A number of directors of the Chinese company granted approval for a coal mine on New South Wales’ Liverpool Plains have been investigated for corruption in China.

The Federal Government last month granted conditional approval to Shenhua for an open-cut coal mine near prime agricultural land in NSW.

Shenhua’s former vice-president and three other executives have now been identified as being among those accused of acting corruptly.

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The revelation has prompted the NSW Farmers Federation to call for the State Government to reject a mining licence application for the Liverpool Plains mine.

Fiona Simson from the NSW Farmers Federation said she had written to the State Government calling for the company’s application to be rejected on the basis of the fit and proper person test.

The test was included in the New South Wales Mining Act last December after the Independent Commission Against Corruption (ICAC) found the previous Labor government’s mining minister, Ian Macdonald, and businessman Eddie Obeid, had acted corruptly regarding a different mine.

The Federal Government has granted conditional approval for the open-cut mine near prime agricultural land in NSW.

“The [NSW] Government brought in the fit and proper person test to clean up the exploration and mining licence area,” Ms Simson told the ABC’s 7.30.

“If they’re serious about this, then they can’t sign the mining licence with such questions about Shenhua.”

In Ms Simson’s letter, she refers to former Shenhua vice-president Hao Gui, who was employed by the company in China for two decades.

In June the coal giant acknowledged Hao was being “investigated by competent judicial authorities” and was therefore “unable to properly perform his duties”, but it has not specified what the allegations are.

Investigations by 7.30 have found that Hao is not the only Shenhua executive under a cloud.

Last year Chinese government investigators spent three-and-a-half weeks looking at Shenhua and its subsidiaries as part of an anti-corruption campaign in China.

Chinese court documents also show that six managers from Shenhua Ningxia Coal Group’s subsidiaries have been given jail sentences of between five and 13 years for accepting bribes.

Shenhua declined 7.30’s requests for an interview and refused to answer written questions about the allegations.

Mine application to be assessed within fit and proper person test

The State Government is yet to receive Shenhua’s mining licence application, but said that when it does, it will be assessed in line with departmental policies, guidelines and procedures, and in accordance with the law.

“We are aware of the allegations that have been raised around links to Shenhua and other companies,” a spokesperson for Resources and Energy Minister Anthony Roberts said.

“However, it is not until a mining lease application is lodged by the company that it will be assessed by the NSW Division of Resources and Energy [DRE], in line with the state’s legislation, which includes the fit and proper person test.”

Radio pundit Alan Jones has been a vigorous critic of the project. Photo: AAP

The spokesperson said submissions from interested parties would be considered by the DRE and it would also carry out its own inquiries into Shenhua for as long as necessary.

Solicitor Pauline Wright from the Law Society of New South Wales said this would be one of the first tests for the fit and proper person test in the state’s mining act.

“What it’s designed to do it to make sure that the people who are actually going to be given licences aren’t people who are likely to accept bribes, make bribes, or behave in a way that’s unconscionable, dishonest, corrupt, criminal — so we can trust the people who are operating mines in our country,” Ms Wright said.

“The State Government thought it was time they introduced something fairly robust into the Act really to address the concerns that were made out of those ICAC findings so they brought in this new test.”

Ms Wright said the DRE would be looking for hard evidence as it applied the test.

“Allegations are always tough — if you’re relying just on allegations then there’s nothing proven so that’s nothing like as certain as if there was some finding by a court in Australia or a court overseas,” she said.

As well as a mining licence, Shenhua must also apply for water licences from the NSW Office of Water and Environmental Protection Licenses from the Environmental Protection Authority.

The Commonwealth’s Independent Expert Scientific Committee has also asked to review the company’s water monitoring plan.

The 35-square-kilometre open-cut coal mine Shenhua plans to build on the Liverpool Plains would pump $1.5 billion of royalties into the NSW economy over 30 years.

-ABC