Clive Palmer has warned that mining companies would be wary of investing in WA after the state government moved to legislate its way out of a dispute with the mining magnate.
Clive Palmer has warned that big mining companies, including Rio Tinto, BHP and Woodside, would be wary of investing in Western Australia in future after the state government moved to legislate its way out of a long-running dispute with the mining magnate.
In a scathing assessment of the legislation, which is designed to void the ongoing arbitration between the state government and Mr Palmer's Mineralogy over the state's refusal to approve the Balmoral South Iron Ore Project from 2012, Mr Palmer said WA would be branded an outlaw state by resources companies.
"It's an outlaw state that doesn't recognise the rule of law. This sort of thing is what's done with Saddam Hussein in a dictatorship, where you don't have a rule of law. It's a very worrying sign and I hope in the future that people don't see that as a way of solving problems. It's not what we do in Australia normally. If the High Court decides to strike this down, where does Mr McGowan go?" he said.
"All the lawyers we have spoken to said they can't believe that an Australian state government would try to do that. ... It just undermines the rule of democracy and the rule of law. That was their view to me. And I think it does. I think even [Attorney-General John] Quigley must know that."
Mr Palmer said Mr Quigley's claims in state parliament that the Bill, which would amend Mineralogy's 2002 state agreement, did not create a risk to other state agreement parties or to future investment in WA were clearly wrong.
"The McGowan Government accepts that the Bill is unprecedented," Mr Quigley said.
"It contains a number of provisions and measures that are not usual, but Mineralogy and Mr Palmer are not normal and the state needs to [take] these measures to best protect its interests and the community's interests. WA governments, from both sides of politics, have always refrained from intervening in the operation of state agreements by statute. This Bill does not represent a change to this general and longstanding policy.
"This Bill does not give rise to sovereign risk. Since the 1950s, the state has entered into over 70 state agreements and currently has over 50 state agreements on foot. In the history of state agreements, no other state agreement proponent has sought to challenge a minister's decision about a proposal or taken the state to arbitration on any matter, let alone a minister's decision to reject or comment on a proposal which has been submitted.
"This Bill does not therefore create a risk to other current state agreement parties or to future investors. Other state agreement parties and proponents deal properly and appropriately with the state in terms of their proposals."
Mr Palmer said any company that was a party to a state agreement should be concerned.
"You should be able to rely on the law in WA. All State Agreement Acts have got a simple clause in them that says 'if there's a dispute between the parties, they'll have an arbitration'," he said.
"So they're saying now that regardless of what all the agreements say, if we're going to lose an arbitration, or we think we are, we're going to legislate against you. So, that in effect negates all the arbitration clauses in all the state agreements. Obviously, you can't have an arbitration when it's only there when you win.
"In our Act, you've got a clause that says 'if there's a dispute, you'll have an arbitration'. And that's in everyone's Act. ... Obviously, they've had an arbitration. This might be the first one they're going to lose. But they couldn't take it. They had to legislate against it. So, there's no reason they wouldn't do it if it was BHP or Woodside or someone else. They will do the same thing, I think. So, they can't be relied on."
He also said it was now clear that the state government had declared war on him over his recent border dispute in an attempt to win popular support for this legislation.
But he warned that any attempt to demonise Clive Palmer would not help when he challenged the legislation in the High Court.
"The reality is Adolf Hitler thought the same thing. History is littered with people that did things because they thought they were popular at the moment. But the reality of it is you've got to do what's best long-term ... and certainly the rule of law and democracy is very important to us in Australia. It's not the case in China [and] I know Mr McGowan's got close links with China," he said.
"I think the state government has taken a set against me because they are in a dispute and they know they're guilty. And because they are guilty they are going to strike out at me because there's no way out of it. So we aren't the villains of this. We are the victims, really."
Mr Palmer urged the state government to instead negotiate a settlement and revealed that the figure of $30 billion, cited in parliament by Mr Quigley, had been put forward as part of a commercial negotiation.
"We are happy to talk to the government at any time, but they have never been willing to sit down and talk with us," he said.
"This indicates they don't have a defence to this. They don't have a case. If they did, they wouldn't do this, would they?
"I think the state government should just calm down. Mr Quigley and Mr McGowan should have a break that they obviously need. A couple of days to calm down, because they have worked themselves into a frenzy.
"This may look like a solution, but it's not a solution in the long term because it's going to affect negatively on WA and other people's state agreements. And it's highly likely that this will be thrown out by the High Court and they'll be back to where they started anyway."