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City Council turns its back on fossil fuel divestment

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Adelaide City Council has voted against becoming the first council in South Australia to divest from the fossil fuel industry after some councillors warned the policy was too broad and potentially costly.

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The majority of councillors – including all six so-called “Team Adelaide” representatives and independent Jessy Khera – last night voted in favour of removing a clause from council’s Treasury Policy that proposed council preference banks that do not invest in the fossil fuel industry, where there is a competitive rate of return.

Council administration had earlier concluded that the policy change would have no detrimental impact on council finances and would be consistent with the policies of other city councils including Hobart, Sydney and Newcastle.

Moving that the policy come into effect, area councillor Robert Simms, who first proposed that council divest from fossil fuels in 2015, told last night’s council meeting that voting in favour of the policy would be a “milestone” for the council.

“If implemented tonight, this will be a win for our environment and a win for the council,” he told the chamber.

“We talk about wanting to be a carbon neutral city, we talk about wanting to be one of the world’s leading cities and this is an opportunity for us to put our name where our mouth is.”

But central ward councillor Jessy Khera said the term “fossil fuels” was too broad and, as such, there would be a “potentially significant” administration cost involved in defining what constituted a fossil fuel-related investment.

Khera moved an amendment that removed the fossil fuel divestment policy from the revised Treasury Policy, saying the clause would lead to costly “administrative churn”.

He said state and federal governments already had policies that targeted fossil fuel emissions reduction and urged councillors to refrain from “telling the banks how to run their business”.

“There is a significant and varied cost to this provision,” Khera told the council chamber.

“For example, if a bank loans money to a trucking company does that mean an investment in fossil fuels? If it’s a taxi company, are they an investor in fossil fuels?

“There is clearly a potential significant administration cost in defining and investigating these matters.

“This is money that, instead of being spent on administrative churn, we could, for example, spend on low emission LED lights, which would provide a continuing reduction in emissions.”

Khera’s amendment drew scorn from Simms, who said removing the policy would be “squibbing” on a “huge opportunity for council to show some leadership”.

“As administration has said, the council will not be out of pocket in any way, so it’s not going to be something that’s damaging our financial position,” Simms said.

“This has been debated a hell of a lot over the last few years… let’s not kick this off our road again.”

Simms was supported by fellow councillor Phil Martin, who had proposed that council divest from fossil fuels in August last year when Simms was not sitting on council.

Martin said the policy had been “seriously debated and considered” by the administration, including the Audit Committee, which approved the policy in October.

“These hardened auditors sat there and said, ‘yes, that makes sense’,” Martin said.

“There is no loss to the taxpayer or ratepayer – it will only be implemented where there is a competitive rate of return.

“If we delay it we will diminish in the eyes of the people who regard us as a best practice organisation.”

Martin said there was “no big deal” with identifying appropriate investments, as an “index of fossil fuels” outlining what banks and organisations had ties with the fossil fuel industry was available online.

But Deputy Lord Mayor Houssam Abiad – who seconded Khera’s amendment – argued that because the council borrowed through the Local Government Association, which in turn borrowed from third parties, the council could have exposure to fossil fuel investments.

“This seems that we are not sure where our money is coming from because… some banks we may use may be involved in supporting organisations involved in fossil fuels,” he said.

“We could have a nice phrase that says, ‘We are divesting from fossil fuels’, everyone goes home and sleeps very happy and we’ve solved the world’s problem, or we truly do it and I don’t think with this we truly do it.”

As the public gallery erupted in cries of “shame”, Khera and the six “Team Adelaide” representatives on council – including Houssam Abiad, Franz Knoll, Simon Hou, Mary Couros, Arman Abrahimzadeh and Alexander Hyde – rose to carry the amendment.

InDaily revealed earlier this year that a group of council candidates endorsed by then-Lord Mayor Martin Haese had been meeting regularly, in private, ahead of this month’s local government election – but none was willing to acknowledge an affiliation with “Team Adelaide” publicly.

The grouping won the city council majority, with affiliate Franz Knoll telling InDaily in November that being part of the group meant that he would be able to “modify” his approach to policy proposals “so that what I bring is acceptable to the broader community”.

The group voted as a bloc on three separate items at last night’s council meeting.

Councillor Martin on Facebook last night expressed his dissatisfaction at “Deputy Lord Mayor Houssam Abiad’s Team Adelaide majority faction”, which he said voted down the fossil fuel divestment policy and in favour of a proposal put forward by affiliate Mary Couros to build a “box park” at the vacant 88 O’Connell Street site.

InDaily attempted to contact Abiad for comment but he has not returned phone calls.

Area councillor Anne Moran, who had Haese’s endorsement but said she was never invited to join the group and had not attended its meetings, told InDaily today that she was yet to see members of Team Adelaide “break ranks”.

“It is annoying that they have got the numbers,” she said.

“If you have a group of six that always votes together that renders the rest of us less able to get things through council.

“But, it was pleasing to see that Team Adelaide was voting on other items – the (Adelaide Oval) hotel for instance – which was unanimous.”

Moran said the councillors not on Team Adelaide did not adhere to “party discipline” and could vote as they pleased.

“I think it’s good that the rest of us feel that we can break from what each other are doing,” she said.

“There is certainly no voting discipline with us – which we saw when Jessy (Khera) voted against the fossil fuels.

“I just hope that Team Adelaide allows people to cross the floor.”

Khera told InDaily this morning that he was a “complete independent”.

“I have seen that there has been some of the people who are notionally on Team Adelaide who have not voted in a bloc,” he said.

“As far as I am concerned there is no Team Adelaide.”

Donovan said this morning that it was “interesting” that some voting patterns had emerged in the council chamber.

“It’s going to be interesting to see what happens in the future,” she said.

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