Stopped from testifying. Coal fraud whistleblower talks with MWM
The failure of regulators to prosecute large mining companies in Australia’s biggest coal fraud is a crushing disappointment for whistleblower Justin Williams
In July 2019, Justin Williams joined TerraCom Limited as General Manager. Within days, he was confronted with evidence that coal quality certificates underpinning export contracts worth millions were being systematically altered. What began as an internal concern would spiral into a five-year ordeal, involving the Australian Federal Police, NSW Police, the corporate regulator, and ultimately, a courtroom battle that left Williams empty-handed.
Widespread fraud
Williams’ allegations echoed what later came to light in independent investigations. A PwC report, cited in ASIC’s court filings, found that in 12 out of 14 shipments tested, results had been altered in TerraCom’s favour, boosting the apparent value of exports by more than $1.1 million.
Mr. Williams’s submissions to the Federal Court have suggested that the value of the shipments affected is more than US$100 million. This is because when coal does not meet the agreed-upon quality, the cargo may be rejected, and in this case, 100% of the cargo’s value must be refunded by the seller to the buyer.
According to Williams, the implication was clear: coal was being made to look cleaner, more energy-dense, and therefore more valuable than it really was.
The practice was not limited to TerraCom. ALS, the global testing giant that admitted to the manipulation of results, and other coal companies implicated in systemic fraud, were never charged. Instead, ASIC pursued only a civil penalty against TerraCom, avoiding the larger industry-wide issues of fraud and potential foreign bribery.
Adding insult to injury, when ASIC lost its civil case against four TerraCom directors, taxpayers were left to foot the bill. Last month, court orders saw ASIC pay more than $3.6 million in legal costs for executives Wal King, Nathan Boon, Danny McCarthy, and Craig Ransley.
The AFP and ASIC
Williams first took his concerns to law enforcement. “I had first reported this matter to police rather than ASIC because I wanted law enforcement authorities to pursue the criminal charges of fraud and foreign bribery against the large coal companies and certification companies who had been committing the fraud for decades.”
“I was interviewed at length by the Australian Federal Police, who referred my concerns to ASIC,” he recalls.
Despite the significant evidence of wrongdoing, Williams alleges that the AFP declined to pursue the case due to concerns that it would affect the Australian coal industry.
“Contrary to what has been reported in relation to the findings of the Australian Federal Police, they told me that there was significant evidence of fraud perpetrated by ALS Limited but that they were concerned that they could not progress any legal action due to the significance of the coal industry to the Australian economy,” Williams said.
“The Australian Federal Police were very clear that they would not progress the matter because it was not in Australia’s national and economic interest.”
MWM put questions to the AFP. They declined to comment on the matter.
The cover-up
On 24 July 2020, Williams had his first substantive in person meeting with ASIC. Williams requested that his lawyers be present however, ASIC denied this request giving him assurances that this was unnecessary as he was not the subject of the investigation. In hindsight, Williams regrets not having legal representation in his meetings with ASIC.
https://michaelwest.com.au/terracom-whistleblower/