Australian miners and pension funds have begun to cut ties with Russia as the global push to isolate Moscow gathers pace.
- Several Australian companies are already cutting ties with Russian business partners
- Corporate social responsibility advocates say some of the measures to reduce ties are ‘frontage’
- Some large companies, such as Rio Tinto, still operate joint ventures with large Russian companies
Russian businessman Maxim Mayorets has agreed to step down from the board of Falcon Oil and Gas, a partner in Origin Energy’s Beetaloo Basin gas project in the Northern Territory.
But resource heavyweight Rio Tinto continues to co-own one of Australia’s biggest alumina refineries, Queensland Alumina Limited (QAL), with Russian aluminum giant Rusal.
“We are closely monitoring the situation in Ukraine and the related sanctions,” a Rio Tinto spokesperson told AAP.
“We are confident that we have the appropriate structures in place to ensure that QAL’s operations will not be disrupted.”
Australia’s sovereign wealth fund Future Fund and the country’s second-largest superannuation fund, Aware Super, have announced they will shed Russian assets.
The Future Fund said it would reduce its exposure to Russia, including assets not currently subject to disposal sanctions, if market conditions allow.
The sovereign wealth fund holds about 0.1% of the fund, or about $200 million, in companies listed on the Russian stock exchange, but no Russian sovereign debt or other fixed-income assets.
Australia also joined other central banks in pressuring Russia, preventing the encashment of $8 billion of Australian bonds by the Bank of Russia.
Since the invasion of Ukraine last week, more than 400 Russian individuals and entities have been added to the “Consolidated List” – a list of individuals and entities subject to financial sanctions – which is maintained by the Ministry of Foreign Affairs and Trade.
Rusal owns a fifth of the QAL refinery in Gladstone but is not on the list of sanctioned entities.
Falcon’s Mr Mayorets and the Russian oligarch he represents, Viktor Vekselberg, are also not on the list.
Australasian Center for Corporate Accountability spokesman Dan Gocher said Mr Mayorets’ resignation was “a window dressing”.
“Vekselberg will personally benefit from any successful exploration Origin conducts in the Beetaloo Basin,” Mr. Gocher said.
Resources Minister Keith Pitt told AAP that unlocking the Beetaloo Basin was key to the Australian government’s plans for a gas-fired recovery.
“The situation in Ukraine is deeply concerning and the Australian government is closely monitoring developments and providing support.”
Origin said in a statement to investors that it was “appalled by Russian aggression and the invasion of Ukraine.”
Origin has operations across Australia, Papua New Guinea and the South Pacific and said it was monitoring the situation and would adhere to sanctions imposed by Australia and other governments.
Andrew Leigh, deputy treasurer of the Labor Party, said the federal government must crack down on tax havens and toughen anti-money laundering laws to track down the sources of Vladimir Putin’s “illicit money”.
According to some estimates, Mr Putin’s personal wealth could be as high as $200 billion, with the money sitting in tax havens and shell companies.
The financial intelligence agency AUSTRAC and major banks have been alerted to monitor suspicious transactions following the sanctions imposed by Australia.
Some Russian banks have also been removed from the SWIFT international payment system, making it harder for Russian individuals and businesses to transfer money.