It has been revealed former Labor resources minister Ian Macdonald introduced legislation which not only overruled a New South Wales court but also delivered a $1 billion windfall to two mining executives.
The two executives who are also being investigated by the Independent Commission Against Corruption, Travers Duncan and Brian Flannery owned the Moolarben coalmine near Mudgee for more than 30 years.
But it was not until the Labor government introduced legislation that overturned the NSW Court of Appeal’s decision that Moolarben could not be mined because the lease encroached on a lease held by mining giant Xstrata, that the operation delivered a significant profit, SMH reported.
The court’s August 2008 decision was overturned by legislation which was put to the entire cabinet for approval.
At the time Macdonald said the bill was needed to restore certainty to existing mining tenements.
Greens MP Jeremy Buckingham said it was outrageous the Labor government had so quickly legislated to overrule a court decision.
''This action implicates the entire Labor cabinet, not just a single rogue minister,'' he said.
The ''speed of the law change was very unusual'', Peter Coates, a senior executive at Glencore Xstrata said.
After the bill was passed Moolarben owner, Felix Resources released a statement praising Macdonald’s decision to amend the Mining Act.
At the time Flannery who was the managing director at Felix said the government's action had ''restored clarity and certainty to mining leases that had been placed at risk of unnecessary and costly litigation by the recent Court of Appeal decision''.
Flannery told the ICAC that the mine’s construction phase commenced almost immediately after the legislation was passed and it was one of the few mines developed at the height of the global financial crisis, growing to now employ 400 people.
Just one year after the introduction of the legislation, Duncan and Flannery sold the mine to Chinese producer Yanzhou Coal, securing a $530 million pay out to each executive.
This was not the first time the Duncan and Flannery’s cause had been championed by the Labor government.
Both were also shareholders in Cascade Coal which was after a questionable tender process was in 2009 granted an exploration licence at Mount Penny, located in the NSW Bylong Valley.
Commenting on the parliament’s move to overrule a court decision, George Williams, from the University of NSW law faculty, said in general, it was ''unusual but not unreasonable''.
''It is certainly not common but it does happen in circumstances where Parliament is particularly concerned about the court decision,'' he said.
''It raises real concerns about whether it is appropriate to override that decision and you normally expect a strong case to be put forward in Parliament to permit that.''
The current Resources and Energy Minister Chris Hartcher said that "if there is sufficient evidence of misconduct the government will ensure a thorough investigation occurs".
Australian Mining has previously reported that Duncan has launched legal action aimed at shutting down the ICAC inquiry in which negative evidence was presented about himself.