Origin Energy has had a deliberate policy of ignoring coal seam gas wells that have been leaking and an offshore gas well that has potentially been leaking for more than a decade, a corporate whistleblower has alleged.
The claims, filed in a revised statement of claim to the federal court and denied by Origin Energy, suggest Origin also failed to properly measure the amount of gas it was producing and therefore underpaid its royalties to the Queensland government – something the whistleblower says senior management were alerted to but also ignored.
The allegations were made by Sally McDow, a former senior manager of compliance at Origin, who has launched a case that will test Australia’s corporate whistleblower legislation.
Some of the allegations were made in an earlier statement of claim filed with the court, and reported by News Corp Australia, but the new statement of claim – first reported by Fairfax Media on Tuesday – goes much further and contains many more details.
The new allegations led anti-coal seam gas activists to call for a complete overhaul of self-regulation in the oil and gas industry, and for a special investigation into Origin’s compliance with environmental and other regulatory and legislative requirements.
McDow outlines a staggering number of incidents where Origin allegedly failed to properly comply with legal or regulatory requirements, and where it failed to report incidents either in official internal systems or to regulators.
Among the allegations is the claim that Origin failed to maintain hundreds of gas wells across Australia and New Zealand for periods of “10 years or more”. It had also failed to properly plug abandoned wells – a legislative requirement meant to stop leaks.
One offshore gas well in New Zealand waters was allegedly known to be leaking oil and gas into the ocean as long ago as 1993 but had not been inspected or maintained since then.
McDow says in one case a meeting of 35 senior managers she attended heard of multiple serious issues that had not been previously reported, including the contamination of aquifers, leaking oil and gas, and spills of radioactive materials. In the following months, McDow says, she was told not to mention the incidents in her audit reports.
She says she learned a shipping container carrying radioactive material had broken in Western Australia, spilling some of its contents. It was not reported to regulators, she says.
She also describes a culture of bullying, where staff were sometimes yelled at, abused and physically intimidated when they attempted to report serious incidents, and where several staff left the organisation after being bullied or harassed. Several employees allegedly left the organisation when they were victimised after raising concerns with managers.
McDow alleges that a general manager told her Origin had a deliberate policy not to comply with mandatory legislative and regulatory obligations because it was too expensive. Describing it as a “self-insurance” strategy, she says the company calculated it would be cheaper to pay fines if they were imposed. [Is that Encana’s policy when frac’ing drinking water aquifers in Pavillion Wyoming and Rosebud Alberta?]
She describes a dossier of incidents she was given by another employee containing a list of breaches by Origin of legislative and regulatory obligations, which went unreported. In that dossier there was a note of “significant gaps in monitoring equipment used to calculate payment of gas royalties to the Queensland state government”.
The document allegedly estimated the lack of monitoring meant “tens of millions of dollars of revenue” was not being received by the Queensland government.
After a serious explosion at the Beharra Springs Redback South Well #1 near Perth in 2013, McDow says a meeting of about 60 senior managers she attended was told the incident was the worst the chief executive of Upstream Division had seen in his 35 years in the oil and gas industry.
McDow says she read the report into the incident, which concluded the explosion could have caused multiple deaths and was the result of about 13 systemic issues which had been ignored by management in audits and reports over about 10 years.
On several occasions, McDow says, the allegations over cover-ups were taken to the then chief executive and current president of the Business Council of Australia, Grant King, but he did not want the incidents reported.
McDow also describes a conversation with another colleague who told her King didn’t want incidents reported since it could assist opponents of the coal seam gas industry, and “if notified, regulators may then be forced by political pressure to shut down the APLNG project or put further approvals on hold”.
… The allegations form part of a claim under the Fair Work Act. McDow says she was dismissed after blowing the whistle on the alleged cover-ups, writing directly to chairman of Origin’s board and presenting 120 pages of of evidence.
McDow will argue she is protected under the whistleblower provisions of the Corporations Act and her dismissal – as well as other negative consequences of her disclosure to the board – was in violations of those provisions.
The claims come just weeks before the closure of submissions into a parliamentary joint committee inquiry into whistleblower protections. [Emphasis added]
Chilling tale of Origin Energy whistleblower by Adele Ferguson, January 25, 2017
January 23 will be a day to remember for whistleblowers, regulators, politicians – and, of course, corporations.
On that day whistleblower Sally McDow, a highly credentialled lawyer and former senior compliance manager at Origin Energy, lodged the first ever case in Australia that tests whistleblower protections under the Corporations Act, alleging significant and dangerous compliance breaches, a deliberate cover-up by management and potential breaches of the Corporations Act.
Introduced in 2004, Part 9.4AAA of the Corporations Act was designed to protect whistleblowers from potential reprisals as a result of exposing wrongdoing. But it has far too many shortcomings.
It goes some way to explaining why corporate Australia is littered with whistleblowers who have taken enormous risks to speak out but ended up as collateral damage.
McDow’s case, to be heard in the Federal Court, will outline how she became a whistleblower at Origin Energy in 2015, her subsequent treatment and the impact on her life and career after she was made redundant in October 2015.
She was a lawyer with 17 years’ experience in senior compliance roles, working on international investigations and policy developments related to money laundering (Enron, organised crime and Christopher Skase), corruption and bribery, ethics and employee codes of conduct.
Now she claims she is unable to get a suitable job and has had periods when she alleges she has been too stressed to leave the house and personal relationships have been negatively impacted.
At the very least this case will put the spotlight on whistleblower protections in this country at a time when it is being heavily debated in parliament and the media.
A parliamentary joint committee (PJC) inquiry into corporate whistleblowers will hold a series of hearings in the first half of the year.
McDow’s statement of claim alleges Origin is a company with serious compliance failures at its gas and oilfields, it has a culture of leaks, spills and explosions, and victimises and intimidates anyone who dares to speak out. [Sounds like Alberta’s lying, bullying, cowardly, Charter violating AER!]
She alleges executives right up to the top, including former chief executive Grant King, who is now president of the Business Council of Australia, covered up some of the compliance failures, some of which were serious and should have been reported to the regulators and the ASX.
King referred questions from Fairfax Media to Origin, which strongly refuted the claims made by McDow and vowed to fight them vigorously in court.
Like many whistleblowers, McDow paints a sad and chilling picture of her treatment. She alleges management told staff she was being investigated and “made stuff up”, “is going to make us lose our jobs”, “is having a mental breakdown and calling it stress leave” and “is a faker and wants to hurt us”.
She alleges the disclosure to staff that she was a whistleblower without her consent was intimidating and damaged her ability to get a job.
In October 2015, she alleges she applied for a job with an ASX-listed financial institution and was told the culture fit would not be right for “someone with her whistleblowing history”. She alleges she had not told the company about the events at Origin.
She alleges she was told by a recruitment agency she was not employable in Brisbane due to her “known” status as a whistleblower and that she should change her name or move to another country.
Equally disturbing is the allegation that she isn’t the only whistleblower to raise compliance concerns inside Origin.
One whistleblower, allegedly a field, health, safety operations and maintenance officer, told McDow she had reported on November 5, 2012 to senior executives a culture of cover-up at APLNG sites and a lack of compliance with mandatory standards, rules, legislative obligations relating to safety. Alleged harassment and victimisation forced her to leave in early 2013.
Another whistleblower, allegedly a pipelines supervisor on the APLNG project, lodged a whistleblower report in mid 2013, outlining a series of concerns that the pipelines were “continuing to be operated, despite a lack of preventative maintenance which should have been reported to regulators and which could result in an increased risk of pipeline asset failure”.
Alleged victimisation resulted in her departure in 2014. A number of others, who spoke up about inappropriate conduct, allegedly left the company.
Whatever the merits of her case, the legal action will bring to the forefront the treatment of whistleblowers in this country. ASIC, which has a keen interest in whistleblowers, will be sure to take a front row seat in the courts.
Some of the country’s biggest scandals – Commonwealth Bank, National Australia Bank, Macquarie, IOOF and 7-Eleven – would not have come to light without the brave contribution of whistleblowers. They all paid a heavy price. [Emphasis added]
[Refer also to:
2017 01 24: CAPP blew the whistle. Any courageous whisteblowers at AER & Encana? Origin Energy denies massive cover-up after accusation in explosive lawsuit by company whistleblower, Sally McDow, lawyer and senior compliance manager
2015 04 09: Mr Bender’s death was ‘a snap decision’ after Origin Energy tried to force him to sell.” Family of George Bender Submission to Senate Inquiry into Regulation of CSG (CBM) Industry: 1,000 pigs dead due to gas industry pollution
2015 10 22: If frac’ing is safe & wonderful, why so many gag orders, why is fracking killing hope, people, fish, animals, vegetation, water, air, soil, and busting caprock? Why so much fraud by regulators, politicians, companies, NGOs, experts, academics etc covering up murderous corporate crimes: threats, bullying, abuse; dropping rodent shit into water wells of the harmed; trespassing, home invasions, interrogations of harmed families by police; intimidation; “terrorist” labeling to violate rights of citizens filing lawsuits? George Bender “died of a broken heart” says family.
2015 10 15: “A terrible terrible day.” George Bender, CSG (CBM) impacted farmer, Darling Downs, Queensland, killed himself. “Not only does this community have to live with this scourge of CSG coal seam gas mining on a daily and nightly basis, now they have to deal with one of their most-respected and most-loved community members taking his life.” ]