Companies can theoretically break environmental laws overseas and still be eligible for discounts on the bond needed to clean up any mining projects in Queensland, the state’s environment department has determined.

The department is currently deliberating on how much money Adani would need to set aside to clean up the aftermath of Australia’s largest proposed coalmine. But it has told Guardian Australia the Indian conglomerate’s record of regulatory compliance elsewhere cannot be taken into account.

In any case, the coal giant may struggle to show it is eligible for the 30% discount on “financial assurance”, which is available to miners with “good environmental performance” in Queensland. Adani’s only operational business in the state, the Abbot Point coal terminal, did not qualify, the department said.

It comes after various allegations about the track record of the Adani Group overseas, including recent accusations by its own lawyer of fraud, illegal land purchases and other violations over a solar project in India.

That company, a subsidiary of Adani Enterprises – which is also the parent company of Adani Mining Australia – has denied wrongdoing and taken legal action to gag the lawyer, whom it accused of blackmail.

Ariane Wilkinson, a lawyer at Environmental Justice Australia (EJA), said the fact companies could not be held accountable for their overseas record was “a serious failure of the law”.

“From a practical perspective, the international environmental track record of the Adani Group is clearly relevant to the amount of financial assurance that should be set for the Carmichael coalmine,” she said.

“The financial assurance exists to cover costs if a company fails to meet their obligations contained in the environmental authority. The past environmental performance of a company and their executive officers, and any related companies, is clearly relevant when assessing the risk of noncompliance.

“This is the case whether the failure to comply with environmental laws occurred in Australia or overseas.

“There is no sensible reason to restrict consideration of past environmental performance to compliance with Australian environmental laws. If foreign companies wish to operate in Australia, they should be accountable for their environmental track record, rather than have governments turn a blind eye simply because the foreign company has set up a number of subsidiary companies in Australia.”

Adani has been granted an environmental permit by the state government for its Carmichael mine in north Queensland.



But it is yet to give the department its plan of operations, which “must include a rehabilitation program to the land proposed to be disturbed”, a spokeswoman for the Department of Environment and Heritage Protection said.

“The plan of operations must include a proposed amount of financial assurance and proposed discounts,” she said.

Mining companies usually give financial assurance via a bank guarantee, or less commonly, cash.

The government has been reviewing its financial assurance scheme, which was heavily criticised in a report by the Queensland auditor general less than two years ago. The report found rehabilitation of mines at the expense of miners remained “an unrealised aspiration” and financial assurance was “often insufficient to cover the estimated cost of site rehabilitation”.

The office for the Queensland environment minister, Steven Miles, said in a letter to EJA last month the government would obtain a bond from Adani “commensurate with the real cost of rehabilitating disturbed land”.

The spokeswoman for the Department of Environment and Heritage Protection said the department was unable to “take into account the overseas record of a company or related companies when determining financial assurance”.

“Companies who can demonstrate good environmental performance in Queensland can apply for a financial assurance discount,” she said.

Those with a chequered record in Queensland were ineligible, she said.

For Adani to gain a discount on its bond, it would have to show a track record in mining separate from its running of the Abbot Point coal port, the spokeswoman said.



“The department considers the environmental performance of the activity at the site being assessed when making a decision on financial assurance,” she said.