The mining industry has cautioned that if the level of corruption alleged at the ICAC inquiry into NSW mining licences had occurred in Africa, investors would walk away from the region.
Concerned that the entire industry is being tarred with the same brush of corruption, Julian Malnic, founder of the Sydney Mining Club, has called on the state government to rectify the reputation of the industry.
The Australian reported that he said mining in Australia has now been internationally damaged because of the allegations being publically played out at the Independent Commission Against Corruption's investigation into mining licences issued by former Labor resources minister Ian Macdonald in the NSW Bylong Valley.
The inquiry is currently looking at Macdonald’s involvement in the allocation of coal exploration licences over land owned by the family of former Labor MP and powerbroker Eddie Obeid.
The inquiry has heard Macdonald stood to make $4 million if a proposed $500m takeover of Cascade Coal, the company that held the exploration licence on the Obeid family farm, proceeded.
Macdonald is listed on today’s ICAC witness list.
Malnic said yesterday that it took decades to build the mining industry’s reputation but only days to shred it to pieces.
"This news (out of ICAC) will start to ripple out around the world and conversations will be had to reassess NSW (investment attractiveness) downwards," he said. "The news headlines are still going off like firecrackers and the realisation of how bad it is is still being reached."
He added that the reputational damage caused by the ICAC fallout could take between one and two decades to repair.
Malnic said the actions of some of the companies caught up in the alleged corruption activities could be forgiven, saying for some it was a case of either "shut up" or "play the game".
"Companies have very stringent corruption policies but if you know it's either you play this game or no game at all; I find it somewhat forgivable that industry gets drawn into it."
Alan Broome, chairman of Austmine, the peak industry body for the mining equipment, technology and services sector agreed the industry's reputation had been damaged by the attention ICAC has received.
"When you get this sort of, as yet unproven circumstance, that comes into the public domain, it certainly does suggest that there may be some impropriety and there is nothing that turns off investors, particularly international investors, more than the suggestion of impropriety," he said.
"If we are trying to attract investment, and we are getting this sort of bad feedback, even though it's not yet proven, it can't be doing us any good."
Broome said the sector was competing for global investment dollars and while Australia was once the second most attractive destination on a global risk survey, it had now slipped to seventh place.
"We risk continuing to go down if this sort of thing continues . . . circumstances bias people's views and this is one of them."
Responding to the industry concerns was NSW Resources Minister Chris Hartcher, who said ICAC had full discretion to come up with any findings or recommendations, and the government would duly consider and act on these as it deems appropriate.
"The O'Farrell government is committed to delivering transparency at every stage of the licensing process and has implemented significant changes to deliver investment confidence and certainty to industry," he said.