There, bleached by the flashlight, craning its neck above the reeds, is the unmistakable silhouette of a great egret, a rare wading bird on the protected species list. The photograph was taken by a naturalist in 1988 in a marshy reserve alongside Wolli Creek in Sydney’s south-western suburbs.
Imagine, then, how flabbergasted the local residents were a year or so later when a voluminous and extremely expensive assessment of the creek’s environment was put on public display – an assessment that claimed that “no native animals” inhabited the area.
That study, an environmental impact statement (EIS), as they are known, was a key document in determining when, where or whether the Government should build a massive six-lane freeway viaduct known as the F5 along the valley, devastating what the locals say is the last surviving remnant of natural bushland in south-west Sydney.
The sudden extinction of the great egret, and 43 other species of native birds, frogs, reptiles and mammals recorded in the Wolli Creek reserve, was not the only mystery in the report, a soothing document which gave the impression that no great harm would be done by the construction of the freeway.
A sub-consultant’s preliminary report on potential traffic noise had had a couple of annoying percentage points knocked off its decibel estimates by the time it was published in the EIS. Another consultant’s description of the visual impact of the freeway as “high” had been subtly transmogrified into the less alarming “significant”.
What makes these glitches all the more surprising is that the report was prepared by Kinhill Ltd, a consultancy group little known outside the arcane world of green engineering, which over the last 10 years has become Australia’s largest and most influential company specialising in environment assessment. It has cornered about a quarter of the $50 million-a-year industry and has been involved in some of the most controversial projects of recent years, ranging from uranium mining to powerline siting, freeways, ports and the construction of the third runway at Sydney airport.
Kinhill, of course, has a perfectly plausible explanation for all of the above. The disappearance of the wildlife was, the company says, a typographical error. The noise estimates were reduced to take into account a different road surface. The substitution of the word “significant” was for consistency with the rest of the report. Any suggestion that Kinhill had fudged the EIS to make the freeway look more attractive was wrong, and malicious.
This, however, failed to convince a constellation of local action groups which dismissed the EIS as a “sales document” for the freeway, and said its composition was “as challenging and creative as writing advertising copy”. An astonishing 6,500 “representations” protesting against the EIS poured in, and last April the State Transport Minister, Bruce Baird, announced that he would postpone the project and call in another firm to do a “supplementary EIS”.
The battle for Wolli Creek – still unresolved, by the way, pending completion of a regional transport strategy by another consultant – along with other highly controversial studies conducted by Kinhill, brought into sharp focus a number of issues which have been bubbling beneath the surface of this boom industry.
Most importantly: can the public have faith in the independence of environmental consultancies like Kinhill, which are predominantly engineering companies and which may later bid for lucrative construction contracts for the projects which they are assessing?
“There is no conflict of interest … there are checks and balances within the EIS process, (so) that if we produced a document which was either biased, not objective or inadequate, we would be (exposed as having) failed in our role as consultants.”
His dark eyes are flashing with anger, his manicured beard juts towards you across the plate of buttered hot cross buns on the boardroom table; Bryan R. Jenkins, BE (Hons), ME, MAdmin, PhD, FIE Aust, Kinhill’s director of environment, economics and planning, is not a man who takes kindly to questions about the independence and integrity of his company.
Kinhill was founded 30 years ago by an engineer named Malcolm Kinnaird and three friends from Unley High School in Adelaide. His first job was surveying building subdivisions. Last year his company turned over $100 million, and employed 1,600 people in 30 offices around Australia, in Asia, the Pacific, India and Europe.
It is an unlisted public company, 80 per cent owned by its staff, with the rest of the shares held by the National Mutual Life insurance company (9.9 per cent) and a company called Enterprise Investments (8.9 per cent). Kinhill is the biggest in the business – at last count it was involved in projects worth more than $1 billion – but just what is its business?
Ten per cent or so is environmental, including preparing some 60 EISs (see below) in recent years. Kinhill has given the nod to an impressive list of projects ranging from the Apcel pulp mill in South Australia, the Olympic Dam mine, a sodium cyanide plant at Kwinana in WA, the selection of Sydney’s second airport site, docks and chemical plants around Botany Bay, a coal liquifaction plant in Victoria. A company it took over, Cameron McNamara, was responsible for the much-disputed EIS on Sydney’s cross-harbour tunnel.
The other 90 per cent of Kinhill’s business is engineering, design and management. And occasionally, concedes Bryan Jenkins, the two do overlap. He points to four projects where Kinhill has prepared the EIS, and then gone on to win the contract to build or manage the project: two natural gas pipelines in South Australia (Moomba to Stony Point, and Wasleys to Adelaide); the largest goldmine in Australia, Boddington in Western Australia, where Kinhill designed a 250,000-tonne-a-year processing plant; and that coal liquifaction plant in Victoria where Kinhill has “an ongoing role” in both design and environment assessment.
But the most controversial perceived conflict of interest involved the$2.25 million EIS Kinhill prepared for the proposed third runway at Sydney’s congested Kingsford Smith Airport. Kinhill’s report was widely seen as giving the green light for the controversial development, and a coalition of opposition groups has claimed it paid insufficient attention to alternatives, such as building a new airport at Badgerys Creek.
The allegations of conflict came from Kinhill’s previous involvement with the Federal Airports Corporation in the design of extensions to the international terminal building and taxiing aprons at Sydney airport. And the suspicion that it would bid for the contract if the third runway went ahead.
Under parliamentary privilege, the former Aviation Support Minister, Gary Punch, claimed that Kinhill had been selected to “produce a study to achieve a predetermined result”. Mr Punch, who resigned from the ministry in a protest against the runway, said: “Clearly, at bureaucratic level, the fix is on”, and Kinhill’s selection was an attempt to “subvert the environmental impact statement”.
Bryan Jenkins, naturally, denies this:
Q: Gary Punch implied you were more or less hired guns, and you were there to deliver a desired result. How did you feel when you heard that criticism?
A: He made that statement in Parliament. We invited him to make that statement outside parliament … he’s totally misrepresenting the situation. Q: Will Kinhill bid for that work if the third runway goes ahead?
A: Our chairman has said we will not be bidding for that work … if the credibility of Kinhill is considered to be adversely affected by the alleged concerns about conflict of interest, if our credibility is on the line, we are not bidding.
Stand back from Kinhill for a moment. Look at the whole industry (there are 101 firms in the Sydney Yellow Pages alone, listed just before Escort Services- Social) and ask whether there is a general bias by environmental consultants in favour of development. There is only one person in Australia who can tell you whether or not they get their predictions right, and even he concedes his data is a few years out of date.
Ralph Buckley was a lecturer in environment science at the Bond University until it decided to close down the science faculty. He is now a consultant based on the Gold Coast and describes himself as an environmental auditor.
Three years ago, Buckley set out on the ambitious task of auditing the accuracy of every EIS that had then been done in Australia – well over 1,000 of them. Not all could be assessed (some were so lamentably vague there was no way of measuring what they promised), but of the 400-odd predictions he was able to analyse, many of them relating to large and controversial mining projects, he came up with some quite shocking figures.
To summarise the book he wrote for the Australian National University on his audit, nearly one third (28 per cent) of all EIS predictions were gross underestimates of the potential damage to the environment. On average, pollution from the project turned out to be three times as bad as predicted, and in a worst-case misjudgment, someone underestimated the radiation exposure from the Ranger uranium mine by some 20,000 per cent.
To Ralph Buckley – talking about the industry in general, and not about Kinhill – “the greatest danger is secret deals between the bureaucracy and the developers” and “the greatest safeguard against this is public involvement in the EIS process”. But other senior and respected figures in the Australian environment industry are not as sanguine.
Warwick Giblin is the immediate past president of the NSW branch of the 1,600-strong Environment Institute of Australia, the organisation representing environment professionals (including, incidentally, Bryan Jenkins of Kinhill, who was for two years its federal treasurer). Giblin’s view is that “justice must not only be done, it must be seen to be done … the whole credibility of the EIS process is based on a public confidence that it is done independently and impartially.”
Richard Smyth, who for 10 years was director of the NSW Planning and Environment Department (it has now even lost the “Environment” from its title)is even more blunt: “It is quite unethical for firms preparing EISs to subsequently bid for the work,” he says.
Smyth’s experience is that under the Australian system, consultants and sub-consultants preparing EIS statements are likely to produce the report they know will make their paymasters happy. In the early 1980s, he recalls, a team from the Australian National University was commissioned to study the impact of a Forestry Commission proposal to log rainforest in northern NSW. It came up with a report recommending against it … and received no work from any forestry authority in Australia for the next five years.
Smyth points to practice overseas to back up his point, and particularly to the United States, where there is a more arm’s-length relationship between the developer (the “proponent” in envirojargon) and the group doing the EIS.
The Herald’s inquiries led to Nona Dennis, who is vice-president of a large San Francisco environment consultancy and former State president of the American Association of Environmental Professionals.
Dennis says that in most States firms bidding for EIS contracts have to certify that they will not subsequently tender for the project, if it is approved. New York and Los Angeles go one further – the public authorities which handle the EIS contracts insist that there be no previous business relationship between the consultant and the developer. An arrangement such as Kinhill’s third runway study would have been barred.
The American association, in its code of ethics, also has a clause prohibiting its members from standing to gain from the results of their EIS reports. And every member promises that “I will not accept fees wholly or partly contingent on the client’s desired result, where that desired result conflicts with my professional judgment”.
No such clause appears in the code of the Australian Environment Institute, although it has grappled inconclusively more than once with “the issue of perceived vested interest arising from direct consequential work after the EIS publication”.
Does all this matter? Well, yes. EISs are likely to play an increasingly important role in directing development. In NSW alone there have been 177 of them in the past 12 months (at an average cost of perhaps $100,000), and there are currently no fewer than 14 of them on public display.
It matters also because confusion over the roles of environment advocate and development contractor gives ammunition to those who (according to Bryan Jenkins) attempt to discredit the environment assessment process by attacking the credibility of the firm involved. In the case of Kinhill, the attacks have been long and loud.
The F5 freeway study (pigeonholed pending a new report) and the EIS on the third runway (currently the subject of a $500,000 critique) are not the only EISs by Kinhill which have been roundly condemned by the people affected by the proposed development.
Just last week, Sir Harry Gibbs, a former Chief Justice of the High Court, delivered a scathing report on another project for which Kinhill did the EIS -a tick for an Elcom powerline marching 160 kilometres across private farmland through the shire of Oberon.
There had not been enough public consultation, said Sir Harry. Compensation should be extended. There should have been more consideration given to routing the power towers through State-owned forest rather than the cheaper alternative of resuming farmers’ cleared land. There was much more.
Bryan Jenkins again reacts angrily to this criticism. “Gibbs got it wrong,”he says, bluntly, of the 12-month inquiry headed by this distinguished jurist. “We have written him a letter … there are some factual errors in that document.”
Kinhill’s corporate philosophy states that “continued client satisfaction is the single factor on which the fortunes of the firm most clearly depend”, so it is reasonable to ask whether, of all the 60 environment studies the company has completed, they ever recommended against going ahead with a development.
Jenkins thinks for a while and then comes up with one: a proposal by the RAAF to stage supersonic tactical manoeuvres at its Tindall base, near Katherine in the Northern Territory. Kinhill, just this once, found that “the impact would be unacceptable” and the RAAF decided to order its Hornets to play their games over the ocean.
Kinhill’s major works
Proposed third runway, Sydney Airport, – Kinhill does EIS, then announces it will not bid for any construction work after claims of conflict of interest.
New $500,000 study being prepared by another group.
Second Sydney airport site selection – EIS recommends Badgerys Creek.
Geelong airport – environment effects statement.
South Western (F5) freeway, Sydney.
Alexandria to Beverly Hills -Government pigeonholes EIS, calls for fresh inquiry after residents’ mass protest.
F3 freeway, Wahroonga-Berowra, EIS.
Eastern Freeway (F19), Western approaches, Melbourne, EIS.
Proposed Eastern arterial road extension and Ringwood bypass, air quality study.
Australia’s largest goldmine, Boddington, Western Australia – Kinhill wins EIS and $15 million construction contract for processing plant.
Electricity transmission line from Lithgow to Goulburn, NSW – judicial inquiry criticises planning and route.
Armidale to Lismore electricity transmission line, EIS.
Portland aluminium smelter, Victoria, EIS.
Olympic Dam project, South Australia, EIS.
Moomba to Stony Point pipeline, SA and Wasleys gas pipeline to Adelaide, awarded EIS plus construction contract.
Pine Creek Gold Mine, Northern Territory, EIS.
Multifunction polis, SA, EIS.
Apcel pulp mill redevelopment project, SA, EIS.
Penrith Lakes scheme, regional environmental study.
Pub: Sydney Morning Herald
Pub date: Saturday 23 March 1991
Word count: 2838
Keywords: Environment Public works Studies Conservation
Illustration: Michael Fitzjames
Caption: Kinhill’s Bryan Jenkins.
Table: Kinhill’s major works