RESOURCE Issue 014 Winter 2016
What’s next for Clough?
New boss, new vision
Amanda Lacaze: Steering Lynas off rocky path PLUS MMG’s 80 years in Tassie, OZ Minerals
ripe for growth, and industry’s ‘5 Reforms Over 5 Years’
PROG HIGHL Richard Owen, Chairman, ExxonMobil Australia People leadership for a strong resources future Nev Power, Chief Executive Officer, Fortescue Metals Limited Employee engagement strategy for profitability and competitiveness Peter Bennett, Chief Executive Officer, Clough Limited Keynote: Leading a project delivery organisation Senator the Hon Michaelia Cash, Minister for Employment & Minister for Women Keynote Political Address Dr Jason Fox, Motivation Strategy and Design Expert Change the game – craft a culture fit for the future of work
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CONTENTS
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COVER IMAGE Clough
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EDITOR Tom Reid Tom.Reid@amma.org.au DEPUTY EDITOR Kylie Sully Kylie.Sully@amma.org.au AMMA CONTACTS 1800 627 771 membership@amma.org.au media@amma.org.au policy@amma.org.au training@amma.org.au
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www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
CONTENTS
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3
REGULARS
04 05 54 56
From the editor Chief executive’s message Events calendar Business partner directory
COVER STORY
06 New Clough boss makes his mark LEADERSHIP
10 12 13 14
Tassie township shares in Rosebery’s success New mines minister in to bat for WA Mining memories with former AMMA boss OZ Minerals ripe for growth
HUMAN RESOURCES
16 18 19 20 21
Lacaze steers Lynas off rocky path Poor culture to blame for employee exits Mining wage growth hits 22-year low FWC backs approach to reducing FIFO salaries R&R dispute clarified
OHS & WELLBEING
42
22 23 24 25
Green light for coal miner in drug testing dispute App brings air quality to fingertips Safety breach reinstatement overturned Employers failing to tackle absenteeism
TRAINING
26 New talent fuels refinery success 28 Kids connect to resource industry careers DIVERSITY
30 31 32 33 34
Sisters take the wheel Aspiring Aboriginal leader gets taste for top job Former army chief on new mission Guide maps path to flexibility Hilti women smash construction barriers
MEMBER NEWS
36 In brief: people and projects POLICY
38 Policy at a glance 40 Election survey shows employers want change 41 Full bench clarifies JJ Richards fix
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INNOVATION
42 Prelude powers on 45 Scientists to research mining solutions 45 Paddl steers students toward industry jobs 46 CO2 key to green construction ECONOMY & FINANCE
48 50 51 52 53
Gold producers shine bright Employer super obligations: how far does it extend? Exploration and investment key to resources future Funding promise for new resource discoveries Commission supports next steps in nuclear storage
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REGULARS
Tom Reid EDITOR
From the editor NEW CLOUGH CEO Peter Bennett has taken on the top job at a very exciting time, not only for the Australian engineering and construction firm that is entering a new phase of growth, but for the oil and gas industry more generally. While there remains ‘post-boom’ competitive pressures for all players, the market is particularly ripe for the top service sector companies that are tapping into a massive emerging market for brownfields asset management and servicing contracts. At the same time, there is great opportunity for proven engineering, procurement and construction (EPC) managers within existing energy projects and the next wave, local and abroad. This is where Bennett is looking for ‘two bites at the cherry’, with the long-term success of his two-pronged strategy likely to be reflective of the industry’s evolution as a whole. The leadership focus of our Clough cover story sets a suitable tone for this Winter 2016 Resource People. As South Australian copper-gold miner OZ Minerals progresses its first new project since the height of the commodity price cycle, we caught up with CEO Andrew Cole to discuss his successful cost reduction and growth strategy, and get his views on everything from skills availability to
traditional-owner engagement and future demand for copper. In Perth, Australia’s only rare earths producer Lynas Corporation has also undergone a positive transformation under CEO Amanda Lacaze, whose refreshing take on engagement with her Australian and Malaysian-based workforces has been central to putting this once struggling company on a profitable path. From Tasmania, we bring you a leadership story of a different kind. Celebrating 80 years’ continuous operation of its Rosebery mine in the state’s north-west, MMG is a shining example of how to manage a mutually beneficial and enduring relationship with the local community. In Queensland, we meet Lisa Campbell, a recipient of Thiess’ ‘Sisters in Mining’ initiative, which is training Indigenous women to drive haul trucks at its project locations. Turning to innovation, we bring you the latest on Shell’s Prelude floating LNG project and the Australian talent driving its development 200km off the Kimberly coastline. I hope you enjoy these stories and the various other features, news articles, interviews and advice columns within these pages, all tailored for you, the resource industry professional. RP
REACH RESOURCE INDUSTRY EXECUTIVES Directly mailed to more than 5,000 subscribers nationwide, Resource People is Australia’s only source of quality workforce news for professionals, managers and executives operating in Australia’s dynamic resource industry. As the official magazine of Australia’s resource employer group AMMA, Resource People is an unrivalled opportunity to get your brand in front of the industry’s key decision makers. Download the Resource People media kit at amma.org.au/mediakit to find out about affordable advertising options.
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
Covering the latest on: • Recruitment • Training and Development • Workplace Relations • Migration • Leadership • Plus more workforce topics
Steve Knott
Chief executive’s message THIS EDITION OF Resource People lands during the final and critical weeks of the longest federal election campaign since 1969. While every election is important, in 2016 our nation faces a range of significant challenges that will greatly impact our economic, social and community wellbeing if we choose not to tackle them head-on. As detailed in our policy section (page 40), AMMA has launched a campaign for ‘5 Reforms Over 5 Years’ in one critical area for employment and growth in our country – workplace relations. With interest rates and wage growth at historic lows, sustained low commodity prices and the Reserve Bank running out of firepower, Australia needs to replace our rigid and dysfunctional workplace relations system with one that instead provides businesses with the flexibility to employ and keep Australians in work. Importantly, AMMA’s campaign has been driven by the direct input of resource employers. Reporting on their experiences of the Fair Work system through our 2016 Federal Election Survey, only one in 20 employers said they believe our current laws reflects the modern Australian economy, while only one in 13 think enterprise bargaining is meeting the needs of employers and employees.
Clearly the system is in need of more than just the Band-Aid solutions proposed by the Productivity Commission’s recent review of Australia’s workplace relation framework.
AMMA CHIEF EXECUTIVE
Clearly the system is in need of more than just the Band-Aid solutions proposed by the Productivity Commission’s recent review of Australia’s workplace relation framework. The next term of government must see an end to the paralysis that has characterised our workplace relations system following the vast re-regulation under the Rudd/Gillard Government. We need to get back to what was essentially a bi-partisan commitment under Keating and Howard to maximise the potential of enterprises to work collaboratively with their workforce through direct employment and agreement making. Early in the election campaign, I wrote to all members and senators of the Australian Parliament to focus their attention on how AMMA’s reforms would deliver real growth, increase productivity and create a more positive operating environment for businesses of all sizes and across all industries. While only the first steps on longer-term ‘roadmap to reform’, such changes would start to address serious flaws and imbalances within the Fair Work Act and thus begin to reenergise business with the confidence to invest, employ and create economic value for Australia now and in the future. I thank each and every AMMA member who took the time to contribute to this significant advocacy project through our election survey and encourage you to visit our campaign page www.amma.org.au/backontrack for the latest on our advocacy. As your national resource industry employer group, we will continue to advocate for genuine reforms in areas that have been identified as barriers to employment and business growth. A ‘less is more’ approach to labour market and economic regulation – one that minimises the role of government and maximises direct engagement between employers and their employees – will greatly support the business community in tackling our nation’s future challenges and creating further stories of success, innovation and initiative like those within the pages of this publication. RP
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COVER STORY
NEW CLOUGH BOSS MAKES HIS MARK Oil and gas specialist Peter Bennett has taken the reins at engineering and construction firm Clough Limited. Now six months into the job, he tells Resource People about Clough’s growth ambitions and how a new collaborative approach to project costs could deliver value across the industry.
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
COVER STORY
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Peter Bennett
THE SECURING OF a major engineering services contract with key client Woodside in April, covering the full spectrum of asset management for the Australian hydrocarbons producer, typifies the type of long-term contracts fuelling Clough’s next phase of growth. While the Perth-based company has had an integral role in the engineering and construction of several recent major Australian LNG projects, Bennett is seeking to now integrate its suite of project services and strengthen its position within the increasingly important brownfields asset management sector. “After such a sustained period of new project construction, we believe the near-term oil and gas industry needs will be predominantly brownfields and maintenance services for these new facilities,” explains Bennett. “At Clough, our strategy is very much focused on this market. We need to utilise both our strong technical know-how with our ability to deliver a self-managed field solution as we address our clients. “With the depth and strength of our technical capability, combined with our proven ability to recruit and efficiently manage a skilled workforce, we can offer a unique capability in the maintenance and brownfields markets.
“We think this combination is a real differentiator for Clough in Australia.” It is little surprise that Clough would target major brownfields maintenance and support contracts given the enormous LNG production capacity coming on-line in Australia. With the Clough AMEC joint venture also this year winning a new three-year support and maintenance contract for ConocoPhillips’ Bayu-Undan offshore field development, the strategy is already paying dividends. That isn’t to say the firm is neglecting its construction-based engineering roots. Bennett believes the traditional infrastructure market is also showing signs of resurgence and anticipates this to be a strong source of engineering, procurement and construction (EPC) project work within Australia, particularly in the near term. Clough has worked on several onshore natural gas projects in central Queensland, as well as Chevron’s Gorgon and Wheatstone LNG developments. »
We need to honestly look at where we have seen cost creep and understand where we have added cost but not value. This is equally applicable to contractors and owners.
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COVER STORY
International oil and gas expansion is high on Clough’s agenda
»
The company was also recently awarded two separate contracts for hook-up services on INPEX’s Ichthys LNG Project related to its 336m-long floating, production, storage and offloading (FPSO) facility and the central processing facility (CPF), which will soon be the world’s largest semi-submersible platform. These are in addition to the three other scopes of work for the Ichthys Project, the LNG Jetty and Module Offloading Facility contracts, completed in 2015, and the ongoing Integrated Project Management Services contract.
The days of the hierarchical approach to managing contractors will not deliver the improvements required. Projects need more effective, efficient, innovative and collaborative in planning and development.
Clough technical experts at work
approach to managing contractors will not CHANGING PROJECT LANDSCAPE deliver the improvements required. Projects Regardless of whether Clough’s team need more effective, efficient, innovative and is building projects, providing support collaborative planning and development.” during commissioning, or maintaining From a broader industry perspective, assets during production, Bennett Bennett believes the project-by-project believes the landscape has changed for oil focus in recent years has contributed to and gas contractors and how they deliver an unsustainable growth in costs, which is value for project owners. now seeing operators relentlessly target “Clients need better project economics, cost reduction strategies. He notes how each new project has both from new developments (capital expenditure) but in particular lower added ‘more and more project-specific OPEX (ongoing costs) for their operating requirements’, both from a technical and facilities,” Bennett says. governance perspective, which has added “This will not come from contractor to the scale of project management and and vendor margins alone, as these are driven up schedules and costs. already under tremendous pressure, so “As an industry, we need to take this to the magnitude of the required changes heart if we are to utilise this current period of demands a new approach. cost focus to its fullest extent,” he explains. “More collaboration is a key element of “We need to honestly look at where this process. The days of the hierarchical we have seen cost creep and understand
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where we have added cost but not value. This is equally applicable to contractors and owners. “The bright side is our industry is incredibly responsive and accepts and overcomes challenge well.” GLOBAL AMBITIONS
Bennett spent two-and-a-half decades with CB&I Contractors before accepting the top job at Clough. He lauds the success of his predecessor, Kevin Gallagher (now Santos boss), in revamping the company’s people capabilities and internal governance, and setting a ‘very solid foundation’ for the company’s future. However, after a short settling-in period, he is now more than ready to make his own mark on Clough. With his most recent role involving
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managing CB&I’s international oil and gas business from the Netherlands, Bennett’s exposure to emerging markets and business development is a perfect match with Clough’s ambitions to expand its global footprint. “Globally, Clough has embarked on a path to re-establish our international business market with opportunities in the South East Asia region, North America and Africa,” Bennett says. “Most of my experience has been in the international arena and focused on growing new markets, so my background fits well into Clough at this stage of its growth. “Strategic acquisitions in North America and Europe have boosted our delivery capability globally, and we have further taken advantage of (parent company) Murray & Roberts’ capability in Africa to establish a Clough Murray and Roberts (CMR) brand in South Africa. “Our strategy now is to grow our revenue streams in the international arena on the back of our oil and gas capability, in a few select strategic markets.”
Asked about his leadership approach to rallying a diverse and international team behind such a strategy, Bennett believes having trust, communication and commitment from his leaders will be critical. His focus, however, never strays far from technical excellence. “Communication is key with any leadership team, as is getting everyone aligned behind our strategic vision. We must all be pushing in the same direction, and the team we have at Clough embodies this focus and commitment,” he says. “From a technical perspective, I genuinely believe the breadth of roles Clough played on all of the world scale projects built in Australia in the past few years has allowed us to develop a worldclass technical depth in our organisation that few in Australia can match. “The next few years will see us build on this foundation and really emphasise
The company has a strong portfolio of onshore and offshore work
the project EPC delivery capability that we provide to the market. Consistency of results and certainty of delivery will be our trademark.” Peter Bennett is a keynote speaker at the AMMA 2016 National Conference – West, taking place in Perth on August 4. For more information visit nationalconference.amma.org.au RP
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
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LEADERSHIP
TASSIE TOWNSHIP SHARES
in Rosebery success
As MMG celebrates 80 years’ continuous operation of its Rosebery mine in northwest Tasmania, Resource People speaks with the company’s general manager of Australian operations about the community relationship, the resilience of its employees and the mine’s future.
THE 1000-STRONG TOWNSHIP of Rosebery could well be the quintessential ‘mining town’, with MMG’s zinc, lead and copper mine being central to its economic and employment activities for eight decades. Yet while Rosebery has witnessed significant technology, productivity and safety advancements since the original mill opened in 1936, one thing that hasn’t changed is the resilience and adaptability of the town’s residents. MMG’s general manager of Australian operations Rick Watsford, says the ability for Rosebery’s people to not only adapt, but excel with change, has been the secret to the mine’s success. “The Rosebery community and the Rosebery mine have been literally
dependent on each other for over 80 years, and there are a high number of local people employed and involved,” Watsford says. “It’s a very high grade ore body; the type that will continue to deliver more and more resources. However, the most important thing is that the Rosebery workforce is a very adaptable workforce. “They’re resilient and very open to change. As time has gone on they’ve adapted to the changes that have been necessary to ensure the mine can keep operating. “When you go through Rosebery these days you can see the remnants of where we used to have horses pulling mine carts. The township and the workforce has seen all sorts of technological change.” Outside the locals directly employed
A high number of local people are employed at Rosebery
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Rick Watsford
by the mine, MMG’s respectful relationship with Rosebery’s broader community has been critical to its 80year longevity. “At Rosebery the mine looks at the town and the town looks at the mine. It’s all very integrated and the community is very accommodating in that respect,” Watsford says. “For instance, we’ve begun undertaking a major construction of a new tailings storage facility at the mine. We had active involvement from members of the community who wanted to understand the project and be actively involved in the process. “We also ran a communications campaign to explain what was happening, and once people understood that any short-term inconvenience would provide for the continued operation of the mine, they supported it.” MMG’s role within the Rosebery community doesn’t stop with communicating and collaborating on operational matters, however. The company respects its bigger responsibility to social investment and continues to contribute millions into everything from education and school
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Work underway at the Rosebery site
health programs to local sporting organisations and arts and culture. “One of our mantras is that we ‘mine for progress’ and that progress includes the welfare of the communities in which we operate,” Watsford says. “We draw from the Aussie tradition of ‘helping out your mates’. For example, we recently gave a helping hand to enable the continuation of the Queenstown Heritage and Arts Festival, which isn’t in our immediate area of employees and residents, but is important to our broader region. “Globally, MMG invested $63.5 million in social development last year across all our operations. Wherever we are mining, we don’t just take care of the technical and environment issues but also the social aspects – it’s all integral to being good corporate citizens.” STRONG PRODUCTION MARGINS
When asked of the major challenge facing Rosebery, as well as the company’s other projects across Australia, Asia, Africa and South America, MMG’s response is all too familiar to the mining industry. Ore bodies now being discovered are typically deeper and harder to mine, meaning
continually ratcheting up the targets you’re aiming to achieve. “It also allows for a very collaborative approach with your workforce. We’ve been involving our employees and getting ‘bottom-up’ ideas about how we can get to the next level of performance and achieve greater site-level productivity. “Our operators get great satisfaction by helping set improvement targets and achieving them. They go home with smiles on their faces after a good day’s work.” modern day mining practices are focused As for the Rosebery Mine, only time on reducing cost and improving extraction will tell how many more years it can add processes to maintain strong profit margins. to its impressive 80-year continuous The good news for MMG is that over the production run. While rough estimates past few years in particular, it has built a put a closure somewhere in the 2020s, reputation in the industry as a low-cost miner. Watsford happily advises the project “We always want to be toward the could very likely keep producing well bottom end of the cost curve and be beyond that timeframe. one of the lowest cost producers in all “Rosebery is a complex polymetallic of our metals. That provides us with a ore body, with high-grade saleable buffer when the prices come down, and concentrates, but the recovery of the an opportunity to make significant returns metals there is pretty simple,” he explains. when prices go up,” Watsford explains. “That all makes it a very valuable “We’ve been focused on output project. We’re still increasing current productivity for a long period of time production, spending money on and have had some great success. Asset exploration and our plan is to work hard utilisation is a valuable measure because to ensure it will continue to operate into it drives continuous improvement by the future.” RP The Rosebery township and its namesake mine have coexisted for 80 years
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
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LEADERSHIP
NEW MINES MINISTER
in to bat for WA
Sean L’Estrange may have taken on Western Australia’s mines and petroleum portfolio during challenging conditions but, as the new state minister writes, there is plenty of opportunity to be harnessed.
WESTERN AUSTRALIA IS adjusting to an economy that has come off the biggest resource sector construction boom, along with commodity price peaks that have never been seen before. This cooling of the state economy requires an ongoing analysis of the resources and small business sectors’ needs. We must build on our ability to assist the market to quickly identify and respond to emerging trends and opportunities. I am thrilled Western Australia was recently rated as the world’s top mining investment destination by the highlyrespected Fraser Institute, and I am determined to build on our leading status to continue attracting national and international investment. The Liberal-National Government gained this top ranking because of our determination to be the best in the business. This is evidenced by our rolling red tape reduction program, which has sped up approvals processing, cutting millions of dollars in mining industry costs. We are supporting investor confidence, through transparent regulation, a stable and proven royalty system, and freely available world-class exploration data. Plus, we have the highly successful Exploration Incentive Scheme. I know that in the competitive world of global resources, investor confidence is one of our most precious economic imperatives. This has historically given Western Australia our leading edge. With the current low-cost environment, along with a strong industry focus on improving efficiency, this really is an opportunistic time to be building a mine in Western Australia, in preparation for the next resources market upswing. I am also determined to create more Western Australian jobs, by growing
WA Resources Minister Sean L’Estrange
the state as a global centre for mining and petroleum excellence, and building on our automation, computing and geophysics leadership. For instance, Western Australia already produces the lion’s share of global mining software and hosts key centres for major operators. We are on track to become one of the world’s biggest exporters of LNG, including the amazing floating LNG project, which will bring a further technology surge to Western Australia. As Minister for Small Business, I also see how our resources sector dominance translates into further small business opportunities. Small business engages thousands of households throughout Western Australia, with more than half of our working population either owning a small business or working in one. I am keen to tap into the most important state resource we have – our people. We are home to some of the
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
brightest innovators and entrepreneurs in the world. Our small business framework must harness this natural strength and aim to create a small business environment which gives Western Australia a comparative advantage both nationally and internationally. There is, therefore, great opportunity to support small business markets to take advantage of fast-moving and everchanging information, communication and technology discoveries, while also applying continuous improvement to the small business regulatory framework. I will continue to build on the excellent work the Liberal-National Government has done to advance the interests of Western Australia in the portfolios of Mines and Petroleum, and Small Business. We live in exciting times and our Western Australian ‘can do’ attitude, and aspirational character, will continue to propel our state on an upward trajectory. RP
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MINING MEMORIES
with former AMMA boss In a 27-year career with Australia’s resource industry employer group, former AMMA chief executive David Young saw everything from landmark industrial relations agreements to new mineral deposit discoveries and the emergence of Australia’s oil and gas industry.
WHEN FOUR GENERATIONS of successive AMMA chief executives get together, there are sure to be a few old war stories on everything from industrial relations to the ups and downs of Australia’s national resource industry. It would be hard to top those told by David Young, the oldest and second longestserving AMMA chief executive of the group (behind current CEO Steve Knott). Young started with AMMA in 1955, cutting his teeth in the Melbourne head office, which at the time ‘comprised of just two blokes’ looking after a range of ports, manufacturing, mining and construction operators from Newcastle to Sydney, and out to Broken Hill. A few years later, he moved to Brisbane during Queensland’s emergence as a national mining force. Mount Isa Mines had doubled production, Mount Morgan was at the peak of its powers (closed in 1981), and there were new discoveries at Weipa and Mary Kathleen (former Rio Tinto mining settlement in north-west Queensland). “The major difference between then and now was probably the strength of the unions at the time. In Queensland, there was about 80 per cent unionisation,” Young says. “‘Boom time’ at Mary K’s was very rich. The union wanted to make a name for itself and they’d come up, flex their muscles and cause some trouble. “Or perhaps the blokes just wanted a break from the climate and to get back to civilisation, given Mary K’s was out in the sticks. Half of the disputes up there would be about what breakfast cereals they could choose from. “So we’d be putting out spot fires all the time. A lot of claims had no merit, though occasionally they had merit. We were like unofficial conciliators. Nobody was keen on litigation costs and with the tyranny of
distance in those days, it was in everybody’s interests to settle things on the spot.” Young also speaks fondly of his work at Weipa, in particular restructuring its industrial arrangements during the mine’s early and rapid development. However, Young didn’t only have a knack for clever industrial arrangements, he also led AMMA through a significant growth period, which included the organisation cementing its position within the emerging oil and gas sector. The discovery of oil at Moonie and other places on Australia’s east coast was the beginning of a whole new industry. “Given the only other holes that had ever been drilled in Queensland were water bores of maybe 100m deep, I saw an opportunity and grabbed it with both hands,” Young says. “Some of the American companies came out and had strict instructions to never be unionised because that’s the position they had in the United States. Others would walk straight into the union office and try to make a deal.
“I opened up a new branch in the Brisbane office with three staff, had two new staff in Sydney and another six to cover the Bass Strait divers, helicopters and all the maritime work that was involved. “And then we had the iron ore discoveries in the west that saw AMMA open a branch office in Perth.” When Young retired from AMMA in 1982 after 27 years’ service, he had overseen the growth of the organisation from a handful of industrial officers to 40 staff on the books nationally. “My function changed greatly from being entirely hands-on and sitting with the blokes to try and assess their claims, to a more strategic and management role,” Young says. “There are certainly a few highlights from my time as AMMA CEO. The mining industry overall is a very attractive place to work. “It’s made up of people who like to work in different circumstances and get away from the ‘humdrum’ of other jobs. There’s certainly something special about it.” RP
Four generations of AMMA leadership: (L-R) Rex Whiffen (started 1969, CEO 1982-93), Steve Knott (started 1996, CEO 1997 to present), Norm Amos (started 1970, CEO 1993-97), and David Young (started 1955, CEO 1966-82)
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
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LEADERSHIP
OZ MINERALS ripe for growth One year into CEO Andrew Cole’s ambitious growth strategy, OZ Minerals is fast-tracking plans for its new Carrapateena copper-gold project in a counter-cyclical move that will deliver hundreds of jobs and restore South Australia’s status as the country’s copper powerhouse.
WHETHER YOU’RE IN real estate, resources or any other cyclical market, it is often said that a low point in the price curve is a prime time to invest. However, it tends to be a small few that have the capital and courage to put this mantra into practice. CEO of South Australian coppergold miner OZ Minerals Andrew Cole, is one of those few – brimming with confidence as the company embarks on one of Australia’s few new major mining developments since boom prices. Located 160km north of Port Augusta in the mineral-rich Gawler Craton, Carrapateena would be OZ Minerals’ second mine after Prominent Hill, which has been operating since 2009, employs about 1200 people, and is soon to undertake a 30 per cent expansion in underground production capacity. Speaking to Resource People from OZ
Minerals’ Adelaide headquarters, Cole is confident the fundamentals underpinning Carrapateena make it a strong project regardless of market sentiment. The 4Mtpa mine will cost more than $800 million to develop and from 2019, should contribute around $150m annually to OZ Mineral’s cash flow. “It shouldn’t matter what part of the resource cycle you’re in if you’ve got a really good project. In my view, any decision about construction and development should be independent of the market cycle, as these decisions are taken on behalf of the life of a mine that will be decades long,” says Cole, a former Rio Tinto executive. “However, if we build Carrapateena over the next couple of years, it will be one of the only projects being built in the country. This means we can get the best people, the best contracting companies The Carrapateena project will deliver 400 new jobs
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Andrew Cole
and the best contracts that are fixed-price, where suppliers take most of the risk. “That allows us to build projects faster and cheaper, where the risk of schedule and budget overruns are much more reduced.” Putting OZ Minerals firmly on a path to growth has been Cole’s mission since taking the reins as CEO in late 2014, after a challenging couple of years for the miner. His strategy has been underpinned by a program to lower business costs through more competitive price regimes with contractors, productivity efficiencies, and a 2016 salary freeze across the company. By mid-April 2016, this had already achieved $20m in annualised savings and the target is to achieve $25m more. “We’ve been on a path of really instilling good strong operating discipline in the company where people have clarity on expectation, we have very clear KPIs, we measure them carefully and I’d say the operating performance of the company is demonstrating that,” Cole explains. “We are on the very bottom of the cost curve when compared to other operations around the world and that’s a direct result of the frontline leadership team being crystal clear on what they’re trying to achieve.” News that Carrapateena would create 400 jobs during construction and about
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The Carrapateena site
the same once operational has been warmly welcomed by the South Australian community, which according to government statistics, has lost around 6500 resource industry jobs over the past year alone. Needless to say, Cole is optimistic about the company’s ability to source an optimal skills mix across all construction and operations roles, while also leveraging the expertise of the Prominent Hill mine workforce. “We already have people who have been based at Prominent Hill working on Carrapateena. As we ramp up the project, we will be able to give our employees more opportunities so they can experience different operations and environments. That helps with their personal development as well as skills transfer across the company,” he continues. “We are also considering introducing some innovative design criteria looking at remote monitoring and operating at Carrapateena. There is going to be a real mix of skills needed. “In this market there are an awful lot of skilled people available and we’ll have the luxury of drawing the best talent across all levels in the organisation.” Discussions have also commenced on a social and economic plan involving
We are on the very bottom of the cost curve when compared to other operations around the world and that’s a direct result of the frontline leadership team being crystal clear on what they’re trying to achieve. traditional owners, the Kokatha people. “We need to be working with the Kokatha now; helping them to position local businesses and people so that they’re job-ready when these roles come up,” Cole says. “We’re also requiring contractors who work with OZ Minerals at Carrapateena to work with the Kokatha people to help them get businesses ready.” Cole has declared that once in full production, Carrapateena will help ‘return South Australia to the copper mining powerhouse it once was’.
The fact that gold prices are performing well while copper has been at a low for a number of years hasn’t dampened his long-term outlook. “The vast majority of copper operations around the world are getting tougher. They’re getting deeper, harder, the grade is coming down and operating costs are going up. Long term, and we are talking about decades here, finding good copper resources is going to be hard,” Cole explains. “Looking at the demand side, the thing I like about copper is that it’s such a diversified consumption base. Copper as a commodity is linked to construction staves or power transition grids in China, all the way through to windfarms here in South Australia, or Tesla car manufacturing in the US. “It’s unlike some other commodities which are correlated to a single country or a single market consumption. “That doesn’t mean the price is going to go up tomorrow or next month or next year. There absolutely will be volatility, but that’s not how we make our investment decisions. We make our investment decisions based on the fundamentals, and for copper, the long-term fundamentals are very robust.” RP
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
16
HUMAN RESOURCES
Amanda Lacaze with employees at the Lynas processing plant
LACAZE STEERS
Lynas off rocky path Australia’s only rare earths producer was facing some serious operational challenges when Amanda Lacaze was appointed CEO and tasked with turning it around. Two years later, her relentless focus on workforce efficiency and cultural leadership has put Lynas Corporation on a new, profitable path. WHEN A KEY competitor bowed out of the market last year, Lynas Corporation became the only sustainable rare earths miner outside of China – a nation that controls around 90 per cent of global supply. The company possesses one of the highest grade rare earth deposits in the world at Mt Weld, Western Australia, where it extracts Cerium, Lanthanum and other elements critical to a broad range of applications, from car manufacturing to batteries and petroleum refining. Despite this enviable positions, when Amanda Lacaze was appointed CEO and managing director in mid-2014, Lynas Corp was headed towards difficult times. Historically low rare earth prices, coupled with inefficient production and an unsustainable cost structure, created a perfect storm for the company. The share
price (ASX:LYC) has reflected investor uncertainty, with the stock trading at $1.66 on average during 2011, before falling to a low of $0.03 in mid-2015 and clawing back to $0.08 earlier this year. Under Lacaze’s leadership, Lynas Corp’s future is back on track. From the outset the new CEO was on a mission to improve business fundamentals. She started by relocating the company’s head office from Sydney to Kuantan, Malaysia – the location of its processing plant – and at the same time worked to address production and labour force efficiencies. “Coming in as the CEO, I was facing a situation where there really needed to be substantive change in the path that the business was on,” says Lacaze, who has experience across the
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
Amanda Lacaze
telecommunications, consumer products and chemicals industries. “The first priority was to achieve safe, stable production. We also needed to ensure we had efficient use of all resources and capabilities.”
HUMAN RESOURCES
17
BREAKING DIVERSITY BARRIERS
Lynas employees are now more engaged, productive and efficient
A large part of Lacaze’s focus has been on streamlining internal processes that had become ‘overcomplicated’. Everything from position descriptions to performance management systems, training and safety programs was up for review. Lacaze found many employees were not being utilised to their full capability and some workforce restructuring was urgently required. While a reduction in headcount was unavoidable, she says the workforce is now far more engaged, productive and efficient. “If you really only have half a job, then you’re not going to be as busy or satisfied as if you have a whole job,” she says. “It’s about ensuring people understand what their job is, providing them with the skills to do their job well, and measuring their performance so that there is recognition for those who do well and consequences for those who choose not to perform.” While Lynas Corp’s share price is slowly recovering, the turnaround in operational performance has been far sharper. Sales volumes increased 62 per cent in the second half of 2015 compared to the same 2014 period, while the company recorded a positive cash flow position for three consecutive quarters and is exceeding production targets.
A VISIBLE CEO
Lacaze sees engagement with her employees as critical to the company’s success. Preferring face-to-face communication, she travels between Australia and Malaysia regularly and undertakes direct briefings with the 650-strong workforce every quarter. “It is really important that every single individual in the organisation knows me and knows that they can ask me a direct question about the business,” Lacaze says. “Often people over-complicate human resources strategies. I look at how many businesses spend money putting up big posters of their values, but by far the most important thing you can do as a leader in an organisation is to live your values. “My focus is on ensuring that throughout our entire team, we have a consistent view on what is essential to make our business work and we communicate that properly to our people.” Even with a heavy focus on cost reduction, Lynas Corp has continued to invest in training – particularly where it applies to leadership and management capabilities, and promoting positive and safe workplace cultures. “We have a much more engaged workforce now because employees understand what their role in our success is,” Lacaze explains.
Not only is Lacaze one of a small group of women to reach CEO level in the mining industry, but Lynas Corp now has a respectable 30 per cent female representation on both its board and executive leadership team. A member of the Australian advocacy group Chief Executive Women, Lacaze acknowledges that Lynas Corp still has some way to go in lifting the 10 per cent female participation rate across the broader workforce. However, it is clear unconscious bias in the workplace is already being addressed. “When I came in as CEO, I found we had a qualified draftsperson working as a personal assistant and at the same time we were paying a contractor to do our drafting,” she says. “Another female chemical engineer was working in administration. She is now one of our best performing plant supervisors. These were the really obvious wins that we could address.” Lacaze explains a number of people in the organisation who believed women would not be interested in plant-based roles have seen the value the female employees have provided and are now actively working to recruit more women. “Sometimes you need successes to prove a point,” she says. “I want diversity in Lynas – whether it’s gender, experience, age or ethnicity. I have found varied experience leads to richer discussions on issues, and new and different ways to address business challenges. “My executive team currently comprises three women and six men. We have Australians, Malaysians and people from various European countries. It’s a good combination with varying backgrounds.” Although rare earth prices remain subdued, Lacaze is optimistic demand across existing and emerging sectors will continue to grow at least in the low double digits. While the future is never certain, she has surely readied Lynas Corporation and its workforce to meet the challenges and opportunities that lie ahead. RP
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
18
HUMAN RESOURCES
POOR CULTURE TO BLAME
for employee exits A LACK OF workplace culture is to blame for two-thirds of Australian businesses losing employees, according to a new survey. The Australian Institute of Management (AIM) recently sought the opinions of more than 500 organisations across Australia, covering more than 25,000 employees and 270 different job roles. The survey found 66.8 per cent of Australian employees left a current job to start a similar role at another organisation. Businesses are worried workplace culture is to blame for this shift, with 63.7 per cent citing this as the human resource issue they are most concerned about. AIM chief executive officer David Pich notes recruitment is a threat to business operations with the study putting the cost of replacing staff at $26,410, which
equates to almost half the average salary in Australia. “Employees can become restless in roles that have limited career advancements or where they don’t enjoy their time at work,” Pich says. “Combine that with a volatile property and rental market and the pressure to contribute more to their superannuation fund, it’s no wonder staff are becoming disillusioned and feel the need to move jobs as a perceived guarantee to a salary increase.” Pich is encouraging business leaders to reassess their current pay model and suggests creating a positive and inspiring workplace culture to decrease staff turnover and boost retention rates. “People don’t leave companies; they leave leaders. Great managers and
leaders make decisions that impact people’s lives and that impact can be felt well beyond the workplace,” he says. “We spend about a third of our workingage lives doing just that – working. So it is vital our experiences in the workplace are positive as they impact on our overall wellbeing and on society as a whole.” Among those surveyed, it was also found that national salary growth had decreased from 4.1 per cent in 2012 to three per cent in 2016. The industries with the biggest decreases in salary growth are construction, retail, finance, manufacturing and professional services. However, one in three (34.5 per cent) Australian businesses are making superannuation contributions above the standard. RP
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HUMAN RESOURCES
19
MINING WAGE GROWTH
hits 22-year low WAGE GROWTH IN mining industry enterprise agreements approved in the December 2015 quarter fell to a 22-year low, according to the Australian Government. The Department of Employment’s recent Trends in Enterprise Bargaining report shows the average annualised wage increases (AAWI) for mining fell to 1.8 per cent in the December 2015 quarter. The mining AAWI hasn’t been that low since the June quarter of 1993 (at a 1.2 per cent increase), and is down from a 2.3 per cent increase in the September 2015 quarter. The department reports the AAWI for all 1231 private sector agreements approved in the quarter was 2.9 per cent, representing a 24-year low. It was
down from the 3.5 per cent increase in the September 2015 quarter, and down from the 3.3 per cent increase in the December 2014 quarter. The construction industry and education (both at 3.8 per cent) had the highest AAWIs in the December 2015 quarter. However, the department notes that the three largest private sector agreements covering 55,827 employees from Westpac, ANZ and Optus do not contain quantifiable wage increases. The three agreements cover 24.9 per cent of all employees covered by agreements in the December quarter, and the department believes that if estimates were included in overall calculations, private sector AAWIs would be 3.1 per cent.
In contrast, the AAWI for the 44 public sector agreements approved in the December quarter was 3.2 per cent, up from three per cent in the September quarter. Influencing future wage growth, the Consumer Price Index (CPI) recorded its first percentage drop since 2008 in the first quarter of 2016, moving into negative territory at -0.2 per cent and falling annually to 1.3 per cent. The Australian Bureau of Statistics data came as a surprise to many economic commentators who had expected a 0.2 per cent gain during the quarter, and the result prompted the RBA to cut the cash rate by 25 basis points to a historic low of 1.75 per cent in May. RP
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www.hwholdsworth.com.au RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
20
HUMAN RESOURCES
FWC BACKS APPROACH
to reducing FIFO salaries In a case that reflects the careful attention needed when drafting terms in an enterprise agreement, an employer’s approach to reducing salaries after changing FIFO roster patterns was put to the test, and ultimately backed by the Fair Work Commission.
THIS ISSUE WAS central to AWU v Fluor Rail Services Pty Ltd [2016] FWC 1612; a dispute which centred around the interpretation of ‘appropriate annual salary’ in an enterprise agreement (EA) that permitted a change in the pattern of hours or work cycle due to operational needs of the business.
compensation for ‘any and all disabilities associated with the work and the FIFO nature of the employment’. The term ‘disabilities’ contemplated constituent parts that were not readily identifiable. Commissioner Cloghan also considered the more specific constituent of travel time and although clause BACKGROUND AND EARLIER DECISION 38 clearly noted this was taken into Fluor Rail Services Pty Ltd employs about account in the annual salary, it was not a 290 employees on a fly-in, fly-out (FIFO) factor, akin to disabilities, that could be arrangement. In 2014, Fluor implemented discretely identified or calculated in an a new work cycle in accordance with clause annual salary (as the AWU sought to do). 38 of the EA that changed the roster pattern It followed that the annual salaries from 14/7 to 7/7. in the agreement ‘are all inclusive This clause also enabled the calculation and cannot be (historically or of an ‘appropriate annual salary’ for such contemporaneously) disaggregated into change. Fluor therefore proposed to reduce constituent part. In such a situation, the annual salaries by 25 per cent, calculated on annual salaries cannot be disassembled the change in work hours per annum. and changes made to various The AWU did not oppose the roster components, to arrive at appropriate change, however, they did raise a dispute salaries for the new work pattern’. in relation to the reduction of salaries, Accordingly, the reduction in 25 per cent arguing that any reduction in salary should of the salary as proposed by the employer reflect changes to individual components was an appropriate approach to take. such as travel time. IMPLICATIONS FOR EMPLOYERS ‘ANNUALISED’ VERSUS National resource industry employer group ‘ANNUAL’ SALARIES AMMA’s director of workplace relations In his decision, Commissioner Cloghan and legal Amanda Mansini points out a drew distinction between an ‘annualised number of key lessons from this case: salary’ – which describes weekly or • when drafting an EA, all the words periodic amounts that are converted to in a sentence will impact meaning. a yearly amount (a ‘bottom-up’ exercise); For example, the word ‘includes’ is and an ‘annual salary’ – describing a likely to be seen as limitless and nonspecific yearly amount for a year’s worth exhaustive, whereas ‘is’ or ‘means’ of work (a ‘top down’ approach). are more final and less open to different meanings; WAS THIS THE CORRECT APPROACH • parties to an EA cannot retrospectively TO REDUCING SALARIES? construct a basis for a meaning of a The EA provided for an annual salary term in an EA; that ‘includes compensation’ for specific • rostered hours and overtime work can components such as travel time and be objectively calculated and a direct working on public holidays. It also listed monetary consequence attributed,
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
in contrast to other aspects such as disabilities relating to FIFO work; and • it is difficult to construct a particular formula for the breakdown of an annual salary, but annualised salaries can be more easily aggregated from discrete component parts. Mansini says this decision is also a reminder that an employer does not need to rely on salary figures in a preceding EA. “It is open for an employer at the bargaining table, as occurred in this decision, to base negotiations around salary on market research and commercial considerations,” she says. “Careful drafting can also allow for flexibility and change as a result of operational needs, however, this will still require agreement of bargaining representatives (who may resist such wording). “It is also clear that for FIFO work, changes in rosters may result in increased travel, however, this then also means FIFO employees spend less time away from home and their families, which can endorse a reduction in disability compensation associated with FIFO employment.” AMMA encourages employers to seek advice when changing roster cycles. RP
HUMAN RESOURCES
21
R&R PAY
dispute clarified A FULL BENCH of the Fair Work Commission (FWC) has clarified that fly-in, fly-out (FIFO) workers are not entitled to extra pay when a period of rest and relaxation (R&R) coincides with their demobilisation notice period. In its decision involving contractor Kentz Australia and the Communications, Electrical, Plumbing Union (CEPU), the full bench upheld the longstanding practice in the resource industry whereby employers can give employees notice of demobilisation that runs concurrently with a period of R&R. The decision overturns a February 2016 ruling by Commissioner Michelle Bissett that notice of termination could not run concurrently with a period of leave. The full bench also believed
Commissioner Bissett overlooked an important attribute of the various forms of leave that is not shared with R&R. “Unlike the circumstances in respect of the taking of R&R, an employee taking one of the various forms of leave is no longer participating in the work cycle,” the bench said. National resource industry employer group AMMA intervened to support the appeal of Kentz Australia, which is completing major construction works on one of Australia’s most significant resource sector projects, the Ichthys LNG Project in Darwin. AMMA director of workplace relations and legal Amanda Mansini, says intervening was critical given concerns the original decision could have
exposed other resource projects using this longstanding practice to multimillion-dollar back-pay claims. “Resource employers welcome the FWC confirming on appeal that R&R is akin to weekends and is not a special kind of leave,” Mansini says. “Any argument that R&R is an entitlement that must be paid-out is fundamentally flawed. It fails to take into account the unique work practices of large-scale remote resource projects and long-standing practices when project work comes to an end.” Demobilisation practices and entitlements can be complex. AMMA encourages resource employers to seek advice about this issue if it arises within your workforce management activities. RP
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22
OHS & WELLBEING
GREEN LIGHT FOR COAL MINER
in drug testing dispute
A Queensland Supreme Court Judge has rejected a mining union’s argument that a change to a resource employer’s drug testing procedure was not voted up, despite the majority of employees giving it the tick of approval.
IN 2015, BHP Mitsubishi Alliance (BMA) wanted to change the criteria for assessment for drug testing at its Goonyella Riverside coal mine, which included the introduction of urine testing. When the change went to a ballot, 721 employees, or 46 per cent of employees voted in approval, compared to 592 employees, or 37 per cent, who voted against it. There were, however, 257 employees who did not vote in the ballot, prompting the Construction, Forestry, Mining and Energy Union (CFMEU) to argue those employees should be considered as disagreeing with the proposed criteria for assessment, making the change unlawful. In considering the CFMEU’s application at the April 2016 trial, Justice Glenn Martin referred to the Coal Mining Safety and Health Regulation 2001 of which section 42(7) states “if the majority of workers at the mine disagree with the criteria for the assessment under subsection (7), the criteria for assessment stated in a recognised standard apply
until an agreement is reached.” In a previous case, Justice Martin had dismissed a majority ‘yes’ vote to reduce the number of rest breaks per shift at an Anglo American coal mine because the number of employees balloted fell short of the ‘majority of workers at the mine’. “I held that what was required was a positive agreement by a number of workers equivalent to, at least, half plus one of those who fell within the description ‘workers at the mine’,” Justice Martin said
No authority was provided to me that suggested it was appropriate to regard a failure to vote as being equivalent to a vote against a proposal contained in a ballot paper.
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
of the rationale behind his decision. “Section 42 of the regulation has been amended since that decision and a slightly different regime applies where the improper use of drugs is concerned.” Justice Martin ultimately did not accept the CFMEU’s argument that a failure to agree to BMA’s drug testing regime change is the same as signalling disagreement, saying that a failure or omission to vote can indicate a number of reasons including disinterest or ‘an event which prevented the person from voting’. “Section 42(7A) establishes a test which requires a majority of workers at the mine to disagree, not fail to agree,” Justice Martin said. “No authority was provided to me that suggested it was appropriate to regard a failure to vote as being equivalent to a vote against a proposal contained in a ballot paper. It was not suggested at any stage during the proceedings before the vote was taken that a person who did not vote would be regarded as having voted ‘no’. “In order for it to be established that a majority of workers disagree with proposed criteria, at least half of the workers at a mine plus one must be shown to have disagreed. “If the principle advanced on behalf of the CFMEU were to be applied in other circumstances then, for example, a director of a company who did not vote on a proposal because of a conflict, would be regarded as having voted against the proposal.” Drug detection rates at the Goonyella Riverside mine have reportedly increased recently, however the CFMEU claims the bulk of positive readings for methamphetamines were among contract workers rather than permanent employees. RP
OHS & WELLBEING
23
APP BRINGS AIR QUALITY
to fingertips MOUNT ISA RESIDENTS can now get instant air quality readings through a simple tap of a smartphone application. The Air Quality Mount Isa (AQMI) app presents data from Mount Isa Mines’ air quality monitoring systems. Residents can also log into an online portal via the company’s website to access sulphur dioxide data automatically updated every hour. HSEC manager for Glencore’s North Queensland operations Maryann Wipaki, says the online tools provide the community with open and transparent information on the company’s air quality management performance. “Mount Isa has one of the most intensive air quality monitoring networks of any city in Australia. Mount Isa Mines monitors air quality in Mount Isa 24 hours
a day, seven days a week and works to minimise sulphur dioxide impact on the community,” she says. “Our air quality control app works both proactively, through daily forecasts and reports, and reactively, by monitoring and responding to real-time air quality data, to minimise impacts to our community and ensure compliance with our regulatory limits.” RP
The Black Star open cut pit, Xstrata Mount Isa Mines infrastructure and the city of Mount Isa
Mount Isa has one of the most intensive air quality monitoring networks of any city in Australia.
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RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
24
OHS & WELLBEING
SAFETY BREACH
reinstatement overturned A full bench of the Fair Work Commission (FWC) has quashed a decision ordering the reinstatement of a forklift driver who was dismissed over a breach of company safety procedures, writes AMMA senior workplace policy adviser Lisa Matthews.
IN OVERTURNING THE decision, the bench found the safety breach was a valid reason for dismissal and the original commissioner made an error of law in finding otherwise. The 63-year-old forklift driver was dismissed by Parmalat Food Products Pty Ltd in March 2015 over an alleged breach of policy and trust arising from a safety incident. A milk palette had collapsed due to not being properly secured, causing a milk spill in a trailer, after which the leading hand entered the trailer and the applicant followed him. The trailer was not ‘locked down’ after the spill for clean-up, as required by the company’s safety procedures. THE DECISION AT FIRST INSTANCE
In his original August 2015 decision, deputy president Jeff Lawrence ordered the man be reinstated but not reimbursed for lost wages between his dismissal and the date of the decision, saying he should ‘suffer some penalty in lost wages because of the breach of policy’. However, despite finding the man had
breached the company’s safety policy and practices, DP Lawrence found there was not a valid reason for dismissal. He also noted the leading hand, who should have been expected to accept greater responsibility for the incident, was not dismissed, whereas the applicant was. THE APPEAL DECISION
In the appeal decision handed down on March 29, 2016, a full bench found the original decision ‘conflated’ two different concepts under s387 of the Fair Work Act in considering whether the dismissal was harsh. “In this case the commission found the applicant breached its safety policy,” said the full bench comprising vice president Watson, deputy president Hamilton and commissioner Johns. “The commission then found this did not constitute a valid reason for dismissal for reasons including that the applicant had not received a written warning, there were rational reasons for breach of policy, the applicant was honest and contrite, the applicant’s good service, the need to avoid differential treatment Lisa Matthews
of employees, and ‘there were lesser punishments open to the respondent that would have been appropriate’.” In finding this, DP Lawrence had ‘conflated’ the requirement to decide whether there was a valid reason for dismissal with making a finding as to whether the termination was harsh, unjust or unreasonable, the bench said. Due to the breach of safety policy, the bench found there a valid reason for dismissal, and other extenuating factors do not come into play in relation to whether there was a valid reason. “In applying s387 of the Act, the commission must give consideration to the need to enforce safety standards to ensure safe work practices are applied generally at the workplace. This is both for the protection of employees and others, and to comply with legal obligations imposed on employers, which require them to take various actions, including establishing and enforcing safety policies,” the full bench said. The decision was overturned and the unfair dismissal matter remitted to another commissioner to decide. LESSON FOR EMPLOYERS
Although the appeal was favourable for the employer, with the commission recognising the need to enforce a notolerance approach to safety breaches, this situation serves as a lesson to resource employers to always follow a thorough and well-documented process for incident investigations and dismissals to reduce the risk of having to defend a costly unfair dismissal claim. AMMA’s consultants are available to assist employers in drafting the right policy and procedures, and provide support in conducting workplace investigations, warnings and dismissals. RP
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
OHS & WELLBEING
25
EMPLOYERS FAILING
to tackle absenteeism AUSTRALIAN WORKPLACES ARE losing on average almost nine days per employee each year to unscheduled absences, with 41 per cent of employers believing unscheduled absences increased in their workplaces last year. The Australian Human Resources Institute’s 2016 HR Pulse Survey on Absence Management, based on answers from 533 respondents, reveals trends in absence levels, the causes and effects. Almost two out of three survey respondents (64 per cent) believe absence rates are too high, with only a minority (13 per cent) reporting any reductions in absence levels within their organisations. The majority (79 per cent) don’t formally record the cost of absences on their business. “While the findings indicate most
organisations turn their minds to the problem of managing absences, with only 10 per cent reporting their organisation does nothing, it appears that few organisations enjoy much success in making inroads towards alleviating the problem,” AHRI national president Peter Wilson and CEO Lyn Goodear say in the report’s executive summary. “There is likely to be a number of reasons for this, one of which is that unscheduled absences are often a symptom of broader issues in the organisation. “For example, more than half of the respondent sample (57 per cent) believes that poor employee engagement is a contributor to unscheduled absences. “Employee disengagement is a particularly challenging and complex
issue to tackle in its own right, and usually requires a co-ordinated, organisation-wide effort to turn around.” The survey also sought opinions on presenteeism, which traditionally refers to an employee who is physically at work but too unwell or disengaged to function at their full capacity. Broader definitions also include employees who are unmotivated to work at a productive level due to other issues such as being disillusioned by the workplace or their role. The top cause of presenteeism identified by the survey is a high workload or work-related stress, followed by employees not considering their illness serious enough to take time off, and having no one to cover their workload when away. RP
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RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
26
TRAINING
NEW TALENT FUELS
refinery success
Now in its ninth year, ExxonMobil’s Altona Refinery Operator Traineeship Program is building a pipeline of skilled employees to take over from its ageing workforce. Here, HR manager Richard Zvirbulis explains what’s behind its success.
ALL SIGNS POINT to the latest recruits to ExxonMobil’s Altona Refinery Operator Traineeship Program enjoying a long and rewarding career. “Since the program commenced in 2007, 35 people have gained full-time employment at the refinery, with just two leaving to move interstate,” says human resources manager, refining supply and midstream Richard Zvirbulis. “A number of people from the original trainee group nine years ago are now competing for leadership positions. That’s a credit to them and the program.” Given the latest recruitment campaign attracted 400 applications for just five traineeships, it’s fair to say the program
and prospect of employment at the refinery located 13km west of Melbourne is highly sought after. Zvirbulis believes the refinery’s location, a close-knit culture and the company’s commitment to training and development are all factors in the low turnover among the workforce of 350, which primarily occurs through retirement. While this is positive, ExxonMobil sees the traineeship program as a key part of a long-term strategy to sustain and diversify a strong skills mix into the future, each year welcoming applicants from different backgrounds. “Some of the trainees are already fitters or tradespeople, having already worked Trainees can go on to forge lifelong careers at the Altona refinery
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
here on site with our contractors such as Broadspectrum,” Zvirbulis explains. “However, we’ve also taken on mechanical engineers and people from industries such as training and banking. Each one brings different skills and perspectives, and we value the diversity. “As employees retire we’ve got people who are two years into the traineeship and can confidently step into the vacated roles. It benefits us, it benefits the local community and on the rare occasion someone leaves, we give them a solid foundation so they are not lost to the industry.” Run in partnership with Apprenticeships Group Australia, the program takes participants through ExxonMobil’s Global Manufacturing Training (GMT) framework before they become immersed in the role of an operator at the refinery. “Once on shift they are assigned an experienced operator who provides a lot of mentoring and coaching support,” Zvirbulis says. “We certainly don’t guarantee employment at the end of the traineeship – they need to meet our expectations. But, each trainee gains oil industry qualifications to a high global standard, with the opportunity to be hired as an operator at the end of it.” Ultimately, Zvirbulis says that the program is helping sustain the refinery’s positive workforce culture, which is central to its ongoing success as a reliable supplier of high-quality fuels to Victoria. “Our investment in training and development means we’ve got employees who are aligned with our desire to continuously improve and run a sustainable business,” he says. “We take a long-term view and having good people is part of our core business.” RP
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28
TRAINING
KIDS CONNECT TO
resource industry careers More than 240 Western Australian primary school students got a taste for careers in the mining, oil and gas industries when they were visited by resource employers for an event promoting science, technology, engineering and math (STEM) careers.
HOSTED BY AMMA, the Resource Kids Connect event at Halls Head College opened the minds of students aged between eight and 11 to exciting resource industry jobs through hands-on activities such as digging for diamonds. A major drawcard was Thiess’s mine equipment simulator, which gave the students a realistic experience of operating machinery on a mine site. Resource Kids Connect is an industry initiative that delivers on the National STEM School Education Strategy – the COAG Education Council’s plan for renewing focus on STEM subjects in all Australian schools. “Industry has a massive role to play in articulating the opportunities that STEMrelated skills and occupations can offer. There is no better industry for this than the resources industry, particularly in a state like Western Australia,” says AMMA executive director Tara Diamond. “This event was all about engaging schoolkids on the rewarding careers that can be found within Western Australia’s resource industry, particularly through education in the STEM subjects. “We teamed-up with some of the country’s leading mining and engineering companies in Fortescue Metals Group, Thiess, Monadelphous and Georgiou Group, to teach students about the different jobs in our industry and engage them with interactive, hands-on activities. “Although these students won’t be hitting the workforce for a number of years, it is vitally important to capture their interest in STEM at a young age as they develop an awareness of what subjects and careers they may pursue in high school.” Halls Head College hosted the event that also involved students from three additional primary schools: Falcon, Ocean Road and South Halls Head.
Thiess’s mine equipment simulator is popular among the students
Women from Fortescue and Georgiou Group talk about their work in the industry
Women working across geology, engineering and other operational roles within Fortescue Metals Group and Georgiou Group provided role model presentations to show female students in particular that women can succeed in what have been viewed as maledominated careers. “Women comprise just 13.7 per cent of the national resource industry workforce
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
and far too few of those women work in site-based operational roles. This is an important step in turning that around,” Diamond explains. “While resource employers are actively working to attract and retain more women, it is critical to break down gender barriers and stereotypes before young women make important decisions around their future study and career paths.” RP
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DIVERSITY
SISTERS TAKE the wheel Thiess’s Sisters in Mining program is providing Indigenous women like Lisa Campbell the opportunity to carve a career in traditionally maledominated roles, and in turn, inspire others to reach their full potential.
WHEN ASKED WHAT they do for a living, not many women say they drive trucks the size of houses. That’s exactly what Lisa Campbell does. It’s a job that has intrigued her ever since watching her father build a 20-year career in the resource industry, beginning as a gardener and working his way up to labourer and onto the big rigs. “My father gained a number of tickets through his time at the mines and retired with a wealth of experience under his belt,” says Campbell, who is a mobile truck operator at Thiess’s Lake Vermont site. “Seeing the opportunities he had, and how the resource industry supported him and our family, made me determined to follow in his footsteps.” A South Sea Islander and Mackay local, Campbell is a graduate of Thiess’s Sisters in Mining program. Developed in 2013 in collaboration with Wesfarmers Resources and the Salvation Army Employment Plus, the program was originally called Oothungs, which is ‘sisters’ in the language of the Ghungalu people. It has since been extended across all of Thiess’s Queensland project locations and is today a collaborative initiative through the state and federal governments and the Juwarki/Bungoo Aboriginal Cooperation to provide training and employment opportunities to Aboriginal and Torres Strait Islander people. Each cohort begins by completing a three-week employment program, where they learn soft skills such as goal setting, negotiation, nutrition and managing money. The next phase of critical simulation training provides a sense of what it is like behind the wheel of a haul truck before participants become official trainee haul truck drivers, while completing the remaining 18-month Certificate III in Surface Extraction Operations. “When the opportunity to participate in the Sisters in Mining program came up, I
My son loves the fact his mum drives big dump trucks and I make sure that he and my two daughters understand they can be whatever they want to be in life.
Lisa Campbell
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jumped at the chance,” Campbell says of her experience. “I was looking for a career different to the norm and one that would give me different opportunities and experiences. “I’m now able to say I drive trucks the size of houses for a living. While it has been a great challenge, I have loved the experience. I have learnt so much about myself during this time and I’m inspired about the future career opportunities I now have.” According to Thiess diversity manager Penny Hamilton, it is not unusual for the
DIVERSITY
‘sisters’ to experience a personal growth journey during their traineeship as their eyes are opened to new possibilities in front of them. Believing Sisters in Mining is an industryfirst, she has seen the tangible impact it has had on individuals and communities, which reinforces the importance of skills and employment programs targeting underrepresented talent pools. “When I began seeking participants for the first cohort, community leaders advised me that despite various training initiatives in their regions, nothing similar to the program had ever specifically targeted Indigenous women,” Hamilton says. “A number of hopeful recruits also told me they had tried unsuccessfully for years to enter the mining industry. The program has opened doors that didn’t exist before. Many of the trainees were unemployed, some long-term, others underemployed due to a lack of opportunities available to them. “The reputation of the program has spread across Queensland’s communities and over 90 per cent of participants are still working with us. “In 2015, there was a record 350 women who applied for 25 positions on offer.”
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The 2016 graduates from Thiess’s Sisters in Mining program
Campbell admits working in the mining industry isn’t always easy. She works 12hour shifts, as well night shift and often misses special family occasions. However, she is also motivated by the example she is setting for her children and peers. “My son loves the fact his mum drives big dump trucks and I make sure that he and my two daughters understand they can be whatever they want to be in life,” she says.
“My hope is that my kids will one day provide a life for their families that is filled with better opportunities than what my family before me had available. “I often get stopped on the street and asked by others about how they can get a start in mining, and I mentor potential candidates as they go through the application process. “I hope to demonstrate to them that they can be just as successful as I have been.” RP
ASPIRING ABORIGINAL LEADER
gets taste for top job A FORTESCUE METALS Group Aboriginal development professional received valuable career mentoring when recently chosen to shadow CEO Nev Power for a day. Rowena Roberts, superintendent for Aboriginal development at Fortescue’s Christmas Creek mine, was the latest recipient of the company’s CEO for a Day initiative. She was chosen for her leadership and commitment to helping more than 350 Aboriginal employees identify their strengths and develop solid career pathways beyond purely
operational roles. Working alongside Power ahead of Fortescue’s quarterly results release provided Roberts with a genuine taste of working in a senior executive role within a leading national company. “I believe in what this company stands for and I’m proud to be a part of it. I’ve got my sights set on continuing to expand my career with Fortescue and this opportunity is another step in that direction,” Roberts says. “Fortescue’s commitment to helping Aboriginal people with a hand up,
not a hand out, is genuine and flows from the top. Nev and the executive team genuinely care about people and making a real difference in our Aboriginal communities.” RP
Rowena Roberts with CEO Nev Power
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
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DIVERSITY
FORMER ARMY CHIEF
on new mission
Chief of Army turned equality advocate, David Morrison AO is using his platform of 2016 Australian of the Year to urge the nation to tackle its diversity and equality issues.
SINCE BEING NAMED Australian of the Year, David Morrison has wasted no time shining a spotlight on equality challenges across all sections of the community. For the resource industry, the former Chief of Army has a clear message. “If you can generate a workplace where everybody, irrespective of their gender, the god they believe in, their cultural heritage or sexual orientation, has a chance to reach their potential, then they will be better off, your organisation will be better off and the Australian community will be better off,” he recently told an Energy Skills Queensland audience. Morrison believes that industry leaders have a responsibility to ‘stand next to’ the big challenges facing their organisations;
a valuable lesson he learned in the fallout from the 2013 sexual abuse incident that led to his viral video speech telling Army troops to treat women equally or ‘get out’. “Good leaders find the big problem and stand next to it. They identify publicly with the challenge and tell those they lead, their investors and stakeholders, they will be identified as a success or failure in the way they tackle the issue,” he says. Admitting that at one time he didn’t believe the Army had a culture problem, Morrison came to understand that appreciating culture for what it is doesn’t mean you should turn a blind eye to some of the problems within it. As he sees it, ‘culture is the stories we tell ourselves about ourselves’, and just like the resource industry has traditionally been viewed as involving men’s work, he points out that encapsulated in the term ‘Aussie digger’ is for most people an image of an Anglo Saxon male. “What does that say to women, or men and women from non-Anglo Saxon heritage? It says don’t join, or if you join we can guarantee the hurdles you will have to jump will always be higher than someone like me,” Morrison continues. “I think we must pause from time to time to look deeply into our culture and decide if the stories we are telling ourselves about ourselves are inclusive or exclusive.” During his time as chief, Morrison instigated the Army’s first targeted campaign to increase gender diversity among its 30,000-strong workforce and succeeded in overseeing the recruitment of 700 more women over two-and-a-half years. In conversations with his troops about why the Army had begun encouraging and supporting women to undertake roles traditionally occupied by men, Morrison discovered the benefit of finding the right language to convince employees to
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
Australian of the Year David Morrison
I think we must pause from time to time to look deeply into our culture and decide if the stories we are telling ourselves about ourselves are inclusive or exclusive. support cultural change. “It isn’t about women per say. It’s about bringing people into your organisation that are going to create true diversity,” he says. “What worked for me was to talk about how diversity of thinking actually makes you more capable, and for an army, that makes you more able to outthink your adversary, to win. People then started to listen differently. “When you take the blinkers off and put the gloves on and start to change the paradigm that you helped construct, you do change the essential nature of your professional world. “As a result, people have the chance to reach their potential, and because of that you are better off.” RP
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GUIDE MAPS
path to flexibility EMPLOYERS ACROSS AUSTRALIA’S resource industry now have a practical tool for implementing flexible workplace arrangements, thus providing an edge in the recruitment and retention of female talent. The Australian Women in Resources Alliance’s (AWRA) Guide to Flexible Work is the latest in a number of practical initiatives to help mining, oil and gas and related construction-sector employers increase their workforce gender diversity. “In recent years the Australian resource industry has overhauled its recruitment and human resources practices to diversify the skills and talent mix of its workforces. However, putting flexible work into practice at their operations remains a
challenge for many employers,” says the resource industry. AWRA spokesperson Tara Diamond. AWRA’s Guide to Flexible Work is “AWRA’s Guide to Flexible Work helps available at www.awra.org.au RP resource employers think outside the box and consider the broad range of modern AWRA’s Guide to flexible work options that may suit their Flexible Work workplaces. This can help raise their appeal to a greater pool of employees – both female and male – and ultimately benefit organisational culture and performance.” The guide includes: • advice on how to make flexibility work in the resource industry; • 13 types of flexible work options; • example workplace policies and templates; • useful legal tips; and • real case study examples from across
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
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DIVERSITY
HILTI WOMEN SMASH
construction barriers With a workforce comprising almost double the industry average of women employees and 38 nationalities, construction services firm Hilti is walking the walk when it comes to prioritising diversity.
AS A GLOBAL manufacturer and supplier of specialised tools and fastening systems, Hilti has made diversity a key business strategy in its quest to shift misconceptions about construction sector careers. The company’s 20 per cent female representation among its 320-strong Australian workforce is almost double the construction industry average of 11.7 per cent, while an executive team comprising 40 per cent women ensures employees have visible role models. Along with its impressive female participation rates, Hilti’s Australia-wide employee base covers 38 nationalities, with many having no prior experience in the construction industry. Research indicates Hilti will stand to benefit from this diversity. According to 2015 McKinsey & Company analysis, gender diverse companies are 15 per cent more likely to financially outperform those lacking diversity. This increases to 35 per cent for ethnically diverse companies. Hilti’s diversity push also helped it receive an Aon Hewitt ‘Best Employer’ accreditation for five consecutive years. Talent acquisition manager Kellie Warta says an open-minded approach to recruitment and support through training, clear career paths, access to leadership roles and attractive packages all play a role in the company’s success. “Our selection process is designed to assess a candidate’s potential to progress and grow beyond the initial role they are appointed to,” Warta says. “As such, we look for people who have quick learning agility, are passionate about working in a team, have a strong work commitment and an ambition to outperform. “At Hilti, we have numerous inspirational success stories of female
team members achieving outstanding results right across the business.” One of those success stories is Ipsa Rivas, an engineer from Venezuela who has worked at Hilti Australia for more than three years. Rivas cites a great work-life balance, excellent training and clear career progression as fundamental to her career at Hilti. “I’ve learnt I can do more than I thought
of myself. Once you know what you’re doing and have a solid knowledge of what you’re providing, that female barrier is broken. Women are encouraged to be part of the industry,” she says. To complement its gender diversity success, Hilti is now building an inclusive strategy and is rolling out global ‘Beyond Bias’ training to build awareness among managers of how unconscious biases affect communication, behaviour and decisions. RP
Women at a Hilti training seminar
Field engineer Ipsa Rivas
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
The AWRA e-Mentoring Program Your next career connection
Your next professional development opportunity could involve someone you’ve never met.
AWRA e-Mentoring is an industry-run program connecting women with experienced men and women mentors from all corners of Australia’s resource industry.
The online platform means the challenges of face-to-face mentoring, such as remote working locations, complex rosters and proximity to industry peers, are history.
Whether you are seeking a mentor or looking to pass on your experience and advice, AWRA e-Mentoring offers an enriching professional experience with unique flexibility.
Play your part. Be rewarded. Express your interest today.
send. For more information, please visit
www.awra.org.au/e-mentoring AWRA.e-Mentoring@amma.org.au | 1800 627 771
The AWRA e-Mentoring Program is delivered by AMMA and funded by the Australian Government.
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MEMBER NEWS
IN BRIEF: People and projects A snapshot of news and milestones across the Australian mining, oil and gas sectors.
ROY HILL TRUCKS GO PINK FOR BREAST CANCER THREE PINK TRUCKS named Hope, Ginny and Rachel can now be seen hauling iron ore at the Roy Hill mine site in the Pilbara as part of an initiative by chair Gina Rinehart to raise awareness of breast cancer, as well as opportunities for women in mining. Over time, the 225-tonne capacity trays on the remaining 34 of Roy Hill’s growing truck fleet will all be painted pink in what will be an industry first. “One in eight women will unfortunately develop breast cancer in their lifetime, with an average of eight women dying from this disease every day in Australia,” Rinehart explains. “The more we can do to raise support for helping fight this very, very serious and frightening battle, the closer we are to finding ways to improve treatment options and cures for one of the biggest killers of women in Australia.”
Rinehart adds that Roy Hill is one of the highest in percentage employers of women in the iron ore and Western Australian mining industry. “From an early age I have been involved in a predominantly male-centric industry, and now I’m seeing many more women employed in the industry and telling me they find it a great career choice,” she says. RP QGC is hosting six of the 18 LNG process operator trainees
Over time, the 225-tonne capacity trays on the remaining 34 of Roy Hill’s growing truck fleet will all be painted pink in what will be an industry first.
The Roy Hill team pose with freshly painted pink trucks
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
LNG SECTOR OPENS LOCAL CAREER PATHWAYS THE OPERATORS OF the three LNG projects on Queensland’s Curtis Island are wasting no time in building a pipeline of skills to support the long-term production of the projects. Australia Pacific LNG, QGC and Santos GLNG have come together to launch a new traineeship program, qualifying 18 local residents to apply for LNG process operator roles by early 2017. “Our collaboration in developing the future operators of the industry is the right decision for Gladstone, offering word-class training opportunities and providing locals with career prospects both locally and globally,” says a spokesperson for the LNG Process Operator Traineeship working group. Trainees will enjoy on-the-job experience hosted at one of the three LNG facilities, while completing their Certificate III in LNG Plant Process Operations with Energy Apprenticeships Group. RP
MEMBER NEWS
SODEXO SIGNS LANDMARK CONTRACT WITH RIO TINTO SODEXO HAS ENTERED a 10-year contract with Rio Tinto to deliver integrated facilities management services at the company’s extensive operations in the Pilbara region. Estimated at $2.5 billion, the contract is the largest of its kind for Sodexo and covers Rio Tinto’s ports, towns, aerodromes, operational sites, accommodation sites, commercial buildings, and residential properties. “Sodexo’s role is to support Rio Tinto’s long-term strategic plan by continually
reengineering ourselves to operate at the right cost, while providing seamless service solutions and anticipating evolving needs in quality of life,” says Sodexo’s CEO Mining Worldwide Johnpaul Dimech. Continuing its growth plans, Sodexo also recently committed to creating 400 new jobs for Indigenous Australians across its operations nationally over the next four years in response to an Australian Government invitation to participate in the Employment Parity Initiative (EPI). RP
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Adani’s Carmichael coal project
ADANI ONE STEP CLOSER TO MINING GALILEE INDIAN MINING COMPANY Adani is one step closer to being the first to mine the Galilee Basin’s vast coal reserves after the Queensland Government approved three mining leases for its Carmichael project. Premier Annastacia Palaszczuk says the mining leases were approved after ‘extensive government and community scrutiny’. Adani’s Carmichael project has been the subject of multiple high-profile legal challenges from traditional land owners and environmental groups. The company says the approvals provided the certainty needed to progress the project and plans to ‘return to the pre-engineering work that had to be suspended in 2015’ with a clear aim of ‘commencing construction in calendar year 2017’. The Carmichael mine and rail project is estimated to create 5000 new jobs during construction and a further 4500 during peak operation. RP
Sodexo global mining CEO Johnpaul Dimech with employees
FIRST CARGO SHIPS FROM GORGON IN A MAJOR milestone for Chevron and its joint venture partners, shipments of liquefied natural gas from the $54 billion Gorgon project have begun departing from Barrow Island off the northwest coast of Western Australia. The first LNG cargo, bound for Japan, was delivered by the Asia Excellence, one of Chevron’s new state-of-the-art LNG carriers. The company is in the final stages of a large shipbuilding and modernisation
program, which will bolster its fleet of LNG carriers by six. “Departure of the first cargo from the Gorgon project is a key milestone in our commitment to be a reliable LNG provider for customers across the Asia-Pacific region,” says Chevron executive vice president midstream and development Mike Wirth. “This is also important for our investors as we begin to generate revenue from a project we expect will operate for decades to come.” RP
The first cargo of LNG from Chevron’s Gorgon project departs for Japan
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
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POLICY
POLICY AT a glance A wrap-up of recent resource industry and employment policy developments by AMMA executive director, policy and public affairs, Scott Barklamb.
EMPLOYERS CAN RECOVER
FURTHER FWC APPOINTMENTS WELCOME
COSTS OF FRIVOLOUS CLAIMS
Employers have welcomed Employment Minister Michaelia Cash’s ongoing efforts to restore balance to the FWC, in terms of gender experience and background. Highly regarded workplace relations practitioner Lyndall Dean was most recently appointed a deputy president of the FWC; the fourth woman appointed since the Coalition took power in 2013.
The Fair Work Commission (FWC) has demonstrated that employers can have the ability to recover costs of unfair dismissal claims where those claims are ruled to be frivolous, vexatious and/or otherwise unmerited. In Post v NTI Limited, a former employee was ordered to pay the indemnity costs incurred by his employer in defending what was described as a ‘hopeless’ unfair dismissal claim. AMMA recommends that where employers believe they have clearly defensible cases, it should be made known the company will always defend such matters and consider pursuing costs in accordance with the Fair Work Act. MODERN AWARDS REVIEW CONTINUES
AMMA is spearheading the resource industry’s advocacy in the first four-yearly statutory review of the Modern Awards system, being undertaken by the FWC. In recent developments, we have been involved in strongly opposing the ACTU’s common claims across the award system, which, if implemented, would significantly increase labour costs and reduce flexibility for resource industry employers. These include claims relating to casual and part time employment. AMMA has also been advocating to retain key flexibilities it secured in the award modernisation process, which the FWC seeks to modify with its own preferred model clauses.
OFFSHORE VISA RULES SAFE FOR NOW PORTABLE LEAVE ISSUE REMAINS LIVE
The next Australian Government (after the July 2 election) may continue to explore the extension of portable long service leave after a senate committee earlier this year recommended consideration of extending portable LSL entitlements to all workers. AMMA has consistently argued that extending portability of LSL outside existing parameters would act like a “universal tax or payment on employment” and increase already high labour costs, reduce competitiveness and limit businesses’ free capital to invest.
Visa arrangements for foreign nationals working in the offshore oil and gas sector are safe for now, after a Labor disallowance motion in the senate was not progressed prior to parliament dissolving for the election. Labor had intended to move a motion to disallow the Migration Amendment (Offshore Resources Activity) Regulation 2015, however, this has been postponed until after the election. AMMA took urgent action to communicate the concerns of the industry to the Opposition as it was considering the disallowance motion during the final sitting days of the parliament.
UNION GRANTED ACCESS TO EMPLOYEE RECORDS
TRUCKIE PAY TRIBUNAL ABOLISHED
AMMA is calling for changes to Australia’s workplace laws to protect employees’ privacy following a decision of the national employment tribunal to allow a trade union access to personal information of non-union members. Regardless of the complexities of this matter, which related to a bargaining dispute involving a Brisbane meat processer, AMMA has argued that no one outside of the employee, the employer or government inspectors has any business seeing employment records that may include sensitive personal, health, performance and financial information.
The Road Safety Remuneration Tribunal (RSRT), which sought to impose a minimum rate that owner-drivers could charge, has thankfully now been consigned to history as a flawed and misguided experiment that was shut down before permanent damage was done to the trucking industry. The next industry the RSRT was to set rates for was the oil, fuel and gas sector – a process that will now not proceed.
NEW 457 VISA RULES IN EFFECT Scott Barklamb
engage in discriminatory recruitment practices, such as hiring or firing a person based on their immigration or citizenship status. The new rules also remove the criteria for visa applicants to have evidence of English language proficiency if they are already required to demonstrate such proficiency to obtain occupational registration or licensing.
Amendments to migration regulations have taken effect. One change confirms that standard business sponsors cannot
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
SUPERANNUATION CHOICE SHOULD BE OPEN TO ALL
AMMA will urge a re-elected Coalition to revisit proposed legislation to ensure unions cannot use enterprise agreements to stop Australian employees choosing which fund they want to direct their superannuation into. RP
RESOURCE INDUSTRY EMPLOYER GROUP
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POLICY
ELECTION SURVEY SHOWS
employers want change With the 2016 Federal Election looming, resource industry employer group AMMA asked its national membership of mining, oil and gas, and allied sector employers what their policy priorities are for the next Australian Government. Their responses have sent a loud and clear message to Canberra about the need for change.
A NATIONAL SURVEY of over 100 resource companies employing more than 85,000 Australians has shown only one in 20 employers believe Australia’s current workplace relations system reflects the modern economy, and 90 per cent want our next government to urgently deliver genuine workplace reform. These jolting findings, and many more, have come from a survey conducted by national resource industry employer group AMMA. To guide its policy positions in the 2016 federal election year, AMMA sought its members’ views on a range of major employment policy issues. Other findings include nine in 10 resource employers said implementing the Productivity Commission’s key recommendations for workplace reform must be an urgent priority for the next government following the 2016 polls. “Workplace relations reform will be
Key priorities for resource employers identified in AMMA’s 2016 Federal Election Survey include: • 94% of employers rate government regulation/compliance costs as a key impediment to growth. • Only 1 in 13 believe enterprise bargaining is meeting the needs of both employers and employees. • 89% report an inability to structure employment arrangements to suit operational needs. • 79% are concerned at the frequency of union visits to their workplaces. • 95% are concerned at having to pay ‘go away money’ to settle unfair dismissal claims even when they have no merit.
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incredibly important if Australia is to maintain a competitive, job-generating resource sector that contributes to growth, job opportunities and living standards,” AMMA chief executive Steve Knott explains. “This is reflected in the very strong engagement of our members with this survey. More than 100 of Australia’s leading resource companies reported on their current workplace employment and operational challenges, and identified the workplace relations reforms the next government should prioritise.” As well as highlighting the importance of the Productivity Commission’s recommendations for change handed down in late 2015 following a 10-month review process, the AMMA 2016 Federal Election Survey also shows that 87 per cent want the government to go further with reform (see box left). If successful in the election, the Coalition is expected to implement modest workplace relations reform. Mr Knott says that wouldn’t be good enough for the resource industry or for the Australian economy and jobs. “The survey overwhelmingly confirms that Australia’s workplace relations laws are creating significant barriers to employment and growth, and are making it difficult for Australian companies to compete globally,” Mr Knott continues. “Consistent with recent findings from the Productivity Commission, the Fair Work Act must be significantly reformed in the interests of future jobs, growth and living standards.” “Key areas where our current workplace legislation is clearly not working and needs change include bargaining and agreement making, unfair dismissals, individual flexibility and union powers to enter workplaces.
POLICY
“For example, nine in 10 resource employers question why unions have an artificially privileged position in enterprise bargaining. This is no surprise given only 10 per cent of private sector employees are union members and the current legislation rewards unions for gaming the system rather than sensible negotiation that contributes to productivity and competitiveness.” AMMA has been a consistent advocate for workplace reform since before the former Labor government’s legislation, the Fair Work Act, came into effect in 2009. While it is unlikely we will see fundamental change in our employment framework in the short term, one thing that is certain is there has never been a more important time to improve Australia as a place to invest, do business and create jobs in the resource industry. The AMMA 2016 Federal Election Survey can be found at amma.org.au. RP
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5 REFORMS OVER 5 YEARS As a starting point for getting Australia’s workplace relations system ‘back on track’, AMMA has developed the following five reforms over five years, which we will advocate for during the 2016 Election campaign and during the next term of government:
1. FOCUS ENTERPRISE BARGAINING, and ensure legally protected strike action can only be taken over claims pertaining to the employment relationship, not union ‘wish lists’ of claims. 2. RETURN BALANCE TO UNION WORKPLACE ENTRY LAWS by creating an enforceable code of conduct and removing union access to employee lunch rooms when other suitable meeting rooms are available. 3. EXPAND AGREEMENT MAKING OPTIONS to facilitate employment arrangements, both individual and collective, directly between employees and employers. 4. REFORM UNFAIR DISMISSAL and ‘general protections’ laws to ensure employers are not forced to pay ‘go away money’ to settle claims without merit. 5. REPLACE THE FAIR WORK COMMISSION with modern, balanced institutions by creating an Australian Employment Tribunal and a separate Employment Appeals Tribunal.
FULL BENCH CLARIFIES
JJ Richards fix A FULL BENCH of the Fair Work Commission (FWC) has clarified the operation of new Fair Work Act provisions as to when a union can secure a protected action ballot order (PABO), providing a right to strike without liability for legal action. The new s437(2A) within the Fair Work Act took effect on November 27, 2015 as a ‘fix’ following the high-profile JJ Richards case in which a full court of the Federal Court ruled that a union bargaining representative could apply for a PABO before bargaining had actually commenced. This was summed up by industry as a right for unions to ‘strike first, talk later’, and was one of the problems the Coalition government sought to fix in its 2015 amendments to the Fair Work Act. The recent FWC full bench decision
involved a dispute between Maersk Crewing Australia and the Maritime Union of Australia (MUA) as to whether bargaining had officially commenced for the agreement in which the MUA was seeking a PABO. Maersk challenged the validity of the MUA’s PABO application on the basis that no valid notice of employee representational rights (NERR) had been issued by the employer in relation to the agreement. The union argued the fact the parties had been bargaining over a separate agreement was notification enough that bargaining had commenced, and thus its application for a PABO was valid and it should be able to legally strike. The Full Bench ruled in favour of the union, agreeing that s437(2A) of the Fair Work Act only required ‘notification time’
before a PABO could be sought, and the fact a valid NERR was not issued for this specific agreement was inconsequential. “The decision confirms bargaining must have commenced via a ‘notification time’ before a PABO could be sought, however, indicates that a valid NERR for an agreement is not required to be issued prior to a PABO,” AMMA workplace relations and legal director Amanda Mansini explains. “This is disappointing given if an agreement had hypothetically been reached, the commission could very well have ruled it invalid due to the absence of a legitimate NERR.” Given the contention around this interpretation of the new JJ Richards provisions, it would appear this longstanding issue under the Fair Work Act is not quite yet resolved. RP
RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
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INNOVATION
PRELUDE powers on As newly installed seabed infrastructure lies ready to support the world’s first floating liquefied natural gas (FLNG) facility, Resource People looks at the innovations and people power helping Shell’s Prelude FLNG Project make history.
MOST AUSTRALIANS WOULDN’T know it, but an operation of mammoth proportions and extreme precision recently took place in isolated waters 200km off the Kimberley coastline. The installation 250m below the ocean’s surface of four anchor piles each measuring 11m in diameter, 13.5m in height and weighing more than 250 tonnes was a critical piece of a much larger puzzle. These enormous piles now wait to anchor one of the most globally anticipated resource innovations in history – the Prelude floating liquefied natural gas facility – a structure longer than four soccer fields laid end-to-end and weighing more than 600,000 tonnes. Vice president of production for Prelude FLNG at project operator Shell, David Bird, says excitement is building among the workforce as the project takes shape. “Everyone at Shell is extremely proud of Prelude, our flagship project and the largest offshore floating facility ever built,” Bird says. “But it will not only represent a milestone for Shell. Prelude represents an important technological development for the global LNG industry, allowing for the production, liquefaction, storage and transfer of LNG at sea, as well as the ability to process and export liquefied petroleum gas and condensate.” Shell hasn’t confirmed exactly when Prelude will leave its construction yard in Geoje, South Korea for delivery to its Browse Basin gas field, however the company has indicated the project is on track to deliver ‘material cash flow’ in 2018. Regardless of its start-up date, the excitement around Prelude is unlikely to abate considering it will not only be the world’s first floating LNG project in operation, but likely the sole project of its kind for a number of years. While Australia spent the most part
David Bird
of a decade as the epicentre for LNG investment, the current economic and market environment has seen similar projects put on hold, including the Browse Development, of which Shell is a partner. Recent progress in Prelude’s construction, however, indicates Shell and its project partners INPEX (holding 17.5 per cent interest), CPC (5 per cent) and KOGAS (10 per cent) remain committed to forging ahead. “In Geoje, all 14 topsides are now installed on the facility, many of which weigh as much as a single typical offshore platform. Integration of modules continues and commissioning activities have commenced,” Bird says. “At the Prelude gas field, a two-year drilling campaign was closed at the end of 2015 with the successful completion
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
of all seven production wells, and the installation of subsea infrastructure to control the flow of gas to the floating facility is now in place.” INNOVATION
Once in production, Prelude will draw global attention to Australia. However, the project really is a case study of international collaboration. More than 600 engineers worked on design options, and along with Shell’s Korea and Australia-based employees, and teams in Dubai, Malaysia, Singapore, France and Spain have been involved in various design, construction and testing. The obvious advantage of the FLNG design is its ability to facilitate access to remote gas reserves that would otherwise be deemed uneconomical
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More than 150 Australian technicians have been employed to work on operations readiness
Our focus has to be around building employees for the future. We are looking at ways we can bring in semiskilled recruits and train them within their role. to extract. For Prelude, which is more than 400km from the nearest port, it removes the need for pipelines to shore, dredging and onshore works. Bird explains that while many parts of the project operate like an onshore facility, some technology modifications have
been made in order for processes, such as liquefaction and offloading, to run at sea. “Cooling water intake risers will be used as part of the cooling process needed to turn the gas into LNG, and 50 million litres of cold water will be drawn from the ocean every hour to help in this cooling process,” he says. “Another important design feature is the LNG offloading arms, which have been developed to transfer LNG from the facility to ships moored alongside it. “Prelude’s LNG tanks are designed and constructed to handle the sloshing motions of the liquid LNG within the hull if and when there are stormy seas. This means the facility can remain connected and moored to the sea floor even in extreme weather conditions, including a category 5 cyclone.”
PEOPLE
Although the project itself is an international one, Australian talent has always been critical to its success. Since Shell began its recruitment process for maintenance technicians in 2012, more than 150 Australians have been employed with many deployed to Geoje to work on operations readiness. “This hands-on experience is crucial for the successful commissioning, startup and operations and maintenance of Prelude,” Bird says. “We’re now actively recruiting for a variety of roles including material handling, logistics, process or utilities, for offshore work on rotation. These could be candidates from the LNG industry but also from logistics, resources and military backgrounds.”
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»
INNOVATION
While many of the skills required to operate and maintain Prelude are the same as land-based LNG projects and are therefore transferable, the real differences lie in the skillsets required of FLNG service technicians. To build local capacity and expertise, Shell is investing millions in Australian universities and education providers, including the development of the world’s first training program for FLNG technicians, in partnership with the Challenger Institute of Technology in Western Australia. “Production and operations roles are in demand now and will continue to be as competing LNG projects become operational,” Bird notes. “Our focus has to be around building employees for the future. We are looking at ways we can bring in semi-skilled recruits and train them within their role, and we are particularly interested in using
this approach to drive and retain more female technicians.” During normal operations, up to 140 staff will be required to operate Prelude as it produces at least 5.3 million tonnes per annum of liquids. This will be resourced by two rosters of three weeks on, four weeks off, and three weeks on, five weeks off from a pool of 240-280 staff working fly in, fly out. Up to 300 people could be on the facility during heavy maintenance periods, while onshore, staff at a new Collaborative Work Area in Perth will provide a key role in supporting Prelude in real time. According to Bird, Prelude employees will have access to some of the best offshore accommodation and recreation facilities, including a golf simulator and movie theatre. In providing offshore facilities management services, Sodexo will deliver
a tailored wellness and nutrition program and through a joint venture between Shell Australia and INPEX with their nearby Ichthys project, Nextgen are installing a 2000km subsea cable system which will keep employees connected with family through high-speed data and voice communication services. At a time when more than $200 billion in new major resource projects have been stalled at pre-construction or ditched during feasibility, the successful delivery of Prelude will offer Australia much more than its own ongoing benefits in the form of employment, business contracts, training partnerships and billions of dollars in tax revenue over its 25-year operation. It also offers Australia the chance to reinforce to the international investment community that our country remains at the forefront of industry innovation and collaboration. RP Shell’s Prelude FLNG facility takes shape
The new Collaborative Work Area in Perth will provide a key role in supporting Prelude FLNG once it becomes operational
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
INNOVATION
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SCIENTISTS TO RESEARCH
mining solutions THREE QUEENSLAND SCIENTISTS will share in $540,000 of state government funding over three years to research innovations to overcome resource industry challenges, such as unlocking ore reserves and improving safety. The funding is a share of more than $10 million awarded under the Queensland Government’s first round of Advance Queensland Research Fellowship and PhD Scholarship programs. “Queensland is recognised internationally for its research in mining and engineering and we are home to many brilliant scientists, who in a number of institutions and joint ventures, are working to develop new technologies and bring them to commercial success,” Minister for Innovation, Science and the Digital
Economy Leeanne Enoch says. The funding recipients, all based at the University of Queensland, are: • Dr Hong Peng, who aims to develop new pathways to unlock Queensland’s bauxite ore reserves through process technology innovation in collaboration with Rio Tinto and the University of Queensland Rio Tinto Bauxite and Alumina Technology Centre; • Dr Pradeep Shukla, who aims to upscale new technology to produce cyanide onsite for gold and base metal mines in a safer process to avoid bulk transport of toxic material, in partnership with Synergen Met Pty Ltd; and • Dr Sergio-Andres Galindo-Torres, who in collaboration with Golder Associates, aims to introduce novel modelling and visualisation
technologies for use in coal seam gas extraction and hydraulic fracturing. Accurate simulation tools will maximise their outputs and minimise the potential hazardous effects, as well as improve current understanding. Minister for Natural Resources and Mines Anthony Lynham says the research funding investment is a welcome boost for an industry that remains vital to the economy. “Important issues like increasing productivity, improving safety, reducing employment impacts, and training future mining engineers are being addressed with support from the $180m Advance Queensland initiatives,” Minister Lynham says. “These scientists will partner with industry organisations to ensure the research is translated into real, practical application.” RP
PADDL STEERS STUDENTS
toward industry jobs A NEW APP launched by tech company CareerLounge is helping tertiary students solve the age-old challenge of getting a job without experience or experience without a job. Paddl connects employers with universities to see students gain valuable industry-relevant experience in the form of paid casual or part-time work while they complete their studies. CareerLounge managing director Dominique Fisher says the Paddl app also meets the challenges faced by employers who often find graduates don’t have a realistic idea of what work in their chosen field entails, while educators
have also expressed a desire to be more proactive in providing employment outcomes for their students and to get closer to key employers. “Educators kept telling us they were desperate for their students to find employment as many were struggling to live and even remain students without additional employment,” Fisher says. Paddl is already supported by major employers Myer, Metro Trains, Crown, Loan Market and Australia Post, along with educators including Deakin University, Holmesglen Institute of TAFE and Entamio Education Group. “Paddl helps students gain the
industry experience that is so important for success in an increasingly competitive job market,” says Deakin University vice chancellor, Professor Jane Den Hollander. The app has clear guidelines to ensure employers, students and education institutions get the most value from it. Any job posted must be a paid position at minimum wage or higher and students only see jobs relevant to their qualification. In the first 10 days following Paddl’s launch, more than 1000 students had activated accounts, 60 job applications had been completed and more than 50 jobs advertised. RP
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INNOVATION
CO2 KEY TO
green construction Carbon dioxide emissions could soon be used in the large-scale production of ‘green’ construction materials, following almost a decade of research and development undertaken by mining services company Orica and joint venture partners.
A REACTER AT the CO2 mineral carbonation research pilot plant located at the University of Newcastle Institute for Energy and Resources recently commenced operation, transforming captured CO2 emission into forms of carbonates and silicates for potential use in building materials such as cements and plasterboard. The reactor is operated by Mineral Carbonation International, which works to develop novel methods for permanently and safely disposing carbon from emissions of fossil fuel electricity generators and other industrial processes. “The mineral carbonation technology mimics and accelerates the earth’s own carbon sink mechanism by combining CO2 with low grade minerals to make inert carbonates and silica, which are similar to common chalks and sand,” explains CEO Marcus St. John Dawe. The commissioning of the new research pilot plant follows nine years
Carbonated product from the mineral carbonation process
of R&D undertaken by the University of Newcastle, GreenMag Group and Orica. The $10 million project operates with joint funding from the Commonwealth and the New
The MCi Mineral Carbonation Research Pilot Plant
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
South Wales Government, Orica and supported by the R&D Tax Incentive. Orica acting group executive strategic marketing and technology Jez Smith says the achievement brings Orica and its partners another step closer to closing the carbon loop. “Mineral carbonation technology has the potential to help Orica and customers address issues associated with CO2 intensive operations, produce materials for use in the construction sector and open up new markets for the materials used to sequester the carbon dioxide,” Smith says. University of Newcastle deputy vicechancellor Professor Kevin Hall says the research pilot plant was an excellent example of research and industry working in collaboration to solve global challenges. “This project highlights the scale of innovation being led out of the Hunter through NIER and points to emerging industries and future job markets that may arise as a result of these innovative technologies,” Hall says. RP
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48
ECONOMY & FINANCE
GOLD PRODUCERS
shine bright
Gold is often referred as a ‘safe haven asset’ and in 2016, its resilience among otherwise volatile commodity markets is holding true to form. Evolution Mining and Newmont are two operators defying the trend of constrained spending and instead investing heavily in their assets.
IF AUSTRALIA’S MINING employers are broadly in a period of constrained spending, streamlining assets and ‘safety first’ investment decisions, Perth-based gold producer Evolution Mining must have missed the memo. Since Australian gold equities bottomed in late 2014 (more than 12 months before their North American peers), Evolution has consolidated its $413 million acquisition of La Mancha Australia’s assets, purchased the Cowal mine from Barrick for more than $70m, and still recorded a 150 per cent increase in underlying profits earlier this year. The man behind the hectic 12 months for Evolution, executive chairman Jake Klein – a former accountant who jokingly calls himself an accidental miner – says the company’s strategy was always to upgrade the quality of its mine portfolio. “The best time to deliver on this strategy is when asset prices are at cyclical lows,” Klein says. “To put ourselves in a position to grow, we have worked very hard at optimising our assets to generate strong cash flow, despite the lower gold price environment. The acquisitions we made in 2015 provide us with a large, prospective tenement package that creates exciting opportunities to grow the company organically.” Klein says gold operators are in a relatively strong position to make such acquisitions due to the unique characteristics of the commodity. While the US gold price has steadily declined since late 2011, there are a number of factors that has kept it relatively resilient, compared to other commodities. “This may include its role as a safe haven asset – an alternative currency in an environment of global currency
Jake Klein, Evolution Mining
debasement, and the low opportunity cost of holding gold, with potential for capital appreciation, in a world of low or negative interest rates,” Klein explains. He says, however, that the positive sentiment in Australia’s gold sector is driven by a ‘dramatically improved operating environment’. “The mining boom coming to an abrupt end has actually been very positive for gold companies,” Klein continues. “With gold only representing a small part of Australia’s resource industry, gold companies are ‘cost takers’. The end of the mining boom has led to lower costs and better quality people becoming available to drive productivity and
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
Michael Bisset, Newmont
efficiency improvements in the sector. “Cash margins have been expanding rapidly as costs have normalised from exceptionally high levels, and a depreciating Australian dollar had seen the gold price trading back near record highs.” Underpinning Evolution Mining’s financial performance is a thorough human resources strategy that emphasises employee engagement, development and ownership. Klein estimates the ‘Act like an Owner’ program has seen $6m in cost savings through non-management led initiatives during the past 12 months alone. NEWMONT BOLSTERS BODDINGTON, BOOSTS PRODUCTIVITY
Australia’s largest gold producer, Newmont Asia Pacific, is also investing significantly in its assets to improve productivity and reduce production costs. In late 2015, the Newmont Board approved a $400m ‘pit cutback’ to expand its largest gold mine, Boddington, and extend its lifespan. The company is also undertaking a $120m expansion at its Tanami operation in the Northern Territory. Newmont’s group executive for human resources Michael Bisset says the strategy
ECONOMY & FINANCE
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Newmont’s largest gold mine, Boddington, is set for expansion
to focus on ‘what we can control’, in terms of costs and productivity, was timed well as the gold price started falling. “Our CEO Gary Goldberg motivated all of Newmont’s operations to concentrate on value over volume and lower the cost base early in the piece,” Bisset explains. “We have a devolved regional accountability operating model, whereby general managers at individual sites are able to make decisions and adjustments for reducing their costs in a responsive way. “The speed at which our operations in Australia were able to respond to the cost and productivity strategy was rapid, which positioned the company well. “So, while asset productivities weren’t the priority focus during the boom, the rate in which Newmont has improved production results, lowered our cost base and increased site productivity has been a strength over the past couple of years.” Bisset says it is not unusual for a company to have too few people understanding what it is really trying to achieve. He believes changing this approach can lead to ‘good things’ within an organisation. “From a productivity perspective, once the technical experts had determined
Evolution Mining has become a major player in Australia’s gold sector
what was possible in terms of productivity throughput, it was then critical to engage all our operations people on the improvements we need to achieve in the plan,” he explains. “Communicating targets and optimum utilisation rates with all our operations people has been extremely important. “When everyone has a clear
understanding of what we are trying to achieve, all people want to play their part and share in the company’s success.” Newmont reported $803m in global earnings before interest and taxes for the first quarter of 2016 alone. Boddington is the company’s second largest project after the Carlin gold mine in North America. RP
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ECONOMY & FINANCE
EMPLOYER SUPER OBLIGATIONS:
how far does it extend?
As the experts in superannuation for the resource industry, Resource Super is often approached by employers uncertain of how their super obligations extend when temporarily placing Australian employees overseas. Here, chief executive officer Tim Baker explains.
STANDARD SUPERANNUATION
To gain exemption from the Tim Baker superannuation payment in the other Australian employers are required to pay a country, employers are required to obtain a minimum of 9.5 per cent of an employee’s certificate of coverage from the Australian ordinary time earnings. This obligation Taxation Office (ATO). The certificate of is met at least four times per year (every coverage confirms the Australian employer quarter). Superannuation guarantee law will continue to make superannuation came into effect in 1992 and is mandated contributions for the employee while they to increase to 12 per cent by 2025 under are working in the other country. the current government. However, with consideration to the DETERMINING TAX RESIDENCY recent federal budget update, we now The Australian employer is no longer know superannuation is not only on the obligated to make superannuation government’s agenda, but is a revenuepayments for the employee working earning strategy to reduce the current overseas only if the employee becomes a systems in the world. deficit, and is likely to be subject to non-resident for tax purposes. Employer superannuation obligations can be subject to complexities especially further amendments. The below table can serve as a general guide to determine an individual’s tax with the transitory nature of employment EMPLOYEES WORKING OVERSEAS residency, according to the ATO: in today’s global society, and made even more complex with additional Sending employees overseas for work is employment agreements, workplace now a common occurrence, especially IMPORTANT CONSIDERATIONS arrangements and immigration issues. with global trends easing the facilitation of Superannuation legislation does not resources. If an Australian employee is sent differentiate contributions from residents It is important that employers discuss employee needs before placement overseas to work temporarily in another country, and non-residents. Employees deemed to safeguard their financial wellbeing. the Australian employer must continue to as non-residents (i.e. does not satisfy pay superannuation contributions for them any of the above) can continue to make Employers should seek professional in Australia. The employee is still covered concessional contributions up to the advice before implementing the practices by the superannuation guarantee law, annual cap of $25,000 (as proposed in mentioned here as the information pending they are still Australian residents the Federal Budget 2016, subject to provided is factual information only, and for tax purposes. approval). This allows employees to does not take into account any of your continue to grow their retirement nest particular objectives, financial situations EXEMPTIONS egg in one of the best superannuation or needs. RP In the event an Australian employee is temporarily placed in another country that QUALIFYING QUESTIONS YES NO also mandates payments into superannuation Place of Is the permanent home in Australia? Australian Foreign or equivalent schemes, the issue of ‘double permanent home Does the individual maintain personal resident resident superannuation coverage’ may arise. and/or family connections in Australia? for tax for tax Bilateral agreements with 23 countries purposes purposes exempt Australian employers from having Place of Is the individual present in Australia to double up superannuation payments constructive for more than half the income year residence (+183 days)? (or equivalent), provided the Australian employer continues to pay contributions Intent Does the individual intend to return under the superannuation guarantee law to Australia? in Australia. OBLIGATIONS
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ECONOMY & FINANCE
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EXPLORATION AND INVESTMENT
key to resources future
The Australian resource industry’s long-term fundamentals are strong, but falling exploration and subdued investor confidence remain key hurdles.
A QUARTERLY PUBLICATION providing a snapshot of the health of Australia’s resource sector economics shows while challenges exist in the immediate operating environment, medium- to longterm prospects are promising. Despite such promise, there is significant ‘upside risk’ that the benefits of the industry’s favourable position may not be realised if operators and investors don’t take advantage of it, says the latest edition of the AMMA Resource Industry Market Outlook. “Our country has more than $220 billion worth of major tier-one greenfield and expansion resource projects currently stalled in the pre-construction pipeline, and with existing operations ageing, there is a real risk the industry could come to a premature halt,” explains report author and AMMA senior industry policy adviser Tristan Menalda. “The upside, however, is that if we can tip the scales to a point where mid-to-long term investment attractiveness exceeds current investment risk, Australia could capitalise on proven and probable future gains generated by ongoing development of the nation’s many resource deposits.” Menalda believes increased exploration is the key to realising Australia’s resources potential, with exploration spend being a leading indicator on the future prosperity of any major resources nation. While last year exploration spend was higher year-on-year for gold and mineral sands, across some of Australia’s biggest exports it was a different story. According to government statistics, onshore petroleum exploration fell by 63 per cent (or $272.5 million to $158.9m) over 2015 and offshore petroleum exploration fell by 55.2 per cent (or $398.6m to $323.1m). Mineral exploration expenditure fell by 17 per cent (or $77m) in the past
calendar year, marking Australia’s fourth consecutive year of falls – now down 63 per cent (or $650.4m) compared to four years ago. “Exploration spend is now trending 32.2 per cent lower than the 10-year quarterly average. This is going to have significant long-term repercussions for Australia in terms of job losses, royalties, taxes and both living standards and what we can achieve as a community in the years ahead,” says Menalda. “It is now vitally important that at both the state and national level, falling exploration spend is tackled head-on, and that we look to innovative measures such as taxation reform, positive government investment and lifting moratoriums on energy sources of the future, such as nuclear, to stimulate exploration activity.” In the first quarter of 2016, expected capital expenditure of resource companies fell by 5.6 per cent (or from $60.2b to $56.8b), just above the original 2016 estimate of $53.b. Menalda explains that although there
are signs of optimism, the forecast that capital expenditure will fall to five-year lows of $34.4b in 2017 indicates resource companies are largely sceptical about the current economic environment, and foresee challenging times ahead. “Inaction on capital resource expenditure will likely create a situation where ageing capital assets decrease multi-factor productivity and production levels which will ultimately negatively impact on company profitability levels,” he says. “Complementing Australia’s worldclass commodities with sustainable and balanced regulation, and incentives and concessions such as taxation relief, could be the turning point where the risk of inaction would be outweighed by opportunity and potential reward. “Addressing this upside risk could once again inflate the construction and investment phase of the Australian resource industry and renew its productive capacity.” Get more insight from the AMMA Resource Industry Market Outlook via www.amma.org.au. RP
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ECONOMY & FINANCE
FUNDING PROMISE FOR
new resource discoveries The Coalition Government’s 2016-17 budget commitment to fund $100 million in resource exploration is a welcome measure to boost Australia’s future resources development.
ACKNOWLEDGING THE IMPORTANCE of supporting resource industry growth, the federal government has announced that if re-elected on July 2, it will provide $100 million in funding toward mapping mineral, energy and groundwater potential in key resources territories. The funding will be placed with Geoscience Australia, the government’s advisor on geology and geography. “The $100m Exploring for the Future program will produce pre-competitive geoscience data, to be released on an annual basis over the next four years,” says Minister for Resources, Energy and Northern Australia Josh Frydenberg. “Geoscience Australia estimates that around 80 per cent of Australia remains under-explored, in particular, areas in the Northern Territory, Queensland, Western Australia, and South Australia, which will be the focus of this initiative. “This will improve Australia’s long-term exploration prospects and help address
declining new onshore exploration.” Past analysis by Geoscience Australia helped identify the potential of significant resource deposits including the Ichthys gas field in the Browse Basin and the Olympic Dam copper, uranium and gold deposit in South Australia. AMMA senior industry policy adviser Tristan Menalda says the funding is precisely the type of support Australia’s resource sector needs to nurture a new generation of mineral exploration that could fuel our nation’s next wave of major resources projects. “The Geoscience Australia funding is a major step in the right direction toward kick-starting the next mining investment era,” Menalda says. “While $100m over four years appears modest, it only takes one successful new discovery to deliver a return on investment to the nation of many times this amount. “We only have to remember Roy Hill’s $10 billion iron ore mine was once just a
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
yet-to-be-discovered deposit, as was the $54b Gorgon LNG project.” The Association of Mining and Exploration Companies (AMEC) national policy manager Graham Short is calling for a long-term rollover and additional annual commitment to the Exploration Development Incentive to compliment the geoscience funding. “The production of pre-competitive data by Geoscience Australia, the state and territory geological surveys and the EDI have to be recognised as inextricably linked if we are to improve exploration outcomes and provide new mines for future generations,” Short says. “These strategies are also vitally important in recognising a number of largeproducing mines are coming to an end and not being replaced at a fast enough rate. “New mines will create thousands of jobs and generate significant economic and social dividends for the nation and local communities.” RP
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COMMISSION SUPPORTS
next steps in nuclear storage SOUTH AUSTRALIA COULD safely benefit from the storage and disposal of nuclear fuel and intermediate level waste used overseas, a Royal Commission has found. Twelve recommendations were made in the final report of the Nuclear Fuel Cycle Royal Commission, which was established last year by the South Australian Government to examine its potential involvement in the nuclear fuel cycle. According to the commission led by Kevin Scarce AC CSC, a waste disposal facility could generate $257 billion in total revenue, with costs of $145b over the 120-year life of the project, including a $32b reserve fund for facility closure and ongoing monitoring. The commission maintains this could be achieved safely. “The findings and recommendations
in this report represent the beginning of a new series of conversations with the community that address their questions and concerns, and ultimately enable decisions to be made by the people of South Australia,” Scarce says. “The commission’s recommendations address the opportunities that might arise from becoming more involved in the nuclear fuel cycle and identify the next steps the South Australian Government might take to pursue those benefits, should there be social consent to do so.” While noting expansion of Australia’s nuclear energy would require ‘significant legislative and regulatory change’, Federal Minister for Resources, Energy and Northern Australia Josh Frydenberg, is optimistic about the report’s findings.
ALL FUNDS ARE NOT CREATED EQUAL
“Although Australia does not generate nuclear energy, we have participated in the nuclear fuel cycle for more than 60 years, helping to create and export potentially lifesaving medicine and cutting edge industrial technology,” Frydenberg says. “Furthermore, we have an established uranium mining industry that supports thousands of jobs and is estimated to produce around $980 million in export income in 2015-16. “The Royal Commission’s report provides a sound basis for the South Australian Government and broader community to make informed and considered decisions about South Australia’s role in the nuclear fuel cycle, and the potential economic opportunities the report identifies.” RP
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RESOURCEPEOPLE | WINTER 2016 | www.amma.org.au
EVENTS 54
EVENTS CALENDAR
JULY
Tues 26 – Thurs 28
Tues 30 – Thurs 1
QUEENSLAND MINING & ENGINEERING (QME) EXHIBITION
NATIONAL AGEING WORKFORCE FORUM
The 2016 QME Exhibition will bring nationwide industry innovators together to showcase the latest mining and engineering technical solutions on the market. A highlight of the program, the ‘Thought Leadership Panel Discussion’, will examine the domestic and international outlook on coal. Held at Mackay Showground. More info at: queenslandminingexpo.com.au
Australia’s population aged 65 and over is estimated to double by 2054-55. This conference examines current ageing workforce trends and provides organisations with innovative tools to optimise their workforce. Held at Novotel Darling Harbour, Sydney. More info at: www.akolade.com.au
AUGUST
SEPTEMBER Mon 5 – Tues 6
Mon 22 – Wed 24
SIA NATIONAL SAFETY CONVENTION
INTERNATIONAL MINE MANAGEMENT 2016
The annual SIA National Safety Convention brings together stakeholders in the health and safety profession including the profession, regulators, business and unions, to talk about what’s working about existing approaches, as well as new ideas and leadership. The program explores the theme of ‘disruptive safety’. Held at Sydney Showground. More info at: www.siasafetyconferences.com.au
The focus of this AusIMM conference is to discuss and share the high level challenges faced within the minerals industry. Presentations will cover strategic and tactical approaches in the short term, how to retain sustainable development in a capital constrained market, innovation and technology, and the importance of leadership. Held in Brisbane (venue TBC). More info at: immconference.ausimm.com.au
Wed 14 – Thurs 15 Wed 24 – Thurs 25
NT RESOURCES WEEK
MINING 2016 RESOURCES CONVENTION
NT Resources Week sees the South East Asia Australia Offshore & Onshore Conference (SEAAOC) run alongside the Mining the Territory and Building the Territory Conference. The event brings together leading personnel in petroleum, mining, exploration, engineering, construction, and gas to meet and discuss the latest developments within Northern Australia and South East Asia. Held at Darwin Convention Centre. More info at: ntresourcesweek.com.au
With back-to-back presentations from key resource industry experts and participants, this two-day event has previously secured delegations in excess of 1500. This year’s conference will incorporate the Australian Copper Conference, with 80plus booths set to fill the bustling exhibition area and ample networking opportunities at its attendants’ fingertips. Held at the Pullman Brisbane King George Square. More info at: verticalevents.com.au/mining2016/
AMMA NATIONAL CONFERENCE – EAST & WEST
Gold Coast: July 28
Perth: August 4
In 2016 Australia’s resource industry employer group AMMA has split its annual National Conference into two tailored one-day events on the east and west coasts. The conference programs include top speakers from the resource industry, employee relations, human resources and government to explore all your workforce issues. Both conferences will culminate with presentations of the 2016 AMMA Industry Awards at a glittering gala dinner. Covering everything from HR excellence and recruitment innovation to gender diversity, Indigenous employment and training initiatives, the awards recognise the excellence of individuals and organisations across workforce-related professions in the sector. Attend one conference, or both! The full program for AMMA’s 2016 National Conferences – East and West – is available at nationalconference.amma.org.au.
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
Resource employers turn out for AMMA’s Gala Dinner and Industry Awards
Together, we are better equipped to face the challenges and opportunities that lay ahead for Australia’s evolving resource industry.
ENGAGEMENT
INFLUENCE
ADVOCACY United industry voice
EMPLOYEE RELATIONS
WORKFORCE ADVICE
Supporting you to develop & execute strategies
SUPPORT
There when you need us
WORKFORCE DEVELOPMENT
EXPERTISE
Experts in people & skill development
AMMA membership. When you need expert support for your business challenges, the answer is AMMA.
Visit amma.org.au/AMMA-membership to find out more or contact us on 1800 627 771 or membership@amma.org.au
BUSINESS PARTNER DIRECTORY
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Only dedicated corporate health provider for the resource sector www.guhealth.com.au
Tailored insurance solutions www.coverforce.com.au
Value added superannuation for Australian Resource Industry www.resourcesuper.com.au
urces specialists and ruitment specialists www.dfp.com.au
National initiative to raise awareness of anxiety and depression www.beyondblue.org.au
Employee Rewards & Recognition Programs www.hwholdsworth.com.au
Leading vocational education and training assessment provider www.vetassess.com.au
g occupational ervice providers obfit.com.au
Working to reduce the impact of prostate cancer www.prostate.org.au Industry health & safety testing, training & prevention www.medvet.com.au The Australian Women in Resources Alliance www.amma.org.au/awra
www.amma.org.au | WINTER 2016 | RESOURCEPEOPLE
Real jobs for industry employers www.miningoilandgasjobs.com
4 REASONS TO BECOME AN AMMA CORPORATE PARTNER Corporate Events AMMA offers an exciting event calendar for companies seeking to further their brand recognition and network with other leaders in the resource industry.
Exclusive Offers Extend your market reach through exclusive offers to AMMA members.
For unrivalled connections to decision makers in the resource industry, the answer is AMMA. Visit amma.org.au/partnership or call 1800 627 771
Direct brand, marketing and product exposure to key decision makers through a range of different channels.
Networking Share information and develop important contacts across the resource industry.
Are you enjoying the generous health benefits you could be getting as a GU Health member?
Speak to your HR representative today!
Australia’s only corporate health insurance specialist.
Grand United Corporate Health Limited (GU Health) ABN 99 002 985 033 is a registered health insurer and a member of the Australian Unity Group. Š Grand United Corporate Health Limited 2016. GU Health respects the privacy of our members, view our privacy policy at guhealth.com.au.