Government seeks ASIC briefing and coal industry insiders call for public inquiry after federal MP Andrew Wilkie accuses Hunter coal operators Glencore, Peabody of testing scam

These are some of the words used by Hunter coal industry insiders and former coal testing laboratory staff this week to describe the "decades-old open secret" of falsifying coal test results to boost mine profits and make coal exports appear cleaner than they are.

Insiders say they are hopeful the latest accusations levelled in Parliament on Monday that mining companies, coal testers, bankers and auditors were complicit in falsifying tests, will force a public inquiry to finally bring an end to the "murky grey area".

A former lab manager says for too long the pressure to comply with falsifying results has been "intense".

He blames "non-stop profit driven" coal companies and coal marketers for outright trying to bully labs into faking analysis of coal samples.

He says it was common knowledge in the industry if labs did not "play ball", they could lose export coal testing work and struggle to hold contracts in other coal-related areas.

Another former lab manager, who reported the issue to the Independent Commission Against Corruption, says "there is a variation", it's "always plus or minus something" and the only way to end the fake testing is an independent inquiry.

He says there were rumours of some labs that ran "two sets of books", describing the coal testing industry as a "closed shop" that has for too long held a "great big open secret".

"It's simply greed," he says. "Any sort of inquiry hopefully that will blow the issue wide open so it ends."

Resources Minister Chris Bowen says he wants to ensure the "absolute accuracy" of claims made by Australian companies about the quality of coal exports.

Glencore, one of the companies mentioned in independent MP independent MP Andrew Wilkie's speech to Parliament, said it had not been investigated for falsifying coal test results.

Asked if Glencore had been involved in doctored testing, a company spokesperson said: "We note the comments and allegations made by Andrew Wilkie.

"Glencore has not been involved in any investigations or proceedings related to this matter."

The coal giant, which operates nine mines in the Hunter, was among eight companies accused of being involved in a testing "scam".

The government has asked for an Australian Securities and Investments Commission briefing on the allegations.

The government has not responded directly to Mr Wilkie's call for a parliamentary inquiry, but Mr Bowen said on Tuesday that the government was taking his claims "very seriously".

"Mr Wilkie has not raised this with me directly; he's raised it in the Parliament," he told ABC Radio.

"That means we'll take our time to obviously look at what's he's raised in the Parliament carefully.

"I do note there have been inquiries into these matters by ASIC and others, so it has been examined ...

"But I want to ensure the absolute accuracy of all claims made by Australian firms and I will look at the matters Mr Wilkie raised yesterday."

Mr Wilkie said a senior coal industry executive had provided him with thousands of documents which "prove Australian companies have been lying for years about the quality of our coal".

He named Glencore, Peabody, Anglo American, TerraCom, Macquarie bank, Ernst&Young and testing firms ALS and SGS among industry players implicated in the "scandal".

Hunter MP Dan Repacholi, whose electorate includes most of the region's mines, said the coal sector was not "above the law".

"No matter what the industry, we have rules that need to be followed," he said.

"If there is something there that needs investigation, then the authorities will deal with it, and we will look at what else needs to be done.

"At the moment these are unfounded allegations made by an MP under parliamentary privilege and we have to wait for authorities to look at them."

ALS, which runs coal testing laboratories at Mayfield and Maitland, and SGS were accused of falsifying results two years ago.

The Newcastle Herald reported at the time that fake testing was an "open secret" in the Hunter mining industry.

An external audit showed 45 to 50 per cent of ALS tests had been doctored in the previous 13 years. The company suspended four staff, including three in Newcastle.

ASIC investigated the matter but took no action.

Mr Wilkie tabled in Parliament two versions of an SGS coal sample analysis which he said had been altered to show a moisture content of 15.9 per cent instead of 16.7 per cent.

The test was on a shipment of TerraCom Resources coal from northern Queensland to Japan in 2019.

A Peabody spokesperson said on Monday that the company "strongly denies" Mr Wilkie's claims.

An Ernst&Young spokesperson said the firm would not comment on matters relating to clients.

Do you know more? Donna.page@newcastleherald.com.au

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