Australian Small Business Ombudsman proposes veto powers over bank bans on mining projects | Business


The Small Business Ombudsman has proposed powers that would override decisions made by banks and insurers to deny services to businesses over concerns about issues such as climate change or animal welfare.

Bruce Billson, a former Liberal small business minister, introduced the proposal in a submission to an inquiry chaired by MP George Christensen into climate policies for banks and insurers.

Coal companies Centennial and the Bloomfield Group have also filed complaints complaining about their treatment by banks and insurers.

The inquiry into the prudential regulation of investments in Australia’s export industries was set up in February after a referral from Resources Minister Keith Pitt, despite resistance from the Liberals inside and outside the committee.

Christensen, who has denied the link between climate change and the severity of natural disasters, wants to grill financial regulators – the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority – as well as banks over loan withdrawal plans or insurance for mining projects due to climate change.

Billson argued that he had heard from small businesses unable to obtain insurance or banking services “due to industry, location and other factors.”

These were basic services that “should not be denied to legal businesses on the basis of arbitrary concerns”.

“When denial of these essential services occurs, for example in industries such as exports and live animal resources, it hampers export opportunities for small businesses and therefore Australia’s economic recovery from the impacts. of Covid-19, “he said.

He suggested that as the small family business ombudsman, he, or another agency, should have the power to force banks or insurers to “justify” a decision. The government should also consider giving the Australian Financial Complaints Authority power to review the decision.

The Big Four banks have announced that they will align their portfolios with a goal of net zero emissions by 2050, with most aiming to stop lending to thermal coal companies by 2030.

The banks’ decisions – which heed regular warnings from regulators and the central bank on climate risk – have sparked a furious backlash from national MPs who want a new coal-fired power plant in North Queensland, with some even calling for a boycott . banks, including ANZ.

Centennial, a thermal coal producer, said that in 2017 it saw a “significant change” in sentiment among Australian banks because the “grief-to-income ratio” was too high for the coal deals.

“Despite an impressive claims history, insurance availability, levels of coverage, deductibles and premiums have all been significantly affected,” Centennial said.

“No bank wants to be the last man standing, to use Apra’s Geoff Summerhayes phrase” holding a stranded asset. “

Centennial said it was “unfairly and negatively blocked” and that after coal manufacturing, transportation and construction could be the next targets.

Bloomfield, which produces both thermal and metallurgical coal, said the insurance was “prohibitively expensive if it could be obtained.”

He said companies serving the mining industry were also affected, citing ANZ’s decision in February to pull out of the Newcastle Port finance union.

The Whitsunday Conservation Council complained that the investigation was “clearly an attempt by the federal government to promote further investment in the coal and gas industries at a time when smart money in our banking, insurance and retirement sees increased financial and health risks in these industries. ”.

He warned Australia was increasingly isolated on climate and raised the possibility of the European Union imposing climate tariffs on its goods.

“By encouraging new investments in infrastructure and fossil fuel extraction, Australia could be more exposed to the risk of stranded assets,” he said.

Despite the survey being put in place, the Morrison government says it has moved on to reducing emissions and is supporting the achievement of net zero emissions as quickly as possible, preferably by 2050.

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