Home / Daily / Liberty Mutual responds to new coal controversy
2 July 2020
US insurer Liberty Mutual is embroiled in a new coal row, this time over its plans to push ahead with the development of a Queensland coal mine that it wholly owns through subsidiary Liberty Metals and Mining Holdings.
Climate activists say the proposed Baralaba South project, located about 1165km south-west of Rockhampton, contradicts the insurer’s global policy statement outlining the actions it will take to reduce its business exposure to fossil fuels.
Paul Stephenson, whose grandparents own a cattle farm that borders parts of the mine’s site, calls Liberty Mutual’s position on the project “a massive violation" of the spirit of the insurer’s climate policy statement.
He says farmers in the area as well as the local community are worried about the environmental impact of the mine, including potential risk of flooding plus air and water pollution.
“Liberty Mutual has made a statement that it will make no new additional investments in the coal industry,” he told insuranceNEWS.com.au. “Now if they are not lying, they cannot proceed with this project.
“This project would cost hundreds of millions of dollars to build so they can’t simultaneously claim to not invest in the coal industry while making hundred million dollar investments in this.”
He says his repeated efforts to reach out to the insurer have been met with a “stonewall of silence”.
Liberty Mutual, which last month was revealed as having provided insurance for the Adani mine’s early construction works, has defended its involvement with the project. Information on the Queensland Government website says the proposed project will have a mine life of about 19 years, with an annual production of up to five million tonnes of pulverised coal.
“The Baralaba metallurgical coal mine provides hundreds of jobs in rural Queensland and the environmental impact study for the South mine is expected to be submitted to the government by the end of the year,” a spokesman for the insurer told insuranceNEWS.com.au.
“We recognise the risk of climate change to our planet and are taking action to reduce carbon emissions. Environmental sustainability has been a key focus for us for some time, and we have a long-term strategy of decarbonisation and investment in renewable energy.
“We recently launched our inaugural Environmental, Social and Governance report and last year we announced our global policy on coal underwriting and investing and our new Office of Sustainability, which will further embed responsible investment and risk management policies into our decision-making."
In the global policy statement made last December, the insurer promised among other things that it would no longer accept underwriting risk for companies where more than 25% of their exposure arises from the extraction and/or production of energy from thermal coal. Additionally the insurer will not make new investments in debt or equity securities of companies that generate more than 25% of revenues from thermal coal mining.
The spokesman says coal mines form a “very small part” of the insurer’s overall investment portfolio and that the business has made the “strategic decision” more than a year ago to stop new additional direct investments in the industry.
“We’re taking many steps that demonstrate our commitment to the shift toward clean energy, and we will continue to improve and build on the progress we’ve made,” the spokesman said.
But Lock the Gate Alliance, a grassroots movement campaigning against coal mining and related activities, has slammed the insurer for backing the Baralaba South coal mine.
“As an insurance company Liberty Mutual should understand the risks of this project,” Queensland spokesman Ellie Smith said. “The community doesn’t want a mine on this fertile river country. Now is the time for the company to cut its losses, get out of coal and stick with the insurance business.”