Disaster at Coal Mine", New York Times, November 13, 2014.
  21. ↑ NSW Independent Commission Against Corruption, “ICAC finds corrupt conduct in relation to Doyles Creek coal exploration licence”, Media Release, August 30, 2013.
  22. ↑ "Former NSW government minister Ian Macdonald being prosecuted over Doyles Creek mining exploration licence", Media Release, November 20, 2014.
  23. ↑ “ICAC recommends tighter controls to minimise coal mining corruption “ICAC recommends tighter controls to minimise coal mining corruption”, Media Release, October 30, 2013.
  24. ↑ Lock the Gate, “ICAC recommendations must be adopted”, Media Release, October 30, 2013.
  25. ↑ Richard Baker, Nick McKenzie and Ben Doherty, “Leighton faces graft inquiry in India”, Sydney Morning Herald, November 2, 2013.
  26. ↑ Choe Sang-Hun and David E. Sanger, "Korea Execution Is Tied to Clash Over Businesses", New York Times, December 23, 2013.
  27. ↑ “East Ayrshire councillors accepted gifts from mine firms”, BBC, February 6, 2014.
  28. ↑ “East Ayrshire sacks planning chief over a £132m mine shortfall”, ‘’BBC’’, July 17, 2014.
  29. ↑ “East Ayrshire sacks planning chief over a £132m mine shortfall”, ‘’BBC’’, July 17, 2014.
  30. ↑ “Abandoned mines ‘will become hazards’”, Carluke Gazette, July 21, 2014.
  31. ↑ “Dossier of Banjarmasin mayor submitted”, Jakarta Post, March 14 2014.
  32. ↑ "Court delays verdict for PDI-P politician, again", The Jakarta Post, April 08 2014.
  33. ↑ "Ex-Alstom exec pleads guilty to bribery over Indonesia power contract", Reuters, July 17, 2014.
  34. ↑ Stephen Chen and Tiffany Ap, "Top National Energy Administration official held in widening graft probe", South China Morning Post, May 14, 2014.
  35. ↑ "Govt accused of blocking debate over MP’s coal-fired plant", Eleven, September 25, 2014.
  36. ↑ "Irrawaddy Division Residents Concerned After Officials Discuss Coal Plant", Irrawaddy, September 16, 2014.
  37. ↑ Ken Ward Jr., “Lab official admits faking coal water quality reports”, West Virginia Gazette, October 9, 2014.
  38. ↑ John Cheves, "State Rep. Keith Hall indicted on bribery charge", Kentucky.com, October 23, 2014.
  39. ↑ "Notice of Intent to Sue for Clean Water Act Violations", Pace Environmental Litigation, November 14, 2014.
  40. ↑ "Citizen Groups File Legal Action Against Frasure Creek Mining For Falsifying Pollution Reports", Appalachian Voices, Kentucky Riverkeeper, Kentuckians For The Commonwealth and Waterkeeper Alliance, November 17 2014.

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