Cougar Energy has commenced legal proceedings against the Queensland Government and three Queensland Government officials.
The Coal Seam Gas producer is seeking more than $34 million in compensation over the government’s decision to halt the company’s development of its power plant project at Kingaroy in the State’s south east.
Cougar is suing previous Department of Environment and Resource Management (DERM) chief executives John Bradley and Terry Wall and current head James Reeves for negligence and breach of statutory duties in their administration of the Queensland Environmental Protection Act.
Cougar Energy chairman Malcolm McAully said the company had commenced the legal action following advice from its legal advisors that the closure of the Kingaroy project was unreasonable.
He said the decision was compounded by the defendants’ continued refusal to allow the re-opening of the plant despite, what the company described as “a wealth of scientific evidence that its operations posed no threat to the environment”.
“Based on our legal advice, it is the actions of the Bligh Government, these office holders, and their unreasonable decisions, that have inflicted a significant loss on the company,” McAully said in the company’s announcement to the Australian Securities Exchange.
“During more than 15 months we have attempted to resolve the forced close-down with the Government and DERM in good faith.
“However, as all of our proposals have been rejected, the company is left with no option but to seek Court intervention to redress the loss and confirm Cougar Energy’s reputation as a world leading developer of alternative energy projects.”
Mr McAully said Cougar Energy had not caused any environmental harm at Kingaroy nor polluted the Kingaroy water supplies.
He also claimed no benzene has been detected in any water bores on neighbouring properties since Cougar Energy commenced water testing in March 2010.
“The Government and DERM officials have duties to administer the Environmental Protection Act for the purpose of protecting the environment in a way that allows for ecologically sustainable development,” McAully said.
“Significantly, they have applied the inappropriate water quality guidelines in justifying its actions to close us down.”
According to Cougar on 15 July 2010 then DERM chief executive John Bradley issued a media release stating that the Kingaroy site was to remain closed.
Cougar claims that on 14 July 2010 DERM and the company had agreed to carry out further water tests after an anomalous test result, which was subsequently proven on 16 July 2010 to be false.
Bradley authorised the serving of formal orders on the company on 17 July 2010 preventing the recommencement of operations.
Cougar claims that DERM’s own test results on that day found no evidence of chemicals breaching the drinking water standards.
Addressing a press conference in response to Cougar’s announcement, Queensland Deputy Premier Andrew Fraser said the State Government would vigorously defend its actions in relation to Cougar Energy.
“Obviously the company [Cougar Energy] has announced today that it’s going to pursue officers of the government,” Fraser said.
“But let’s be very clear about this – we have an important environmental regime in place, which protects the interest of the environment and makes sure that industry can operate with certainty and the government will be defending this action vigorously in the courts, as you would expect.
“The issue here is one for a company that was found guilty of making environmental breaches and wasn’t able to provide assurances that those breaches wouldn’t occur into the future and cause a detriment to the environment, and therefore the decision of the government stands.”
Fraser said that Cougars actions in suing the government and the three men would not dissuade the government from discharging its responsibilities on that front.
“Ultimately this company has decided to take this action for their own reasons,” Fraser said.
“I don’t think that we want to see a situation where companies believe that they can get different decisions by merely threatening individuals with multimillion dollar law suits and that’s why the state will stand behind the decision.”
Cougar claimed that DERM and the Queensland Government have taken no significant action against Coal Seam Gas projects elsewhere in the State despite much higher detections of chemicals over the past year.
“We are confident that our Kingaroy project is safe,” McAully said.
“It presents no danger to human health, no danger to drinking water, no danger to livestock and no danger to other farming activities and Cougar Energy has been unreasonably denied the opportunity to complete its trial at Kingaroy under the permits issued by the Queensland Government.”