[Press Release] Hundreds of citizens challenge Korean public financing of risky gas project2023-01-12
Hundreds of citizens challenge Korean public financing of risky gas project
South Korea is the world’s third-largest public financier of fossil fuels. People are stepping up to oppose its latest investment.
January 12, 2023 – Over 600 people in South Korea have formally requested an investigation into Korean public financing approval for the Barossa gas project, off the coast of Northern Australia. The request calls into question whether the banks properly assessed the stranded asset risk of the project prior to their investment decisions.
In the limelight are Korea Trade Insurance Corporation (K-SURE) and the Export-Import Bank of Korea (KEXIM). The government-owned banks approved an additional USD 660 million for the offshore gas project, in addition to the USD $196 million they already financed.
“The people have spoken. Korean citizens do not want their taxes wasted on a fossil fuel project, which is worsening the climate crisis and ignoring Indigenous rights,” said Jooyoung Park, a legal officer at Seoul-based Solutions for Our Climate. The Barossa project is currently expected to be Australia’s dirtiest gas project. “K-SURE and KEXIM are violating their own guidelines by financing a project that does not meet international environmental standards.”
The legal action follows a landmark ruling from last December, where the Full Federal Court of Australia revoked the Barossa project’s drilling permit due to insufficient Indigenous consultation. The project is now facing delay sine die, with the project owners having to submit a fresh environment plan after proper consultation and follow-up measures.
In a similar case in 2022, Australia’s High Court rejected a coal project financed by another Korean public institution, KEPCO. The ruling left USD $405 million of investment up in the air, and experts say the Barossa gas project could be another repeat.
“Fossil fuel projects are increasingly facing legal challenges all over the world. As a result, the Barossa gas project is also quickly losing its business prospects,” said Somin Kim, a climate finance researcher at Solutions for Our Climate.
The Board of Audit and Inspection of Korea will now have to decide whether to proceed with the audit. If it goes forth, the agency will examine the financing approval process of K-SURE and KEXIM. KEXIM’s decision was made several weeks after Tiwi Traditional Owners lodged a legal complaint against the state financiers in 2022.
According to a Korean news source, the financing approval of K-SURE is set to expire on January 26. The question is now whether K-SURE will cancel its decision or extend the approval despite public scrutiny.
“Since its financing approval in 2021, the risks of this project have all been realized,” added Kim. “There is still time for the banks to clean up their act. We urge K-SURE to cancel its financing approval and properly review business risk in the future.”
For photos of press conference, please refer to this link.
Solutions for Our Climate (SFOC) is a South Korea-based group that advocates for stronger climate policies and reforms in power regulations. SFOC is led by legal, economic, financial, and environmental experts with experience in energy and climate policy and works closely with policymakers.
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