The NSW State Government announced it will cancel mining licences for Doyles Creek, Mt Penny and Glendon Brook following ICAC recommendations. Local communities are celebrating the decision. After ICAC found that the licences were granted corruptly by Ministers in the last state government Eddie Obeid and Ian MacDonald, this state government wants to finalise the mess as soon as possible. But we don't think it will end there...
The legislation is yet to be seen, but it sounds like in addition to preventing mining on the sites, it will require all the exploration data collected by the miners to be handed over to the State and the miners will still bear the burden of any obligations to rehabilitate the sites. The State says it won't be paying any compensation to the miners, and will try to 'indemnify the taxpayer from any possible claims'.
Predictably the miners are threatening multi-million dollar claims against the State including a constitutional challenge. In addition to those claims, aggrieved investors in the miners might try to:
- bring a claim against the miners and/or their directors. To win they would need to show that the directors did or should have known that the licences were obtained in corrupt circumstances and by failing to disclose that to the market caused the investors to suffer loss;
- file an investment treaty claim against the Commonwealth Government if they can show that they reside in a foreign State that has an investment treaty with Australia that would give them standing to sue the Commonwealth for a breach of the general investment protections offered under the treaty.
While there may be a number of options open to the investors the decision to bring any claim will turn on the facts surrounding the granting of the licences. As the details still seem murky, it is a case of watch this space.
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