RESOURCE PEOPLE Issue 007 | Winter 2014 by AREEA

Issue 007 Winter 2014

Harnessing Chevronâ&#x20AC;&#x2122;s human energy Graduates rate MMG

Minister Robb talks new trade deals La Mancha upskills for golden era BHP fires up for coal demand

PLUS Fair Work changes reviewed and miningâ&#x20AC;&#x2122;s new dress code

CONTENTS

LEADERSHIP 22 | BHP fires up for coal demand 24 | Supporting resource investment in the west 25 | $75m infrastructure boost for NSW regions 26 | Labor signals move from union stronghold 27 | New GVK Hancock CEO leads Galilee Basin charge COVER STORY 28 | Harnessing Chevron’s human energy POLICY 32 | Fair Work changes to restore balance and sensibility 33 | Contentious tribunal rulings push barrow for appeals bench 34 | PC Review once in a generation opportunity 35 | Major workplace study underway MIGRATION 36 | 457 visa program under microscope 37 | Unnecessary offshore migration laws to be scrapped

DIVERSITY 38 | Mining’s new dress code 39 | Gender reporting delayed 40 | Morris awards $14m Indigenous transport contract 42 | Indigenous pathways help close the gap

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CONTENTS

Issue 007 Winter 2014

Harnessing Chevron’s human energy Graduates rate MMG

COVER IMAGE Chevron GM human resources Kaye Butler

Minister Robb talks new trade deals La Mancha upskills for golden era BHP fires up for coal demand

Photography by Rovis Media

PLUS Fair Work changes reviewed and mining’s new dress code

Editor | Tom Reid Tom.Reid@amma.org.au Deputy Editor | Kylie Sully Kylie.Sully@amma.org.au Advertising | Samantha Edmunds Samantha.Edmunds@amma.org.au

AMMA Contacts 1800 627 771 | membership@amma.org.au migration@amma.org.au miningoilandgasjobs@amma.org.au training@amma.org.au

| Winter 2014 | www.amma.org.au

REGULARS

From the Editor RESPONSIBLE FOR MANAGING the human aspect of $80 billion worth of pioneering liquefied natural gas infrastructure on Western Australia’s coastline, Kaye Butler is under no misconceptions about the magnitude of her role. In this issue’s cover story, Chevron Australia’s general manager human resources opens up about the motivation she draws from the generational employment and economic potential of the Gorgon and Wheatstone projects, and how she is harnessing Chevron’s ‘human energy’ to position Australia as an LNG powerhouse. Our Human Resources section delves into the talent development approach which saw base metals miner MMG voted the industry’s 2014 ‘Top Graduate Employer’, while Training tells two tales of skills development with Queensland driller Savanna Energy Services and West Australian gold miner La Mancha both empowering their workforces for the long haul. With the resource industry being by far Australia’s most financially rewarding sector to be employed in, it is highly appropriate that our OHS section looks at why a growing number of employers consider pathways to financial advice as critical to employee wellbeing. Leadership packs a punch with BHP Billiton’s president of coal Dean Dalla Valle discussing the high-performing focus of

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Queensland’s largest coal miner. The one-time BHP apprentice offers a timely reminder that demand for the energy source is set to rise in the next two decades and is confident innovations in people and processes can triumph over commodity price fluctuations. In Diversity, we showcase two start-ups changing the face – or form – of protective workwear for women and meet three new Indigenous recruits to the hospitality services sector who are shining examples of effective industry and government collaboration. We’re pleased to offer special columns from WA mines minister Bill Marmion, who lays out the steps his government is taking to keep resources investment flowing into the state, and federal trade minister Andrew Robb who tells Resource People why the industry is set to benefit from two landmark trade agreements with Japan and South Korea. Also on the policy front, we hone in on Australia’s workplace laws and the amendments currently up for consideration – but will they go far enough to support further job creation and investment into new projects as many existing developments transition to the long-term production phase? These and many more stories found within Winter ’14 celebrate the people and practices underpinning our industry’s ongoing success. Happy exploring. Tom Reid

Editor

REGULARS

Chief Executive’s Message THE opportunities created by Chevron’s landmark LNG projects make a fitting cover story for this edition of Resource People, in which we also explore the importance of Australia growing to be one of the world’s most diversified and globally engaged trading nations. Nothing typifies Australia’s growing economic engagement with the rest of the world like the $200 billion in LNG projects under construction across the country – projects that bring decades of jobs and domestic gas supply as well as ongoing national income through global energy deals. Represented in our Winter 2014 issue by its general manager human resources Kaye Butler, Chevron has already secured its historic place in the nation’s LNG revolution with $80 billion worth of LNG projects offshore Western Australia, creating 14,000 construction jobs and 3000 long-term operational positions. The ongoing economic and employment opportunities delivered by new mega-resources projects are, of course, not limited to hydrocarbons. Hancock Prospecting’s funding deal for its $10 billion Roy Hill iron ore project is further welcome news for our industry and our nation. As explored in Member News (page 49), Roy Hill will employ about 8,500 people during construction and 2,000 once operation commences in 2015. A strong commitment to local suppliers will have positive flow-on effects for Western Australia and the nation. The scale of these projects and their importance to Australia highlights why it is so critical to have a domestic regulatory framework that will bring more investment to our shores. Securing projects of this magnitude cannot be taken for granted and policy shortcomings need to be addressed. In his column to AMMA members (page 50), Trade and Investment Minister Andrew Robb writes that the resource sector will benefit from new free trade agreements, and has already contributed greatly to the existing strength of our national exports and the one-in-five Australian jobs they create. However just as the resource industry is one of the most globally engaged Australian industries, our sector is also among the most heavily exposed to increasing global competitive pressures. Over the past two years, more than $150 billion worth of critical job-creating projects have been delayed or cancelled, with investors not progressing the onshore Browse LNG Project,

Port Hedland mooted outer harbour, Olympic Dam expansion, the Wandoan Coal project and so forth. Hence, while the Prime Minister and Minister Robb should be congratulated for signing-off on historic free trade agreements with Japan and South Korea, seizing these new opportunities also requires much needed domestic policy reform to boost our productivity and competitiveness. As we go to print the Productivity Commission has released a new report showing Australia’s business efficiency has slid for the ninth consecutive year, placing our multifactor productivity among the worst of the developed world. The first step in improving our national competitiveness is doing all we can to ensure the new Senate passes key policies the Abbott Government was elected to implement, including reducing red tape and abolishing the carbon and mining taxes. Just as important is restoring some stability and practicality to Australia’s workplace laws and in this magazine we detail much of the government’s proposals in this critical policy area (pages 32-35). AMMA continues to strongly advocate for changes that will support more resource investment, more projects and more jobs.

Nothing typifies Australia’s growing economic engagement with the rest of the world like the $200 billion in LNG projects under construction across the country...

Enterprise will also need to play its part by pursuing efficiency and productivity gains and continuing to engage with global best practices and Australian-driven innovation. This time of year is when more than 400 industry professionals gather at AMMA’s national event, the 2014 Australian Resource People Summit to address these very issues. Australia’s former Prime Minister John Howard is just one of many outstanding presenters in our line-up. Held in WA this year, some delegates will travel over 2,000 miles to be in attendance. For George Osborne, the UK’s Chancellor of the Exchequer, this would be a short trip to see our headliner. In March, Osborne commented, “the G20 meeting (in Australia) was just a bonus, I would have flown 10,500 miles just to hear the wisdom of John Howard”. Themed “Innovation through People, Policy and Productivity”, the event is a timely reminder that if our nation is to attract new global investment on the basis of our productivity and not just our vast natural resources, such competitiveness will ultimately be driven by our people. Steve Knott

AMMA Chief Executive

| Winter 2014 | www.amma.org.au

HUMAN RESOURCES

Graduates raTE MMG on top The experience MMG offers its graduate employees saw the base metals miner recognised as the industry’s 2014 ‘Top Graduate Employer’, further reinforcing its approach to talent development. IT takes a person with a ‘whole lot of get up and go’ to be accepted into base metals miner MMG’s graduate program, according to group manager organisational development Luke Messer. “That’s who we look for. We seek dynamic people who bring not only a strong sense of values but also have the ‘agency’ to LUKE MESSER express these – the motivation and ability to promote, shape and align others around those values,” he says. This approach was validated when MMG was named the mining industry’s top graduate employer in the Australian Association of Graduate Employers’ (AAGE) 2014 survey. The miner placed 26th across all industries and businesses in Australia, recognising its graduates’ positive experiences across 20 categories including training and development, quality of work and company culture. MMG’s annual graduate intake varies depending on growth, skill gaps and internal development capacity, but typically involves 20 new graduates each year, with 100 people having participated in the program since it began five years ago. Messer says MMG’s program hinges on providing real job opportunities that allow graduates to add value from day one. “To do this successfully, the entire business needs to align with this expectation and the treatment of our graduates needs to be positive, respectful and consistent,” he says. “It is rare for me to engage with MMG’s leadership team and walk away without at least being questioned about the program and where people are at. This high-level focus has cascaded throughout the business. “A lot of our people see involvement in graduate development as making a lasting difference in the industry, so it comes as no surprise our graduates are highly engaged.” Graduates in the two-year program rotate between two MMG sites where on-the-job experience is balanced with a structured development program building technical, safety and leadership skills. Exploration graduate Louis Cohalan says MMG’s program has provided a diverse and rewarding kick-start to his career. “MMG is focused on mineral exploration which is something that many mining companies have divested from recently. This gives graduates like me the opportunity to work in a variety of interesting places with the potential to be part of a future discovery,” he says.

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MMG exploration graduate Louis Cohalan.

It is rare for me to engage with MMG’s leadership team and walk away without at least being questioned about the graduate program and where people are at. Luke Messer Cohalan spent a year at MMG’s Sepon open pit copper and gold mine in southern Laos, conducting exploration field work and developing geological mapping and interpretation skills. “Working in Laos was a special learning experience. I got to work with geologists from many different countries, spent time in the local villages and visited the copper plant guided by a Lao graduate metallurgist,” he says. Upon completion of the program, graduates are supported in applying for ongoing employment at MMG operational sites and its Melbourne headquarters. “The majority of MMG’s graduates end up taking on permanent roles in the business. We focus on developing graduates into strong, decisive, safety-focused leaders who work with both the heart and the head,” Messer says. “The saying ‘no-one cares how much you know until they know how much you care’ guides our approach to graduate leadership development.”

HUMAN RESOURCES

Graduates rotate between MMG sites in a two-year program

Broader recruitment strategies MMG graduates complement the miner’s workforce of approximately 3,000 across its Australian operations. Central to its wider recruitment strategy has been a successful advertising campaign featuring real workers and members from the communities where it operates. “Our belief that ‘we mine for progress’ came from our people. Featuring real employees and community members is critical to illustrating the tangible benefits delivered through training, professional development and social investment,” Messer says. “While it was a public campaign, the intention was to also send a clear message to our own staff that we all believe this and it’s time we let the market know what we stand for.” Operating across three states on either side of the country means MMG has not escaped labour sourcing challenges. In particular, it had to focus heavily on attracting workers to its Rosebery underground polymetallic base metal mine 300km north-west of Hobart. “During periods of high demand for labour, resulting from the project investment cycle, people tend to choose fly-in/fly-out opportunities in favour of residential opportunities. Regretfully this means Rosebery is often overlooked, making recruitment challenging,” Messer says. “While our strategy to recruit for this project isn’t particularly different, it often demands higher costs and effort. “However, in the last couple of years Rosebery unexpectedly attracted a lot of candidates and the residential lifestyle emerged as a key reason for this. People see Rosebery as an opportunity to achieve a sense of normality after FIFO.” The MMG Recruitment team is also responsible for driving workforce diversity. Its Century open cut zinc mine in north-west Queensland boasts 21 per cent Indigenous employees and contractors. It is also home to MMG’s ‘Work Ready, Job Ready’ program, preparing young Indigenous locals to work within the company and other industries. “Investing in young Indigenous locals is critical as it ensures

Geology graduates at MMG’s Rosebery Mine, Tasmania

they have the skills to find employment beyond the life of our operations,” Messer says. The recruitment team’s performance is also measured around gender diversity. Subsequently, the company has consistently lifted female hiring rates year on year and is presently tracking at 22 per cent for 2014. “When you compare this to the latest industry stats where the percentage of women in mining has hovered around 15 per cent at best for the past three years, the team has performed above market,” Messer says. “Our work has just begun here but I am pleased that our recruitment is trending in the right direction.” Whether it is the way MMG supports graduate development, creates cutting-edge recruitment campaigns or fosters a diverse workforce, Messer is on point when he says it is all about ‘developing tomorrow’s leaders today’. From that perspective, the future for MMG and the wider resource industry looks promising.

| Winter 2014 | www.amma.org.au

HUMAN RESOURCES

The social side of employer branding Employer branding through online networks can be a big step for any organisation. LinkedIn’s Tim Grogan explains why it should be embraced and how to do it right. BEFORE Tim Grogan accepted a position with LinkedIn in 2011, the now head of Talent Brand Solutions logged on to learn more about the professional network and people he would be working with. This simple act is a telling sign of the way access to an employer brand and the expectations of talent is evolving. An experienced brand specialist with a previous client list that includes ANZ, Telstra and Coles, Grogan believes employers are still learning how to communicate their employer brand through online mediums. “Today we are empowered through the accessibility of information to make life decisions, whether that is a new career, car or holiday,” he says. “Consistency is the most important consideration when activating a brand. What a company communicates on its careers website should be consistent with how it educates and influences its target audience through a social or professional platform.” While the recruitment landscape is constantly changing, Grogan believes many companies are still in a reactive state where talent engagement and sourcing happens only when employees leave. “Often in a reactive environment, a company is comfortable hiring who they feel are the best people available at that specific time,” he says. “However, more employers are considering the role talent plays in organisational growth, innovation and productivity. They are looking at how to invest ahead of the curve. “They may not have a job opening today, but they are proactive in facilitating a relationship between critical labour segments and the business brand so that when they are ready to recruit, people have a real understanding of the organisation and why it is a great place to work.” Grogan says many organisations will mistakenly launch into employer branding on social media without properly considering their target market or the message they want to get across. “I advise employers to look at their workforce plan and what talent will be critical to business growth and success. Once that is clearly defined, you can start to engage with the target market,” he says. “It is also important to be authentic. There needs to be an accurate reflection of the business, its state of play and the experience a person will have as an employee. “If a business is under significant cost pressures yet growth is expected in a year’s time, communication needs to accurately convey this transition and explain that while there are economic constraints, the leadership is still focused on talent.” A quick scroll down a LinkedIn homepage reveals employees can also contribute to employer branding. “More and more, organisations see this as a huge asset,”

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Grogan explains. “Best practice is when an employer does not try to control what employees say, but rather provides them with guidelines on how to communicate on a digital platform.” In a competitive marketplace, it may become uncommon for an organisation’s employer brand to not be accessible through online channels. Not surprisingly, Grogan urges employers to meet this market demand. “We are really seeing a trend in people expecting to have access to information through social media, blogs, videos and pictures,” he says. “It is important not to avoid these for fear they cannot be controlled. These channels should be leveraged - they all tell a story and help people get a sense of what it is like to work at an organisation. “Otherwise employers could miss the opportunity to engage with talent that may be working with competitors or be in another geographical location, but holds the skills to help improve the business.” LinkedIn head of Talent Brand Solutions Tim Grogan

HUMAN RESOURCES

| Winter 2014 | www.amma.org.au

HUMAN RESOURCES

Kentz to hire a further 1,200 for Ichthys A further 1,200 construction jobs will soon commence in Darwin through a new contract secured by Kentz Engineers and Constructors for the Ichthys LNG Project. The $615 million contract is for 30 months of electrical and instrumentation (E&I) construction work on the INPEX-operated project, with site preparation set to commence in August 2014. It will encompass site-wide E&I installation for the two process trains and utilities, and additional pre-commissioning and commissioning expertise. Primary engineering, procurement and construction (EPC) provider for Ichthys, JKC Australia LNG, awarded the contract to Kentz as it oversees progress of the project’s onshore facilities, including the gas processing plant at Blaydin Point. Kentz is well-acquainted with the project, having already been awarded the structural, mechanical and piping contract, the soon-to-be-completed temporary telecoms package, and the underground electrical and instrumentation construction contract. “Kentz participation in the Ichthys LNG Project demonstrates how our structure and approach to business is flexible and

agile and is designed to successfully service customers’ varying execution strategies,” says Chris Warlow, Kentz managing director Australasia region. Joining the INPEX group of companies in the Ichthys LNG joint venture is major partner TOTAL and the Australian subsidiaries of Tokyo Gas, Osaka Gas, Chubu Electric Power and Toho Gas. 4000 people will be employed during its construction phase and, once operational from 2017, the project will produce around 8.4 million tonnes of LNG per annum. Labour analytics firm Pit Crew forecast the Northern Territory to experience the nation’s tightest construction labour market throughout 2014, but noted the resource industry’s persistence in addressing skills shortages had already led to an impressive growth in employee numbers. Don’t miss the next edition of Resource People for an exclusive insight into how INPEX is transforming Darwin.

NSW jobseekers get inside scoop THE allure of a resources career proved prevalent in New South Wales when hundreds of jobseekers piled into a recent Newcastle employment and training forum to explore opportunities across the industry. The event was the latest in a series organised by AMMA Skills Connect to facilitate direct engagement between local resource employers and jobseekers. As speakers took to the stage in Newcastle, their presentations were also streamed live across the web to eager jobseekers in Wollongong, Tamworth, Dubbo, Orange, Parkes, and Aubrey. AMMA executive director of industry services Tara Diamond says the forum was designed to open jobseekers’ minds to the myriad of employment opportunities within the industry. “We want jobseekers to understand that resources activity in New South Wales is continuing to serve up a variety of roles from technical, through to construction, transport, maintenance and hospitality support services,” Diamond says. “People from a range of backgrounds came along, including retrenched workers from other industries, experienced workers and those looking for that entry-level opportunity.”

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Employers including emerging coal project Shenhua Watermark, construction and mining company Leighton Contractors and facilities services specialists Assetlink, let jobseekers in on their respective employment opportunities and recruitment processes. “Shenhua Energy’s planned $845 million Watermark thermal coal project located near Gunnedah is expected to employ 600 workers by the time construction is complete in 2015. If the industry is supported by the right policy settings, we will see more projects like this come online,” Diamond says. Jobseekers were also provided with valuable information on the realities of a FIFO lifestyle and tips on how to navigate training and employment pathways. “Resource employers invest heavily in the talent attraction and recruitment process. They understandably seek the best talent and it is up to jobseekers to inform and prepare themselves to stand out from the crowd,” she says. “The forum attendees have already shown a keen interest in learning about the industry and we will assist them further by providing their registered details to interested employers across the country.”

5 minutes with...

HUMAN RESOURCES

AMMA’s new director of government relations, Daniel Mammone.

DANIEL MaMMONE

I’ve worked in policy and industry representation for: Nearly a decade at the Australian Chamber of Commerce and Industry (ACCI). As director of workplace policy and director of legal affairs, I managed a group of dedicated professionals involved in the whole gamut of workplace policy and represented Australian businesses in both domestic and international labour forums.

collective interests of resource employers and our national policy makers. My alternative career choice would be: A choice between a career in law enforcement or foreign affairs. My favourite thing about Melbourne is: The coffee and the food. If I could be anywhere else in the world it would be: This would present as a hard choice between Europe (France or Italy) and Southeast Asia (probably Singapore, where my wife is from).

My new role with AMMA involves: Working within the AMMA Policy & Public Affairs Division, I am responsible for strategic development and advocacy of AMMA policy, and advocating the views of resource employers before a Coalition government which has stated that Australia ‘is open for business’.

I couldn’t live without: My family, internet access and coffee.

The greatest opportunity of my work is: In a time of increasing global competitiveness and economic structural change, to strengthen the great advocacy work of AMMA through building a stronger bridge between the

I would spend my last $100 on: My son is obsessed with Kinder Surprise chocolate eggs. I could probably buy around 20 of those with enough change for my last short macchiato.

I’m inspired by: People who have a go in life no matter what the circumstances and challenges. My two-and-a-half-year-old son, Massimo, has been my most recent inspiration.

| Winter 2014 | www.amma.org.au

TRAINING & DEVELOPMENT

La Mancha upskills for golden era West Australian gold miner La Mancha Resources is entering a significant new phase of production capability and harnessing the full potential of its workforce.

90% of La Mancha’s underground operational crew enrolled in a Cert III Underground Metalliferous Mining

LA MANCHA may not be the biggest mine operator in Western Australia’s prosperous Goldfields-Esperance region, but the company is nonetheless enjoying a game changing year. Six years since achieving full commercial production of its profitable Frog’s Leg underground gold mine 20km west of Kalgoorlie, the company has recently constructed a $110 million processing facility to significantly increase its internal capability. A critical cog in the company’s growth strategy, the mill is expected to produce 160,000 ounces of gold annually. It will allow La Mancha to move away from toll milling of Frog’s Leg ore, while also progressing the neighbouring White Foil open cut mine to full production. Overseeing La Mancha’s Australian assets is general manager Rodney Johns, who holds more than 25 years experience in the gold mining industry. “We have had growth strategies and plans for some time and completing construction of our own processing facilities and bringing the White Foil pit online by mid-2014 are part of those. Having mining and milling all under the La Mancha banner enables the continuation of this growth,” Johns says. “As such, our traditional underground workforce of 180 is expanding and we expect it to reach 280 people by the final quarter of 2014.” Australia’s gold miners are recovering from a difficult 2013, which at one point saw spot gold prices drop to a near three-year low of around $1,249 US an ounce. Despite this,

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strategic mine consulting firm Surbiton and Associates has reported a focus on lower production costs and higher grade ore saw gold production in the year reach 273 tonnes, up 7 per cent from 2012 levels. While Johns has been focused on leading La Mancha’s Australian operations towards greater cost-optimisation, he is also determined to see his expanding workforce develop alongside the company. “Lower operating costs are essential to business continuity and it is certainly a high focus in the gold business at present – it has had a bumpy road over the past 12-18 months with falling gold prices,” Johns says. “Processing the ore ourselves will maximise the value we gain out of our resources and lower our costs by at least $100 an ounce, which obviously makes us more profitable. “A big part of our strategy is also focused on the engagement and empowerment of our people. Heightening skills and unlocking potential also helps to drive that cost down.” Utilising Australian Government funding dedicated to supporting industries with skills needs, La Mancha engaged resource industry employer group and registered training organisation AMMA to help its people gain certificates across work health and safety, frontline management and project management. Delivering the customised training, AMMA consultant Craig Gilvarry says this type of nationally recognised training is an ideal way to build on successful employee engagement and

One of the keys in our strategy is leadership throughout the organisation. Increasing our people’s skill sets through training will only help us to meet that goal. Rodney Johns retention strategies. “La Mancha already had a strong workforce that was highly engaged with the company’s culture, which is a big plus from a trainer’s perspective,” Gilvarry says. “Nonetheless, with completion of its processing mill and a

TRAINING & DEVELOPMENT

La Mancha’s gold mining operation in Kalgoorlie

second mine becoming operational, the company needed to prepare for significant workplace and workforce change. “To recognise its employees’ existing skills through nationally recognised training not only reinforces engagement, but encourages career progression, builds on internal capability and sets the company up for growth. “Enhancing leadership and project management skills, as well as equipping more people with work health and safety qualifications provides a solid foundation for La Mancha’s growth.” To facilitate further learning in the workplace, Johns wants some of the company’s more experienced employees to become qualified workplace trainers and assessors, ensuring skills are passed on in a cost-effective and efficient manner. “The mining business is all about unlocking the potential of your resources. Around 90 per cent of our underground operational crew are enrolled in the Cert III Underground Metalliferous Mining, so the response to development has been really good,” Johns says. “One of the keys in our strategy is leadership throughout the organisation. Increasing our people’s skill sets through training will only help us to meet that goal. “Having internal trainers and assessors will be cost-saving, but will also create a heightened skill set that will be a positive influence on the wider workforce.” Johns continues to come back to the philosophy of engagement and empowerment when discussing La Mancha’s workforce. He believes this is the key behind the company’s high retention rates. “We have historically had very good retention rates. La Mancha’s genesis was during the boom times and even then our turnover was significantly less than the industry average. “Now, whether training is a part of that is the intangible

Training is central to supporting La Mancha’s expanding workforce

I suppose, but we have always believed that training is an essential part of our strategy to unlock that human resource capability. “We believe people like to be engaged and to feel they are being developed professionally.” La Mancha are expecting to produce up to 1.2 million ounces of gold from its Kalgoorlie operations as part of a mine plan taking the company through to 2021, while undertaking further exploration on its tenements. With a workforce newly armed with high-level workplaces skills, the gold miner looks set to deliver on its plan and gain a more prominent position in one of Australia’s key commodity markets.

| Winter 2014 | www.amma.org.au

TRAINING & DEVELOPMENT

Gas giants support local talent pipeline Two leading operators in Queensland’s booming CSG-LNG sector, Origin and BG Group’s QGC, are investing in the future of young people in the Surat Basin and surrounds through separate development programs. SEVERAL local apprentices could soon follow in the footsteps of Aaron Mengel from Dalby, who last year completed an apprenticeship with funding from the Community Skills Scholarship (CSS) program delivered by Origin for its Australia Pacific LNG JV project. Mengel is now a fully qualified diesel fitter with local civil construction company Ostwald Brothers. The scholarship enabled him to purchase more tools and manage the costs associated with completing his trade. “I would advise anyone who is thinking about pursuing a skills-based career to look at opportunities locally, before looking elsewhere,” Mengel says. Origin is now taking applications for its 2014 CSS program, which is offering up to $13,500 in scholarship payments for apprentices aged 15 years or older, living in the Western Downs Regional Council, Maranoa Regional Council or Banana Shire Council areas. Origin community relations manager Scott Bird says the program involves critical partnerships with businesses and supports local communities to build and retain a skilled workforce. “The program recognises businesses that invest in developing the skills of their local workers,” Bird says. “It also provides a strong incentive for young people to secure a sustainable future in their local towns, rather than leaving in the search for work elsewhere.” Now in its eighth year, more than 130 scholarships have

Gold Coast Titans players Aiden Sezer and Albert Kelly with two Indigenous students from Chinchilla

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AARON MENGEL Ostwald Brothers

been awarded to date. Along with the funding, Origin provided added incentives for mature-aged applicants and bonuses for apprentices who stay with their employer after completing their trade. Meanwhile, one of Origin’s major competitors, QGC, operator of the $20 billion Queensland Curtis LNG project, is supporting an Indigenous youth program encouraging young Aboriginal and Torres Strait Islander people in the Surat Basin to finish school. The company is contributing $420,000 in a year-long partnership with Titans 4 Tomorrow, the community outreach arm of the Gold Coast Titans Rugby League Club. The partnership will result in 14 three-day camps at which local elders and traditional owner groups will help to connect young people with their cultural heritage and mentors will advise on educational and vocational opportunities. QGC vice president sustainability Brett Smith says the company’s involvement with Titans 4 Tomorrow will build on its work of addressing low rates of high school graduation among Indigenous youth. “We’re impressed with the passion of Titans 4 Tomorrow to improve education and employment for Aboriginal and Torres Strait Islander people,” Smith says. “Their goals reflect our own commitments made in the QGC Reconciliation Action Plan and Social Impact Management Plan for the Queensland Curtis LNG Project.”

TRAINING & DEVELOPMENT

| Winter 2014 | www.amma.org.au

TRAINING & DEVELOPMENT

Savanna drills down skills challenges Providing drilling, well servicing, and logistics in Queensland’s burgeoning coal seam gas sector, Savanna Energy Services is laying the groundwork to meet the market’s skills challenges head-on. IN the 18 months since Claudia de Beer joined Savanna Energy Services as its Australian human resources manager, she has seen the driller’s Queensland workforce double in size. The Canadian-headquartered company has been servicing Queensland’s emerging coal seam gas Claudia de Beer (CSG) sector since mid-2010, currently undertaking a major drilling and rig contract with Origin Energy’s $24 billion Australia Pacific LNG project. “By the end of 2014, we expect to have just over 500 employees,” says de Beer, who last year had Energy Skills Queensland conduct a nine-month skills and training analysis. “From a skills perspective, everything we do here as a drilling contractor has an immediate impact on the business because if our people are not trained and compliant, our rigs get shut down. “It is critical not just from a commercial perspective but also from a safety perspective, that we ensure our people can competently and safely execute the requirements of their role.” To meet its Queensland skills demands, Savanna’s recruitment and training strategy involves hiring from other industries, often targeting retrenched workers, and training them to take on entry-level labouring roles including leasehands and floorhands.

Savanna Energy undertakes drilling and well services in Queensland’s CSG sector

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Sourcing talent for mid-tier roles has presented great challenges. “We are well aware of the skills shortage in the domestic market and that resource industry employers are competing for the same talent,” de Beer says. “If we can’t source labour within Australia to fill higher level positions such as drillers and rig managers, there is an option to sponsor skilled overseas workers. “However, our challenge lies in filling mid-level roles, such a lead floorhands or derrickhands, which hold greater responsibilities on the rig. There is a shortage of these skill sets in the local market, but the roles do not qualify to be sponsored. “We do train our junior workers to move into mid-tier roles but it takes time, so there tends to be a lag in that space.” De Beer engages external Registered Training Organisations (RTOs) to assist with external training from certificate level through to diploma of drilling and the newly introduced diploma of well servicing. She explains Australia’s RTOs are just beginning to get across all requirements of the well servicing qualifications and are subsequently playing catch-up to meet a growing market demand. “Australia’s drilling sector is still relatively immature compared to the North American market, for example, which is 100-odd years old. So Australia’s training in that area is still developing to where it needs to be,” she says. “Another key challenge is that we don’t have enough technical trainers in Australia to be able to fulfil some of these requirements. “To complete a drilling or well servicing certificate, you need to be trained and assessed by someone competent in that area. It is a very unique skill set. “In some instances we encourage our existing rig workers to become certified in training and assessing, who then assist us to train and assess others.” Savanna’s Australian operations have a competitive advantage in that it can draw on the skills and knowledge of its established North American workforce; although the company is only now realising the benefits of transferring skills in this way. “We have a contingent workforce of Canadian rig managers who bring critical expertise to the Australian industry and equip our local talent through a succession plan over five to 10 years,” de Beer says. “The majority of our Canadian employees come from within Savanna, so they understand our equipment, which is very

TRAINING & DEVELOPMENT

technologically advanced. “However at this point, their Canadian qualifications cannot be mapped across to Australia, so they had to obtain an Australian Certificate II through to diploma and are only now, two years later, in a position to fully support our local workforce.” As an active participant in Australia’s progress towards one of the world’s top suppliers of natural gas, Savanna Energy Services’ experience is a prime example of Australia’s evolving skills challenges. While de Beer expects the local market to remain tight for some time, she is adamant the company’s priority to support skills competencies will gather the momentum needed to meet future demand. “We have been fortunate so far in that our recruitment strategies and policies have proven successful in crewing our rigs. However, I think finding the right skills in the local market will continue to be challenging,” she says. “That’s why it is so important for us to invest in our employees and ensure we have a sophisticated training and competency system in place to effectively develop our people.”

Savanna Energy is tackling training and skills challenges

| Winter 2014 | www.amma.org.au

OHS & WELLBEING

Healthy, wealthy and wise In a continuous effort to support employee wellbeing, resource employers are realising the power of financial advice in creating happy and productive workforces.

Access to financial advice can improve employee wellbeing

MONEY might not buy happiness, but it cannot be argued that financial stability – or lack thereof – does play a role in a person’s overall wellbeing. Since the Australian Psychological Society launched its annual survey into stress and wellbeing in 2011, Australians have identified financial issues as the leading cause of stress in their lives. This was particularly true among working-age Australians. The results do not surprise Big Sky Building Society’s general manger retail banking Richard Irving, who says providing access to financial support is an emerging trend among resource employers aiming to improve employee wellbeing and engagement. “In the past five years we have seen a shift towards employers supporting people through the broader health and wellbeing challenges of working in the resource industry,” Irving says. “Financial wellbeing has probably been slower in terms of gaining acceptance as an area employers should focus on, but those that are adopting this focus are seeing the link between broader financial eduction and employee productivity and happiness.”

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First formed as the BHP Employee’s Credit Co-operative more than 40 years ago, Big Sky has grown into a broader resource industry financial services provider. Irving aims to help employers and employees understand the clear link between financial wellbeing and work performance. “I think Big Sky’s history in the resource industry has given us a lot of insight into the unique challenges of supporting employees,” he says. “The area where we have been strongly engaging with employers is really aligning financial wellbeing with work satisfaction. “If people come to work happier and no longer stressed about their financial wellbeing, it can lead to many positives such as less distraction at work and illness-related absences.” According to the Australian Bureau of Statistics, mining is the highest paying industry in the country, with workers receiving on average $2,470 per week in ordinary earnings. It is therefore understandable for people not to expect the average resource worker to experience financial stress. However, Irving says that it comes down to the individual. “There are definitely those in the industry who are interested in their financial situation and broader areas such as investment markets, stocks and properties,” he says. “But one of the challenges is really about supporting younger workers who may not appreciate their level of remuneration and how to manage the decisions that come with that. “We often see those who look to live for today rather than live for the future. But the reality is, the industry is cyclical

OHS & WELLBEING and employees must prepare for the ups and the downs. “You can’t force people to adopt this mindset and it is certainly not the employer’s obligation to do so, but you can provide the right programs and access to knowledge to support those employees. It really is about education.” One segment of the workforce, Big Sky, has recently been working with are contract workers, who due to their unique work arrangements have traditionally had difficulty accessing finance such as home loans. “We are working with one resource company where there are contract workers who have been with the organisation for 10 years or more. In our view, these employees are no more risky than someone who has been employed on a permanent basis for 10 years,” Irving says. “The traditional approach of most financial institutions is to use automated processes to asses someone’s ability to get a loan. But a lot of these processes don’t understand the true picture of the resource industry.” According to Irving, it is too early to see the extent to which the contract workers will benefit, but he expects around 65 per cent will be eligible for finance that otherwise would not have been approved. “The industry does have some unique elements to it and

richard irving big sky

we shouldn’t be scared of them,” he says. “We should embrace these elements and work with the industry to find different ways to support it.”

| Winter 2014 | www.amma.org.au

OHS & WELLBEING

FIFO families well adjusted While fly-in, fly-out (FIFO) working arrangements have long been a part of Australia’s resource industry, the recent increase in FIFO workers driven by new major project construction activity has seen the lifestyle subject to a growing body of research.

Despite FIFO often dividing public opinion, a recent Australian Institute of Family Studies review of 17 existing studies has confirmed families with an income earner on a FIFO arrangement are typically as well-adjusted as their daily commute counterparts. Releasing the 24-page report Fly-in fly-out workforce practices in Australia: The effects on children and family relationships, Child Family Community Australia manager and research lead Elly Robinson says numerous factors unique to each family situation will impact their ability to cope with the lifestyle. “The lifestyle does not suit everyone, with some research suggesting that in those families who cope well, the at-home partner is supportive, has access to family support, good education options and child care, and is more self-reliant,” Robinson says. “One of the potential impacts on children is a lack of daily interaction with the FIFO parent. However, the flipside is that the FIFO parent is then home for extended periods and available to spend quality time with children.

A FIFO workforce is critical to FMG’s Christmas Creek iron more mine in the remote Pilbara region

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“Families themselves need to thoroughly review the benefits and challenges of the lifestyle and the likely impact on individuals within the family and the family as a whole.” The research unveiled the importance of resource employers to manage new employees’ understanding of the FIFO lifestyle, for the benefit of both the workforce and the business. “One study in the Pilbara region of WA found many couples take around six months to work out if the FIFO lifestyle is suitable for them and their families,” the report states. “This has potential impacts on workforce training, turnover and recruitment processes if the employee leaves the position and undoubtedly creates disruption for workers (and subsequently their families) as they seek alternate employment options.” Child Family Community Australia, which is affiliated with the government-funded Australian Institute of Family Studies (AIFS) recommends further research that is longitudinal, engages with all types of FIFO workers and their families, and includes data collection prior to entry into FIFO work be undertaken.

OHS & WELLBEING

Downer delivers truckload of awareness DOWNER Blasting Services’ (DBS) bright blue bowl truck is turning heads at Jellinbah Mine, while so far raising $3,000 for not-for-profit Beyondblue in a bid to lift awareness of depression and anxiety. As the truck rotates through some of its projects, DBS is donating $1 per tonne of product it delivers, as well as running mental health awareness sessions and establishing a Peer Support Program. DBS executive general manager Cliff Gale says the initiative is creating greater understanding of depression and anxiety among the workforce. “We hope this initiative will not only raise money for Beyondblue, but also help reduce the stigma associated with mental health conditions and provide avenues for employees to seek help,” Gale says. Jellinbah Resources has pledged to match DBS’s donation.

| Winter 2014 | www.amma.org.au

LEADERSHIP

BHP fireS up for coal demand It’s not over for coal. Global demand is expected to increase over the coming decades and president of BHP’s global coal business, Dean Dalla Valle, says productivity and a high-performing workplace culture are critical to a sustainable coal export industry in Australia. COAL is an important part of BHP Billiton’s global portfolio and Dean Dalla Valle is determined to keep it robust as one of the resource giant’s four key pillars which also include copper, iron ore and petroleum. Headquartered in Brisbane after merging its Sydney-based Energy Coal with its Brisbane-based Metallurgical Coal business in 2013, BHP owns nine operating coal mines in central Queensland along with the Hay Point Coal Terminal and other related infrastructure, with joint venture partners Mitsubishi and Mitsui. “We are the largest coal miner in Queensland and a major contributor to the Queensland economy, directly injecting more than US$10 billion into the economy and employing more than 7,000 people at our Bowen Basin operations,” the president of BHP’s global coal business told a recent CEDA conference. “In the 2013 fiscal year, along with our partners, the coal business produced 154 million tonnes of coal, making us the largest seaborne supplier of metallurgical coal in the world.” People and processes Since starting as an apprentice at BHP Billiton’s Illawarra collieries 37 years ago, Dalla Valle has seen the price of coking coal as low as $55 per tonne in today’s dollars, putting into perspective recent variability in energy coal prices currently sitting at around $75. BHP Billiton, like many in the industry, is combating

BHP employs a workforce of 6,000 across its Bowen Basin operations

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Dean Dalla Valle BHP Billiton commodity fluctuations through investment in technology to improve safety, reduce costs and drive production. “As I visit our operations, I remind people – particularly those who have only joined our industry in the last decade and are now feeling the pinch as prices contract – this is nothing new,” Dalla Valle says. “But the good news is we have the equipment, technology, infrastructure and expertise to operate our mines more safely and efficiently than ever before. “Over the past 18 months we have focused on our cost base throughout our operations. There is still more we need to do as we look for ways to improve the productivity and competitiveness of our mines. “The process we are undertaking is essential to ensure that we have a viable and sustainable industry over the longer term.” Dalla Valle sees increasing productivity in processes and people as key to generating acceptable financial returns from coal production over the long-term. “We have invested in systems to standardise many aspects of the way we manage our business all over the world,” he said. “For example, I can compare the productivity of a truck and shovel fleet at one of our mines in South Africa against a similar truck and shovel fleet at one of our mines in the Bowen Basin.

LEADERSHIP

“It costs our business approximately 1.5 times more for a truck operator in the Bowen Basin compared to the same truck in New Mexico in the US. “This highlights the productivity and cost challenge we have in Australia.” A strong workforce mix Unlocking workforce productivity, according to Dalla Valle, begins with a change in culture and mind-set in the industry and more broadly. Despite employing a local workforce of 6,000 at its various Bowen Basin operations, he acknowledges the company’s decision to employ a fly-in, fly-out workforce at its new Daunia coal mine was ‘contentious’, but says it exemplifies a new operation where culture is helping to deliver productivity gains. “(Daunia) and the nearby Caval Ridge mine currently under construction, have the best equipment and technology – as you would expect from a new mine,” Dalla Valle says. “But what really struck me as representing modern coal mining, is the workforce.” BHP Billiton received 30,000 applications for 900 positions across the two new mines. Out of the 450 new Daunia employees, mostly sourced from Cairns and Brisbane, 25 per cent are women and more than half are new recruits to the industry. “People who were previously working in all sorts of careers from catering to carpentry and other trades have now trained to be operators, safety officers and maintainers, and a host of other positions,” Dalla Valle says. “What is evident when you go to Daunia is that when you bring a diverse, enthusiastic group of new people to our

industry and blend them with experienced miners and the right training and supervision, a new culture develops. “Having a broad reach across the state allows us to recruit the best people, with the best skills and is, we believe, what makes BHP Billiton an attractive company. “It also helps us increase our diversity as we re-shape our workforce and strive to better reflect the diversity of our society.” Dalla Valle says the demand for coal as an affordable and

I can compare the productivity of a truck and shovel fleet at one of our mines in South Africa against a similar truck and shovel fleet at one of our mines in the Bowen Basin. Dean Dalla Valle

readily available source of energy is expected to grow in the next two decades, particularly in Asian nations which lack the investment and infrastructure to switch to gas. But he warns Australia’s global proximity should not be taken for granted. “Australia is well placed to be a part of that global growth, but if we can’t do it competitively then someone else will and the loss will be ours.”

BHP joint venture BMA owns and operates mines in Qld’s Bowen Basin.

| Winter 2014 | www.amma.org.au

LEADERSHIP

Supporting resource investment in the west Speaking to Resource People, Western Australia Minister for Mines and Petroleum Bill Marmion explains how the state government is supporting a competitive resource industry.

As export treasure is unearthed in Western Australia, jobs are created and income streams are generated that benefit us all. What’s good for the resources industry is good for the state, so I’m pleased to report that industry has notched up its third consecutive year in which its value has Bill topped $100 billion. Marmion That’s also very good for the nation. Western Australia’s share of Australia’s total merchandise exports last financial year was 47 per cent, a prodigious contribution. The fact that mineral and petroleum exports made up 89 per cent of the state’s merchandise exports underscores the continuing dominance of Western Australia’s resources sector at a national level. ABS figures show investment in Western Australia rose to a record $48 billion (7 per cent up on the previous financial period) in 2012-13. This is a comforting statistic as we enter a period where major projects are nearing completion and some mining companies are re-evaluating their investment positions. Nevertheless, Western Australia remained the nation’s leading mining investment destination in 2012–13, attracting 51 per cent – $95 billion – of total capital spending by the industry in Australia. In September 2013, Western Australia had an estimated $146 billion worth of resource projects under construction or in the committed stage of development. A further $97 billion has been identified as planned or possible projects in coming years. This investment is predominantly in iron ore and liquefied natural gas (LNG) developments and includes Hancock Prospecting’s Roy Hill mine, and Chevron’s Gorgon and Wheatstone LNG projects. To keep investment interest keen, this government is determined to maintain its sharp focus on making sure Western Australia is cost-competitive in a global market. We are keeping the investment ball rolling through reforms of processes and initiatives being pioneered by our lead agency, the Department of Mines and Petroleum (DMP). The department has cut approval times dramatically by pioneering an online application process that has been applauded by the Productivity Commission as best practice for regulators in Australia. More and more companies are getting on board and the new technology has resulted in administrative efficiencies and reduced www.amma.org.au | Winter 2014 |

To keep investment interest keen, this government is determined to maintain its sharp focus on making sure Western Australia is cost-competitive in a global market. Bill Marmion costs for government and the resources sector. Other excellent examples of innovations now driving down industry costs are the introduction of the internationallyapplauded Mine Rehabilitation Fund (MRF) and the Exploration Incentive Strategy (EIS). The MRF essentially replaces unconditional performance bonds and reduces imposts on industry by introducing a risk-based approach that avoids duplication and overlapping processes. The EIS flagship, the Co-funded Exploration Drilling program, continues to provide incentives to drill in under explored areas by offering refunds of up to 50 per cent of drilling costs. I’ve quoted quite a few statistics in this article. All these amounts and percentages add up to more than a reassuring bottom line for the resources sector; they are also a testament to the pivotal role research plays in advancing the state’s resources sector. The government is continuing to encourage technological innovation through the Minerals Research Institute of Western Australia (MRIWA). Top quality research improves the likelihood of commercial success for new mining and resource extraction projects in WA. I have just announced a new MRIWA team and I’m confident their combined expertise will give fresh impetus to crucial areas of pre-competitive research. The South West Hub Carbon Capture and Storage (CCS) project is another leading technological initiative. This partnership between government, industry and universities is tackling the problem of how to capture and permanently store carbon emissions deep underground. WA has been listed by the Fraser Institute as the world’s toprated jurisdiction for investment attractiveness, and sixth in the Policy Perception Index (see page 53). This sort of recognition makes me confident WA will continue to be a state which attracts high-class investment and responsible development of our natural resources.

LEADERSHIP

$75m infrastructure boost for NSW regions THE New South Wales Government has announced more than $75 million in regional infrastructure projects to support mining communities as part of the biggest-ever round of the Resources for Regions program. Funding from Restart NSW has been allocated to 14 projects in the Cobar, Lithgow, Mid-Western, Muswellbrook, Narrabri, Newcastle and Singleton local government areas. The funding includes $12.3m to support the Narrabri Water Supply Augmentation project; $10.1m for a new Waste Water Treatment Plant in Lithgow; and $4m for the Upper Hunter Tertiary Education Centre to help address skills needs in the coal industry. The funding is the second amount invested in 201314, bringing the total to more than $117.7m across 20 infrastructure projects. “Over the four years of the program we will deliver at least $160m in infrastructure funding for communities experiencing unique direct and indirect pressures on their infrastructure and

services as a result of mining activity,” says Minister for Regional Infrastructure and Services, Andrew Stoner. “Successful projects have been chosen by an independent panel for their capacity to support economic growth and productivity, ease infrastructure constraints, and support NSW communities affected by mining. “These projects will deliver infrastructure to the regions in order to better service our communities, improve productivity and create jobs.” Minister Stoner says in 2014-15, mining-affected communities will again be able to provide feedback for financial support, with enhanced funding selection criteria. “While our focus has always been on priority needs first, we value community feedback and this has played an essential part in ensuring government remains flexible in its approach,” he says. “Two years into the program, we are now in a position to further expand the criteria to ensure all mining affected areas have the best possible opportunity to state their case for financial support.”

| Winter 2014 | www.amma.org.au

LEADERSHIP

Labor signals move from union stronghold In an attempt to mend a damaged and defeated Australian Labor Party, Opposition Leader Bill Shorten is deconstructing 113 years of union influence.

DESPITE identifying as a ‘proud union member’, Opposition Leader Bill Shorten can see the writing on the wall for the Australian Labor Party (ALP). Picking up the pieces of a shattering federal election defeat and factional infighting, Shorten has announced a ‘major campaign to rebuild the Australian Labor Party’, making it easier for non-union members to join. “Tony Abbott did not put Labor in Opposition – the Australian people put us here. Unless we change, it is where we will stay,” Shorten says. By July 2014, Labor will have launched a ‘one-click’ online joining model and a fee structure that caters to young people, people on low incomes, students and trainees. “I’ve been a member of the Labor party for 29 years. When I was 16, it took me nearly a year to jump through all the hoops for membership,” Shorten says. “In a time when we can book flights, do our banking and file our tax returns online – every Labor supporter should be able to become a Labor member in minutes, not months.” The Labor leader and former workplace relations minister believes modernising his party involves changing the role of unions which he says has developed into a ‘factional, centralised decision-making role’. “I am proud of what modern Australian trade unions have done to lift the living standards of working people in Australia… but our world and our workforce are changing,” he says. “As a party we can’t remain anchored in the past – we need to rise with the modern tide. “I believe it should no longer be compulsory for prospective members of the Labor party to join a union. And I have instructed our national secretary to have this requirement removed from Labor party rules. “It is a change that makes it clear that Labor is not exclusively for one group of Australians.” As the Coalition’s Royal Commission into union corruption and governance gets underway, Shorten appears to be distancing his party from unlawful union conduct. “For me it was straightforward. No-one is above the law: no business, no union, no individual,” he says. “Corruption is a profound insult and a deep betrayal of everything the Labor party and the union movement stand for. “If you are in the pockets of organised crime you don’t deserve protection and you won’t get it from us. We don’t want you. Get out.” Shorten also encouraged state and territory parties to follow federal Labor’s lead in electing their leaders using the 50:50

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Opposition Leader Bill Shorten

As a party we can’t remain anchored in the past – we need to rise with the modern tide. Bill Shorten

voting system by members of the party and parliament, and allowing local members a greater role in pre-selections. “This is all about respect. Respect for our members – their values and their judgement,” he says. “It is true that in our 113 years as Australia’s oldest continuous political party, Labor’s pre-selections have gained a reputation for being rugged battles. “That is why we will be giving local members a greater role in pre-selecting their local Labor candidate.” As the ALP leader attempts to rewrite the party’s core values to capture a more modern stance, only time will tell if such a move can restore the confidence of the wider Australian electorate in the once dominant ALP political force. The one thing Shorten can bet on, in his own words, is that ‘rebuilding is never painless, but it is far less painful than the alternative of a weaker, less-relevant Labor party’.

LEADERSHIP

New GVK Hancock CEO leads Galilee Basin charge TAKING the reins as GVK Hancock’s CEO this year, 30-year mining industry veteran Darren Yeates is bullish on the jointventure’s position to unlock the vast coal reserves in central Queensland’s Galilee Basin. Yeates comes on board to deliver the final development stages of GVK Hancock’s Alpha, Alpha West and Kevin’s Corner coal projects, a proposed rail solution and a new third Abbot Point Coal Port terminal. Alpha, the most advanced of the projects, is tipped to begin operating in 2016. “I am astutely aware of the strong position the projects are in today and of the significant progress the project team has achieved throughout the approvals and planning process for the Galilee Basin projects,” Yeates says. “Our projects will deliver one of the most significant pieces of regional and economic development Queensland has seen for decades, and I’m really proud to be playing a key role in such a significant suite of projects in my home state.” Formerly chief operating officer for Rio Tinto Coal Australia, Yeates represents a major coup for GVK Hancock, bringing extensive experience in managing ports and infrastructure in the Pilbara. “My immediate focus will be on continuing to build on the significant progress achieved to date and on driving a clear path forward to project delivery,” he says. Poised to be one of world’s largest coal mining operations, GVK Hancock’s combined projects will deliver strong benefits to the

state, employing 7,500 people during construction and almost 4,000 once operational. Holding total resources of eight billion tonnes of high quality thermal coal, the projects are expected to achieve 80 million tonnes per annum for around 30 years and contribute $40 billion in taxes and royalties over the life of the mines. GVK vice chairman Sanjay Reddy welcomed Yeates to the role and thanked former managing director Paul Mulder, who was on secondment from JV partner, Hancock Prospecting. “I look forward to working with Mr Yeates to bring these projects through the next chapter with final operational, construction and financing arrangements coming together to enable us to bring online a new world class high quality, low ash, low sulphur, low gas thermal coal basin,” Reddy says. “I would also like to thank Hancock Prospecting for making Mr Mulder available to GVK on secondment for the past two years. Our two organisations as partners have a strong and long-term future ahead in the Galilee Basin.” Queensland Deputy Premier and Minister for State Development, Infrastructure and Planning Jeff Seeney, confirmed in February that six Galilee Basin projects were either undergoing assessment or approval. In addition to GVK Hancock’s, Clive Palmer’s $8.8 billion China First Coal is also highly advanced after receiving final federal government environmental approval in late 2013 and targets coal production to begin in late 2016.

Incoming CEO Darren Yeates (left) is congratulated by outgoing managing director Paul Mulder

| Winter 2014 | www.amma.org.au

COVER STORY

Harnessing Chevronâ&#x20AC;&#x2122;s

human energy

www.amma.org.au | Winter 2014 |

COVER STORY

In developing more than $80 billion worth of world-class resources infrastructure off Western Australia’s coastline, it is clear Chevron commands a historic place in Australia’s LNG revolution. As 14,000 workers construct the Gorgon and Wheatstone natural gas projects, Resource People speaks to Kaye Butler about the workforces building a healthy and productive future for the nation’s burgeoning energy sector.

AUSTRALIA’S rapid emergence as a global LNG destination is not only setting the nation up for many decades of self-sufficient domestic energy supply, but multi-billion dollar export deals, far-reaching local economic benefits and just as importantly, ongoing employment opportunities. In a decade where record levels of resource industry investment have flowed into the country, no other major project has symbolised Australia’s emergence as the world’s next LNG powerhouse quite like the Chevron-led Gorgon Project. The A$55 billion development centres on Barrow Island off Western Australia’s north-west coast and stretches some 220km offshore to the Jansz-lo and Gorgon fields – collectively holding up to 60 years supply of natural gas. While the single largest resources development in the nation’s history, Gorgon tells only part of Chevron’s Australian story. Next cab off the rank is the Chevron-led Wheatstone Project, based 12km west of Onslow on the Pilbara coastline. The $29 billion Wheatstone Project is set to produce 8.9 million tonnes per annum (MTPA) of LNG, making it no ‘little brother’ to Gorgon and setting it apart as the third largest of several new natural gas projects underway across the country. The project credentials are as impressive as they come, but Chevron is first to proclaim it is only made possible through harnessing significant reserves of ‘human energy’. Overseeing all people services on Gorgon and Wheatstone is general manager human resources Kaye Butler who, after seven years in the thick of Chevron’s project development, appreciates the magnitude of the US energy giant’s work more than ever. “Working on two of the biggest resource projects ever constructed in Australia is a unique experience and a

rare opportunity. Gorgon and Wheatstone are generational projects that will offer ongoing employment opportunities and economic outcomes for Australians well into the future,” Butler says. “Chevron recently marked 60 years as an upstream oil and gas company in Australia, and we wouldn’t want to be anywhere else than Western Australia. The state’s abundance of natural gas is a key resource for Australia and is transforming the nation into a significant energy player on the world stage.” Chevron’s global portfolio includes 160 trillion cubic feet of un-risked gas resources and, with 50 trillion in Australia alone, is the country’s largest holder of the energy resource. Its commanding presence ‘down under’ leaves the company primed to take advantage of the increasingly important Asia Pacific market. When building more than $80 billion worth of world-leading LNG projects, expectations around employment, training and local Australian contracts are as colossal as the task itself. “For both projects to date, more than $30 billion has been committed to Australian industry, which is equivalent to the cost of building about 15 Fiona

Stanley hospitals or around 36 Sydney Opera Houses in today’s currency,” Butler says. “Looking ahead, taxation during the estimated 30-year life of both Gorgon and Wheatstone is expected to bolster government coffers by more than $60 billion – a total that could employ triple the current national teacher workforce.” In the past five years, Gorgon alone has contributed $24 billion in local contracts including steel fabrication, pipe cutting, »

Gorgon in Numbers • A$55 billion investment with five JV participants, including ExxonMobil and Shell. • $24 billion-plus current Australian spend. • 10,000 direct and indirect jobs across Australia. • Annual LNG production of 15.6 million tonnes per annum • $64 billion estimated add to Australia’s GDP.

The Gorgon Project is about 80% complete.

| Winter 2014 | www.amma.org.au

COVER STORY

The Wheatstone Project has started its offshore drilling campaign.

A career with Chevron is not just a job, but an extraordinary opportunity to help shape our future and deliver energy to the world. This requires the best and brightest minds. » civil works, electrical and mechanical instrumentation, transport logistics and a plethora of other major project construction functions. These benefits continue to flow as the project leads up to first gas in 2015. Under its State Development Agreement with the Western Australian government, Wheatstone has committed more than $250 million towards social and critical infrastructure upgrades across health and education, recreational facilities, power and water. “We believe in getting results the right way – what we like to call The Chevron Way,” Butler says, explaining the company’s focus on community investment and integration. “At the heart of The Chevron Way is our vision to be the global energy company most admired for its people, partnerships and performance. This vision helps us establish a common understanding not only for those of us who work here, but for all who interact with us throughout the community.” To this aim, Chevron recently launched a new national television and newspaper campaign called We Agree to promote the common ground the company has with the community on key energy issues. At time of print, the campaign’s interactive function on Chevron’s website had more than half a million people endorsing the company’s various mission statements.

www.amma.org.au | Winter 2014 |

“The We Agree campaign goes into detail about our key values here in Australia. It really gets into why and how we’re boosting local content, protecting the environment, our social and community investment, and technological prowess and innovation,” Butler says. Develop the best and brightest With a combined construction workforce of more than 14,000 people, it is little wonder Chevron considers ‘human energy’ to be its key asset. Gorgon has created more than 10,000 jobs through its construction phase, with 6000 on or around Barrow Island alone. Meanwhile, more than 3,000 workers reside at Wheatstone’s state-of-theart construction village at Ashburton North, while the project has created job opportunities for thousands more Australia-wide. Chevron’s own direct Australian workforce comprises more than 4000 people, with more recruitment campaigns planned this year to build the capability needed to operate the mammoth LNG projects for more than 40 to 50 years. In competing for talent with Australia’s other significant offshore and onshore natural gas developments, Butler believes Chevron’s reputation as ‘an employer of choice’ has given it a competitive advantage. “Delivering energy to the world

requires a wide range of technologies and the best and brightest minds to develop them. A career with us is not just a job, but an extraordinary opportunity to help shape our energy future,” she says. “The effort we invest in developing our people and meeting the needs of a diverse and talented workforce is respected by our partners and enabled our reputation as a great place to work. “In addition, our targeted recruitment campaigns allow us to speak directly to the issues and interest of potential employees, allowing us to overcome traditional barriers. “Chevron Australia offers a truly global and collaborative work experience. You can really team up with some amazing people here and use leading edge technology to create energy solutions – you can’t get any better than that.” Integral to Chevron’s commercial requirements and its role as a strong community partner are apprenticeship training opportunities. A partnership with Apprenticeships Australia has seen a number of programs implemented to provide new career pathways for apprentices and trainees. “Chevron has so far invested almost $14 million in recruiting and training apprentices and trainees in preparation for when the Gorgon LNG and domestic gas plant become operational,” Butler says. “We also employ around 160 university graduates through our Horizons graduate development program. This program is crucial as it provides young people with valuable experience on the front line and some significant responsibility as they grow into their full potential.” The value and respect Chevron places on diversity in the workplace is similarly reflected in its pathways to employment, which have allowed more than 450 Aboriginal employees to find meaningful and rewarding work through its contractors, associated Aboriginal businesses and directly with the energy giant. “We have a team dedicated to Aboriginal employment and are actively working with the community to facilitate participation. This includes a full-time Aboriginal Traineeship Program, which provides a high level of support and the opportunity to work with and learn from people with diverse industry experience and skills,” Butler says.

COVER STORY

The domestic gas meter station has now reached mechanical completion

A healthy and productive future Kaye Butler’s wide responsibilities for two of Australia’s most significant energy projects brings her into the spotlight on its own merits, but the Broken Hill-born HR executive is also often recognised as a figurehead for women across Australia’s resource industry. She is pleased to see the sector begin to truly understand the value of diversity and increasing opportunities for women and Aboriginal Australians. However, she sees a real need to educate the next generation of Australians about the array of career opportunities offered by the resource industry. “I am passionate about ensuring we have a strong pipeline of talent to support not only Chevron but Australia’s

Wheatstone in Numbers • $29 billion investment with six JV participants including Apache and KUFPEC. • More than $12 billion spend on Australian goods and services (to reach $17 billion). • More than 4,000 Australian jobs created (to reach 6,500). • Annual LNG production of 8.9 MTPA LNG production (potential for 25 MTPA). • $250 million towards Onslow infrastructure.

For both projects to date, more than $30 billion has been committed to Australian industry, which is equivalent to the cost of building about 15 Fiona Stanley hospitals or around 36 Sydney Opera Houses in today’s currency. LNG industry into the future,” Butler says. “An important part of this vision is to see women as well as Aboriginal Australians in every sector and across every level of the resource industry. This way, we will have achieved the increased participation required to ensure a healthy and productive future for the industry and the community. “In my role with Chevron I am able to make real contributions to this objective including building partnerships with local universities who are training the next generation of engineers and LNG professionals. “We are also working with local schools to assist young people in understanding the opportunities provided by the LNG industry and what our business is all about.” Since 2012, Chevron has engaged more than 200 local high school students through its Powering Careers in Energy program, inspiring students to pursue a career in the energy industry and making them the first resources company to develop a program endorsed by the Western Australian School Curriculum and Standards Authority.

The ongoing contribution of Australia’s rapid development of world-class LNG projects will be multi-faceted and Chevron’s role is only just beginning. Through direct employment opportunities for this and the next generation as well as the wider community reaping the benefits of domestic energy capabilities and export taxation revenue, its landmark West Australian projects will long command centre stage. Butler is excited by this vision, but for now is intently focused on the most important resource in Chevron’s successful project delivery – its formidably capable workforce. “Chevron is an organisation that has strong values and really demonstrates its care and concern for the people who work in the company,” she says. “It’s great to work for a company that strives every day to ensure its people are able to have a satisfying career, make a contribution to their community and go home safely to their family every day. This is what makes Chevron a rewarding place to work.”

| Winter 2014 | www.amma.org.au

POLICY

Fair Work changes to restore balance and sensibility Australia’s resource industry has urged the Senate to pass the Abbott Government’s first round workplace relations changes, but has warned its proposed system for new project agreements risks locking in unsustainably high wages. IN its comprehensive submission to the Senate Education and Employment Legislation Committee reviewing the Fair Work Act Amendment Bill 2014, national resource industry employer group AMMA says the legislation addresses many critical priorities for the sector. “The resource industry has always been heavily exposed to global competitive pressures and, as such, we were the first sector to raise serious concerns with the previous government’s Fair Work framework,” says AMMA chief executive Steve Knott. “Australia’s workplace laws must better support investment, job creation and competitiveness as well as protecting those in work. The status quo is clearly out of balance and increasingly ill-serving our economy and the broader Australian community.” One particularly welcome amendment is the move by the Coalition to return the laws governing union entry into worksites to the pre-2009, given the previous government significantly shifted the goalposts in the favour of unions. Noting employers simply want the Abbott Government to deliver on the former Labor government’s broken promise not to change the laws, AMMA’s submission to the Senate Committee highlights that ‘Australia had the checks and balances right prior to 1 July 2009’. “The commencement of the Fair Work Act in July 2009 saw massive changes to Australia’s union right of entry system. Matters were made significantly worse for businesses in further amendments that took effect in 2014,” Knott says.

AMMA says Fair Work laws must better support job creation, investment and competitiveness

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“Following the ALP government opening up union site entry laws, many resource sites have been consistently harassed by union recruitment drives. The Pluto LNG project in Western Australia, for instance, had 450 entry requests in the first year of the Fair Work Act’s operation.

The resource industry has always been heavily exposed to global competitive pressures and, as such, we were the first sector to raise serious concerns with the previous government’s Fair Work framework. Steve Knott “It is well overdue that practicality is restored in this area.” Other key priorities covered in the bill include introducing a more usable model of workplace flexibility and addressing the concerning upward trend in protected strike action. New greenfields test risks locking in inflated wages In its submission, AMMA told the Senate Committee that fixing the current flawed process for setting employment conditions on new resource projects (‘greendfields’) is critical to securing ongoing investment and growth. While acknowledging the amendment bill is a positive step towards a more realistic process, AMMA is concerned about the requirement to not only better the award safety net, but to meet even higher ‘prevailing industry standards’ before new project arrangements are approved. “Employers fear the government’s proposed test may inadvertently lock-in the currently inflated and unsustainable wage levels as the benchmark for all future projects,” Knott says. “If our nation is to compete with not only emerging resource suppliers but also comparable economies such as the US and Canada, we must allow market realities to inform the employment conditions from project to project.” For new projects, AMMA’s submission recommends removing the proposed ‘prevailing industry standards test’

POLICY

in favour of maintaining the three existing tests (the National Employment Standards safety net, the Better Off Overall Test and the public interest test). “The three existing tests are more than adequate to protect employees without any unintended consequences,” Knott says. Employment minister Eric Abetz has indicated he will not change the bill’s provisions on greenfields agreements, however has reinforced his view that a better system is needed to properly encourage and support future project investment. “The (amendment) bill will remove the effective union veto power over greenfields agreements, which have enabled them to frustrate the making of these agreements and delay the commencement of major projects worth billions of dollars,” Minister Abetz says. “Under the amendments, employers will have the option of taking a proposed agreement to the Fair Work Commission if agreement has not been reached after three months.” AMMA’s submission to the Senate Education and Employment Legislation Committee regarding the Fair Work Amendment Bill 2014 can be found on the employer group’s website.

Fair Work laws should support more greenfields projects like Alpha Coal (test pit pictured)

Contentious rulings push barrow for appeals bench THE Australian Government is understood to be giving serious consideration to the establishment of a separate, independent appeals jurisdiction to review contentious or inconsistent rulings from Australia’s industrial tribunal, the Fair Work Commission (FWC). Flagged as a possibility in the government’s pre-election policy statement, further inconsistent rulings arising from the FWC have reignited public and political debate on the proposal, as Minister for Employment Eric Abetz considers submissions from key stakeholders. One contentious decision recently handed down by a FWC Full Bench, and currently being appealed, was the ruling that company DP World could not use urine testing to confirm a positive saliva drug test because it would be an ‘unjust and unreasonable’ incursion on employee privacy. Industry sources say this ruling further highlights the commission’s inconsistent and interventionist approach to drug testing in recent years, with urine drug testing a well-accepted and commonplace OHS policy in many workplaces. Another controversial ruling was the FWC ordering a Sydney commuter ferry operator to reinstate a master who failed a drug test after crashing a passenger vessel into a

wharf. In the ruling, the Commissioner found the sacking was legal but ‘unduly harsh’ given the master’s length of service. AMMA chief executive Steve Knott has been a strong advocate for a separate, independent appeals jurisdiction that, he says, is consistent with international best practice and would create greater precedents to eliminate such ‘contentious and illogical’ rulings. “We have seen a worrying trend where adventurous commission members are taking into account personal circumstances including the financial position or length of service of employees sacked for gross misconduct, clear breaches of contract or endangering their workmates or the general public,” Knott says. “This is why key precedent-setting determinations in Australia should be reviewed by a separate appeals body, as is the case in many other OECD industrial relations systems.” The potential over-allocation of important precedentsetting matters to certain senior commission members has also been called into question, with data published in the Australian Financial Review showing former union-aligned members of the FWC are sitting on a disproportionately high number of significant cases.

| Winter 2014 | www.amma.org.au

POLICY

PC Review ‘once in a generation’ opportunity Australia has a once in a generation opportunity to frame a workplace relations system that will support long-term competitiveness and growth, says AMMA. AMMA executive director policy and public affairs Scott Barklamb, is leading the national resource industry employer group’s submission to the wide scoping Productivity Commission review and says a ‘root-and-branch review’ of Australia’s workplace system is long overdue. “The resource industry strongly supports a comprehensive and open review of Australia’s workplace system as critical to our ongoing prospects for global investment, employment growth and increased national wellbeing,” Barklamb says. “As an independent agency that considers economic and social factors hand-in-hand, the Productivity Commission is able to ask the required questions to ensure we are regulating employment effectively and efficiently in this country.” Since the introduction of the Fair Work Act in July 2009, AMMA’s member companies across the wider national resource industry have experienced an ongoing deterioration in their workplace relations environments, as reported in an RMIT University study that concluded late last year. Among its results, the four-year longitudinal study determined that escalating labour costs are the ‘overwhelming factor’ harming the Australian resource industry’s international competitiveness; and that overregulation of workplace relations in Australia has created a costly, time-consuming and unproductive framework for doing business and employing people. At a more technical level, industrial relations professionals across the resources sector believe the legislation must be amended to create a more workable bargaining system for both existing workplaces and to successfully bring more new resource projects to market in Australia. A Productivity Commission-led review of Australia’s workplace laws and systems was first flagged by the Coalition while in opposition. The May 2013 Policy to Improve the Fair Work Laws document outlined the intention to ‘ensure the laws work for everyone’ and reassured stakeholders the review would be conducted with no preconceived policy directions in mind. “We’re not doing anything more, anything less, other than undertaking a comprehensive review of the laws and a thorough analysis, which is exactly what we promised,” Minister Abetz recently told the ABC’s AM program. “We went to the people at the last election promising a thorough review and that is what we’ll have. [We will be] giving an independent body that has a reputation for social sensitivity and economic robustness the opportunity to advise

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SCOTT BARKLAMB AMMA

The resource industry strongly supports a comprehensive and open review of Australia’s workplace system as critical to our ongoing prospects for global investment, employment growth and increased national wellbeing. SCOTT BARKLAMB

as to future direction for workplace relations laws.” While the process means there could be some time before meaningful change is enacted, industry has urged the federal opposition and the trade union movement to not compromise the effectiveness of the review through political point scoring or scare campaigns.

POLICY AMMA, for instance, believes all parties should see a ‘clear rationale’ for an independent and an open-scoped review of what is recognised as a complex and far-reaching area of regulation. “This process must be embraced by all political parties, industry representatives, unions and other stakeholders as a rare opportunity to openly and honestly discuss where our nation should go on an area as critical as how we regulate work,” Barklamb says. “This high level systemic review is critical to keeping our national competitiveness and productivity on track. We need the best thinking and ideas of all those with an interest in how our workplace relations system operates. “Given the international spotlight that will be on Australia for the G20 Summit later this year, there is no better time to show the world that we are capable of examining crucial micropolicy areas in striving to lift our productivity, competitiveness and living standards.” Notwithstanding Barklamb’s sentiment, trade unions and the Australian Labor Party are denouncing the review as a political tool, but the Productivity Commission is holding its own and emphasising that it will carefully consider what is put before it before providing independent analysis and recommendations for the government to assess prior to the next election.

Minister for Employment Eric Abetz at an AMMA conference.

Major workplace study underway DATA from one of Australia’s most significant workplace studies will soon inform the Fair Work Commission (FWC) on matters including annual wage reviews and pay equity. Currently underway, the Australian Workplace Relations Study (AWRS) involves 3,300 randomly selected businesses, putting forward up to 20 employees each. The FWC promises ‘comprehensive, up-to-date information for stakeholders, policy-makers and researchers on significant workplace relations matters affecting organisations and their workers in Australia’. FWC president Justice Iain Ross says similar international surveys have proved beneficial. “These businesses and their employees will have a unique and confidential opportunity to provide valuable insights into the employment relations environment in Australia,” Justice Ross says. “Studies of this nature have enabled researchers in

other countries to explore a range of employer-employee dynamics that can’t be analysed using separate employer and employee information.” THE SURVEY COVERS: • Workforce management, wage-setting and employee engagement practices; • Ownership structure, market competitiveness, labour productivity measurement and how enterprises respond to changes to the marketplace; • Performance, profitability, income sources and key expense items; • Workforce characteristics, including union density; and • Employee demographics, remuneration and engagement. The Commission says the study is part of its ongoing commitment to promote fair and flexible workplace relations for Australian employers and employee.

| Winter 2014 | www.amma.org.au

MIGRATION

457 visa prograM under microscope THE link between skilled migration and productivity growth is the key focus of an Australian Government review into the integrity of the 457 visa program. Assistant Minister for Immigration and Border Protection, Senator Michaelia Cash, says the review is in line with the Coalition’s commitment to ‘evidence-based productivity reform’. “The review aims to provide recommendations on how to maintain the integrity of the 457 visa program, while not placing unnecessary administrative burdens on business,” Senator Cash says. Along with the contribution the program makes to Australia’s productivity growth, the review will focus on the role of 457 visas in supporting industries and regions experiencing skills shortages. The Abbott Government’s constructive approach to national skilled migration policy comes after intense politicisation of the 457 visa scheme in the lead-up to the 2013 federal election, during which time the former Labor government imposed new restrictions on accessing skilled labour from overseas. Labor’s changes to the Migration Act and related regulations included placing labour market testing requirements on employers, requiring them to advertise a role before nominating it as a 457 visa position, even in occupations suffering recognised long-standing skills shortages. There was also a more than 200 per cent increase in 457 visa application fees – a move the new Minister for Immigration and Border Protection, Scott Morrison, has slammed as ‘economic vandalism’. While the Australian resource industry accounts for just 6.8

MICHAELIA CASH Assistant Minister, Immigration

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per cent of the nation’s 457 visa holders, employers rely on the program as a responsible solution to sourcing highly skilled labour to fill temporary but critical skills gaps. “AMMA and our resource industry members welcomed this review and, through our informed submission to the independent panel, we were pleased to highlight the industry’s commitment to training Australians while ensuring efficient access to skilled overseas labour where needed,” says AMMA senior workplace policy adviser Lisa Matthews. “There already existed strong incentives to employ Australians first before filling jobs with skilled labour from overseas. Labor’s 2013 changes were, for the most part, unnecessary and unwarranted.” According to Matthews, one of the priorities for the independent review should be to recommend the removal of the labour market testing measures implemented by the former government which took effect in late 2013. “Labour market testing for occupations that a business already knows are in short supply is punitive bureaucracy and a waste of time and money,” she says. “If a company is seeking an installation engineer with five years’ industry experience, they already know the outcome before they advertise the job locally. But currently they’ve got to go through the process of proving what they already know – that the job cannot be filled locally. If companies could fill those jobs with locals, they would happily do so.” The costs of sponsoring a worker from overseas were confirmed in a research project between AMMA and Edith Cowan University in 2012. The project, 457 visa workers in the Western Australian resources industry – The benefits and costs for business, migrant families and the community, confirmed that relocation costs ranged from $7,000 to $65,000 per individual worker. ”Migrant skills will play the role of ‘shock absorber’ during labour market readjustment periods and will continue to form an important pathway in future national skilling processes,” the study found. AMMA’s submission to the 457 visa review panel highlights the visa program has proven highly responsive to domestic employment trends. For instance, when the number of job ads declines domestically, so too do the number of 457 visa applications. “This shows that the system is working as intended,” Matthews says. “There has been a sharp decline in the mining industry’s use of 457 visas since peak skills shortages were reported in June 2012. In the past 12 months, our industry’s use of skilled migration has decreased by 48.8 per cent.” The independent four-member review panel is due to report its findings in mid-2014.

MIGRATION

‘Unnecessary’ offshore migration laws to be scrapped THE former Labor government’s contentious new migration laws that will see a special visa required for offshore resources workers operating in Australia’s Exclusive Economic Zone (EEZ) could be repealed by the Abbott Government just months after their implementation. Coming into effect from June 30, the Migration Amendment (Offshore Resources Activity) Act 2013 introduces an unprecedented new level of regulation on far-offshore resource projects that were previously outside Australia’s migration zone and thus not covered by the nation’s Fair Work laws. Introduced by then-Workplace Relations Minister Bill Shorten in mid-2013, the legislation was heavily criticised by industry as an unnecessary move that ignored the realities of international maritime law to pander to trade union ‘scare campaigns’ about foreign labour. The Abbott Government, however, is moving quickly to repeal the legislation and bring Australia’s regulation of offshore resources activities back in-line with global standards, a move consistently supported by the resource sector’s migration and industrial relations specialists, AMMA. AMMA maintains the added regulation must be unwound as it

is ‘inconsistent with international and domestic obligations’ and, due to flow-on increases in project costs, would ‘have a highly damaging effect on the economy’. “This regulation was never anything more than a punitive measure delivered to trade unions with no regard to how this work operates in practice,” says AMMA CEO Steve Knott. The Department of Immigration’s Regulation Impact Statement on the repeal legislation finds that the former Labor government’s move only ‘introduced unnecessary and disproportionate regulation’. “The ORA Act fails to adequately appreciate the complex and overlapping regulatory framework in which the offshore resources industry operates,” says the department’s impact statement. “Repeal of the legislation…would involve least cost to the offshore resources industry as it would maintain existing arrangements for the industry.” While the government had hoped to scrap the Migration Amendment (Offshore Resources Activity) Act 2013 prior to its commencement, the regulation will now likely operate for a few months until the repeal legislation can be passed by the new Senate.

| Winter 2014 | www.amma.org.au

DIVERSITY

Mining’s new dress code Despite an industry-wide focus on gender diversity, many women are still entering the worksite dressed in men’s protective clothing. Resource People spoke to two industry insiders changing the workwear landscape, one carefully tailored garment at a time.

KYM CLARK She’s Empowered

‘CLOTHES make the man’ – it is a long-held saying that refers to the influence clothing can have on a person’s standing in society. But while women are making a greater mark on the maledominated resource and related construction sectors than ever before, many still don high visibility and protective clothing constructed for men. It was in a meeting with her pregnant manager and male colleagues at a central Queensland mine site that first sparked Kym Clark’s idea for her ‘She’s Empowered’ line of workwear for women. “Looking around the room, I noticed how comfortable all the men looked in their uniforms while my heavily pregnant manager was wearing an unbuttoned high-vis shirt over a singlet.” Clark says. “I then started observing how other women in the workplace were wearing their uniform and the issues they had such as sleeve length and excess material. “From research I discovered there are eight different body shapes for women, so I created She’s Empowered to help make every woman feel comfortable at work and increase their sense of belonging.” Launched in 2013, She’s Empowered was the first clothing label to offer the industry a high visibility maternity shirt. Clark’s other designs, the Styleworker and Yoketastic, capitalise on

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structured cuts conducive to comfort, style and safety. “I wanted to give pregnant women the option to wear a uniform that is designed to celebrate their pregnancy. The Baby Bump features two inverted pleats which accommodate a woman’s belly as it grows,” she says. “And when your clothes fit correctly, you are more confident and can easily get up and do that presentation. But it is also a safer option, for example, when you can do your sleeves up at the right length and easily comply with industry standards.” Apto PPE is another label meeting the gap in women’s protective workwear, originally developed from an Engineers Australia Women in Engineering National Committee initiative. Drawing on a career spanning 25 years in the engineering and construction sectors, Laurice Temple is one of three Apto directors who led the concept to fruition with the recent launch of the company’s Signature and Maternity range. Shirts boasting shaped waistlines, slimline collars and back ventilation, and pants with adjustable waistbands are clearly designed to appeal to a woman’s sense of style and comfort. However, Temple agrees safety is core to the clothing’s purpose. “At Apto our goal is to ensure safer working environments, starting with clothing. Whether women are a size four, a size 18 or pregnant, wearing ill-fitting clothing is unsafe,” Temple says.

The She’s Empowered high-vis maternity shirt.

DIVERSITY

“Additionally, we want to give the market some variety. Many of us feel more confident when we are having a ‘good hair day’. This extends to clothing. We believe workwear that fits better enhances confidence at work.”

Whether women are a size four, a size 18 or pregnant, wearing ill-fitting clothing is unsafe. Laurice Temple Clark is excited to see her She’s Empowered workwear range now a permanent fixture on many industrial workwear stocklists, while the launch of the Apto range is also receiving a strong response. So why didn’t the market catch on to this trend sooner? “It is probably due to a traditional lack of numbers in the industry to drive demand, coupled with a lack of ‘collective voice’. It is very much a cultural issue and (needs to be part of the) diversity conversation,” Temple says. “We believe it is okay to wear something different and embrace change, especially when it is a safety issue.”

Apto directors (from L to R) Laurice Temple, Gaye Francis and Michelle Shi-Verdaasdonk with Apto PPE gear

Gender reporting delayed THE Australian Government will streamline gender equality reporting detail to ensure it ‘drives results in the workplace’, following the deferral of additional reporting requirements that were due to commence in April. Minister for Employment, Senator Eric Abetz and Minister Assisting the Prime Minister for Women, Senator Michaelia Cash, say the additional reporting requirements were deferred to allow more time for consultation with industry. They also announced a new Minimum Standard for workplace gender equality, which will apply to employers with more than 500 workers from 1 October 2014. “The Minimum Standard is an additional requirement for large businesses and has been developed following consultation with industry, peak bodies and community groups,” a joint statement reads. The new Minimum Standard will require employers to put in place one or more strategies to: • Support and improve gender equality in the workplace; • Advance equal remuneration between male and female employees;

• Implement flexible work arrangement for employees with caring responsibilities; or • Prevent sex-based harassment and discrimination. The new Minimum Standard is in addition to reporting requirements now in place for the 2013-14 reporting period. This is the first year the requirements applying to employers with more than 100 employees have been fully operational under the Workplace Gender Equality Act 2012. The Labor Opposition’s response, through shadow minister for women, carers and communities Senator Claire Moore, urges the Coalition Government not to ‘water down’ additional gender equality reporting. “Any watering down of the reporting would be a retrograde step in progressing the equal participation, promotion and pay of women in the workplace,” Senator Moore says. “It is unclear why the government determined this new minimum standard is to apply only to businesses with more than 500 employees given the majority of businesses in Australia employ between 100 to 200 people.”

| Winter 2014 | www.amma.org.au

DIVERSITY

Morris awards $14m Indigenous transport contract RESOURCE industry facilities management provider Morris Corporation has awarded a $14 million transport contract to an Indigenous joint venture thought to be the first of its type in Australia. Contract recipients Sadleirs Nexus MIB Transport Pty Ltd was formed between Western Australian Logistics Company Sadleirs Nexus Logistics and Pilbara traditional owner group Martu Idja Banyjima (MIB) Transport. The two-year freight services contract for Morris’ Western Australian operations is the largest the company has awarded to a JV of this nature. It follows a $435 million contract Morris won last year to provide catering and hospitality services through its various Indigenous joint ventures at Fortescue Metals Group’s Pilbara iron ore mines. “We went with Sadleirs/MIB because of sound freight and logistics knowledge, excellent facilities and infrastructure with a professional team. To cap this off, the new Indigenous partnership will contribute to the betterment of MIB people,” says Morris chief executive officer Rodney Molla. Sadleirs Nexus executive director Alun Powell is optimistic the partnership with MIB will provide genuine benefits to both parties. “The winning of the Morris contract is a fantastic start for Sadleirs Nexus MIB Transport and we are certainly looking forward to securing further clients keen to avail themselves to our unique logistics service offerings,” Powell says. “We are delighted our partnership will deliver both commercial returns for the shareholders – Sadleirs and the

Representatives from Morris Corp, MIB, Lionel Samson Sadleirs Group and Fortescue Metals Group

MIB people – and crucially, provide Indigenous people with real employment opportunities in the logistics field.” Morris’ strong commitment to Indigenous workforce participation was recognised with the 2013 Indigenous Employer of the Year Award by atWork Australia; a provider of Indigenous and disability employment services on behalf of the Australian Government. The award acknowledges Morris’ effective combination of recruitment screening, training, mentoring to maintain a 90 per cent retention rate among more than 50 Indigenous jobseekers employed through atWork Australia last year. Morris is also meeting an Indigenous target of nearly 10 per cent of staff employed at its sites.

We are delighted our partnership will deliver both commercial returns for the shareholders and crucially, provide Indigenous people with real employment opportunities in the logistics field. Alun Powell Morris Corp and Native Title Groups also provide facilities management services at FMG villages including the Christmas Creek Karntama Village (pictured)

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DIVERSITY

Indigenous pathways help close the gap A few months ago, George, Sarah and Chris were looking for work and unsure of their futures. Today, after completing an industry training and employment program, they are embarking on promising new careers with one of the largest providers of hospitality support services to the resource sector.

THE three beneficiaries of the AMMA Skills Connect Indigenous Pathways program provide real examples of what can be achieved when government, industry and skills providers join forces to help close the Indigenous employment gap. AMMA Skills Connect is a government-funded initiative delivered by resource industry employer group AMMA connecting key demographics including women, Indigenous people and retrenched workers to employment pathways across the resources, related construction and allied service sectors. Its most recent program partnered with resource industry food and support services provider ESS Support Services Worldwide and Indigenous careers centre Access Working Careers to develop and implement a screening, selection, training, placement and mentoring strategy for Indigenous jobseekers in Western Australia. The aim was to see the group of 20 jobseekers complete a Certificate II in Hospitality and transfer into meaningful employment. Upon completion of a two-week intensive training

Many Indigenous people don’t get the guidance they need to enter the workforce and can stray off into aspects of life that can get them into trouble. George Robson

George is embarking on a chef’s apprenticeship

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Sarah is enjoying her role as a camp utility worker

course, all but one were successfully placed into direct full-time employment at ESS-managed worker accommodation villages in the Pilbara. Here, George, Sarah and Chris offer insight into their experience in the training and employment program and what it feels like to be a part of the resource industry workforce.

George – Apprentice Chef During the training program at Windawarrie Village in Tom Price, George Robson’s keen interest in catering prompted ESS Support Services to offer him a coveted chef’s apprenticeship. “The work experience was definitely the most exciting part of the program for me. I enjoyed being back in the kitchen,” says George, who has previously worked in a restaurant. “I’m undertaking kitchen and food prep tasks, but will soon move on to cooking. I’m looking forward to completing my apprenticeship, becoming a qualified chef and building a career from there.” George considers himself lucky to have been offered a place in the program, having discovered it soon after moving to Western Australia from the east coast. He hopes to see more pre-employment training opportunities tailored to the resource industry for Indigenous jobseekers. “The training was helpful because we also learnt a lot about working in the resource industry generally, such as the fly-in, flyout lifestyle, working conditions and safety,” he says. “Many Indigenous people don’t get the guidance they need to enter the workforce and can stray off into aspects of life that can get them into trouble. “They can end up in the wrong situations and, without the opportunity for teachings, there is no pathway to help them. So I do think it’s a very good idea to have programs like this.”

DIVERSITY

The group undertakes a training activity

Sometimes people just need encouragement to be motivated and believe they can achieve something like this. Sarah Miles Sarah – Camp Utility Worker West Australian local Sarah Miles, now a camp utility worker, didn’t think twice about joining the program, despite never picturing herself as a resource industry worker. “I wanted to be involved because I knew if I completed the training, there was a chance to start work right away,” she says. “I had heard that people working in the industry can make a really good living. But I also thought it was somewhere I could work for a long time and learn new skills.” Sarah enjoyed meeting the variety of workers onsite and undertaking the practical tasks of a utility worker such as cleaning, laundry and catering assistance. “The more I learnt about the industry and the type of work I would be doing in camp utility, the more excited I was to finish the training,” she says. “Sometimes people just need encouragement to be motivated and believe they can achieve something like this. I was unemployed and didn’t really know what to do, but now I have a great new job.” Chris – FIFO KitchenHand For Chris Thomas, the AMMA Skills Connect training and employment program not only gave him full time employment, but a renewed sense of self-worth. “I didn’t really know what I wanted to do before this, but now I’m proud. I’m proud of what I have achieved and the work that I do,” says Chris, who will never leave a shift until things are ‘just right’. “I think if there is opportunity for more Indigenous Australians

to get involved in programs like this, it will be a very good thing.” While the FIFO lifestyle can be a significant adjustment for any new worker, Chris is quick to note the positives of his two-weekson, one-week-off role at the Brockman 4 iron ore mine village. “I think the FIFO lifestyle is fantastic. You have to work hard, but I love it,” he says. “When I’m travelling to and from work, I get to meet site managers and other workers, and learn about what they do. It is a great way to make new friends.” As George, Sarah and Chris progress in their new resource industry services sector careers, AMMA Skills Connect and its training and employment partners continue to explore further initiatives to make a material difference in improving Australia’s Indigenous jobs gap.

Chris prepares food in the village kitchen

I’m proud of what I’ve achieved. An opportunity for more Indigenous Australians to get involved in programs like this will be a very good thing. Chris Thomas | Winter 2014 | www.amma.org.au

INNOVATION

OSE II is used to clean up an oil spill on a Nigerian shoreline

Cleaning up disaster Environmental contamination incidents are something resource organisations go to great lengths to prevent. But are you prepared if the worst was to happen? Here, Resource People explores a new entrant to Australia’s oil spill solutions market delivering promising results. IN terms of scenarios that can negatively impact a resource employer’s reputation, it doesn’t get much worse than an environmental disaster. The tragic 2010 Deepwater Horizon oil spill in the Gulf of Mexico is permanently etched in history and serves as a lesson in response to hazardous pollution. Recently approved by the Australian Maritime Safety Authority (AMSA), Oil Spill Eater II (OSE II) is a new oil spill, contaminated soil and water treatment product now available to the Australian market, boasting a track record of more than 24,000 international contamination clean-ups. Holding exclusive Australian rights for the product is Melbourne-based environmental pollution solutions company CMTA International. General manager Peter Mogridge says as one of the only first-response bioremediation products in the world, OSE II is perfectly suited to the country’s unique ecology. “Australia’s environment is unique and sensitive. It is a remote country, rich in resources, that relies on both importing and exporting,” says Mogridge, a 30-year veteran of the oil and gas industry. “We could see there was a market to clean up oil and other hydrocarbons by using a clean and environmentally friendly solution that restored the environment back to its initial state and without impacting the health and wellbeing of marine and wildlife.

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Peter Mogridge CMTA International “OSE II is 100 per cent non toxic and is the most environmentally safe and cost effective bioremediation process for the mitigation of hazardous waste, hydrocarbon spills and contamination virtually anywhere of any size whether large or small.” Since 1989, OSE II has been used in more than 35 countries,

INNOVATION

namely the USA, Europe and South America. Mogridge points out the product’s key differentiator lies in the speed in which it transforms toxic material. “OSE II differs from other response products in that it can convert hydrocarbon to a non-flammable product within three minutes. Ultimately, the substance is converted to water and carbon dioxide, minimising the effects of the spill on the environment,” he says. “This technique eliminates the traditional method of cleanup, even in the scenario of a road incident where the hydrocarbon may be covered with sand, bagged and taken away for treatment and disposal. Such an intensive method can keep public roads closed for hours at a time.” Mogridge provides examples of where OSE II has been used to effectively mitigate major environmental incidents. “In 2006, the US Navy used OSE II to clean up 12,000 gallons of oil that came from a tanker in the Greek port of Crete. The navy spent an hour applying OSE II to the oil, after which time it had broken down to the point where it was no longer visible,” he says. “More recently, it was applied to a 550,000 litre oil spill in Nigeria. This accident could have had an extremely damaging impact on the local fishing industry, but because OSE II stopped the contamination from sinking, broke it down and detoxified it, fishing was reopened after less than a week. “The cleanup covered river water, ocean water and shorelines, including sensitive mangroves, which showed no signs of contamination after OSE II was applied. Subsequently, the oil company was not sued or fined for natural resource damages.” Since receiving AMSA approval in September 2013, CMTA has been embarking on an industry-wide campaign to build awareness of the product.

“We have been extremely busy setting up the business to support the supply of OSE II across the country and have been conducting demonstrations and trials of contaminated areas with great success,” Mogridge says. As its Australian presence grows, CMTA will offer a service to respond to environmental hazards. However, Mogridge warns that a small incident can easily escalate to a significant

OSE II differs from other response products in that it can convert hydrocarbon to a non-flammable product within three minutes. Peter Mogridge environmental disaster and given the remote nature of resource operations, preparing onsite employees to use the product should be part of a company’s first response plan. “The benefit of companies having OSE II supplies and trained personnel onsite is that a spill or other contamination can be acted on immediately, with the aim to reduce its exposure and impact,” he says. “Being prepared to provide a prompt and effective first response can reduce the overall impact and turn that potential bad news story around.”

Pilbara pipeline to cut costs CONSTRUCTION has commenced on a long term gas transportation agreement in the Pilbara, tipped to significantly reduce iron ore giant Fortescue Metals Group’s energy costs and carbon emissions. The 270km Fortescue River Gas Pipeline will form part of a gas tranportation route from the existing Dampier to Bunbury Natural Gas Pipeline to the Power Station at FMG’s Solomon Hub mine. FMG CEO Nev Power says the conversion of the 125MW Solomon Power Station from diesel to gas is expected to save the company around US$20 milion per annum. “The pipeline to Solomon allows Fortescue to reduce operating costs and play a significant role in cutting emissions by switching stationary power generation from diesel to clean natural gas,” Power says. “The Fortescue River Gas Pipeline also represents a

significant step in the gasification of the East Pilbara to the lasting benefit of the state of Western Australia.” The pipeline will be built, owned and operated by the FRGP Joint Venture of DBP Development Group (a whollyowned subsidiary of DUET Group) and TEC Pilbara Pty Ltd (a wholley-owned subsidiary of TransAlta Corporation). “TransAlta, our exisitng partner at Solomon, and DDG have outstanding reputations with proven capabilities within the energy infrastructure industry. Their expertise will allow Fortescue to forcus on its core business of efficient, low cost delivery of iron ore to customers in China and Southeast Asia,” Power says. Engineering group Monadelphous are undertaking a $100 million construction contract for the pipeline which is expected to be completed in late 2014 and operational in 2015.

| Winter 2014 | www.amma.org.au

INNOVATION

BMA introduces Qld technology first BHP Billiton Mitsubishi Alliance (BMA) is introducing a new extraction technology to the Queensland coal sector under a $1 billion expansion of its Broadmeadow underground coal mine. The technique, called Longwall Top Coal Caving, should allow BMA to mine both the bottom and top of the coal seam in a more economical process. Welcoming the investment, Queensland Natural Resource and Mines Minister Andrew Cripps says the technology allows for almost complete recovery of coal from thick seams. “It is also renowned for its high productivity and for reducing operating costs, which are significant advantages for the coal mining industry,” the minister says. “The extension of three longwall panels at the mine means production will be lifted from 400,000 tonnes per annum to a new total capacity of 4.8 million tonnes per annum.” Minister Cripps says the Broadmeadow mine expansion will generate 650 construction jobs, could increase

production capacity through a 20-year life extension and builds on BMA’s financial contribution to local communities. “Last financial year BMA’s operations contributed around $9.3 billion in direct spending, mostly in regional communities,” he says. “With the extension of the Broadmeadow Mine, BMA has demonstrated its continued commitment to coal production and investment in Queensland for at least the next 20 years. “Mining is now a larger employer of full-time workers in Queensland than both the agricultural or hospitality sectors, which highlights the importance of the sector to economic growth in Queensland.” The Broadmeadow mine is located near Moranbah in central Queensland and is part of BMA’s $5 billion investment in the region, which include the $1.6 billion Daunia coal mine and $2.5 billion expansion of Hay Point Terminal.

Re-elected government to build resources precinct THE South Australian resource industry is looking to the re-elected Labor state government to deliver on its promise of a world-class resources precinct at Adelaide’s Tonsley Park. Premier Jay Weatherill proposed the precinct development, complete with a $32.2 million library and an ‘onshore petroleum centre of excellence’, prior to the March state election as a way to accelerate investment in exploration and development in SA’s resource sector. “In the next 15 years, minerals and energy companies operating in South Australia are planning to create an additional 35,000 jobs,” the Premier says. “Accelerated development of our unconventional gas resources alone can create almost 4000 jobs and contribute an additional $2.8 billion a year to the state’s economy.” Premier Weatherill also committed to expand the state’s accelerated exploration scheme, defer royalty payments for unconventional gas, invest in an air strip to service exploration in the state’s north, and establish a Regional Mining Infrastructure Taskforce.

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“This suite of policies reaffirms Labor’s commitment to the resources sector, as we wholeheartedly understand the crucial role it will play in our state’s future prosperity,” he says. “We want our advanced manufacturers to be in a position to maximise the number of local jobs that will flow from the accelerated investment in the Cooper Basin and mining provinces such as the Woomera Prohibited Area. “We can achieve those aims through the creation of Mining and Petroleum Centre of Excellence linked to a flagship State Drill Core Reference Library at Tonsley Park.” Beach Energy managing director Reg Nelson hopes the initiatives will encourage investment in unconventional exploration in the Cooper Basin as domestic gas contracts expire. “The state government recognises it is significantly more expensive to access deep gas that’s trapped in shale and tight sands than traditional shallower resources,” Nelson says. “Domestic gas contracts on the east coast of Australia are about to expire and the Cooper Basin is well positioned to supply the demand.”

INNOVATION

CRC technology to fight fatigue NEW funding for research and technology is set to reduce the threat of fatigue for the resource workforce. The recently launched Cooperative Research Centre (CRC) for Alertness, Safety and Productivity, was established with a $14.48 million contribution over seven years from the Australian Government. The CRC will develop new products and services to improve alertness and performance, and aims to see 9,000 less fatigue-related injuries each year. “Each year almost 10,000 serious workplace injuries and more than 25,000 serious injuries from road crashes are caused by poor alertness,” says Parliamentary Secretary to the Minister for Industry, Bob Baldwin. “Beyond the terrible human and emotional cost this results in around $5 billion in lost productivity each year. “The CRC for Alertness, Safety and Productivity will look at everything from workforce scheduling and workplace design to state-of-the-art tools to revolutionise the diagnosis and treatment of sleep disorders to reduce the number of preventable errors, accidents and injuries.”

A number of research methodologies are underway, including the development of an alertness monitor to help drivers identify their stage of fatigue, and finding a way to switch what stage of the circadian cycle – that tells the body to go to sleep at night – a person is in, to make them work better at night and sleep in the day.

| Winter 2014 | www.amma.org.au

MEMBER NEWS

Super Pit’s golden extension KALGOORLIE Consolidated Gold Mines (KCGM) has announced its iconic Fimiston Open Pit project, commonly known as the ‘Super Pit’, will continue processing gold to 2029, eight years longer than expected. KCGM general manager Russell Cole explains the mine’s life extension was due to the inclusion of processing low grade stockpiles, which were deemed a mining reserve in 2012. “While current plans have us stopping open pit mining in 2019, processing the low grade stockpiles has now become part of our long-term plan,” Cole says. “The inclusion of the stockpiles means KCGM currently plans to process gold until 2029. Of course, this may change as the economical viability of any project can fluctuate due to external factors such as gold price, taxes, labour costs and so on.” KCGM employs around 1000 people and has contributed about $268 million to the local community. Located 600km west of Perth in Kalgoorlie-Boulder, the Super Pit is Australia’s largest open pit mine, producing up to 800,000 ounces of gold every year. As part of its ‘2013 Life of Mine Plan’, KCGM is seeking approvals of key projects which include increasing the capacity of storage facilities and upgrades to two roasters to reduce air emissions. “KCGM is committed to continually improving the way we www.amma.org.au | Winter 2014 |

KCGM is committed to continually improving the way we operate and this includes our environmental management. Russell Cole operate and this includes our environmental management,” Cole says. “The two roasters at Gidji are scheduled to cease operating by the end of 2015, and will be replaced with a large Ultra Fine Grinding Mill.” While the current Life of Mine Plan has KCGM operating to around 2029, Cole says the company will continue to look for opportunities to further extend the mine’s life. “It is important for the community to understand that while KCGM endeavours to extend the life of the operations, gold price is variable and economically viable mineral resources are finite, and one day the mine will close,” he says. “Providing a nominal date for mine closure ensures that adequate planning is undertaken by the operation, government and community to minimise potential impacts.”

MEMBER NEWS

Funding boost brings Roy Hill to reality International investment to progress the $10 billion Roy Hill iron ore project represents the world’s largest ever finance deal secured for a land-based mining development, according to Hancock Prospecting chairman Gina Rinehart. Nineteen commercial banks and five export credit agencies are contributing more than $US7 billion to finalise a funding package that will allow construction to be completed. Located 115km north of Newman in Western Australia’s Pilbara region, Roy Hill will comprise an integrated open pit iron ore mine, railway and port facility. The project is expected to produce 55 million tonnes of iron ore per annum over a 20-year mine life with first export slated for September 2015. Hancock Prospecting is also demonstrating a strong commitment to local suppliers. Contracts with local mining and related sector companies will significantly extend the employment and economic benefits of this important project. Chairman Gina Rinehart says such substantial international investment and support demonstrates a strong vote of confidence in the project and her wholly-owned West Australian company. “The project has strong partners with international experience in finance, engineering, construction, marketing and logistics which have assisted in the attraction of support from the international financial community,” Rinehart says. “Roy Hill is a crucible of opportunity during a period of global uncertainty - it has already shown it will create new jobs, and benefit the greater mining and construction-related industries, it will add to Australia’s exports, and significantly benefit our West Australian and national economy.

“Today we already have 2,500 people working on the construction of the project; this will grow to 3,600 later this year before we employ 2,000 permanent staff through operations.”

Roy Hill’s workforce will grow to 3,600 this year.

“We look forward to becoming a major iron ore producer on an international scale.” AMMA chief executive Steve Knott congratulates Hancock Prospecting for navigating the challenges of brokering such a massive deal to bring investment to Australia. However, he warned the wider industry’s difficulties in attracting investment of this magnitude need to be addressed. “Over the past two years, more than $150 billion worth of resource projects in Australia’s investment pipeline have been delayed or cancelled,” Knott says. “Everything that we can do to improve our nation’s competitiveness and secure further investment of this size is critical. “Australia’s resource employers have consistently warned unbalanced workplace laws, high-costs and over-regulation are pricing our country out of the resource investment market. It is now 30 per cent more expensive to build a resource project in Australia than in Canada, one of our closest competitors.” Mr Knott says the first step in helping more companies follow Hancock Prospecting’s lead in attracting new investment is ensuring key policies the Abbott Government was elected to implement are passed.

Nineteen commercial banks and five export credit agencies are contributing to the Roy Hill funding package

| Winter 2014 | www.amma.org.au

ECONOMY AND FINANCE

Free trade deals to spur growth Historic free trade agreements with Japan and South Korea have opened doors for Australia to become one of the most diversified and globally engaged trading nations, writes Minister for Trade and Investment Andrew Robb.

AUSTRALIAâ&#x20AC;&#x2122;S trade landscape was altered dramatically in the space of just two days, when the Australian Government concluded negotiations with Japan for the Japan Australia Economic Partnership Agreement (JAEPA) and formally signed the Korea Australia Free Trade Agreement (KAFTA) in South Korea during the first week of April. Already a catalyst for much of our strong trading relationships in Asia, the Australian mining and resource industry will see the benefits of these agreements in fresh export and investment opportunities. Australian export sales to Korea are around $16 billion, and mining and energy products make up almost three quarters of this. Australian iron ore and coal has helped transform the South Korean economy by providing the raw materials to

One in five Australian jobs are linked to trade, and the export figures from our mining and resources industry demonstrate that the sector is an overwhelming contributor. Andrew Robb

build modern cities and affordable energy to power a growing manufacturing sector. I believe KAFTA will further develop this relationship between Australian energy and resources companies and a booming Asian economy that continues to grow and create the demand for our exports as they do so. The agreement will eliminate tariffs of up to eight per cent in 10 years on a number of Australian energy products, such as crude petroleum, natural gas, gold, propane, unwrought lead, unwrought aluminium, gold, titanium dioxide, ammonia and cobalt mattes and articles. Japan, while not an economy undergoing an industrialised

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Andrew robb Trade Minister growth period, is our second largest trading partner and our third largest source of Foreign Direct Investment after the US and the UK, and this continues to grow. JAEPA is the most liberal trade agreement that Japan has ever undertaken with another industrialised country. It has the potential to grow our existing investment relationship â&#x20AC;&#x201C; an advantage to the minerals and resources industry as the sector seeks access to further foreign capital. In export terms, Japan will eliminate tariffs on 100 per cent of Australiaâ&#x20AC;&#x2122;s energy and resource commodities which will benefit coke and semi-coke coal, non-crude petroleum oil and unwrought nickel exporters. One in five Australian jobs are linked to trade, and the export figures from our mining and resources industry demonstrate that the sector is an overwhelming contributor. That is why we will continue, as a Coalition Government, to pursue an ambitious free trade agenda that will benefit our mining and resources industry. We are committed too, to dispelling the myth that the mining boom is over and reassuring foreign capital markets that, after years of anti-trade, anti-mining and anti-investment Labor policies, that Australia no longer carries any element of sovereign risk and is open for business.

ECONOMY AND FINANCE

Member value to determine MySuper winners The federal government’s MySuper reforms have created a new foundation for Australia’s superannuation system, targeting simpler, lower cost solutions for retirement savings.

AS of January 1, 2014, all employers must pay default superannuation contributions to an authorised MySuper product that carries standard benefits such as life and total permanent disablement insurance. In many cases, this new default fund, TIM selected by employers on behalf of BAKER their workforces, supersedes legacy funds. The residual balances in these older funds that once received inflows before MySuper emerged are now likely to sit dormant, fully invested, until advised otherwise by the employee, or ultimately, the government. These reforms have had the effect of returning superannuation back to its original premise of employee benefit and, in doing so, placing greater responsibility on employers. They have also had the affect of homogenising default superannuation options. Key differentiators of price, performance and protection of default funds under MySuper have now converged. Competing pressures within this more homogenous pool have led to fund consolidation, creating the dual effect of shrinking the pool of superannuation funds and increasing the average fund size. (Industry consolidation increased average fund size from $300 million in 2004 to $2.6 billion by 2012.) While consolidation is one response to MySuper, innovation

Our rule of thumb when building solutions is that employees should be able to cover their mortgage in the unlikely event of being incapacitated for any period of time, and this simple premise differentiates us from the rest. Tim Baker

is another. One of only 117 funds registered to receive default superannuation flows is Resource Super, Australia’s only dedicated provider of superannuation solutions designed for people working in the resource sector. Chief executive officer Tim Baker says the group provides world-class funds management protection and employment benefits beyond the parameters of most MySuper funds registered with the Australian Prudential Regulation Authority (APRA). “Resource Super was set up in 2011 in recognition of the unique income and risk profiles of people working in the resource sector, that are often mismatched with homogenised superannuation solutions,” Baker says. “By standardising benefits such as insurance and entitlements within default superannuation, MySuper can leave some employees, particularly those in unique circumstances, at risk. “The incomes, risks and lifestyles of people working in the resource sector are well beyond the norm, with average weekly earnings in mining 1.7 times the national average. “This mismatch between the greater resource sector workforce, which includes up to 1.1 million direct and indirect employees, and the mainstream workforce for whom MySuper was built creates a problem for employers seeking adequate protection inside of default superannuation for sector people.” To address this gap, Resource Super has partnered with global investment managers and insurers, to create a model that combines the low cost focus of industry funds and the customisation of corporate funds. “Our rule of thumb when building solutions is that employees should be able to cover their mortgage in the unlikely event of being incapacitated for any period of time, and this simple premise differentiates us from the rest,” Baker says. “It is in offering these extra benefits, on top of a sound performing and cost effective superannuation solution that can help companies stand apart and build workplace cultures that protect employees and improve productivity. “Building a corporate structure around super creates operational efficiency, employee value and good management.” These superannuation issues can be discussed with the Resource Super team at the Australian Resource People Summit in Perth on May 29-30.

| Winter 2014 | www.amma.org.au

ECONOMY AND FINANCE

Resource export earnings moving on up Australia’s mineral and energy commodity export earnings are forecast to increase to $199 billion in 2013-14, up from $176bn in 2012-13, the Bureau of Resources and Energy Economics (BREE) has revealed.

BREE’s Resources and Energy report for the first quarter of 2014 predicts earnings to increase at an average rate of eight per cent a year to total $284 billion in 2018-19. The bureau’s executive director, Bruce Wilson, says the forecast signals the resource industry’s transition to a strong production phase. “Higher export earnings will be driven by the substantial growth in volumes of a number of commodities despite near term softness in prices,” Wilson says. “In Australia, the resources boom is transitioning from the investment phase to the production phase as the large number of projects developed in he past few years start operation. This is expected to result in increased production and exports for a number of commodities. “Lower prices for most commodities in the past year have put greater pressure on the profitability and competitiveness of some Australian producers. However, the Australian industry is expected to remain fairly resilient over the medium term.” BREE expects iron ore and coal will be the principal drivers of export growth in the short term, while LNG exports will increase as new production capacity comes online. Between 2012-13 and 2018-19, LNG exports are projected to increase at an average annual rate of 22 per cent to reach 79 million tonnes, up from 24 million tonnes in 2012–13. Minister for Industry Ian Macfarlane says the resource industry’s contribution to the Australian economy will be

A vessel is loaded with FMG iron ore for export

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Lower prices for most commodities over the past year have put greater pressure on the profitability and competitiveness of some Australian producers. However, the Australian industry is expected to remain fairly resilient over the medium term. Bruce Wilson

more important than ever in the years ahead. “The Coalition has always valued the economic contribution of the resources sector and cautioned against taking it for granted, not only because of the clear value it adds to the national economy, but also because it employs tens of thousands of Australians, in both direct and indirect jobs,” Macfarlane says. “Many of those jobs are in regional Australia and support regional communities. “That’s why it’s so important the right policies are in place to ensure the mining industry can continue to grow, and that investors have confidence in new and existing projects.” The minister says the federal government is continuing to work to scrap the Minerals Resource Rent Tax (MRRT) and the carbon tax, and also moving ahead with the introduction of the Exploration Development Incentive to support the next wave of investment. “Despite softening commodity prices leading to some downward revision since the last BREE report, the future is bright for the industry,” he says. “The investment phase of our mining boom is coming to an end, and now we see the benefits as we shift increasing volumes of product into hungry global resources markets. “(The) BREE figures reinforce that the resources sector will continue to be essential in delivering greater prosperity for Australia through export earnings, job creation, increased productivity and global competitiveness.”

ECONOMY AND FINANCE

WA breaks top 10 for mining policy WESTERN Australia’s public policy framework is seen as the most conducive to investment in minerals exploration of any Australian jurisdiction, an annual global survey has found. Australia’s largest mining state entered the Fraser Institute’s Annual Survey of Mining Companies top 10 for the first time, placing sixth up from 15th in its Policy Perception Index (PPI). The welcoming results position WA above North American jurisdictions Nevada, Newfoundland and Labrador. Used to compare how policy encourages or deters mining investment and exploration, the Index covers 15 areas including uncertainty around regulatory process; taxation; labour regulations, employment agreements and work disputations; and the availability of labour and skills. Each of Australia’s states and territories received a higher PPI ranking in the survey of 690 managers and executives across 112 jurisdictions, conducted from

September to December 2013. Despite Western Australia being the only jurisdiction in Oceania to break the top 10, respondents believe Australia’s policy framework could be more competitive. One anonymous exploration company vice president told the survey: “Australian governments need to realise we have lost competitiveness and, therefore, find it difficult to attract the foreign capital that is needed to develop mining projects.” “We have high costs of labour, energy, regulation, and tax. Some of these things need to be lowered if we want to be competitive again.” Sweden was ranked the top destination for mining investors and explorers to do business due to its strong political stability and good infrastructure, while the central Asian republic of Kyrgyzstan is perceived as having the least attractive policy environment.

| Winter 2014 | www.amma.org.au

EVENTS 54

EVENTS

MAY

Thursday 29 – Friday 30 Following the theme ‘Innovation through People, Policy and Productivity’, the Australian Resource People Summit will feature eminent leaders of the business community, resource industry specialists and national policymakers to provide invaluable insight into all workforce matters across this diverse and dynamic industry. Held at Perth’s Pan Pacific. Last chance tickets: www.resourcepeople.org.au

Wednesday 16 – Friday 18 The Life-of-Mine 2014 Conference is the second international conference on integrative practices for planning, designing and operating mines that deliver long-term beneficial environmental and social legacies. Held at Pullman Brisbane King George Square. More info at: www.lifeofmine2014.ausimm.com.au

JUNE

AUGUST

Tuesday 10 – Wednesday 11 The inaugural global Gender Economics Conference 2014 brings together international speakers, leading academics as well as practitioners in the field of diversity, economics, sociology, business investment, innovation and leadership. Held at Colombo Theatre, University of New South Wales. More info at: www.centreforgendereconomics.org

Tuesday 12 – Wednesday 13 The AusIMM New Leaders’ Conference 2014 aims to provide current students and recent graduates with skills and knowledge required by new leaders to progress within the minerals industry. Held at Pan Pacific Perth.

Tuesday 17 – Wednesday 18 The Australian Copper Conference has built its reputation around the ‘core to consumer’ perspective, catering for a variety of topics including exploration, development, mining, finance, supply and investment. Held at the Hilton Brisbane Hotel. More info at: www.verticalevents.com.au/copper2014 Monday 30 – Tuesday 1 The 8th Annual Skilling Australia Summit will consider the current policy framework and challenges for skilling the Australian economy. The forum will explore the trends and demand for training and factors influencing workforce participation including the ageing workforce, women and employment opportunities for Indigenous Australians. Held at Novotel Melbourne on Collins. More info at: www.informa.com.au/skillingaustralia

Tuesday 19 – Thursday 21 NT Resources Week 2014 brings together leading personnel in mining, exploration, engineering, oil and gas to meet and discuss the latest developments in Northern Australia and South East Asia. Held at Darwin Convention Centre. More info at: www.ntresourcesweek.com.au Tuesday 19 – Friday 22 Australia’s only national onshore drilling conference, DRILL 2014, will be held on Queensland’s Gold Coast, featuring prominent speakers from the mining and minerals exploration industries, in plenary sessions and workshops/seminars. An exhibition will boast the nation’s largest display of drilling rigs. More info at: drillconference.org

JULY Tuesday 8 – Wednesday 9 In this highly interactive forum, community engagement practitioners from various industries will share their experiences and case studies of online engagement approaches and how they are getting the most out of it. Held at Rydges Sydney Central. More info at: www.arkgroupaustralia.com.au Wednesday 9 – Thursday 10 The 8th Annual Mining the Pilbara Conference will cover key regulatory updates, mine and port operation updates, infrastructure and supply chain optimisation, economic and market outlooks, water and environmental management, and more. Held at Matt Dann Centre, Port Hedland. More info at informa.com.au/conferences AMMA executive director Tara Diamond will speak at the 8th Annual Skilling Australia Summit.

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