Key PointsThe Federal Court dismissed an application by an ASX-listed company mining coal in Russia, which challenged Australia’s sanctions regime.In April 2023, DFAT provided Tigers Realm with an indicative assessment that its operations were against sanction guidelines.The company has been mining coking coal in Russia since 2017 on one of its two exploration sites and selling it to Asian markets.
Following Russia’s full-scale invasion of Ukraine in February 2022, a number of countries rolled out sanctions against it, gradually making it
.
The Australian government introduced
and entities and banned the export and import of a number of goods to and from Russia.
More than two years into the war, there have been at least three cases involving entities or individuals who have challenged the application of Australia’s sanctions, and all three have failed.
The most recent was the unsuccessful bid by Australian company Tigers Realm to dispute the definition of “transport” in court and to prove that its coal mining business in Russia does not fall under sanction regulations.
The judgement of the Federal Court on Tuesday dismissing the Tigers Realm application has sparked a new wave of calls from advocates for stronger and enforceable sanctions.
Players of the mining industry challenging sanctions
The first company to somewhat indirectly challenge Australia’s sanctions was Rusal, one of the world’s largest aluminium producers.
Rusal and mining corporation Rio Tinto both have interests in a joint venture Queensland alumina refinery.
Soon after Australia placed sanctions on Russian oligarch Oleg Deripaska, founder of Rusal, Rio Tinto decided to distance itself and prevent any of the Rusal subsidiaries from gaining profits from its shareholdings in Australia.
Rusal argued in Federal Court that these actions were unlawful. However, Justice O’Bryan
, as it would have otherwise breached the “designated persons” sanctions applied to Mr Deripaska.
In January 2023, Mr Deripaska challenged the individual sanctions, arguing that there was insufficient evidence to suggest that he had personal ties to Russia’s President Vladimir Putin.
. However, in March, Mr Deripaska
.
More recently, Australian coal mining company Tigers Realm challenged the application of sanctions on its activities inside Russia.
Coal is a sanctioned good under current regulations, however, ASX-listed Tigers Realm argued in court that Australian sanctions did not apply, as it only produced coal in Russia, but didn’t transport it across borders.
.
‘Australia is chronically obsessed with coal’
Unlike Mr Deripaska and Rusal, who were effectively barred from profiting in Australia, Tigers Realm haven’t stopped mining and selling coal.
The company holds two exploration licences in
in Russia where it has been mining coking coal and selling it to Asian markets since 2017. It also
near the mine.
In April 2023,
that Tigers Realm’s operations may be in breach of Australia’s sanction laws.
The company refuted that claim and, in June 2023,
that it had filed a court case seeking to prove that its operations in Russia were not in breach of sanctions.
In its recent annual report at the end of February 2024, the company
for the calendar year of 2023.
In September 2023,
alleged, that Tigers Realm had been approached by potential buyers in Russia, but “the foreign owners did not part with their assets”.
SBS Russian requested comment from Tigers Realm on whether these allegations were true and if they were, why wouldn’t Australian owners of the company agree to sell it, given the potential sanctions breach.
Tigers Realm did not respond to the request.
Eugene Simonov, environmental advocacy expert and co-founder of the
, suggests that potential profit and Australia’s “obsession with coal” are among the reasons.
Coal mining abroad is not perceived as an anachronism or anomaly. Instead, it is seen as a normal and quite tempting business.
Eugene Simonov, Ukraine War Environmental Consequences Work Group
“Since they are digging coal here in Australia and holding on to this generally doomed business, it would be surprising if they would miss a chance to also dig coal in an advantageous proximity to China”.
‘Lack of accountability breeds impunity’
At the Federal Court hearing in March, Tigers Realm stated that it produced coal and transported it within Russia from mine to port, where the ownership ended, while the sanctions regulations targeted cross-border transport.
It argued, that DFAT’s interpretation of “transport” was too broad, and that “an Australian citizen using coal produced in Russia to heat his apartment in Moscow” would also then be captured by the same regulations.
But Justice Kennett rejected that interpretation, stating that in the case of the coal miner, it was clear that the transport of coal was done with the purpose of selling the commodity further.
Over the past two years, as the US and the EU were rolling out sanctions, Russia had to find ways to continue selling fossil fuels, its key export goods, that its economy relies on.
In early 2023, it was found that barrels with oil and other fuels
.
In other cases, old tankers with
were used to transport the fuels to evade sanctions. The practice that
, is now under investigation by the US authorities, who
.
In the meantime, China grew its presence and
.
According to Melissa Chen, senior lawyer at the Australian Centre for International Justice, the ruling by the Federal Court only highlighted the need for “stronger and enforceable” sanctions and called for the authorities to further investigate any breaches of regulations.
“Australia needs enforceable sanctions laws to effectively condemn Russia’s immoral and illegal invasion of Ukraine”, she said.
Australia needs to cut off the financial resources which fuel the corrupt and murderous Putin regime.
Melissa Chen, senior lawyer at the Australian Center for International Justice
“It is vital that Australian agencies take action to investigate any breaches of Australia’s sanctions laws, and consider criminal prosecution in light of the court outcome and Tigers Realm’s unceasing mining activities in Russia. Lack of accountability breeds impunity”.
In a statement to SBS Russian, spokesperson of the Department of Foreign Affairs said the Department welcomed the Federal Court’s decision regarding the Tigers Realm case.
“The Commonwealth is considering all relevant options with regards to compliance and enforcement action it may take against Tigers Realm Coal Limited”.
Tigers Realm did not respond to requests for comment from SBS Russian.
, the company has filed for voluntary suspension until further notice while it is “evaluating the best approach to continue operations while ensuring it complies with Sanction regulations”.
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