Origin Energy and Rio Tinto have been urged to review joint ventures with Vladimir Putin-linked oligarchs to ensure they are blocked from receiving any profit from Australia’s natural resources, as pressure mounts on investors to dump their stakes in Russian companies.
Australian investors are being urged to follow the lead of British fossil fuel multinational BP, which has announced it will dump its US$14bn stake in Russian oil group Rosneft.
Origin is in a joint venture with a company part-owned by oligarch Viktor Vekselberg, who is already under US sanctions, to explore for gas in the Beetaloo Basin – a region the Morrison government has touted as a core part of its proposal for a gas-led recovery from the Covid crisis.
Vekselberg and another US-sanctioned oligarch, Oleg Deripaska, together own about three-quarters of Russian aluminium company Rusal, which in turn owns 20% of Queensland Alumina Limited, a bauxite miner and alumina producer.
Deripaska and Vekselberg are currently sanctioned by the US government over Russia’s 2014 invasion of the Crimea and the country’s continued occupation of the Ukrainian territory. Neither is currently sanctioned by Australia, which last week expanded its list of barred people and institutions following Russia’s invasion of Ukraine.
The retirement savings of ordinary Australians are also invested in Russian companies through at least five big super funds – the nation’s largest, AustralianSuper, Energy Super, West Australian government fund GESB, education and community sector fund NGS and retail worker fund Rest, according to research by investor activist group Market Forces.
Dan Gocher, the director of climate and environment at the Australasian Centre for Corporate Responsibility, said that as a result of the Russian invasion Australian companies, including Origin and Rio, “must immediately review their relationships with companies owned or part-owned by oligarchs aligned with Russian President Vladimir Putin”.
Australia’s sovereign wealth fund, the Future Fund, and Australia’s second-biggest fund, Aware Super, have announced they will divest from Russia.
The moves come as western nations ramp up sanctions on Russia that have so far slashed as much as 40% from the value of the rouble and led the country’s central bank to temporarily close the Moscow stock exchange in a bid to stave off a market collapse that analysts see as inevitable.
“The world has spoken, and the strategy now is to isolate Russia completely,” Gocher said.
“Origin and Rio Tinto’s ongoing cooperation with oligarch-owned companies legitimises Putin’s regime.
“Furthermore, some of the profits from Australian alumina and oil and gas projects will end up in the hands of the people responsible for propping up Putin’s murderous regime.”
Gocher and the Australian director of transparency activist coalition Publish What You Pay, Clancy Moore, said the Morrison government should also rule out giving grants to the Origin project as part of a $50m program to kickstart exploration in the Beetaloo Basin.
“Australia’s natural resource wealth should benefit our communities not line the pockets of Russian oligarchs,” Moore said.
“Australian resources companies must ensure that no revenues or economic benefits flow to supporters of the Putin regime.”
He said the government also needed to provide much better transparency of mining interests.
“This includes a public list of who ultimately owns and benefits from mining, gas and oil projects,” he said.
An Origin spokesperson said the company was monitoring the situation and “will follow any rules dictated by the Australian Government, and other governments as appropriate, with respect to sanctions”.
Origin has “significant operational control” over the project and is paying 100% of current exploration costs, “with no funding being provided by its joint venture partner”, the spokesperson said.
A Rio spokesperson said the company was “closely monitoring the situation in Ukraine and related sanctions”.
“We are confident that we have appropriate structures in place to ensure QAL’s operations will not be disrupted,” the spokesperson said.
Will van de Pol, an asset management campaigner at Market Forces, said it was likely that other Australian funds held Russian investments but did not disclose them in the transparent manner that AustralianSuper, Energy Super, GESB, NGS and Rest had done.
“We are appalled that the custodians of our money, governments and financial institutions, have used it to invest in Russian companies – especially oil and gas companies – that on a good day fuel the climate crisis and on a bad day provide the capital for Russia’s government and military forces,” he said.
He said that even before the Russian invasion of Ukraine, Australian funds should have excluded investment in Russian oil and gas companies on environmental grounds.
