Australian lawmaker asks Eximbank not to lend to POSCO E&C

By Kim Se-jeong

POSCO E&C, the steelmaker’s construction arm, faces resistance to its major Australian project from an Australian lawmaker and international environmental groups because of the project’s potential impact on the Great Barrier Reef.

In a letter sent last week to Eximbank CEO Lee Duk-hoon, Larissa Waters, an Australian senator from Queensland, said, “Eximbank’s finance for this project would be inconsistent with Korea’s focus on fighting global climate change and with President Park Geun-hye’s repeated calls for global action to combat the crisis.”

The bank is considering lending money to POSCO E&C, which recently won a $2.3 billion bid to build a coal export terminal at Abbot Point and a railway connection as part of Indian company Adani Mining’s development project.

“Big international companies like City Group and the Goldman Sachs Group have walked away from that project because of environmental risks,” Greenpeace Korea said in a press release.

The state-affiliated bank said it has not yet decided whether to extend the loan. The Organization for Economic Cooperation and Development requires it to review the environment impacts of the projects it finances.

A POSCO E&C official would not comment, but said, “We know Adani Mining faced tough environmental requirements by the Australian government,” implying the project’s impact on the coral reef system would not be as bad as critics might think.

Abbot Point is close to the Great Barrier Reef, the world’s biggest coral reef system and a UNESCO world heritage site.

UNESCO has advised the Australian government to protect the area.

Waters’ letter, which calls for Eximbank to be more environmentally conscious, comes amid an increasing fossil divestment movement around the world. The movement encourages investors to avoid projects that contribute to climate change.

Norway’s Government Pension Fund Global (GPFG), which is leading the movement, announced last week it had removed 114 companies from its investment portfolio last year because of risks they posed to the environment.

Korea is yet to respond to such calls, making the economy a priority over the environment.

The Ministry of Environment recently scrapped a proposed carbon tax program on vehicles last year after the automobile industry argued that the program could hurt the economy.

The program involves giving rebates to consumers who buy vehicles that emit fewer greenhouse gases than traditional vehicles.