The Adani Group has hit out at Australia’s three major insurers for refusing to underwrite the thermal coal industry in future as its controversial Carmichael mine in Queensland struggles to secure compulsory insurance for the construction of a rail line.

Separate submissions to a federal parliamentary inquiry from Adani Australia and BMD Constructions - the builder of the rail line to facilitate transport of coal from the mine to Port of Abbot Point for export - warn the industry’s stance will have repercussions for the Australian economy.

“These Australian insurance companies appear to have followed a global divestment push led by European insurance companies with little to no regard to their national responsibilities to the workers and companies of Australia,” Adani says in its submission.

“In short, by withdrawing services from the Australian thermal coal sector, the finance and insurance sectors are exporting Australian livelihoods offshore.

“Removing Australian coal from the global seaborne market will only see other jurisdictions with poorer quality coals and less stringent environmental regulations to fill the gap.”

IAG, QBE and Suncorp have all set out timeframes to phase out coverage of the thermal coal industry. They have also said they are not involved with the Carmichael mine.

Adani says the Australian insurance industry’s “boycotting” of the local thermal coal sector is “misconceived” and will lead to “consequential impact” on the economy.

BMD Constructions in its submission says governments at either state or federal levels should consider providing the “necessary insurance” from public funds to ensure the export industry is supported.

Another alternative will involve clients and principals “absorbing” the risks concerned so that the contractor is effectively indemnified from risks which it cannot insure against.

BMD says its inability to find insurance for public liability, environmental protection and directors’ and officers’ places it in breach of the contracts it has signed with Adani for the Carmichael mine.

Its broker conducted a search globally, including approaching 33 underwriters to provide public liability insurance, but was turned down on each occasion when it was revealed the coverage was for the mine.

“BMD’s inability to obtain these insurances puts in jeopardy not only its ability to claim over $20 million dollars a month of progress payments but also its ability to continue to deliver projects which collectively employ over 600 workers,” BMD says.

“BMD is aware that the worldwide insurance market is removing its support for coal related projects and that coverage for projects associated with coal moving forward will see limited available coverage.

“Clearly this position will impact the Australian coal market but what BMD is hoping to highlight in this submission is the peripheral consequences this stance is having on the broader Australian construction industry and the ability of contractors to perform works not directly related to the extraction of coal.”

Climate activist group Market Forces has pushed back against Adani and BMD Constructions. Its campaigner Pablo Brait told insuranceNEWS.com.au “they should listen to the very clear message the global insurance sector is sending them and walk away from coal”.

“BMD and Adani are risking their entire business for this one thermal coal project,” he said.

Market Forces and the Insurance Council of Australia (ICA) also made submissions to the Joint Standing Committee on Trade and Investment Growth chaired by George Christensen. The committee is inquiring into the prudential regulation of investment in Australia’s export industries.

Market Forces says the committee must understand that investment in Australia’s fossil fuel industry comes at the long-term expense of other major Australian industries, such as tourism and agriculture.

“The future economic prosperity of Australia therefore depends on mitigating climate change, and that requires the equitable and rapid phasing out of the coal, gas and oil industries,” Market Forces says.

The submission from ICA says climate change presents not only risks but also opportunities for the insurance sector.

ICA says it has established a Climate Change Action Committee to support the insurance industry to embed climate change issues and insights into decision making.

The committee will also work with stakeholders to raise climate change awareness, engage with governments and support industry disclosure of climate risks and opportunities.

Click here to access the submissions.