The Hon Don Harwin MLC
Minister for Resources
Minister for Energy and Utilities
Minister for the Arts
GPO Box 5341
SYDNEY NSW 2001
Dear Minister
RE: KEPCO AS A FIT AND PROPER PERSON
I write to you regarding the company Korea Electric Power Corp (KEPCO), and its wholly owned and controlled subsidiary[1] [2] KEPCO Bylong Australia, which holds five leases in the Western Coalfield: A287, A342, MLA502, MLA503, and MLA504.
I assess that this company is not a “fit and proper person” within the meaning of section 308A of the Mining Act (NSW) (“the Act”), and I urge you to investigate this further. If you conclude that the company is not fit and proper, I contend that no further leases should be granted to this company, and its existing lease-holdings should be reconsidered.
Under section 380A(2) of the Act, the decision-maker may take into consideration a number of matters in determining whether a company is a fit and proper person to hold a mining right. These considerations include:
· criminal conduct issues;
· record of compliance with relevant legislation;
· technical competence in regard to management of activities or works;
· whether the company or a director thereof is not of good repute; and
· whether the company or a director thereof is not of good character, with particular regard to honesty and integrity.
Please consider the following matters of public record, which I contend are strong evidence that KEPCO does not qualify as fit and proper, given the criteria above.
In 2013, a tip-off from a whistle-blower led to a major government investigation of KEPCO's nuclear power supply chain in Korea. The investigation found evidence of widespread corruption and bribery, and fabrication of safety tests for nuclear equipment. Several power stations were closed down due to safety concerns as a result, and 100 people were charged with offences relating to the matter. Among those charged were the Vice-President of KEPCO, and a chief executive at KEPCO subsidiary Korea Hydro and Nuclear Power, both for bribery offences.[3] [4]
In February 2015, 10 executives of KEPCO and its subsidiaries were charged with bribery offences by Korean authorities alleging they'd accepted kick-backs from a telecommunications supplier company, in exchange for preferential contracts.[5]
Separately, in 2015 the US Securities and Exchange Commission launched an investigation into allegations that five US coal companies paid kick-backs to KEPCO subsidiaries, in exchange for preferential contracts[6]. I am not aware of the results of that investigation.
In March 2016 KEPCO Bylong Australia was charged with furnishing false and misleading information to the NSW Division of Resources and Energy. KEPCO admitted to the offence, but charges were dropped after the company entered into an enforceable undertaking with DRE, promising to not do it again.
In light of KEPCO's alarming record of corruption and non-compliance with legislation, both in Australia and overseas, I ask you to give serious consideration to cancelling their coal leases in accordance with the fit and proper person provision of the Act.
Sincerely,
Warwick Pearse
Acting Secretary
Bylong Valley Protection Alliance.
21 June 2017
[1] https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=109000818
[2] https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=38575740
[3] http://www.nytimes.com/2013/08/04/world/asia/scandal-in-south-korea-over-nuclear-revelations.html
[4] http://www.reuters.com/article/korea-nuclear-idUSL4N0I01GL20131010
[5] http://www.koreatimes.co.kr/www/news/nation/2015/02/116_172794.html
[6] http://www.koreaherald.com/view.php?ud=20150910001214#jyk