Everybody knows

Everybody knows the deal is rotten, Old Black Joe’s still pickin’ cotton

Leonard Cohen

imageRampant and unfettered neoliberalism, casino capitalism or free market fundamentalism has seen an alarming increase in the perception of regulatory capture and symptoms are evident amongst most federal and state legislative authorities. It involves government oversight or ineptitude and occurs when a statutory agency or authority advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.

An impression emerges where businesses receive preferences or benefits at the expense of the crown or public interest and the liaison appears unethical. Its tentacles extend far beyond the boundaries of government. Penetrating capture via intense lobbying has infiltrated the media, industry associations, unions and most independent peak representative bodies. It is also termed client politics or corporate welfare and the majority of costs inevitably cascade onto taxpayers and the community, whilst an elite cabal of powerbrokers, lobbyists, public serpents and career politicians reap substantial benefits.

Following the global financial crisis, hardly a week elapses without an exclusive expose of malfeasance, turpitude or noncompliance with good governance and the principles of corporate social responsibility. The miasma is the new normal and evident across countless commercial and industrial sectors including aged care, building and construction, energy markets, financial services, franchising, health care, mining and mineral resources, retail, telecommunications, transport and waste recycling.

The risk increases when regulators adopt conciliatory and cooperative approaches via persuasion and negotiation in preference to adversarial and punitive enforcement. Conflict of interest also arises if the government agency has a fundamental responsibility for the productivity and economic success of the regulated industry. This was raised during the public inquiry into the Piper Alpha oil rig disaster. The Cullen report recommended statutory responsibility for offshore safety be transferred to the Health and Safety Executive. It would reduce regulatory capture risks and curtail the production versus protection dichotomy. The rig operator, Occidental Petroleum was found guilty of having inadequate maintenance and safety procedures but no criminal charges were ever brought against the company.

Several recent high profile incidents in the United States have raised significant concern regarding performance of federal and state regulatory authorities and their unhealthy relationship with regulated entities. In 2010, following the Upper Big Branch underground coalmine explosion in West Virginia, the state governor requested an independent investigation into the disaster. The report revealed the US Department of Labor Mine Safety and Health Administration failed to use its legislative power to ensure compliance with federal laws. Furthermore, the role of the state regulatory authority was repeatedly undermined and demoralised by the influence of Massey Energy. This was accomplished via its brutal chief executive and corporate sociopath, Don Blankenship, a former director at Fluor Corporation, which was recently rewarded with a major coal seam gas project in Queensland.

The BP Deepwater Horizon catastrophe resulted in multiple fatalities with the release of over 200 million gallons of oil into the Gulf of Mexico. Regulators provided select corporations with blanket exemptions for environmental impact statements and allowed many companies to drill without statutory permits. Industry lobbyists dismissed the disaster as an aberration and despite significant environmental risks, the regulator continued to issue exploration and drilling permits. It appears the agency had abandoned any pretense of regulating the industry and was complicit in the circumvention of legislation. The former BP executive Tony Hayward, is now chairman with Glencore, a resources conglomerate recently embroiled in a mining agreement and money laundering scandal and such egregious performances should at least warrant an order of chivalry. Regulatory capture is prevalent throughout Alberta in Canada, which has vast oil and gas reserves and is the residential province of a former neoliberal prime minister and lobbyist for chrysotile asbestos. It is evident across Australia and was identified during recent parliamentary inquiries into coal workers’ pneumoconiosis.

It occurs across every government structural level and creates a distortion gap. Major corporations capture federal authorities to oppose state policies whereas smaller businesses capture state governments and use federal delegates as its industry voice. It involves financial and cognitive capture and an ostensible risk emerges when statutory officials develop unhealthy relationships with regulated entities. It is extremely difficult to prove, especially without a precise definition of public interest. The risk significantly increases in remote regions, where agency inspectors and their families share community and social services and develop informal relationships with industry leaders and lobbyists.

This byzantine calumny is simple to identify and categorise but almost impossible to prove. It is easily repudiated, elusive and rarely leads to any significant punitive action unless blatant political corruption is evident. It occurs via a labyrinth of complex processes, which include substantive legislation to favour specific business interests and self-serving biases with ideological motivated behaviour. Other damaging mechanisms, which can significantly increase the risk include insufficient government funding, ruthless budget cuts or ossification of statutory legislation.

A significant amount of criticism during the Queensland black lung parliamentary inquiry involved ethics and genuine independence of the regulatory authority. This was initially raised in June 2008 and merely involved sanitisation with a coat of distemper from the Queensland ombudsman. It concluded the Department of Mines and Energy compliance activities were acceptable and did not raise any cause for concern. However, there was a reasonable perception of regulatory capture throughout the inspectorate.

This was recently corroborated by Jeremy Buckingham and supported via extensive research from Graham Readfearn on behalf of the Australia Institute. It indicates revolving doors are spinning like a roulette wheel in an era of casino capitalism, especially across the resources sector with the transfer of senior and influential personnel between regulatory authorities and regulated entities throughout Business Queensland. Further investigation from Joel Rosenzveig provides sufficient substantive evidence covering the magnitude of regulatory or policy capture and the sinister practice of revolving doors and golden escalators throughout the resources sector:

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Figure 1: Regulatory capture – Revolving doors and golden escalators

The devastating impact includes an escalating toll of mine dust lung diseases throughout the Queensland coal mining sector although the disease enigmatically disappears across the coalfields in New South Wales and a hoary medical aphorism resonates…………Absence of evidence is not evidence of absence.

This is antagonized by the identification of silicosis amongst many stonemasons and other tradesmen across Australia, which placed extraordinary strain on an already struggling public health system. More recently, a spate of fatalities throughout Queensland’s coal and metalliferous mining sector prompted immediate reaction from its Department of Natural Resources, Mines and Energy (DNRME) via the Brady Heywood review. It was littered with statements of the bleeding obvious and merely borrowed your watch to tell you the time while a major mining disaster across the Queensland resources sector beckoned.

It was only a matter of time and inevitably transpired on 6th May 2020 courtesy of Anglo American at its Grosvenor coalmine near Moranbah in central Queensland. An underground gas explosion left five victims, who were employed under contingent labour hire arrangements, with critical or serious life-threatening injuries that required intensive care at the Royal Brisbane and Women’s Hospital. A beleaguered and embattled minister eventually established a board of inquiry in accordance with the Queensland Coal Mining Safety and Health Act 1999, which involved the selection of retired district court judge, Terence Martin SC as its chairperson. Additional appointments included the engagement of Professor Andrew Hopkins AO PhD although legal objections were raised regarding his undisclosed statements before the official board of inquiry appointment. The industry safety expert ultimately stepped aside to exclude any perception of bias or potential conflict of interest.

Following the recusal, Professor Hopkins was immediately replaced by a seasoned corporate veteran whose previous roles included Vice President of Health, Safety and Environment with Peabody Energy Australia and Chief Inspector of Mines with the Queensland state government. This enigmatic replacement is not without controversy and may even undermine the integrity and independence of the entire proceedings. It can hardly be categorised as impartial, especially with the merger of state and corporate interests amidst a miasma of regulatory capture.

Indeed, the Queensland Department of Natural Resources, Mines and Energy received excoriating criticism throughout the recent parliamentary inquiry into black lung. Its subsequent report revealed……..A catastrophic failure, at almost every structural level, of a regulatory system that intended to protect the health and safety of coal miners. The inquiry was unable to substantiate any evidence of regulatory capture although it provided recommendations covering the transfer of influential personnel between statutory agencies and regulated entities. The recent appointment of a former senior manager with a renowned corporate predator to the board of inquiry appears rather curious or even imprudent and has left many detractors believing a fox is in the henhouse. This is further exacerbated by the egregious and reckless performance of Peabody Energy over recent decades, especially across its coalfields throughout the United States and Australia. Despite the sesquipedalian rhetoric on its corporate website its recent achievements could never be described as good governance or operational excellence. The ruthless brigand has repeatedly failed to reflect the principles of corporate social responsibility, which has generated significant adverse media attention.

Patriot Coal was a subsidiary of Peabody Energy and operated numerous mining complexes throughout Kentucky and West Virginia in the United States. During 2011, it produced over 31 million tons of steam and metallurgical coal for its domestic and global markets. Its operations included exploration and development using the controversial mountain top removal process. It was considered far more efficient than underground mining although it was extremely destructive and involved blasting of mountains or hillsides to reach interior coal seams. The devastating process often involves deforestation, which alters natural drainage patterns and increases flood risks and typically requires purchase and relocation of surrounding communities. Its environmental and social impact is exquisitely captured by the late John Prine:

And daddy won’t you take me back to Muhlenburg County

Down by the Green River where Paradise lay

Well, I’m sorry my son but you’re too late in askin’

Mister Peabody’s coal train has hauled it away

Numerous epidemiological health studies across the Appalachian region especially amongst communities adjacent to mountain top removal operations confirm increased mortality and cancer rates with disproportionate birth defects.

Following the global financial crisis, a prolonged economic slump witnessed widespread redundancies throughout the US coalfields amidst plunging coal industry share prices, which significantly curtailed production and in early July 2012, Patriot Coal filed for bankruptcy protection. It involved some creative accounting or fiscal chicanery with assistance from the notorious Blackstone Group. This required comprehensive financial restructuring to address substantial and unsustainable legacy costs via an optimal financing package. The bankruptcy tactic supplemented by economic jargon is a recognised corporate scam that merely privatises profit and socialises loss. Moreover, Patriot Coal was furtively established to fail and enabled Peabody Energy to circumvent its contractual obligations and significantly reduce the health care and pension entitlements of its workforce.

Peabody’s predatory tactics and vituperative culture were evident in Australia during the recent expansion of its Wilpinjong mine near Mudgee in New South Wales The mine was scheduled to close in 2027 although recent approvals means it will expand and operate much longer and the community at Wollar is merely categorised as collateral damage and treated like roadkill. The company owns all but four properties in the village and acquires vacant land and houses in a nefarious attempt to ensure there is nobody left to register any complaints. It has adopted a typical US adversarial economic tactic which entails throwing enough money at the remaining residents until they go away. Dust in the gutters used to be brown and now it’s black and the entire social fabric of the tiny hamlet has been destroyed. Alcoa Australia resorted to similar tactics with the residents of Yarloop adjacent to its Wagerup alumina refinery south of Perth in Western Australia.

More recently the statutory investigation into a spontaneous combustion fire, which occurred at the Peabody North Goonyella mine in September 2018 has been shrouded in obfuscation and clandestine discussions between the regulatory authority and technical experts. An initial media release littered with imprecise and meaningless bureaucratic jargon merely amplified the confusion and proclaimed……At the appropriate time the company will initiate a formal review of the event with the involvement of independent third parties and intends to share learnings with the industry and other stakeholders. Its preliminary findings into the serious incident were released in March 2019.

Discussions with several colleagues indicate the appointment of its former Vice President of Health Safety and Environment in Australia to the forthcoming Coal Mining Board of Inquiry is rather imprudent and may even compromise the integrity of the entire proceedings. Maybe it should go the whole nine yards and engage the services of Don Blankenship, the former chairman and intimidating chief executive officer with Massey Energy, as an additional subject matter expert.

Over the next few months the Old King Coal Corporate Roadshow with its theme of Socialism for the Rich is coming to a theatre near you. The Brisbane premiere is scheduled for 4th August 2020 and includes live streaming of the pageant. The endangered Acland parrot, Alan Belford Jones AO has been appointed as master of ceremonies to protect reputations and ensure genuine independence and integrity. A preliminary session features celebrity guest appearances from the former high court justice, Dyson Heydon AC QC and Ita Buttrose AC OBE, the incumbent chairperson with the Australian Broadcasting Corporation and former squeeze of the late Kerry Packer AC.

Corporate dining tables are available for hire, which enable fawning sycophants to network amongst former or incumbent federal and state cabinet ministers and an eclectic selection of flamboyant entrepreneurs. These include Greg Lindsay AO, Steven Wilson AM, Kevin Will Seymour AM, Clive Palmer FC, Ian Elgin Macfarlane, Tom Domican (ChOHSProf), Roger Caleb Rogerson (FAIHS), Eddie (He who must be) Obeid and the former federal minister for kneecaps, Graham Richardson. Guests are strongly advised to beware of pickpockets and should adhere to COVID – 19 greeting protocols and must count their fingers following inadvertent handshakes.

Any opportunities for investment arising from the festering Ponzi scheme can be discussed with Stephen Schwarzman from the Blackstone Group, Larry Fink at BlackRock or the reclusive Bernie Madoff. The renowned charlatans are appearing via a Skype plenary session from the United States during a scheduled interlude following the preliminary session.

Limited options of platinum, gold, silver and bronze packages are available online via the Department of Natural Resources, Mines and Energy (DNRME) website and surcharges apply, which include extortionate processing fees for credit card payments. Special discounts are available for Australian Institute of Heinrich and Skinner proselytes and certified safety crusaders.

The over-egged theatrics and histrionics will have little to do with the discovery of truth or any realization of justice and typically secure the interests of the powerful over the powerless. Meanwhile, the seriously injured victims embark on an arduous and painful road to recovery. Distraught dependents are left chasing smoke with more questions than answers and the following poignant lyrics from the late Leonard Cohen resonate:

Everybody knows that the dice are loaded

Everybody rolls with their fingers crossed

Everybody knows the war is over

Everybody knows the good guys lost

Everybody knows the fight was fixed

The poor stay poor, the rich get rich

That’s how it goes

Everybody knows

Everybody knows that the boat is leaking

Everybody knows that the captain lied

Everybody got this broken feeling

Like their father or their dog just died

Everybody talking to their pockets

Everybody wants a box of chocolates

And a long-stem rose

Bernard Corden

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One Reply to “Everybody knows”

  1. PS I have deliberately avoided using any Latin phrases because most safety crusaders are ignorant malaperts or philistines and unfamiliar with the conjugation of Latin verbs or the declension of Latin nouns.

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