Chinese banks should not fund Great Barrier Reef oil projects
Rey Edward says investments abroad must adhere to its green policies
After years of speculation, Brazil, Russia, India, China and South Africa recently announced plans to create a BRICS development bank. The long-serving chairman of China Development Bank, Chen Yuan , is expected to head the new institution.
With its leadership of the BRICS bank, in addition to its critical role in the global economy, China is now strategically positioned to push private and public companies to adopt more sustainable development practices.
Over the past years, China has released an array of innovative policies that require Chinese banks and companies to adhere to environmental and social standards, such as tying in company credit scores with environmental performance, ensuring that listed companies follow environmental regulations, and requiring that Chinese banks hold their clients accountable for abiding by international norms in overseas projects.
However, China's inconsistent implementation of policies casts doubt on its ability to take advantage of this opportunity. Take, for example, the Great Barrier Reef oil leak of 2010 when a Chinese ship hauling heavy fuel oil and coal to China hit a sandbank located in protected waters. Its ruptured fuel tank dumped up to three tonnes of oil into the pristine water. Although it is protected under the statutes of the Great Barrier Reef Marine Park, coal and liquefied natural gas exports are turning the world's largest reef system into a treacherous "coal highway" for carriers bound for India and China.
Despite this notorious precedent, several coal export terminals and LNG plants are currently being constructed on the coast of Australia, right inside the reef boundary. Just one proposed coal export terminal, near Wiggins Island, would have an export capacity of approximately 84 million tonnes per year - most of it bound for China and India.
The LNG plants are, likewise, raising local concerns regarding water safety and fracking, as the feedstock for these plants is coal-seam gas, often sourced from prime agricultural land in nearby Queensland.