Memo to potential investors in the Yamba Mega Port scheme

No Yamba Mega Port map

Dear Potential Investors,

You may have seen promotional material created by Australian Infrastructure Developments Pty Ltd or Y.P.R. Australia Pty Ltd for the unsolicited proposal often called the Port Yamba Development (Eastgate) or the Yamba Port Rail Project.

The material probably looks rather intriguing to many of you.

However, there are some matters that this promotional material either does not address or merely skates over.

Today is Wednesday, 10 August 2016.

This is the Port of Yamba Development project timeline still up on Australian Infrastructure Developments’ official company website:

Even if one allowed for the possibility that the NSW Baird Government is politically suicidal enough to give consent for a mega port in the Clarence River estuary and that the first terminals would not be operational until 31 December 2018, that only leaves Des Euen, Thomas Chiu and Lee Purves a mere 873 days to push this project to Stage 1 bulk terminals completion.

Before any part of the extensive port expansion scheme can be progressed there is the sensitive matter of Dirrangun reef, the breakwater walls and possibly the internal training walls, to be addressed. 

Once the potential impact of the removal or significant alteration of breakwater walls sinks in with the communities of Iluka and Yamba I suspect that the friction between community and Yamba Port Rail proponents will increase dramatically.

If any activity required to open up the river entrance for those mega ships looks like placing Dirrangun at risk I’m sure that the Yaegl people, who have now spent twenty years fighting to legally protect their river and dream time reef, will not be happy with the port expansion proceeding and they will have a right to be concerned. A right that is now legally recognized as existing since before written history began in Australia.

As neither Des, Thomas or Lee has held a public information night for Lower Clarence communities to date, that particular failure is going to place a drag on the company’s project timetable from the start.

The hypothetical clock is now ticking.

The dredging of an est. 20km of navigation channel inside the river, at the very least is going to require:

*negotiations with NSW government departments/agencies;

* a least two advertised tender invitations if investors are not planning to just throw their money away;

*sediment sampling at the proposed dredging site and particle size distribution and acid sulphate soils testing to assess sediment properties over the full depth to be dredged;

*assessment of potential impacts on threatened species including wading birds along the est 20 km length of the dredging site;

*assessment of potential noise impacts including what day or night hours of dredging/placement are acceptable; 

* the creation of a dredge spoil management plan;and

*consultation with Birrigan Gargle Local Aboriginal Land Council, Yaegl Traditional Owners Corporation as native title trustees, the general public, local residents and commercial operators, commercial and recreational fishermen, waterway users and environmental groups.

Staying with this hypothetical scenario. Once these lengthy negotiations, assessments and consultations are finalised I suspect the actual dredge and spoil disposal would take up to three years to complete. After all this dredge has to remove at least est.13 metres of river bed in every square metre of a continuous 20 km long line an est 60m wide.

Add to this the time needed to purchase privately held regionally important farm land which the company hasn’t even commenced yet – land held by a number of individual owners some of who are adamant they will not sell - and then allow time for the rezoning process which is bound to be resisted by local residents and affected Lower Clarence communities.  Now those 873 days are beginning to look very inadequate.

At this moment you may be thinking that if all the individual planning procedures were undertaken at the same time the port expansion might move forward faster. However, any large project is only as fast as its slowest strand of required assessment/modelling/
testing and this particular project is being undertaken by a company which admits it has never handled any sort of development project before.

By the time one factors in the many studies required to create a viable development application to commence construction of the built environment then 2023 would not be seen as a long enough time frame to finish Stage 1 bulk terminals.

Some of these studies would be obliged to include the sourcing, transport and stabilzation of enough fill to raise 36 sq.km of terminals and berths above projected flood levels and modelling of existing & changed flooding conditions - because all the proposed terminal & berth areas will be submerged in a 1 in 100 flood to est. depths of 0.05 to 2.8m unless the land is raised. 

At this point in the development process state and local government may become alarmed at the amount of flood water in even a 1 in 20 year flood that will be displaced by a mega port at the end of this ancient floodplain. 

Displaced water (that has likely in some flood events to come at some speed down both the Clarence River and out of the Esk River) which will almost inevitably inundate the proposed remaining undeveloped half of Palmers Island, along with low lying sections of  Woombah, Iluka, Yamba and Wooloweyah, as well as exacerbate upriver flooding as far as Maclean. Quite rightly both tiers of government would quail at the thought of this occurring in conjunction with a king tide entering the mouth of the Clarence River and the clock might be permanently stopped on the mega port scheme then and there.

If not and planning madness prevails, the fact that a freight road bridge and new road/s would need to be built so that bulk product can actually reach the bulk terminals - because Stage 1 will not see a completed Pacific West Rail Link stretching from the coast to north-west NSW - and 2023 turns into a rather sad phantasy because the number of planning hoops the company has to jump through just grew in number.

Australian Infrastructure Developments and its shadowy backers would be foolish to believe that Stage 1 would be remotely achievable by 2028.

It is hard to imagine that Australian Infrastructure Developments will ever be able to establish the social contract with the Clarence Valley it needs to proceed, when its grand plan will diminish or destroy so many existing aesthetic, environmental, cultural, social and economic values within the estuary.

Twelve years is a long time to have investment money tied up in a mega port scheme that in all probability will be successfully scuppered by Northern Rivers people power.

Twelve years in which your company reputations and that of your principal shareholders will be held up for global scrutiny. 

Given the power of almost instant communication that the Internet will give to over 50,000 people and the ability of anyone of those with a personal computer to identify and research your company or superannuation fund, are you sure that the hope of future financial returns is worth the public relations risk?

If you think I exaggerate, ask Metgasco Limited what community resistance across the Northern Rivers did to its plans to develop gas fields.

So, potential investors – you might like to consider taking your money and committing it to an infrastructure project in a locality that actually wants what you believe you have to offer.

This is entirely friendly advice, because I like many others would prefer quietly enjoying the Clarence River estuary and the easy, relaxed lifestyle its healthy environment allows me, rather than spending the next twelve years as part of a peaceful but relentlessly effective grassroots protest movement making your corporate lives a misery.

Sincerely,

Clarencegirl

Mouth of the Clarence River

Something you may have missed in this month's news cycle

Before he entered federal parliament in 2004 Australian Prime Minister Malcolm Bligh Turnbull was Chairman and Managing Director of Goldman Sachs Australia from 1997 to 2001 and a Partner in Goldman Sachs and Co from 1998 to 2001.

In 2009 it was reported that Goldman Sachs made a confidential settlement on his behalf in the matter of the HIH collapse.

To this day he still invests with Goldman Sachs and, this month that investment bank paid US$5.06 billion in civil penalties for serious misconduct which contributed to the Global Financial Crisis (GFC) of 2008. 

Department of Justice

Office of Public Affairs

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FOR IMMEDIATE RELEASE

Monday, April 11, 2016

Goldman Sachs Agrees to Pay More than $5 Billion in Connection with Its Sale of Residential Mortgage Backed Securities

The Justice Department, along with federal and state partners, announced today a $5.06 billion settlement with Goldman Sachs related to Goldman’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007.  The resolution announced today requires Goldman to pay $2.385 billion in a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and also requires the bank to provide $1.8 billion in other relief, including relief to underwater homeowners, distressed borrowers and affected communities, in the form of loan forgiveness and financing for affordable housing.  Goldman will also pay $875 million to resolve claims by other federal entities and state claims.  Investors, including federally-insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued and underwritten by Goldman between 2005 and 2007. 

“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart F. Delery.  “This $5 billion settlement includes a $1.8 billion commitment to help repair the damage to homeowners and communities that Goldman acknowledges resulted from its conduct, and it makes clear that no institution may inflict this type of harm on investors and the American public without serious consequences.” 

“Today’s settlement is another example of the department’s resolve to hold accountable those whose illegal conduct resulted in the financial crisis of 2008,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Viewed in conjunction with the previous multibillion-dollar recoveries that the department has obtained for similar conduct, this settlement demonstrates the pervasiveness of the banking industry’s fraudulent practices in selling RMBS, and the power of the Financial Institutions Reform, Recovery and Enforcement Act as a tool for combatting this type of wrongdoing.”

“Today’s settlement is yet another acknowledgment by one of our leading financial institutions that it did not live up to the representations it made to investors about the products it was selling,” said U.S. Attorney Benjamin B. Wagner of the Eastern District of California.  “Goldman’s conduct in exploiting the RMBS market contributed to an international financial crisis that people across the country, including many in the Eastern District of California, continue to struggle to recover from.  I am gratified that this office has developed investigations, first against JPMorgan Chase and now against Goldman Sachs, that have led to significant civil settlements that hold bad actors in this market accountable.  The results obtained by this office and other members of the RMBS Working Group continue to send a message to Wall Street that we remain committed to pursuing those responsible for the financial crisis.”

The $2.385 billion civil monetary penalty resolves claims under FIRREA, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud.  The settlement expressly preserves the government’s ability to bring criminal charges against Goldman, and does not release any individuals from potential criminal or civil liability.  In addition, as part of the settlement, Goldman agreed to fully cooperate with any ongoing investigations related to the conduct covered by the agreement.

Of the $875 million Goldman has agreed to pay to settle claims by various other federal and state entities: Goldman will pay $575 million to settle claims by the National Credit Union Administration, $37.5 million to settle claims by the Federal Home Loan Bank of Des Moines as successor to the Federal Home Loan Bank of Seattle, $37.5 million to settle claims by the Federal Home Loan Bank of Chicago, $190 million to settle claims by the state of New York, $25 million to settle claims by the state of Illinois and $10 million to settle claims by the state of California.

Goldman will pay out the remaining $1.8 billion in the form of relief to aid consumers harmed by its unlawful conduct.  $1.52 billion of that relief will be paid out pursuant to an agreement with the United States that Goldman will provide loan modifications, including loan forgiveness and forbearance, to distressed and underwater homeowners throughout the country, as well as financing for affordable rental and for-sale housing throughout the country.  This agreement represents the largest commitment in any RMBS agreement to provide financing for affordable housing—a crucial need following the turmoil of the financial crisis.  $280 million will be paid out by Goldman pursuant to an agreement separately negotiated with the state of New York.

The settlement includes a statement of facts to which Goldman has agreed.  That statement of facts describes how Goldman made false and misleading representations to prospective investors about the characteristics of the loans it securitized and the ways in which Goldman would protect investors in its RMBS from harm (the quotes in the following paragraphs are from that agreed-upon statement of facts, unless otherwise noted):

• Goldman told investors in offering documents that “[l]oans in the securitized pools were originated generally in accordance with the loan originator’s underwriting guidelines,” other than possible situations where “when the originator identified ‘compensating factors’ at the time of origination.”  But Goldman has today acknowledged that, “Goldman received information indicating that, for certain loan pools, significant percentages of the loans reviewed did not conform to the representations made to investors about the pools of loans to be securitized.”
• Specifically, Goldman has now acknowledged that, even when the results of its due diligence on samples of loans from those pools “indicated that the unsampled portions of the pools likely contained additional loans with credit exceptions, Goldman typically did not . . . identify and eliminate any additional loans with credit exceptions.”  Goldman has acknowledged that it “failed to do this even when the samples included significant numbers of loans with credit exceptions.” 
• Goldman’s Mortgage Capital Committee, which included senior mortgage department personnel and employees from Goldman’s credit and legal departments, was required to approve every RMBS issued by Goldman.  Goldman has now acknowledged that “[t]he Mortgage Capital Committee typically received . . . summaries of Goldman’s due diligence results for certain of the loan pools backing the securitization,” but that “[d]espite the high numbers of loans that Goldman had dropped from the loan pools, the Mortgage Capital Committee approved every RMBS that was presented to it between December 2005 and 2007.”  As one example, in early 2007, Goldman approved and issued a subprime RMBS backed by loans originated by New Century Mortgage Corporation, after Goldman’s due diligence process found that one of the loan pools to be securitized included loans originated with “[e]xtremely aggressive underwriting,” and where Goldman dropped 25 percent of the loans from the due diligence sample on that pool without reviewing the unsampled 70 percent of the pool to determine whether those loans had similar problems.
• Goldman has acknowledged that, for one August 2006 RMBS, the due diligence results for some of the loan pools resulted in an “unusually high” percentage of loans with credit and compliance defects.  The Mortgage Capital Committee was presented with a summary of these results and asked “How do we know that we caught everything?”  One transaction manager responded “we don’t.”  Another transaction manager responded, “Depends on what you mean by everything?  Because of the limited sampling . . . we don’t catch everything . . .”  Goldman has now acknowledged that the Mortgage Capital Committee approved this RMBS for securitization without requiring any further due diligence.   
• Goldman made detailed representations to investors about its “counterparty qualification process” for vetting loan originators, and told investors and one rating agency that Goldman would engage in ongoing monitoring of loan sellers.  Goldman has now acknowledged, however, that it “received certain negative information regarding the originators’ business practices” and that much of this information was not disclosed to investors. 
• For example, Goldman has now acknowledged that in late 2006 it conducted an internal analysis of the underwriting guidelines of Fremont Investment & Loan (an originator), which found many of Fremont’s guidelines to be “off market” or “at the aggressive end of market standards.”  Instead of disclosing its view of Fremont’s underwriting, Goldman has acknowledged that it “[u]ndertook a significant marketing effort” to tell investors about what Goldman called Fremont’s “commitment to loan quality over volume” and “significant enhancements to Fremont underwriting guidelines.”  Fremont was shut down by federal regulators within several months of these statements.
• In another example, Goldman was aware in early-mid 2006 of certain issues with Countrywide Financial Corporation’s origination process, including a pattern of non-responsiveness and inability to provide sufficient staff to handle the numerous loan pools Countrywide was selling.  In April 2006, while Goldman was preparing an RMBS backed by Countrywide loans for securitization, a Goldman mortgage department manager circulated a “very bullish” equity research report that recommended the purchase of Countrywide stock.  Goldman’s head of due diligence, who had just overseen the due diligence on six Countrywide pools, responded “If they only knew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”
• Meanwhile, as Goldman has acknowledged in this statement of facts, “[Around the end of 2006], Goldman employees observed signs of uncertainty in the residential mortgage market [and] by March 2007, Goldman had largely halted new purchases of subprime loan pools.”  

Assistant U.S. Attorneys Colleen Kennedy and Kelli Taylor of the Eastern District of California investigated Goldman’s conduct in connection with RMBS, with the support of the Federal Housing Finance Agency’s Office of the Inspector General (FHFA-OIG) and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

“Goldman Sachs had a fiduciary responsibility to investors, which they blatantly side stepped,” said Deputy Inspector General for Investigation Rene Febles of FHFA-OIG.  “They knowingly put investors at risk and in so doing contributed significantly to the financial crisis.  The losses caused by this irresponsible behavior deeply affected not only financial institutions but also taxpayers and one can only hope that Goldman Sachs has learned the difference between risk and deceit.  Two Federal Home Loan Banks suffered significant losses so we are pleased to see both entities receive a portion of this settlement.  We will continue to work with our law enforcement partners to hold those accountable who have engaged in misconduct.”

“Goldman took $10 billion in TARP bailout funds knowing that it had fraudulently misrepresented to investors the quality of residential mortgages bundled into mortgage backed securities,” said Special Inspector General Christy Goldsmith Romero for TARP.  “Many of these toxic securities were traded in a taxpayer funded bailout program that was designed to unlock frozen credit markets during the crisis.  While crisis investigations take time, SIGTARP is committed to working with our law enforcement partners to protect taxpayers and bring accountability and justice.”

The settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered tens of billions of dollars on behalf of American consumers and investors for claims against large financial institutions arising from misconduct related to the financial crisis.  The RMBS Working Group brings together attorneys, investigators, analysts and staff from multiple state and federal agencies, including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the U.S. Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, SIGTARP, the Federal Reserve Board’s OIG, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and multiple state Attorneys General offices around the country.  The RMBS Working Group is led by Director Joshua Wilkenfeld and five co-chairs: Principal Deputy Assistant Attorney General Mizer, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Director Andrew Ceresney of the SEC’s Division of Enforcement, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric Schneiderman.  This settlement is the fifth multibillion-dollar RMBS settlement announced by the working group.

Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at www.StopFraud.gov. 

Uniting Church in Australia Assembly to sell-off all fossil fuel investments

Uniting Church in Australia Assembly media release 29 August 2014:

Assembly to divest from fossil fuels

Friday, 29 August 2014

The Uniting Church in Australia Assembly has resolved to divest from investments in corporations engaged in the extraction of fossil fuels.

Uniting Church President Rev. Professor Andrew Dutney has welcomed the resolution of the Assembly Standing Committee, calling the decision an important act of public witness.

“As Christians we are called to respect and care for the whole of creation,” said Rev. Prof. Dutney.

“Wth national governments reluctant to take difficult decisions, it falls to us as members of the body of Christ to show leadership in taking action to reduce damaging pollution.”

“To avoid damaging climate change we must move quickly to a clean energy economy. The Uniting Church recognises that continued investment in fossil fuel industries does not support the change needed.”

The Intergovernmental Panel on Climate Change (IPCC) says the effects of climate change are already occurring on all continents and across the oceans.

A recent IPCC report concluded that there are still opportunities to respond to the risks of climate change, although these risks will be difficult to manage with high levels of warming.
“The future depends on countries like Australia making a strong, unequivocal commitment to reduce greenhouse gas emissions,” said Rev. Prof. Dutney.

“Our partner churches in the small island states have been calling on Australia to take seriously the threat to their futures. We simply must act. This is a matter of social, environmental, and intergenerational justice.”

The Assembly Standing Committee resolution follows similar decisions on divestment by the Synod of NSW and ACT in April 2013 and the Synod of Victoria and Tasmania in February 2014.

Rev. Professor Dutney has congratulated these councils of the Uniting Church in Australia for their leadership.

“We commend this course of action to other Uniting Church entities as they make their investment decisions as well as to our ecumenical partners,” said Rev. Prof. Dutney.