Endorsed the hoax ... Christine Milne. Photo: Alex Ellinghausen
When an anti-coal protester, Jonathan Moylan, sent an email suggesting ANZ had withdrawn finance from Whitehaven Coal's Maules Creek mine, $300 million was wiped off Whitehaven's market value. The hoax was quickly uncovered and value largely restored by investors.
But with the Greens leader, Christine Milne, endorsing the hoax and ASIC investigating the activist, serious issues are raised: to what extent should communities and green groups go to highlight their concerns? And is the planning process hearing them?
Let me introduce the people of Maules Creek, NSW. It's a small village - population about 100 - near Narrabri, made up of farming families who have been in the area for generations. For years they worked hard to keep good relations with the coal mining companies in the area. But they felt betrayed by them when a 2000-page environmental impact statement was delivered just days before Christmas, with only weeks to respond.
One of the farmers, Phil Laird of the Maules Creek Community Council, approached us, a public interest economics group, Economists at Large, to review the economic appendix of the 2000 page assessment. He told me his wife works at the polling station on voting days. ''There are about 100 people here and 99 of us vote National. We think that one non-National is the schoolteacher,'' he half-joked.
They are not natural protesters and they feel let down by the Nationals. Nor are they natural allies with environmental protesters such as ''Jono'' Moylan. But they need him to help their cause.
While investors are upset about this week's hoax, the NSW Department of Planning and Infrastructure has been accepting economic fiction about the Maules Creek project for years.
The 2011 economic assessment is by coal industry favourites, Gillespie Economics. Economic assessment is supposed to establish whether the project is in the interests of the people of NSW and Gillespie Economics trumpeted a net benefit of $8.7 billion for the Maules Creek project. This was accepted by the planning department without scrutiny.
But our assessment of the review is scathing. Gillespie Economics has overlooked the foreign ownership of the project and presented profits to overseas interests as benefits to the NSW community. Other blunders include valuing the project at an exchange rate of $0.76 and using coal prices well above long-term averages.
Assessment of non-market values was equally ham-fisted. No consideration was made of the coal dust from mining on health, despite medical groups and NSW Health expressing concern. Greenhouse gas emissions warranted only a minor mention.
Impacts on the Leard State Forest, where Moylan is camping in protest against the mine, were not estimated. Locals are concerned that groundwater levels will fall by several metres, affecting farming and groundwater-dependent fauna. This impact was considered ''negligible'' in Gillespie Economics' assessment.
Bizarrely, the economic assessment included a $207 million estimate of ''social value of employment''. That estimate implies the public is willing to pay to secure jobs in this mine, over and above the wages of the workers. This is equivalent to paying Whitehaven a subsidy of $23,695 per employee per year.
While the NSW planning department seemed unconcerned by these criticisms, the Maules Creek Mine proponents commissioned the ANU's Jeff Bennett to conduct a review of Gillespie Economics' assessment. Professor Bennett agreed that the value to the NSW public was heavily overstated.
Planning departments around the country are under pressure to expedite approval of major mining projects. Reviewing project assessments is a demanding task, but in the race to cut red and green tape, one question must be answered - is the project in the public interest? Simply accepting proponents' commissioned assessment is clearly unacceptable.
Jittery private investors are ready to act on every piece of information available about the Maules Creek project and are angry when they've been mislead. But the NSW planning department seems unconcerned if the information it is given is fact or fiction. Economic assessment needs to play a greater role in planning decisions and be subject to the same scrutiny that emails purporting to be from ANZ are now sure to receive.
Rod Campbell is an economist and director of Economists at Large.