Origin Energy ignores coal seam gas well leaks, whistleblower says

Statement of claim lodged at federal court alleges that a general manager said company calculated it was cheaper to pay fines than comply with regulations

Origin Energy has had a deliberate policy of ignoring coal seam gas wells that have been leaking and an offshore gas well that has potentially been leaking for more than a decade, a corporate whistleblower has alleged.

The claims, filed in a revised statement of claim to the federal court and denied by Origin Energy, suggest Origin also failed to properly measure the amount of gas it was producing and therefore underpaid its royalties to the Queensland government – something the whistleblower says senior management were alerted to but also ignored.

The allegations were made by Sally McDow, a former senior manager of compliance at Origin, who has launched a case that will test Australia’s corporate whistleblower legislation.

Some of the allegations were made in an earlier statement of claim filed with the court, and reported by News Corp Australia, but the new statement of claim – first reported by Fairfax Media on Tuesday – goes much further and contains many more details.

The new allegations led anti-coal seam gas activists to call for a complete overhaul of self-regulation in the oil and gas industry, and for a special investigation into Origin’s compliance with environmental and other regulatory and legislative requirements.

McDow outlines a staggering number of incidents where Origin allegedly failed to properly comply with legal or regulatory requirements, and where it failed to report incidents either in official internal systems or to regulators.

Among the allegations is the claim that Origin failed to maintain hundreds of gas wells across Australia and New Zealand for periods of “10 years or more”. It had also failed to properly plug abandoned wells – a legislative requirement meant to stop leaks.

One offshore gas well in New Zealand waters was allegedly known to be leaking oil and gas into the ocean as long ago as 1993 but had not been inspected or maintained since then.

McDow says in one case a meeting of 35 senior managers she attended heard of multiple serious issues that had not been previously reported, including the contamination of aquifers, leaking oil and gas, and spills of radioactive materials. In the following months, McDow says, she was told not to mention the incidents in her audit reports.

She says she learned a shipping container carrying radioactive material had broken in Western Australia, spilling some of its contents. It was not reported to regulators, she says.

She also describes a culture of bullying, where staff were sometimes yelled at, abused and physically intimidated when they attempted to report serious incidents, and where several staff left the organisation after being bullied or harassed. Several employees allegedly left the organisation when they were victimised after raising concerns with managers.

McDow alleges that a general manager told her Origin had a deliberate policy not to comply with mandatory legislative and regulatory obligations because it was too expensive. Describing it as a “self-insurance” strategy, she says the company calculated it would be cheaper to pay fines if they were imposed.

She describes a dossier of incidents she was given by another employee containing a list of breaches by Origin of legislative and regulatory obligations, which went unreported. In that dossier there was a note of “significant gaps in monitoring equipment used to calculate payment of gas royalties to the Queensland state government”.

The document allegedly estimated the lack of monitoring meant “tens of millions of dollars of revenue” was not being received by the Queensland government.

After a serious explosion at the Beharra Springs Redback South Well #1 near Perth in 2013, McDow says a meeting of about 60 senior managers she attended was told the incident was the worst the chief executive of Upstream Division had seen in his 35 years in the oil and gas industry.

McDow says she read the report into the incident, which concluded the explosion could have caused multiple deaths and was the result of about 13 systemic issues which had been ignored by management in audits and reports over about 10 years.

On several occasions, McDow says, the allegations over cover-ups were taken to the then chief executive and current president of the Business Council of Australia, Grant King, but he did not want the incidents reported.

McDow also describes a conversation with another colleague who told her King didn’t want incidents reported since it could assist opponents of the coal seam gas industry, and “if notified, regulators may then be forced by political pressure to shut down the APLNG project or put further approvals on hold”.

King has not responded to requests for comment but a spokesman for Origin Energy said the company “categorically deny the allegations that form the basis of Ms McDow’s most recent claim” and that it would “vigorously defend the claim in court”.

“We are confident that we have met, and continue to meet, all compliance-related reporting obligations in relation to our assets,” he said.

Carmel Flint, campaign coordinator with Lock the Gate Alliance, said the allegations suggested a failure of self-regulation.

“One of the allegations that’s most disturbing is that there was a deliberate strategy not to report and not to comply because it was cheaper just to pay the fine if they ever got caught – because presumably they thought they wouldn’t get caught very often,” she said. “That has been the concern of the community from the outset.”

Flint added: “This requires a full regulatory review and a rethink of self-regulation – this shows self-regulation hasn’t worked, as far as we’re concerned.

“The governments of Queensland, Northern Territory and Western Australia, in particular, need to step in now and pursue rigorous action to hold them to account.”

The allegations form part of a claim under the Fair Work Act. McDow says she was dismissed after blowing the whistle on the alleged cover-ups, writing directly to chairman of Origin’s board and presenting 120 pages of of evidence.

McDow will argue she is protected under the whistleblower provisions of the Corporations Act and her dismissal – as well as other negative consequences of her disclosure to the board – was in violations of those provisions.

The claims come just weeks before the closure of submissions into a parliamentary joint committee inquiry into whistleblower protections.

Source:theguardian.com