Clive Palmer speaks at National Press Club event in Canberra, Australia, in a file photo. Image: AFP via Getty Images/Stefan Postles

SYDNEY — Western Australia’s government has enacted urgent legislation to try and halt a US$21 billion lawsuit by tycoon Clive Palmer over an iron ore project that it says could undermine the state’s defenses against Covid-19.

Palmer claims that the virus threat is mostly a media concoction, and has lodged a High Court action against the closure of Western Australia’s borders with other states, which aims to stop the spread of Covid-19. His own application to enter the state from Queensland in July was rejected.

The billionaire miner, whose personal wealth amounted to $2.8 billion in 2019, a $1 billion rise from 2018, says the closures are causing economic disaster. Political leaders have labeled Palmer as selfish, arguing that he was protecting the interests of his companies, Mineralogy and International Minerals.

“The government is taking steps to protect the state from the rapacious nature of Mr Palmer,” Attorney-General John Quigley told parliament.

“Obviously, if the claimants were to succeed in their damages claim at a level anywhere close to the amount sought, this would have dire financial consequences for the state of WA and Western Australians,” he warned.

Opposition parties are expected to back the bill when it is considered by  parliament this week.

A decree is being rushed through because the state fears it may lose the lawsuit, which stems from a 2012 government refusal to approve Mineralogy’s Balmoral South iron ore project in Pilbara region. Palmer claims this prevented him from selling the mine to a Chinese firm.

A man walks past a billboard of United Australia Party leader Clive Palmer in Melbourne. Photo: AFP/William West

A $21 billion payout would absorb the entire 2020 budget, making the state technically bankrupt at a time when most of its finances are being used to stop a Covid-19 outbreak in Victoria from crossing state borders.

While Palmer says he is trying to uphold a constitutional right of passage, he has a strong political motivation for unsettling the state’s ruling Labor Party. His conservative United Australia Party (UAP) is likely to run several candidates in the state election, which must be called by mid-March 2021.

Prime Minister Scott Morrison’s rightwing Liberal-Nationals federal government has also been dragged into the affair, after initially supporting Palmer’s High Court action over the border closures. It withdrew following a public backlash.

A former Nationals member, Palmer set up his own political faction in 2013 and scraped into federal parliament with a margin of 53 votes. He quit and dissolved the party in 2016, but it was revived in 2018.

The UAP failed to win any seats in a poll that year, and he is now fighting charges of fraud and corruption over money transfers just before the 2013 election.

Palmer, who wrote in Who’s Who that one of his hobbies was litigation, settled a lawsuit in 2019 over the collapse of Queensland Nickel that left many workers with outstanding wages but has not made a full payout. 

Mineralogy blamed the collapse on another legal standoff with Hong Kong-based conglomerate CITIC over royalties from its iron ore project in Pilbara that operates on land owned by Palmer’s firm. An appeal court last year ordered CITIC to pay Mineralogy royalties of about $149 million.

Australian Prime Minister Scott Morrison is to hold a virtual summit with his Indian counterpart this week. Photo: AFP

The state government sided with CITIC in the dispute and said Palmer’s Pilbara project was rejected because it did not conform with regulations. Palmer charged that the emergency legislation was a “bad sign for WA because you don’t want governments legislating away peoples’ rights.”

He has attracted support from other miners, but there is less sympathy for Palmer’s efforts to force the borders open, especially from health officials.

Political leaders have credited border shutdowns for the low incidence of Covid-19 — nine deaths from 642 confirmed cases in a population of 2.6 million — and there is generally strong public support for the measures.

A social media campaign is calling on members of the public to cough on Palmer if he wins his case, but few people are expected to actually do so.

“No one from Western Australia is particularly keen on all this being played out in court at the moment. It would be a good idea to just pack up the tent and concentrate on helping Victoria right now,” said Dr Andrew Miller, state president of the Australian Medical Association.

“Or put some resources into the healthcare system in Western Australia  rather than into the legal system, which is doing fine at the moment.”

Police inspect driver licences at a checkpoint in the locked-down suburb of Broadmeadows in Melbourne on July 2, 2020. Photo: AFP/William West

Miller is optimistic that the High Court will side with the state authorities.

“The idea that you can’t have control around your border during an unprecedented public health emergency, I think, will be a difficult one for them to prosecute. Secondly if we do lose that case, that doesn’t mean that the borders necessarily, straight away, open in a legal sense.

“There are plenty of other levers that in a public health emergency the government can use other than a simple closure of the border,” he said.