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The Resources Regulator Lee Shearer revealed in a Budget Estimates hearing on September 1 that it is investigating whether Korean mining company KEPCO is fit and proper to hold a mining licence in New South Wales, after serious international fraud and corruption allegations against the company were made.

KEPCO is proposing to develop two open-cut coalmines in the beautiful Bylong Valley, about 55 km north-east of Mudgee in north-western NSW. The mine is expected to produce up to 6.5 million tonnes of coal a year for 25 years, commencing early next year.

In answer to questions from Shadow Resources and Energy Minister Adam Searle about allegations of criminality and corruption against KEPCO in South Korea, Shearer said: “We have commenced an investigation into a number of mining title holders, KEPCO being one”.

The investigation comes three months after Bylong Valley Protection Alliance spokesperson Warwick Pearse wrote to Minister for Resources Don Harwin asking for an investigation into whether KEPCO was fit and proper to hold a NSW mining licence.

This followed a major Korean investigation of widespread corruption and bribery in KEPCO’s nuclear power supply chain in Korea in 2013. More than 100 people were charged and power stations were closed due to safety concerns. In 2015, KEPCO was again rocked by scandal after American regulators investigated kickbacks paid by US companies to KEPCO officials.

Pearse said: “The NSW Mining Act allows the government to cancel titles if mining companies are found to be not fit or proper, covering a range of legal, financial and technical considerations. KEPCO officials including executives and a Vice-President of the company have been charged with bribery and the faking of nuclear safety certificates in South Korea in recent years.

“This kind of behaviour is not restricted to the parent company in Korea. In March last year, KEPCO Bylong Australia was charged with furnishing false and misleading information to the NSW Division of Resources and Energy.

“KEPCO has shown it has no respect for the rule of law, and is willing to cut corners to get what it wants. KEPCO can't be trusted with a mining licence, and the government should refuse to give them one and cancel their exploration licence.”

Shearer confirmed KEPCO had already been investigated in NSW and charged with furnishing false or misleading information after Bylong property owner Craig Shaw complained that photos of flat paddocks were supplied by the company to support a drilling application on his property. He produced photographs of the actual sites showing steep, rocky terrain that KEPCO had already conceded might require helicopter access for drilling to proceed.

But the NSW government dropped the prosecution and accepted an “enforceable undertaking” from KEPCO, allowing the company to avoid a court hearing and possible $110,000 fine.

Lock the Gate Alliance Hunter region coordinator Steve Phillips said: “The coal mining industry already has a reputation for dishonesty and regulatory non-compliance in the Hunter region.

“The government should uphold basic standards of decency and integrity and make it clear to KEPCO that its poor track record makes it unfit to operate in this state.”

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