RESOURCE PEOPLE Issue 015 | Spring 2016

RESOURCE Issue 015 Spring 2016

Stepping up to the plate

Meet 2016’s industry award winners Fortescue’s Indigenous employees ‘Trade Up’ Mancala trains for overseas advantage ARTC on track for diversity Plus more…

ALSO Bechtel ramps up people development, top

legal minds tackle workplace challenges, and Broadspectrum boss on adaptive leadership

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2

CONTENTS

6

COVER IMAGE Fortescue Metals Group

22

26

40

49

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 | SPRING 2016 | RESOURCEPEOPLE

CONTENTS

18

3

REGULARS

04 05 54 56

From the editor Chief executive’s message Events calendar Business partner directory

COVER STORY

06 Fortescue’s Trade Up upskills Aboriginal employees HUMAN RESOURCES

10 13 15 16 17

Young professionals rise to the challenge Redefining performance measurement Casual hours to count towards redundancy pay Assessing harshness: Contrasting approaches in unfair dismissal Energy sector in transition: Resilience as an enabler

OHS & WELLBEING

18 19 20 21

Wellness program gives new hope to miners Sleeping operator fails to win job back Drug disputes warn employers of testing pitfalls Industry highlights drug testing challenges

TRAINING

32

22 Mancala trains for overseas advantage 24 Bechtel hits the gas on people development 25 Diverse approach to new resources degrees DIVERSITY

26 28 30 30

On track for diversity More women to benefit from e-mentoring Women’s wage growth strong but pay gap remains Shell exec named exceptional woman in resources

MEMBER NEWS

32 In brief: people and projects POLICY

34 35 35 36

Policy at a glance High court rules on offshore visas Research shows need to reinstate construction watchdog Top legal minds tackle Fair Work challenges

LEADERSHIP

38 40 42 42

52

Adaptive leadership drives innovation, says Broadspectrum boss Orica goes back to basics ‘Ideas boom’ must embrace mining: Costello Ombudsman warns advisers over workplace breaches

INNOVATION

44 46 48 49

Compass transforms village life Shaking up the world of workforce resourcing Shell drone research takes flight Innovation centre to solve sector challenges

ECONOMY & FINANCE

50 Market stabilises, geopolitical risk remains 52 ‘Nasty surprise’ tax plan slammed 53 Uranium project one step closer

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

4

REGULARS

Tom Reid Editor

From the editor It is only fitting that for AMMA’s final edition of Resource People for 2016 – a year that has seen ongoing challenges, change and adversity – we explore the successes and initiatives of resource employers that continue to strengthen our industry’s contribution to the nation.

People are the backbone of our industry, and the leadership employers demonstrate in utilising their teams to improve operational performance is what keeps our industry strong.

The recent 2016 AMMA Industry Awards were a celebration of those who have ‘walked the walk’ in key workforce areas.

As testament to an industry-wide commitment to improving workplace practices, this year AMMA received a record number of award nominations. On the night, however, there could be just a handful of winners, which we showcase within these pages.

The 2016 AMMA industry award winners are: • Indigenous Employment & Retention Award: Fortescue Metals Group (p.6) • Young Professional Award: Joint winners, Viva Energy’s Annie Martyn and Wirrpanda Foundation’s Jarrad Oakley-Nicholls (p.10) • Health & Wellbeing Award: New Hope Group (p.18) • Training & Development: The Mancala Group (p.22)

• Australian Women in Resources Alliance Award: Australian Rail Track Corporation (p.26) • Workforce Innovation Award: Compass Group (p.44) Keep an eye out for the special AMMA Awards Seal identifying each story.

As the only magazine for workforce professionals in the mining, energy and related sectors, Resource People also brings you the latest analysis of key human resources and workplace relations issues, from a new concept of performance measurement (p.13) to lessons from contrasting unfair dismissal decisions (p.16) and insight from an industry drug and alcohol testing survey (p.21).

We also sat down with Betchel senior project manager Paul Marsden to hear about the latest training initiatives spurring on the construction of Wheatstone LNG (p.24), while Broadspectrum boss Graham Hunt discusses how an adaptive leadership style is driving innovation in the company’s service offering (p.38).

We enjoyed discovering the many stories within this edition.

If you have an inspirational company initiative or individual that you would like to see within these pages, get in touch via tom.reid@amma.org.au. 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 | SPRING 2016 | RESOURCEPEOPLE

Covering the latest on: • Recruitment • Training and Development • Workplace Relations • Migration • Leadership • Plus more workforce topics

Steve Knott

Chief executive’s message In the previous edition of Resource People, published immediately prior to the 2016 Federal Election, I wrote that our nation faces a range of significant challenges that would greatly impact our economic, social and community wellbeing if we didn’t tackle them head-on.

Since the Coalition was returned to government with a one-seat majority in the lower house and further growth in crossbenchers in the senate, unsurprisingly we are yet to see any significant signs that these challenges can and will be overcome by the new parliament.

This is particularly true in AMMA’s primary advocacy area of workplace relations reform, where the two bills that triggered the double dissolution election – re-establishing the Australian Building and Construction Commission and setting up a new Registered Organisations Commission – remain stalled in parliamentary process.

Nonetheless, as your national resource industry employer group, AMMA’s advocacy for change on behalf of our members remains stronger than ever and will not be distracted by a

Our economy is further exposed to global uncertainty driven by Britain’s exit from the European Union, a possible European debt crisis and threats from all three major international ratings agencies to downgrade our AAA credit rating.

AMMA CHIEF EXECUTIVE

fractious environment in Canberra.

We are continuing our campaign for five key workplace reform priorities identified by AMMA members in our pre-election survey, which drew detailed responses from more than 100 individual employers.

Further advocacy is in progressing the Productivity Commission’s recommendations for workplace reform and in areas of combined interest for the broader business community such as company taxation and reduced red tape for new projects.

One thing that is clear is business needs to better promote our message and traditional approaches to public advocacy no longer have the impact needed to counter sophisticated and well-funded campaigns by nimble activist groups.

If the 2016 election taught us anything, it’s that business advocacy needs to be much better. Representing AMMA’s members and policy interests, I have been meeting with other key business groups to discuss this issue and derive how we can individually and collectively respond to this challenge. Better business advocacy together with seeking to improve business investment conditions for small to medium enterprises will form part of this process.

It is also clear that the emergence of major macro-economic and geopolitical events in 2016 has made the ongoing contribution of Australia’s resource exports, and the need for our industry to be supported by sound, predictable and competitive policy making, even more important.

Australian Government data shows the pick-up in non-mining investment has been far slower to materialise than initially forecast. Our economy is further exposed to global uncertainty driven by Britain’s exit from the European Union, a possible European debt crisis and threats from all three major international ratings agencies to downgrade our AAA credit rating.

It is imperative Australia lifts its productivity and competitiveness and presents a more attractive platform to help secure the $254 billion worth of potential major resource projects that are pencilled in for our shores but yet to achieve final investment decision.

These policy and political issues were hotly discussed at AMMA’s 2016 National Conference, recently held in Perth. Also featuring a range of practical advice and insights on everything from human resources management to how technology and innovation is shaping ‘the future of work’, I thank all speakers and attendees for contributing to another hugely successful AMMA event.

The celebration of industry excellence across key ‘people’ areas including training, Indigenous employment, gender diversity, HR innovation and young professionals was also uplifting and inspiring.

With many of these award-winning success stories detailed within, I encourage you to not only reflect on the talent and ingenuity of Australia’s resource people as you peruse these pages, but to also think of how such successes can motivate change and innovation within your own workplaces. RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

6

COVER STORY

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

cover story

7

FORTESCUE’S TRADE UP UPSKILLS ABORIGINAL EMPLOYEES Underpinned by the principle of offering Aboriginal people a hand up rather than a hand out, Fortescue Metals Group has become synonymous with supporting Aboriginal training, employment and business development. The miner’s latest award-winning program ‘Trade Up’ is building on this success.

Fortescue isn’t a company that does things by halves. In the face of subdued iron ore prices, the Pilbara-based miner defiantly slashed operating costs by an incredible 43 per cent and increased net profit by 212 per cent to US $985 million in the financial year 2016.

This approach of setting and achieving goals that at first glance may appear unobtainable is also applied to its people practices.

Fortescue is well known for its work in creating employment and business opportunities for Aboriginal Australians.

In its direct workforce alone, the AMMA CEO Steve Knott with Fortescue’s head of people Linda O’Farrell

company boasts 13 per cent Indigenous employment while more than 1000 Aboriginal people have received training and employment through its Vocational Education and Training Centre (VTEC) initiative.

In addition, more than 65 Aboriginalowned businesses and joint ventures have been awarded contracts and subcontracts totalling almost $2 billion through its Billion Opportunities program.

So, when an internal review in 2015 identified that less than six per cent of tradespeople employed by the company and its contractors were Aboriginal, Fortescue responded swiftly. »

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

8

COVER STORY

»

A stretch target to have 20 per cent of all trade roles at Fortescue filled by Aboriginal people by 2022 was put in place. To help achieve this, a program was developed to enable existing Aboriginal employees to move beyond purely operational roles by gaining training and development readiness for a trade apprenticeship.

Aptly named Trade Up, the program is an example of what can be achieved when an organisation is committed to action. Delivered within just four months, the first participants were welcomed in September 2015.

Group manager Fortescue people Linda O’Farrell, says delivering Trade Up within such a tight timeframe is testament to the potential the program presented and the company’s strong relationships with contracting partners.

“A lot of hard work and effort goes into making Fortescue’s Trade Up successful, but it’s a clear message to other businesses that programs can be delivered and implemented in a short space of time and by utilising existing resources with no additional budget,” O’Farrell says.

“The commitment of Downer, Goodline, Thiess, ICRG, GUMA, DVG and EGWYC has contributed to the success and sustainability of the program.”

Pathway to apprenticeship

Fortescue initially took on 26 employees in the program, with a further 12 employees joining in March 2016.

Participants undertake a Certificate II level traineeship in a desired trade, choosing from disciplines relevant to the business and suitability for in-house support, specifically electricians, fixed plant mechanics, light or heavy vehicle mechanics, refrigeration mechanics and fabricators.

While the program offers a pathway to an apprenticeship, completion requires equal commitment from the trainees.

“The program was aligned as much as possible with existing apprenticeship practices and takes into account standard rosters, wages and allowances.

Consequently, trainees take pay reductions to gain entry to the program, knowing that the long term gain is the reward,” O’Farrell says.

“We work to ensure retention by structuring the program around the needs of the individual. While some trainees progress to the formal apprenticeship more quickly than others, each trainee has appropriate support to progress at a level that suited their individual needs.”

Participants are trained while at work by qualified tradespeople through placements in either Fortescue or contracting partner trade assistant roles across the Pilbara.

“They are provided with daily onthe-job training by direct supervisors and receive quarterly intensive skills training either at site or at the Apprentice and Trainee Trade Training Centre at Fortescue’s Cloudbreak mine site,” O’Farrell explains.

“South Regional TAFE, our training

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

The trainees appreciate the program could open up many opportunities for them and their families, and allows them to be role models both at work and in their communities. partner, provides onsite training and competency review and assessment services, as well as adult language, literacy and numeracy support and development.”

Gaining traction

One year on, Fortescue’s Trade Up has gained traction with Aboriginal employees as a valuable development opportunity.

With 10 participants completing their traineeship and moving into the apprentice program four months ahead of schedule, it’s clear that the program is harnessing untapped potential within the workforce.

cover story

9

Fortescue boss Nev Power

reflects on culture, success

Addressing the recent 2016 AMMA National Conference in Perth, Fortescue’s charismatic chief executive Nev Power outlined the company’s approach to culture, engagement and attaining the apparently unattainable.

On achieving stretch targets: Fortescue employees

Nev Power speaks with participants at Fortescue’s Trade Up launch

Fortescue’s success in identifying the disparity among its trade employees and developing a sustainable solution within a short timeframe also gained praise from industry when the company was awarded AMMA’s 2016 Indigenous Employment and Retention Award.

“It’s wonderful that the industry recognises the importance of an initiative like this to help close the gap for unskilled Aboriginal people,” O’Farrell says.

“We are delighted with the success of our Trade Up trainees, but perhaps the best endorsement of the program’s success is the trainees in the second intake who followed in the footsteps of their siblings in the first cohort.

“The trainees appreciate the program could open up many opportunities for them and their families, and allows them to be role models both at work and in their communities.

“It truly is a life-changing opportunity.” RP

I’ve been asked more times than I can remember why we don’t under-promise and over-deliver, but that belies the underlying culture and success of Fortescue.

At Fortescue, we say everyone has two jobs. Firstly, we have our own job to do to the best of our ability. But secondly, we need to think of a way to do our job better tomorrow – more productively, more efficiently, at lower cost, more safely.

Everyone that works around Fortescue knows when we have a target, that is the only target and we are going all out to achieve that. So, it’s about setting that target and using innovation or generating ideas to find solutions to that.

If it wasn’t for the sheer determination of our founders, Fortescue would never had existed. It’s that determination that drives us and allows us to achieve those stretch targets.

Leadership and accountability:

We know our culture is shaped and morphed every day by the attitudes that people bring to work. So, if people bring a positive, pumped up, energetic attitude to work and use that to lift people around them, then the whole workplace culture starts to mirror that positive energy.

It is about setting targets, but also giving people complete ownership over the outcomes and inspiring them, engaging with them, encouraging and empowering them to achieve.

We then recognise and celebrate successes for at least 10 seconds, before moving on. We recognise that success is about what we’re going to achieve in the future – that is what is going to define us.

Community engagement:

The very success of our community engagement has been around a very different approach to engaging with Aboriginal communities. We try very hard to understand what we can do to bring benefit to those communities, (and) what we can do is provide real opportunity.

We start by removing barriers to employment; by creating real jobs and then providing training to get into those jobs.

Building capability in Aboriginal communities is also very important. Aboriginal companies employ a lot more Aboriginal people than non-Aboriginal companies.

So, by helping build capability and capacity within Aboriginal contractors and suppliers, we know that the impact, the trickle-down effect or the multiplier effect in terms of employment is going to be much higher.

So, today, while we employ directly 1100 Aboriginal people, some 14 per cent of our workforce, probably more important is the $1.8 billion worth of contracts that we’ve written to Aboriginal companies and their joint-venture partners. RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

10

HUMAN RESOURCES

Young professionals

rise to the challenge

While the disciplines of their work are yards apart, what Annie Martyn and Jarrad Oakley-Nicholls have in common are leadership qualities beyond their years.

Meet the impressive joint recipients of the 2016 AMMA Young Professional Award.

When Annie Martyn graduated with a degree in mechanical engineering she didn’t foresee one day being nationally recognised for her work, let alone at just 29 years of age.

But that’s exactly what transpired after receiving a 2016 AMMA Young Professional Award, presented each year to an individual who, in a short period of time, has had a positive impact on workforce-related processes or practices in their organisation.

With just six years of industry experience behind her and 18 months into her role as asset engineer at Viva Energy Australia’s Geelong refinery, Annie has played a critical role in a major refinery turnaround that would challenge the stress management skills of even the most seasoned professionals.

Located about 10km north of central Geelong, the refinery supplies more than 50 per cent of Victoria’s and 10 per cent of Australia’s fuel. Occurring every six years, the plant turnaround requires the majority of the refinery to be shut down,

AMMA chief executive Steve Knott (L) with Young Professional Award winners Annie Martyn and Jarrad Oakley-Nicholls

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

decontaminated and maintained, all within six weeks and utilising a workforce of 700.

Annie was tasked with creating a process to select and develop scope items to allow preparation and planning for execution of the turnaround.

In delivering her plan, Annie worked with each discipline engineer, process engineer and inspector to assist their understanding of the process and gather information required to complete scope collection. This required the co-ordination and setting of delivery targets for a large part of the workforce, most with many more years’ experience.

“It was a completely new activity for me and also for a lot of people on the team because there is a fair bit of change in the organisation in the six years between turnarounds,” Annie says.

“As scoping takes place 18 months out from turnaround, I had to convince people to work on something that is really above and beyond their day-today activities.

“I learnt a lot about engaging people and getting them on board with how important it was to get it right, both for economic and safety reasons.”

Annie’s transparent and welldocumented solution was quickly supported by management, allowing for scope to be approved at the target deadline. It was also praised by independent global assessing organisation AP Networks as ‘best practice’.

While Annie is quick to share credit for the project’s success with management and colleagues, she’s also found time to reflect on the scale of what she achieved, all while continuing to meet her day-today asset engineer responsibilities.

“There were a lot of other people involved in the process so at the time I

HUMAN RESOURCES

11

Jarrad OakleyNicholls (centre) with Wirrpanda Foundation participants

didn’t think much about my involvement alone. Upon reflection, I was pleased that I was able to contribute to a successful turnaround by aligning key parties to deliver a scope in the timeframe that we had,” she says.

Executed in late 2015, the key turnaround performance indicators were all met, specifically zero safety recordable incidents, schedule targets and with a cost $40 million below the previous comparable event.

Speaking to Resource People a few weeks after her award win, Annie, now Viva Energy’s turnaround execution co-ordinator, is leading preparation for another turnaround at the refinery. This time it involves the Catalytic Cracker – one of the most important pieces of equipment used in the petroleum conversion process.

“This one is twice as big as the previous turnaround and there will be many hundreds of people on site,” she says.

“It’s a massive undertaking but you end up with such a sense of achievement when we complete a safe turnaround on budget and schedule.”

It’s fair to say Annie’s up for the challenge.

Oakley-Nicholls finds passion

member of the foundation’s team.

“It was at the Wirrpanda Foundation that I discovered what I wanted to The concept of ‘paying if forward’ is do after footy. I didn’t have the something Jarrad Oakley-Nicholls technical skills to fall into the job, but practices daily. the foundation put that trust in me At the age of 17, the talented and employed me on my behavioural Australian rules footballer was drafted competencies,” he says. to the Richmond Tigers Football Club Six years on and while still finding and spent six years in the AFL system time to play with the East Perth when he began to wonder what the Football Club, Jarrad is now manager future had in store. of employment programs at the “I had never held what I considered foundation and has been instrumental a ‘normal’ job,” Oakley Nicholls, now in developing its pre-employment 28, says.

“Half way through my final year in the model that assesses a candidate’s behavioural competencies for AFL I sat back and thought if this is to employment. end, what do I have to fall back on?”

With the foundation being a Vocational It was at that time Jarrad, a Yamatji Training and Employment Centre Koori Noongar Kija man, became involved with the Wirrpanda Foundation. (VTEC) in Western Australia for mining, construction and oil and gas, the model Established by AFL legend David has been critical to reaching a target to Wirrpanda in 2005, the foundation fill 230 industry jobs with unemployed supports the education, employment Indigenous men and women. and health of Aboriginal and Torres “During my time working in the Strait Islanders. employment space, I have seen a An opportunity to join as a mentor rotating door of people going in and out ignited a passion for assisting Indigenous people into employment and of work, or being continuously knocked back by employers,” Jarrad says. saw Jarrad fast become an influential » with Wirrpanda Foundation

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

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HUMAN RESOURCES

»

“Many of the participants face significant employment barriers such as low levels of education and no continuous employment history. So, we sit down with participants to find out who they are as individuals and the barriers they’ve had to overcome in their lives.

“From there we can outline their behavioural competencies, such as resilience, and identify the skill sets that they bring to the table.”

The foundation also works with participants to ensure they are workready when vacancies arise and provides

mentoring for at least the first six months of their employment.

While there have been challenges, such as a decrease in employment opportunities due to the economic environment and a shift from construction to operations for some major projects, the approach has been well received by employers.

“We meet with employers to make sure they are on board with everything before we even get to the point of putting our participants forward,” Jarrad says.

“The employers we work with genuinely want to close the Indigenous

The employers we work with genuinely want to close the Indigenous employment gap and understand that by taking on an individual and providing training for the technical skills they may be lacking, they are helping that person make a life change.

employment gap and understand that by taking on an individual and providing training for the technical skills they may be lacking, they are helping that person make a life change.”

Receiving a 2016 AMMA Young Professional Award is testament to how far Jarrad has come from having little work experience himself to successfully leading a team toward the foundation’s VTEC employment target, growing valuable employer relationships and delivering outcomes for Indigenous people.

Through the VTEC contract alone, more than 190 Indigenous people have so far been placed into employment and more than 100 have completed more than six months continuous employment.

“We’re not setting anyone up to fail.

We’re getting people into employment that they want to be in and that they’re going to be in for a long time,” he says.

“It’s been a new challenge for me but it’s one I really enjoy and wouldn’t change for the world.” RP

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HUMAN RESOURCES

13

Redefining

performance measurement Measuring employee performance is a mainstay of most Australian workplaces, but a leading specialist in performance measurement aims to convince employers of a more effective way to get the best of out their people.

According to performance management specialist and author Stacey Barr, approximately 90 per cent of companies measure the performance of employees using an outdated approach.

“Measuring people’s performance to rank them, to reward them and to reprimand them is a bad habit organisations have to shake because it doesn’t work,” Barr says.

“Performance review meetings are too little, too late. They feel superficial and are based often on numbers – like perception ratings – that are mere proxies to real performance. They create competition between employees, when we know that it’s collaboration that makes the difference to overall organisational performance.”

Barr says much of the reason why measuring people doesn’t work stems from the beliefs and attitudes people have about being measured that reinforce a downward spiral in overall organisational performance.

“Managers want people to perform better so they monitor them to assess their performance. When people know they are being monitored, they feel judged. People will then take the judgement personally and that makes them feel threatened,” she says.

“When people feel threatened, they get defensive in an attempt to protect themselves in any way they know how.

“The most common method to protect themselves from the threat of performance measures is to hide performance problems so the measures look good. Or they will manipulate the measures to make the results look good.

Or they will set targets for measures they know they can achieve.”

Two decades of research into the challenges around measuring performance and KPIs led Barr to create PuMP, a performance measurement methodology to replace bad KPI habits with more engaging and meaningful techniques.

She believes instead of holding people accountable for hitting targets, accountability should be defined by: • routinely monitoring important performance results; • validly interpreting the measures of those results; and • initiating performance-improving action, only ever when action is required.

“When an employee is responsible for a specific business result, like problem resolution or accuracy of advice or eliminating rework, they can be accountable for routinely monitoring

Stacey Barr

that result with a performance measure,” Barr explains.

“This drives the behaviour of people focusing on the results that matter; the results that are about the organisation and not about them personally.

Measuring the business results takes the threat out of measurement, and helps employees align with purpose.

“As that employee takes responsibility for monitoring a performance measure, they can be accountable for interpreting what that measure is telling them about the business result it measures.

“This drives the behaviour of people seeking feedback about how the results are actually tracking because the measures are about the business and not about them.

“Then, as the employee takes responsibility for interpreting a performance measure, they can be accountable for deciding what kind of action is needed, if at all. This drives the behaviour of people working on their processes, and not just in them.”

Barr says that if managers coach employees to fully practice using measures to improve business performance then employee attitudes, skills and behaviours will better serve the organisation’s goals. RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

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HUMAN RESOURCES

15

Casual hours to count

towards redundancy pay In a decision at odds with established practice, a full bench of the Fair Work Commission (FWC) has found that casual service counts towards an employee’s redundancy pay where the employee converts from casual to permanent employment.

The decision comes from the Australian Manufacturing Working Union’s (AMWU) successful appeal of an earlier FWC decision in which service as a casual was not found to count towards the calculation of service for the purpose of severance pay.

A majority of the full bench found that because neither the enterprise agreement nor section 22 of the Fair Work Act 2009 specifically stated that a period of regular and systematic casual service is excluded from the definition of ‘service’ or ‘continuous service’, casual service should be included for the purposes of severance payments.

Peculiar outcome for redundancy entitlements

The entitlement to redundancy in section 117 and 119 of the Fair Work Act is qualified according to an ‘employee’s period of continuous service’, however, section 123 excludes casual employees from the entitlement.

The full bench acknowledged that casual employees’ service, however long or continuous, does not qualify them for redundancy if they are a casual at the point in time when their employment ceases, however, the service can be ‘converted’ retrospectively if they are permanent at the

time their employment ceases.

AMMA manager of workplace relations Con Deftereos, considers this could give rise to peculiar outcomes.

“For example, an employee employed as a casual for 100 weeks at the time of redundancy would not be entitled to redundancy. If the same employee then worked one week as a permanent employee, their casual service would be ‘converted’ and they would be entitled to redundancy based on service dating back to when they were originally hired as a casual,” Deftereos explains.

“It would also provide for disproportionate outcomes between permanent employees.

For example, Employee A employed as a permanent employee for 51 weeks at the time of redundancy would not be entitled to redundancy.

“Another employee, Employee B is employed as a casual employee for the same 51 weeks and is paid 25 per cent more than Employee A in this period. If this employee then worked one week as a permanent they would be entitled to redundancy.”

Implications for employers

Deftereos says AMMA does not endorse the approach taken by the majority full bench and is in discussion with other employer organisations regarding the decision.

“In the interim, it is recommended that when drafting industrial instruments employers should consider whether any terms can or should be included to clearly state that service as a casual does not count for severance purposes,” he says.

“Employers making redundancies impacting on employees with periods of casual service prior to being hired on an ongoing basis may also wish to seek advice from an experienced AMMA consultant.” RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

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HUMAN RESOURCES

Assessing harshness:

Contrasting approaches in unfair dismissal AMMA consultant Karen Nelson discusses how the consideration of ‘harshness’ in unfair dismissal applications can result in very different outcomes.

Even when an employee’s misconduct presents a clear case for termination of employment, the Fair Work Commission’s (FWC) consideration of whether it is harsh, unjust or unreasonable under the Fair Work Act 2009 can influence the outcome of an unfair dismissal application.

COAL MINER WINS BACK JOB

In one recent case before the FWC, an operator employed at the Mount Arthur open cut coal mine in the New South Wales Hunter Valley, argued for his reinstatement after being terminated for making racist, sexist and otherwise inappropriate comments over a two-way radio system.

While Commissioner Tony Saunders found the reasons for termination to be valid and the requirements of procedural fairness met, he considered the termination to be harsh due to the personal and economic consequences of the dismissal on the applicant and his dependent children. The Commissioner also found the dismissal to be a disproportionate response to the seriousness of the misconduct.

The operator was ordered to be reinstated into his former position with the continuity of his employment maintained.

Back pay for the period of five months from the dismissal to the decision was not awarded as Commissioner Saunders found the operator must accept a substantial degree of responsibility for the consequences of his conduct.

A separate case heard before the FWC less than two weeks later had a very different outcome.

DOCKHANDS FAIL IN CLAIM

Two dockhands made a dual application

for unfair dismissal after their employment was terminated following allegations of ongoing harassment and belittling behaviour directed at a fellow employee.

Senior Deputy President Peter Richards found the overall assessment of a valid reason for termination relied upon the credibility of the witness evidence.

Although the alleged victim presented his evidence in a distressed manner and lacked specificity, SDP Richards found that this was a proportionate reaction to the alleged ongoing harassment.

In relation to the applicants’ evidence, SDP Richards found that neither applicant showed remorse or contrition, and did not demonstrate sensitivity to the impact of their behaviour, which was personally, socially and psychologically damaging to their colleague.

In finding the dismissals were not, unjust or unreasonable, consideration was given to the applicants’ ages (both 54), their employment history (one 28 years’ service, the other 13 years) and their apparent difficulty in securing employment post dismissal.

Ultimately, however, SDP Richards found that on balance, the conduct of the applicants warranted the sanction

In finding the dismissals were not harsh, unjust or unreasonable, consideration was given to the applicants’ ages, their employment history and their apparent difficulty in securing employment post dismissal.

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

Karen Nelson

imposed by the employer, and upheld the terminations.

Implications for employers

These decisions illustrate a contrasting approach to assessing whether a dismissal is harsh, unjust or unreasonable.

While in the first case, significant consideration was given to the personal and economic consequences of the dismissal even though the employer’s reasons were found to be valid, the second case saw SDP Richards give greater weight to the credibility of the witness evidence and the events surrounding the dismissals.

Therefore, even where the employer is confident they have clear and valid reasons for dismissal, careful consideration must be given to both the criteria set out in the Fair Work Act and the consequences of the dismissal on the individual, prior to dismissing an employee.

Factors such as the length and quality of the employment record, the seriousness of the misconduct, the personal and economic consequences, any mitigating factors and contextual matters, and the absence or presence of remorse shown by the employee may all be taken into account by the FWC. RP

HUMAN RESOURCES

17

Energy sector in transition:

Resilience as an enabler

Founder of The Resilience Institute, Stuart Taylor, discusses the importance of resilience in an organisation’s ability to deal with transitions and disruptions.

The rapid rollercoaster of commodity price peaks and troughs in past years, and uncertainty of demand and supply for various energy sources, has made a very challenging environment for resource companies, their leaders and staff.

In the midst of this change and uncertainty comes the organisational imperative to optimise the largely inflexible P&L and balance sheet leading to real human impact due to downsizing, asset sales, role redesign and technology changes.

Data recently analysed by The Resilience Institute in a study of 16,261 people across 250 companies including from the resource sector, showed 81 per cent of staff experience an intense work environment with very concerning levels of worry, chronic stress symptoms, distress and disengagement.

When faced with change and disruption, how we respond is a testament to our resilience. A resilient person is far better at not forecasting a catastrophe, at gathering resources to improve the forecast and keeping their brain in the present.

What are the consequences of not doing this? Chronic stress hormones, especially cortisol, build up and ultimately lead to chronic stress and the associated illness and life impact.

This link is supported by The Resilience Institute data that shows a very high positive correlation between worry (prevalence of 31 per cent of sample) and distress (.35), ill health (.30), depression (.50), not to mention a negative correlation with resilience (-.55) and engagement (-.32).

At an organisational level, resilient organisations are not only adaptive and agile to disruption and change; they are innovation leaders that drive disruption and change.

What you can do when your organisation is in the midst of transition: Organisational Responsibility: 1. Strategic priorities – be clear, communicate well and reward accordingly.

2. Recruiting – Recruit staff with the right skills to do the job.

3. Challenge – Promote and empower staff to stretch and be challenged such that innovation is fostered rather than hitting overload.

4. Develop agile people – Develop leadership and staff skills around resilience and thriving.

5. Social awareness – Be aware of when staff do show early signs of overload and provide coaching support.

6. Trust Culture – 50 per cent of staff don’t trust their leaders; a prime cause of distress and disengagement. Drive a culture of high trust, low politics and “failure is OK” through strong communication, compassion and intolerance for nonvalues-based behaviour.

Individual Responsibility: 1. Stress is unreal – Recognise that the trigger for stress is a cognitive forecast and a choice, not a reality. This insight can provide self-regulation in an uncertain environment to allow strong engagement rather than triggering a downward spiral.

2. Resilience Skills – Develop your resilience skills to better be able to reframe pressure.

3. Self-Mastery – Incorporate an integral daily practice of relaxation, exercise, sleep, and nutrition that keeps you in a good space.

4. Support – Reach out for help when you need perspective or feel like you are not coping.

5. Spiritual Clarity – Be very clear on your life purpose and values to maintain perspective.

Stuart Taylor

As one example, throughout a period of three years, The Resilience Institute worked with a global petrochemical company as they prepared for potential asset sale with likelihood of staff downsizing. Leaders also needed to manage productivity throughout the transition.

We enabled the organisation and its individuals to maintain engagement and prepare people for potential outcomes.

Among other improvements, during this period we saw a 32 per cent reduction in distress and a 23 per cent increase in resilience. Staff feedback was incredibly positive and appreciative of the process that was used to support them through the enormous disruption. RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

18

OHS & WELLBEING

Wellness program

gives new hope to miners

New Hope has topped a competitive national field of resource employers to win a 2016 AMMA Industry Award for its proactive approach to employee health and wellbeing.

New Hope Group’s New Acland health and wellness program was awarded the prestigious Australian Mines and Metals Association (AMMA) Health and Wellbeing Award for the significant positive impact it has had on employees and the workplace.

As featured in Resource People Autumn 2016, the Live Well, Work Well program was implemented in 2014 at the New Acland open-cut coal mine located 50km north-west of Toowoomba, Queensland.

The program was developed after it was discovered that up to 50 per cent of the 280-strong workforce had risk indicators for chronic disease, and has been effective in encouraging employees to self-manage their health and make lifestyle changes.

New Hope managing director Shane Stephan is immensely proud of the achievement as it was a tough competition.

“We were up against some prestigious national and international companies with nine finalists in this category,” Stephan says.

“Our New Acland program sets itself apart from other organisations through encouraging employees to be the drivers of the program. A company is only as good as its employees so it makes sense to focus on supporting the physical and mental health of our workforce.

Live Well, Work Well has to date resulted in more than 78 per cent of employees making significant positive changes to their health.

“There has been great buy-in from our workforce who have championed the program and been empowered to take control of their health,” Stephen says.

“Many of our New Acland employees had risk indicators for conditions like high blood pressure and high cholesterol.”

“By encouraging sustained positive behavioural change, we’ve been able to help lower the risk profiles for these individuals.”

New Acland’s safety and training coordinator Stewart Sherrington

was instrumental in establishing and implementing the program and says partnering with allied health professionals had been vital.

“Working closely with Toowoomba’s LiveWell Australia has enabled us to really educate and engage with our employees about the long-term benefits of positive health choices,” Sherrington says.

“We were pretty chuffed to win the Queensland Safe Work Award for Best Workplace Health and Wellness Initiative for this program last year, so to win a national award is just fantastic.”

“LiveWell has helped us to deliver weekly physiotherapy clinics, toolbox talks about healthy choices and a sitewide weight loss challenge that saw a combined total of 241kg lost.”

“Our latest initiative is called My Tucker Box Rules and we’ve created a great rivalry on site about who can prepare the best and healthiest lunch.” RP New Hope employees are making positive changes for their health

AMMA CEO Steve Knott (M) with New Hope Group safety and training coordinator, Stewart Sherrington (L) and managing director Shane Stephan (R)

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

OHS & WELLBEING

19

Sleeping operator

fails to win job back A mine site operator who slept for more than two hours during a shift has had his unfair dismissal application rejected by the Fair Work Commission after it was found his behaviour seriously breached safety policies and procedures.

The Mt Arthur Coal employee failed to inform his supervisor of the severity of his fatigue, fell asleep during two separate crib breaks, and neglected to report an oil leak on the machinery he was operating.

The company investigated the incidents and concluded the operator had breached a number of lawful and reasonable directions by his supervisor and procedures for fatigue management at the workplace.

Mt Arthur Coal has extensive fatigue management policies and procedures

in place to reduce the risk of a fatiguerelated safety breach, which require all employees to identify, monitor and report any fatigue issues.

In determining whether the dismissal was harsh, unjust or unreasonable within the meaning of the Fair Work Act, Commissioner Saunders considered that this was not ‘simply a case where an employee has fallen asleep during a night shift’ and found that the operator’s conduct amounted to serious misconduct warranting dismissal.

Commissioner Saunders remarked upon the seriousness of fatigue management and its effect on safety, highlighting that ‘in a mining environment where heavy vehicles are operating, often in relatively close proximity to one another, fatigue management is a

significant and serious matter’.

The Commissioner also concluded that had the operator complied with his obligation to notify the shift supervisor of the extent of his fatigue, the manager would have ‘managed the risk by implementing a measure such as giving [him] a fatigue break, sending him home, or rotating his tasks’.

AMMA employee relations lawyer Lindsay Carroll says the decision demonstrates serious breaches of an employer’s policies and procedures, including fatigue breaches, may give rise to a valid reason for dismissal.

“Employers should be mindful to ensure that investigation and show cause processes are carried our fairly and should seek advice before effecting a dismissal to mitigate the risk of litigation.” RP

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RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

20

OHS & WELLBEING

Drug disputes warn

employers of testing pitfalls Given the serious consequences of drug and alcohol impairment in the workplace, the Fair Work Commission recently issued separate warnings on pitfalls in best practice policies and procedures.

Danger in detection periods

A ruling involving a Coles supermarket employee who tested positive for cannabis after a forklift accident provides a warning for employers about providing information on drug detection periods when enforcing a ‘zero-tolerance’ policy.

The employee argued his dismissal without notice was unfair because he was advised during induction that the window of detection for cannabis when subject to oral testing was between three and six hours after consumption. He claimed he last consumed cannabis the evening before his attendance at work and well outside what he thought to be the detection period.

Contradicting this, however, a high THC reading from the laboratory indicated that consumption was much closer to the timing of the samples taken for testing.

Noting the information about the detection period did not provide an explanation for the breach of Coles’s drug and alcohol policy as it was given as an indicative guide only, Commissioner Peter Hampton said it was still a relevant factor to be considered.

“The information about the indicative detection window is relevant and information about how a policy will be applied, or the consequences of a policy provided by an employer to the employees, will generally

be a factor to be weighed into the overall assessment of a dismissal,” he said.

“There are potential dangers for an employer in providing information about detection periods to the extent that this information might detract from the zerotolerance message in the policy itself.

“It may also, depending upon the overall information actually provided, be misleading given the variations that exist between individuals and the unpredictable potency of various illicit drugs.”

Involvement of direct managers

In a separate ruling, Commissioner Michelle Bissett found an employee of Dorevitch Pathology was unfairly dismissed after refusing to undertake a urine drug test.

The sample was requested after the employee’s disgruntled neighbour told her employer that she was under the influence of drugs.

After Dorevitch’s HR manager and the employee’s direct manager requested the urine sample, the employee refused on the grounds that it was not appropriate for an immediate supervisor to collect the sample and that the procedure was not compliant with the chain of custody requirements in the company’s drug testing policy and the Australian/New Zealand Standard.

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

Although Commissioner Bissett was satisfied that Dorevitch had grounds for requesting a urine drug test from the employee, she was not convinced the company’s approach was best practice.

“I am satisfied that it is not best practice to take a urine drug sample from a person you work with and know and certainly not from a person you directly manage,” she said.

“I accept the process proposed by Dorevitch to take a urine sample and test for the presence of drugs was not in accordance with its own policy for drug and alcohol testing or the Australian/New Zealand Standard.”

Implications for employers

These decisions highlight the importance of clearly articulating a zero-tolerance drug and alcohol policy and the actions that will be taken in the event of a breach.

National resource industry employer group AMMA’s advice to employers is to ensure any information provided on drug detection does not mislead employees or detract from the zero-tolerance message.

Ensuring drug and alcohol testing procedures are carried out in accordance with the national standard and the company’s formal policy will also mitigate against costly legal action. RP

OHS & WELLBEING

21

Industry highlights

drug testing challenges Resource industry employers have provided rare insight into managing the rapidly evolving drug and alcohol testing landscape and the challenges that persist.

A recent survey of more than 50 resource industry employers reveals a range of trends and common concerns relating to managing the impacts of drugs and alcohol in the workplace, including the increased prevalence of drug use in general society, issues with managing transient workforces, and synthetic cannabis.

Australia’s resource industry employer group AMMA, undertook the survey which includes companies across hydrocarbons, maritime, construction, mining, mineral processing, exploration, commercial diving, drilling, subsea operations, transport, and support services.

The findings reveal key themes around drug and alcohol testing policies, their efficacy and challenges faced by employers.

Increased societal use of drugs

others, management adherence to following due process is a challenge.

While 65 per cent of respondents report taking a ‘zero-tolerance’ approach to drug and alcohol use, 26 per cent focus instead on ‘harm minimisation’.

“We will support employees who seek assistance in dealing with an alcohol and/ or drug dependency. We encourage all employees who may need help to use the company’s employee assistance program,” one respondent says.

Issues with contractor management

The overwhelming majority of respondents (96 per cent) include contractors as well as employees in their onsite drug and alcohol testing protocols.

“When testing is being conducted there are no exclusions – if you enter the site you are subject to the testing criteria,” one respondent says.

“Contractors are treated identically to employees,” says another.

This is not without its challenges, however, with some respondents citing difficulties in communicating the message and maintaining education and awareness in light of an often transient contractor workforce.

Numerous respondents cite increased societal use, and acceptance of prescription and illicit drugs as a particular challenge in managing workplace risks. The ability to allocate sufficient resources to conduct more testing in an environment where drug use appeared to be on the rise is a major concern.

Convincing employees to manage their lifestyle outside the workplace given it can impact on their ability to work safely is an ongoing challenge.

“We educate our employees, however, we cannot control what they do when they leave site at the end of the shift,” one YES respondent says.

Synthetic cannabis testing shortfalls

Only 40 per cent of respondents say they test for synthetic cannabinoids, with many doubting the efficacy of such testing.

“Testing is too difficult with only very limited numbers of accredited labs,” one company says.

Another describes the efficacy as ‘limited’ given the tests to detect substances could not keep up with the number of new synthetic drugs entering the market.

Other challenges facing resource employers include: • A ‘conflicting’ Australian Standards landscape with regard to urine or saliva testing from a practical, legal and sensitivity point of view; • Employees not realising the importance of declaring prescription medication; • Workers using masking agents or ‘fake’ urine samples to attempt to ‘beat the system’; • Issues around data privacy and confidentiality in testing and handling protocols; and • Measures to support employees with addiction.

For a full summary of the survey results, please email policy@amma.org.au. RP

ARE CONTRACTORS INCLUDED IN YOUR TESTING PROTOCOLS?

Consistent disciplinary outcomes

Ensuring disciplinary outcomes are consistently applied, fair and equitable is another key concern.

One issue is ensuring that any disciplinary measures imposed are commensurate with the risk posed by the substance, while for

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RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

22

TRAINING

Mancala trains

for overseas advantage When awarded a mine development contract in Vietnam, The Mancala Group set about training an unskilled workforce through an approach that would exceed expectations of the company, its client and community.

Winning a three-year underground mine development and production contract for Vietnam’s Asian Minerals Ban Phuc Nickel Mine in 2013 provided a coveted opportunity for The Mancala Group to extend its presence in the international market.

Although Mancala had previously been involved in challenging projects in Botswana, New Guinea, Fiji and Indonesia, the Ban Phuc project was a step up in scope and complexity.

What won the Australian mine services

provider the contract was not just its technical expertise, but its plan for skilled Australian expats to train local Vietnamese nationals for work at the remote site 220km west of Hanoi.

Carrying out the contract successfully held the promise of a ‘win-win’ for all stakeholders.

The Vietnam government would see the Ban Phuc project reopened after its closure five years earlier and remain resilient to a downturn in nickel prices.

For Mancala, it presented an Working near open holes training

opportunity to gain a competitive edge over other mine service providers in the region, while for about 100 Vietnamese employees, the agreement meant new skills and experience for their futures.

Nevertheless, language and cultural differences presented serious challenges.

“We were developing a workforce with virtually no underground experience to operate competently, safely and achieve high levels of performance in a relatively short time, and in a narrow vein mining environment where there is no shortage of hazards to be managed,” explains The Mancala Group’s executive director Bill Lannen.

“Discipline and tight control were key, and the national workforce thrived under these conditions.”

Adapting to culture

Right from the beginning, Mancala worked to ensure induction and training was adapted to the Vietnamese language and culture.

Relocating to Vietnam as the occupational health and safety manager, one of the first tasks for Warren Melville was to provide cultural awareness training for Australian on-site safety trainers, equipment maintenance trainers and professional mining staff.

“Most of the expat trainers were sourced from Australian projects with minimal overseas experience, so they were mentored on Vietnamese culture and behaviours by national interpreters and supervisors, and then adapted their own methods,” Melville says.

“We also developed training videos using the local workforce and focused on positive work behaviours and correct work practices right from the start. The diligence of the Vietnamese work ethic

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

TRAINING

Loader operator Nguyen Van Phong

meant they were very good at following instructions.

“The Vietnamese also tend to work well in small groups of two or three rather than a large group training situation, so we adapted to that and were very handson with much of the training process by showing practical demonstrations followed up with task observation.”

To traverse the language barrier, Mancala improved training via creative techniques that used images rather than the written word, with a sport analogy proving particularly effective.

“Soccer is very popular in Vietnam, so we explored a visual method using green, yellow and red cards to identify safety issues that could lead directly to injury or

AMMA CEO Steve Knott (M) with The Mancala Group’s project manager, Warren Melville (L) and executive director, Bill Lannen (R)

23

Ban Phuc first inductees underground

damage to equipment,” Melville explains.

“Positive behaviours were reinforced and progressed through weekly interactive safety meetings, daily pre-shift discussions of proactive safety behaviours and the showing of training videos adapted to local language and standards.”

Australian mining best-practice techniques were also used, such as teambased risk assessments and job safety analysis (JSA) – a method that breaks down a work task to identify the safest way to complete it.

“JSA’s were extensively used, especially as a way of specifically describing a task that many in the Vietnamese workforce had not experienced or completed before,” Melville explains.

Resounding success

Mancala’s adaptability to the Vietnamese culture coupled with the attitude and aptitude of national employees was a recipe for success.

By the end of the three-year contract, all training and safety goals were met with no lost-time injuries, while operating performance consistently exceeded production and development targets, earning Mancala a contract extension for the remainder of the mine life.

“We had hoped to achieve and maintain 80 per cent of Australian productivity within 12-18 months, however we reached this level in just six months,” Lannen explains.

“Ultimately, we met and exceeded Australian productivity levels. This was achieved without a lost time accident to date.”

As the recipient of AMMA’s 2016 Training and Development Award, Mancala was praised by the judging panel for providing a positive example of utilisation of a local workforce to deliver benefits for the company and the community.

“Our success in Vietnam in safety and training has not gone unnoticed, with several approaches from large national mining and construction companies seeking our involvement in their projects,” Lannen continues.

“There is a confidence within the group that we can duplicate this performance on other international projects and we are actively pursuing opportunities both in South East Asia and further afield.” RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

24

TRAINING

Bechtel hits the gas

on people development Engineering and construction manager for Wheatstone LNG, Bechtel, is bringing one of the most complex resource projects to life on the Pilbara coast. The company is also investing heavily in skills, leadership and supervisory training.

Currently at close to peak construction, 1200 craftspeople and 300 supervisory staff are working hard on Wheatstone LNG as the structural, mechanical and piping scope for the project’s natural gas trains comes together.

Managing the massive EPC contract is Bechtel, which has brought its contemporary experience in building all three onshore LNG facilitates for Queensland’s recently completed Curtis Island projects over to the west coast.

Understanding that success during this critical phase of construction is driven by the workforce’s skills and competencies, project manager Paul Marsden explains that significant investment has gone into leadership training and supervisory development.

“These are two areas that we’ve actively supported on Wheatstone and that we know are needed to underpin solid delivery,” Marsden says.

“More than 100 leading hands have gone through a one-day leadership

training program. The course integrates contemporary management theory alongside the use of some of Bechtel’s tools that are applied in the construction management space.

“Modules studied have included psychology of behaviours, leadership styles, conflict resolution, negotiation strategies, schedule and quantity reporting, and monitoring progress against our schedules and plans.”

At the supervisory level, Bechtel has placed 104 employees in a Certificate IV program delivered in conjunction with credited registered training organisation providers. The program is delivered on-site and utilises a combination of RTO trainers as well as senior construction leaders in the project who act as subject matter experts.

Marsden notes that these upskilling outcomes, while critical for the successful delivery of Wheatstone to project operator Chevron, are just as important for industry-wide outcomes as well as resourcing Bechtel’s next major contract.

Construction of Wheatstone LNG is seeing plenty of training opportunities

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

Paul Marsden

“My goal is that everybody should have a positive experience while working at Wheatstone, and ultimately, transition from the project with a greater skillset and knowledge base than when they arrived,” he says.

“So when people leave the project, they’ve been personally and professionally developed. Yes, it’s transient for the time that they’re on the project, but that time needs to be impactful in a very positive manner for the duration of the project and beyond.”

Bechtel is even offering its Wheatstone employees training on managing their transition out of the project’s construction phase, with lessons including interview training, CV writing, job-seeking tools, and other general advice.

“I’m truly passionate about employee health and wellbeing from that holistic viewpoint, and I work for a company that has this at the core of its values,” Marsden says.

“We’ve engaged the team after six months of running this program now and 89 per cent of those folks gave us positive feedback, and it’s really making a difference to them on their Wheatstone journey.” RP

TRAINING

25

Diverse approach to

new resources degrees Monash University associate professor Bre-Anne Sainsbury isn’t fazed by ‘end of the mining boom’ rhetoric.

The founding director of the university’s new resources engineering program is confident there will always be jobs in the resource industry.

“We’re never going to stop needing minerals – for technology and almost everything we use every day,” Sainsbury says while holding up her iPhone as an example.

“Renewable and alternative energy use is growing exponentially, but traditional coal and hydrocarbon energy sources will be required long into the future to meet our ever-growing energy demands.”

Undergraduate degrees offered in the new program include renewable energy

engineering, oil and gas engineering, geological engineering, and mining engineering.

Newcrest Mining, MMG, Woodside, Orica, CSIRO and other companies including renewable energy firms are all involved in development and delivery of content.

Sainsbury is also excited about the multidisciplinary nature of the new degrees.

“It’s a new way of teaching, in that we’re embracing and including all engineering and STEM disciplines,” she says.

“We’re delivering course content from each engineering department at Monash, and across several other faculties, dipping into their science and business expertise.”

Chair of the Monash’s Mining and Resources Advisory Board and former

Newcrest Mining executive Debra Stirling, was involved in developing the Resources Engineering program, having previously helped establish a mining engineering program in 2013.

Stirling says the new course structure is aligned with a key objective to give students the opportunity to develop professional networks and secure jobs before they graduate.

“We’re definitely giving the students a practical skill set so that they can hit the ground running,” she says.

“Essentially, we want to ensure they’re job ready, with a real understanding of operating in a global environment with multiple factors to consider. That’s what industry is looking for.” RP

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www.hwholdsworth.com.au RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

26

DIVERSITY

On track

for diversity Faced with the dilemma of increasing workforce diversity in roles that overwhelmingly attract male applicants, the Australian Rail Track Corporation approached recruitment for its Hunter Valley operations differently, and got a very different result.

OPERATING an 8500km rail network across five states, the Australian Rail Track Corporation (ARTC) facilitates the movement of resource commodities including coal and iron ore, as well as general freight, agricultural products and bulk material.

In early 2014, after having invested significantly in network upgrades and extensions, the company sought to capitalise on its investments by enhancing relationships with customers and stakeholders.

Developing a diverse, innovative and engaged workforce was identified as integral to fostering communication with customers and community, but the workforce stats didn’t stack up.

By mid-2015, ARTC’s female workforce participation rate had remained stagnant at 17 per cent for 18 months. It was clear something needed to change.

At that time in the New South Wales

Hunter Valley, where ARTC is rolling out a strategy to optimise coal throughput, there were no female signal/installer certifiers and just one female infrastructure maintainer in its workforce.

“We had attempted to attract females to these positions through general advertising means without success, with just one female application received out of more than 570 in early 2015,” explains ARTC’s executive general manager of

We were initially surprised that advertising for females only would attract so much attention – but did it ever.

ARTC is aiming for woment to comprise 25 per cent of its workforce by 2019

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

people Jenny McAuliffe.

“It was clear this method was not going to result in a meaningful increase in female employee participation rates.”

Female-only recruitment

With a key focus of its diversity and inclusion strategy to improve gender balance within non-traditional female roles, ARTC successfully obtained a twoyear exemption under section 126 of the NSW Anti-Discrimination Act to designate and recruit females for 14 entry-level field worker positions.

“Our application to the antidiscrimination board had to be welljustified as there are a lot of people, especially in the regional areas where we recruit, that are looking for job opportunities,” McAuliffe says.

“We had to convince the antidiscrimination board that this wasn’t just

DIVERSITY

27

ARTC gained an anti-discrimination exemption to recruit women for field positions in the Hunter Valley

200 women attended ARTC’s Musellbrook careers information session

something we were doing on a whim but that we had tried other ways to recruit women and hadn’t been successful.”

Once the exemption was obtained, ARTC set about working with an external advertising company to develop a comprehensive recruitment campaign, which was launched in September 2015 to coincide with Australasian Rail Careers Week.

Initially, six Hunter Valley positions were advertised across print and online media.

In a first for ARTC, social media played a central role in getting the word out.

Videos featuring existing female ARTC employees in field-based roles was promoted across the company’s website, YouTube and Facebook pages.

Media were understandably drawn to the story of hiring women for maledominated roles, and the ARTC used the attention as fuel to spread the message that the rail industry was not just for

men, but that it could provide long-term meaningful careers for women.

“We made it clear that it was not necessary to have any formal qualifications or skills to join the industry and that on and off-the-job training could be provided,” McAuliffe says.

“We were initially surprised that advertising for females only would attract so much attention – but did it ever.”

Prior to recruitment, an information session was held at the company’s provisioning centre in the Upper Hunter town of Muswellbrook, attracting about 200 women. Frontline staff spoke directly with women about what the roles entailed and a BBQ lunch was provided with kid’s activities to create a family friendly environment.

If the ARTC had ever doubted its approach to female-only recruitment, the more than 900 applications received for the six positions soon put those doubts to rest.

“All applicants went through an assessment centre which had previously been utilised to fill the same kind of roles with male applicants,” McAuliffe explains.

“This was seen as important for the females to be accepted into the workplace and remove the view that they got an easy recruitment ride into the positions.” »

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

28

»

DIVERSITY

Due to a number of strong applicants, 11 positions were filled with the successful candidates commencing in January 2016.

“The campaign assisted ARTC to increase our overall female workforce percentage from 17 per cent to 19 per cent,” McAuliffe says.

“Furthermore, 9.6 per cent of employees in field-based roles within the Hunter Valley are now female, up from 1.1 per cent in June 2015.”

Cultural change

Along with the benefit of increasing female workplace participation rates, the campaign changed the culture for considering flexible working options for non-traditional roles.

“Managers of the infrastructure maintainer positions were able to analyse

the requirements of the role and came to the determination that it was feasible for the positions to be worked on a flexible basis,” McAuliffe says.

“As such we were able to advertise the positions as having flexible options available, including part-time and jobshare arrangements. This culture is carried through for all infrastructure maintainer roles, not only those allocated to the female exemption.”

To support diversity over the longterm, female uniforms were sought and each provisioning centre was reviewed to ensure appropriate bathroom facilities were available.

Managers and employees also undertook a variety of unconscious bias and emotional intelligence training, and the company made sure the recruits were

never the sole female within a team.

With all women employees retained, the ARTC is confident it is on the right track to achieve its goal of 25 per cent female participation by 2019.

Reinforcing its efforts, the company was this year named winner of the workforce diversity categories at both the Australian Rail Industry Awards and the Australian Mines and Metals Association’s Industry Awards.

“The initiative has provided a very positive step forward in ARTC’s diversity journey and working towards not only a greater gender balance, but the creation of a workplace culture more understanding and accepting of diversity,” McAuliffe says.

“We’ve set a target that we believe is reasonable. We’re not there yet but we’re making sure that our customers know we’re part of the diversity journey.” RP

More women to

benefit from e-mentoring Hundreds of women are set to benefit from an innovative online mentoring program developed to help boost gender diversity in the resource industry.

The Australian Government has extended its funding for the Australian Women in Resources Alliance (AWRA) e-Mentoring Program, with an additional $490,000 to ensure the successful initiative continues until at least mid-2018.

The program, facilitated by resource industry employer group AMMA, has already connected more than 200 women with experienced male and female mentors thanks to ongoing support from the Commonwealth since 2013.

AMMA director Tara Diamond says the funding will support the resource industry to be more competitive through workforce diversity.

“Australia’s resource industry is

heavily male-dominated, with women comprising 15 per cent of the national workforce compared to 46 per cent across all industries,” Diamond says.

“As the only national program offering mentoring to women via an online platform, AWRA e-mentoring is breaking down the barriers that in the past have prevented some women receiving valuable professional guidance, such as remote locations and non-traditional work schedules.

“The program will continue to be a critical part of the resource industry’s multi-faceted approach to support the career development of women across multiple occupations, particularly technical and trade roles in which women have been traditionally underemployed.

“A key focus for AWRA throughout the next two years will also be to facilitate greater mentoring

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

opportunities for women from culturally diverse backgrounds, including Indigenous Australians.”

Minister for Employment and Minister for Women Michaelia Cash, says the government is committed to backing private sector initiatives that support women to succeed in traditionally maledominated roles and industries.

“To truly empower women’s workforce choices, we must remove barriers for women to enter and succeed in traditionally male-dominated industries, such as the resource industry,” Minister Cash says.

“I congratulate AMMA on this program, which is supporting women to succeed in a male-dominated industry and promoting greater choice and opportunity for Australian women.”

If you are interested in being an AWRA mentor or mentee, visit awra.org.au. RP

30

DIVERSITY

Women’s wage growth

strong but pay gap remains average of 16.2 per cent,” director of the Australian Women in Resources Alliance (AWRA) Tara Diamond says.

“Importantly, the resource industry is making some progress toward closing this inequality, with the current pay gap being

0.9 percentage points better than May 2015 (19.6 per cent).

The data (see graph below) also shows how the resource industry stacks up to other sectors of the Australian economy as of May 2016. RP

GENDER PAY GAP COMPARISON

35 30 PAY GAP (%)

As a sign that more resource employers are taking steps to address pay imbalances and promote women to leadership positions, women’s average earnings increased 3.4 per cent in the year to May 2016 and 9.8 per cent during the past two years.

This outpaced earnings growth for men of 2.2 per cent and 2.9 per cent respectively, according to the Australian Bureau of Statistics.

The resource industry is on average the highest paying Australian industry for both male and female full-time employees. However, the gender pay gap remains a challenge.

“Full-time male resource employees are taking home on average $2659.50 per week compared to $2162.60 for full-time women. This equates to an 18.7 per cent pay gap – slightly higher than the national

30.2

25

24.6

23.5

23.5

20 15 10

19.3

18.7

15.5 12

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7.1

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l n s) te ce ce ort ste ety ing ica sta ctio rce ran tan pp wa hn saf tur e u u s u u c r c i l t s s o s & & a e f s In ns & rea &t l as ter nu Re ion Co l& cia wa tive g( rat ific Ma g& t t o , a cia n n s r s i s i n i t n n ir e n a ga nis sci Mi e& mi l, h Fin mi ity, ad al, car d c nta i n c r A e i h t R c bl sio alt Pu Ele fes He Pro

Shell exec named

exceptional woman in resources Shell Australia vice president commercial Cecile Wake has been named ‘Exceptional Woman in Australian Resources’ as part of the 2016 Women in Resources National Awards.

The judges were impressed with Wake’s career journey, which included seven years working on some of Queensland’s leading resources projects as well as her international oil and gas experience. She has also played a significant role in promoting women in the resource industry.

Other award winners announced at the Adelaide dinner hosted by the South

Australian Chamber of Mines and Energy (SACOME) include: • Exceptional Young Women in Australian Resources: Jasmine Richards, senior environmental adviser, OZ Minerals • OZ Minerals Gender Diversity Champion (male or female) in Australian Resources: Michael Schoch general manager – Crux Project, Shell Australia Pty Ltd • Excellence in Company Programs and Performance: Aurizon • Glencore Outstanding Australian Tradeswoman, Operator or Technician:

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

Kelly Jane Down, safety and training officer, Bell Bay Aluminium. RP Shell’s Cecile Wake won ‘Exceptional Woman in Australian Resources’

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.

32

MEMBER NEWS

In Brief: People and projects A snapshot of news and milestones across the Australian mining, oil and gas sectors.

Roy Hill partners for Aboriginal kids health Roy Hill Community Foundation has partnered with Perth Children’s Hospital Foundation to fund a worldfirst health initiative to identify rare diseases and syndromes for Aboriginal children in the Pilbara.

‘Pilbara Faces’ will build the world’s first resource of 3D photographs of Aboriginal children’s faces – a unique knowledge base to assist in medical diagnosis, treatment monitoring and clinical research.

The non-invasive test and analysis takes just 20 minutes and will give

families a new way to find answers for children with long-standing and often multi-system disorders.

Roy Hill Community Foundation has contributed a three-year donation valued at $298,000.

Roy Hill CEO and chairman of the foundation management committee Barry Fitzgerald, says the program will bring countless benefits now and in the future.

“In the short-term, it may reduce the need for a Pilbara family to travel from their remote community to a regional

Woodside buys stake in Scarborough Woodside has acquired 50 per cent of BHP Billiton’s interest in the underdeveloped Scarborough gas fields, located in the Carnarvon Basin about 300km offshore from Western Australia.

BHP Billiton and ExxonMobil had each held a 50 per cent interest in the Scarborough gas fields. Under the transaction, ExxonMobil will remain operator of Scarborough and operatorship of North Scarborough will transfer from BHP Billiton to Woodside.

The acquisition comes at a cost of US $250 million with a further US $150m upon a final investment decision to

develop the Scarborough field.

The Scarborough area assets are estimated to contain gross 8.7 trillion cubic feet of gas resources. Woodside’s net share is estimated to be 2.6 trillion cubic feet of gas.

Woodside CEO Peter Coleman says adding Carnarvon Basin volumes to the Australian portfolio complements Woodside’s growth strategy.

“We look forward to working with ExxonMobil and BHP Billiton following completion of the transaction to progress commercialisation of these world-class resources,” he says. RP

The Scarborough acquisition boosts Woodside’s portfolio, which includes the North West Shelf LNG project (pictured)

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

hospital or even Perth for diagnosis,” Fitzgerald says.

“There is great potential for this program to enable a quicker and cheaper diagnosis in a far less invasive way.” RP

Downer scoops contracts worth $250m Downer Blasting Services (DBS) has been awarded three contracts for the supply, manufacture and delivery of explosives and down-the-hole blasting services. The contracts are all for multiple years and include works at Newmont Asia Pacific’s Boddington gold mine, Karara Mining’s Karara site, and Grange Resources’ Savage River mine site.

DBS has been providing blasting services at Karara since 2012 and at Savage River since 2007.

Downer has also been awarded an underground mining contract at Newmarket Gold’s Fosterville Gold, which includes providing ground support services and related mining services.

In addition, Waanyi ReGen (WRJV), a 50:50 joint venture between the Waanyi Prescribed Body Corporate and Downer’s ReGen business, has been awarded a three-year contract covering water and land management and erosion prevention activities at the Century mine site. RP

Adani mine approval upheld The Federal Court has upheld former federal environment minister Greg Hunt’s approval of the Carmichael coal mine in Queensland’s Galilee Basin, in which project owner Adani says reinforces the stringency of the strict, science and evidence-based federal environmental approval process governing the mine.

“Consistent with earlier decisions of Queensland’s Land Court and the Federal Court affirming the company’s approvals, the Federal Court has determined that due process has been followed,” Adani says.

“At their core, these challenges have been about stopping investment and jobs as part of a wider activist campaign against mining.

“As has been consistently pointed out, these projects will supply better quality coal for increased thermal coal demand, in conjunction with significantly increased solar demand, in a growing Indian economy that will lift hundreds of millions of people out of energy poverty.”

Pending the resolution of a small number of outstanding legal challenges, the company has flagged construction to commence in 2017. RP

Main power generation start-up at Ichthys The Inpex-led Ichthys LNG project has reached a key milestone with both its central processing facility (CPF) and floating production, storage and offloading (FPSO) facility safely starting up their main power generators in the South Korean shipyards where they are being constructed.

Ichthys project managing director Louis Bon says starting up the main generators of the FPSO and CPF allows the commissioning to further progress by providing the required power for both massive offshore facilities.

“These milestones have been safely reached thanks to the highest safety standards being implemented on the project and the technical skills of teams on site and supporting from Perth,” Bon says.

The CPF and FPSO will be permanently moored for 40 years of operation in the Ichthys Field, located in the Timor Sea about 220km off the Western Australian coast. RP

Power generators have started up at Ichthys

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

34

POLICY

POLICY AT a glance A wrap-up of recent resource industry and employment policy developments by AMMA head of policy, Scott Barklamb.

ANNUAL LEAVE AWARD

FWC CLARIFIES ‘OTHER BREAKS’

CHANGES NOW IN EFFECT

The Fair Work Commission has clarified the meaning of ‘other breaks’ under the Fair Work Act for the purposes of union right of entry provisions.

In CFMEU v BHP Billiton Nickel West, the union lost in its bid to have two officials legally enter the site ‘to hold discussions with workers before or after their shift, provided the discussions are held within the working hours of the premises’.

The contention between the parties was the meaning of ‘other breaks’, which the CFMEU asserted included periods before and after the workers’ shifts. The FWC ruled against the union, clarifying permit holders have a lawful right to hold discussions in breaks that occur during the working day, not before or after, and only during those breaks which cause the least disruption to the employer’s business.

Numerous modern awards have now been varied to include new arrangements for the cashing out, taking and payment of annual leave.

All but nine modern awards now allow an employer and employee to agree in writing to the cashing out of up to two weeks’ paid annual leave each year by an employee. Similarly, all but nine awards now allow an employer and employee to agree in writing to the employee taking a period of paid annual leave before the employee has accrued that leave.

Another clause relating to excessive leave accruals allows an employee to give notice to the employer that they will take a period of leave from their excessive balance, only after the employee has genuinely tried and failed to reach an agreement with the employer about taking leave.

GOV PROPOSES $10M

Scott Barklamb

FRACKING BANNED IN VICTORIA

In a damaging move for the state’s energy sector, the Victorian Labor Government will impose an ongoing ban on the exploration and development of all onshore unconventional gas in the state, including hydraulic fracturing and coal seam gas, until 2020.

It will also legislate to extend the current moratorium on the exploration and development of conventional onshore gas until June 30, 2020.

SECONDARY BOYCOTT PENALTIES

The federal government is seeking to amend the Competition and Consumer Act 2010 to significantly increase maximum penalties for secondary boycotts. The exposure draft legislation takes up the Harper Review recommendation for the maximum penalty applying to secondary boycotts to become the same as that applying to other breaches of competition law.

This would be up from a current maximum of $750,000 to become the higher of $10 million – three times the total value of the benefit obtained from the secondary boycott – or 10 per cent of the annual turnover of the corporation.

AMMA is calling on the government to prohibit unions from using enterprise bargaining to restrict the use of contracting and labour hire arrangements, at the same time as it increases penalties for illegal secondary boycotts.

FULL BENCH UPHOLDS COAL AGREEMENT TERMINATION

The Australian Manufacturing Workers Union (AMWU) has been unsuccessful in appealing a Fair Work Commission decision upholding the right of a coal sector employer to terminate an enterprise agreement.

The Full Bench upheld the original commissioner’s decision, which agreed with Griffin Coal’s evidence that its enterprise agreement significantly impaired its ability to operate productively and efficiently, and contributed to exorbitant production costs resulting in significant losses to the company throughout a number of years.

This decision is useful in further clarifying the considerations that will apply when an employer is seeking to terminate an enterprise agreement on operational and costs grounds.

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

NEW WORKPLACE BULLYING GUIDES RELEASED

Safe Work Australia has published revised guides to help employers and workers prevent and respond to workplace bullying.

The guide for employers, which can be downloaded from Safe Work’s website, provides information on how to manage the risks of workplace bullying as part of meeting their duties under work health and safety laws.

Topics covered include improving transparency when dealing with reports of workplace bullying, demonstrating management commitment when identifying, preventing and responding to workplace bullying, designing safe systems of work to reduce the risk of workplace bullying, and unlawful discrimination. RP

The Fair Work Commission has clarified the meaning of ‘other breaks’...

POLICY

35

High Court rules on offshore visas The High Court of Australia has ruled that foreign nationals on vessels supporting resources activities in Australian waters are required to hold a work visa.

Handed down on 31 August 2016, the judgement supporting the maritime unions’ challenge to an earlier ministerial determination regarding offshore migration arrangements took effect immediately.

Under the determination, non-citizens on vessels supporting offshore resources activities had been exempted from requiring a work visa.

As a consequence of the judgement, non-citizens currently working in Australia under the previous exemption are now required to hold either a Subclass

457 Temporary Work (Skilled) visa or a Subclass 400 Temporary Work (Short Stay Activity) visa.

AMMA head of policy Scott Barklamb says that with most of Australia’s offshore resource projects having moved beyond peak construction, the immediate impact of the decision is not as pressing or widespread as it would have been two years ago. However, there will be some immediate inconveniences and there are broader concerns for the industry.

“The longer term concern lies in the cumulative impact of additional regulatory costs on Australia’s competitiveness as a resource economy,” he says.

“Making the employment of such

New visa rules apply for offshore resources work

workers more regulated, more costly and more difficult in Australia than it is in competing resource economies will have consequences, and will make it even harder to bring future resource investment to Australia.

“AMMA will continue to work to ensure sensible migration arrangements are in place to support the development of future resource projects in Australia.” RP

research shows need to

reinstate construction watchdog

A Menzies Research Centre report has made the case for the ‘urgent reinstatement’ of the Australian Building and Construction Commission (ABCC), citing evidence that suggests excessive wages and disruptive working practices typically increase the cost of construction in Australia by 20 to 35 per cent.

In Constructing a Better Future: Restoring order and competition in the building industry, the centre says anticompetitive behaviour is the biggest obstacle to increasing productivity in the sector.

“In the large-scale construction industry, anti-competitive behaviour thrives, particularly in its labour practices,” the report reads.

“Unconstrained union power is stifling competition by imposing pattern enterprise bargaining agreements across entire projects. These

agreements lock in inflated wage costs unrelated to productivity.”

The report analyses the effectiveness of the ABCC and the cost of is abolishment.

“As a starting point, days lost to industrial action have increased by 34 per cent since the ABCC’s abolition.

An independent economics report observed that during the years the ABCC was active, labour productivity in the building and construction industry out-performed that of other industries by 21.1 per cent,” it says.

The report calls for a reduction in the cost of construction by an ‘eminently achievable’ 10 per cent – a saving achieved by the ABCC in its first incarnation – which would save $5 billion on the federal government’s planned infrastructure spending.

A leading advocate for the return of

the ABCC, AMMA head of policy Scott Barklamb is urging senators to vote up legislation to reinstate the former powers of the ABCC. “The proven mechanism to break down this toxic culture, to stop the bullying, intimidation and illegal conduct, and to empower employers to stand up against pattern agreements, is to properly enforce our industrial relations laws through a dedicated and empowered enforcement agency,” Barklamb says.

“Senators have an opportunity to bring back the ABCC, with coverage extended to offshore resource construction – an area of massive further potential for Australia.

“It is in the interests of all Australians, and our aspirations for a safe, healthy, smart and employed Australia, that they do so.” RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

36

POLICY

Top legal minds

tackle Fair Work challenges With Australia’s workplace relations laws creating headaches for resource employers and legal practitioners alike, the 2016 AMMA National Conference assembled a panel of top minds to tackle the big questions about working within the Fair Work Act and future prospects for reform.

THE biggest challenge with the former Labor government’s heavily re-regulated employment legislation, according to one of the nation’s top workplace relations lawyers, Henry Skene, is that it is ‘very much tied to past models of work’.

“I don’t think the Fair Work legislation reflects how businesses now work, and it doesn’t reflect how people now work,” says Skene, partner at Melbourne firm Seyfarth Shaw.

“It makes some default assumptions about how those arrangements ought to be regulated that are wrong.

“Businesses across the labour market are confronted with a need to change, however, the capacity to actually review existing terms and conditions that were set in very different market contexts is very limited under the current regulatory framework.”

Karen Bradshaw, human resources director at mining services company Bis Industries, agrees that businesses capacity to be nimble and change is being hampered.

“One of the big challenges that we face is that there’s been a real correction in the resource industry with falling

Simon Billing

commodity process, and a lot of our customers are having to rebase their costs,” Bradshaw says.

“As a service provider to a lot of the resources companies, we’re partnering in this process and trying to improve our efficiency.

“My reflection on the Fair Work legislation is that it’s aimed for steady state. When you have changes and particularly prolonged changes, trying to rebase your costs quickly and effectively has been very challenging.”

Simon Billing is partner and leading workplace relations lawyer at Perth’s Corrs Chambers Westgarth. He believes the political environment will ‘produce very little’ in the way of reform and that employers instead need to find new ways to deal with the system they’ve got.

“There might be some minor tweaks to the system that hopefully would be helpful, but we’re dealing with the rules as they’re currently are,” Billing says.

“There are definitely opportunities for business, but it requires leadership, engagement and communication. Where leaders have stepped into the space and embraced direct engagement with their people, and sold the message about what they need to be doing in their business, they have actually achieved important change within the current rules.”

Nonetheless, there are clearly areas in which the federal government should pursue change, according to the panellists.

Billing recognises the current bargaining system is far too complex and rigid, creating ‘huge transaction costs’ for employers, a point not lost on Bradshaw.

“We talk a lot of the enterprise agreements that were entered into during the resource industry’s ‘boom times’,” she explains.

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

Karen Bradshaw

“There are a lot of things that are now bagged into agreements that don’t pertain directly to the employment relationship and that really do restrict the ability of employers to respond flexibly to change.

“A good example is restrictions on the ability to engage contractors. When you’re needing to be flexible in those operational areas, having those restrictions can have a huge impact on businesses.”

Skene agrees with Billing that businesses find a way to achieve change ‘regardless of the legislative framework’, but says the Fair Work Act gives ‘small groups of people (such as) unions, a disproportionate voice’.

“A lot can be done to redress that imbalance without needing to discard the system,” Skene says.

“I might be optimistic, but I’m hopeful that we will have a better political environment than we’ve had in recent times to deal with those regulatory issues. We certainly have a commercial environment where it’s becoming overwhelmingly important.” RP

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

38

LEADERSHIP

Adaptive leadership drives

innovation, says Broadspectrum boss

As head of a company employing 25,000 people, servicing 18 industries and operating across nine countries, to say Graeme Hunt’s leadership style must be universally effective is quite an understatement.

When asked about what drives his company’s continued strong performance, the Broadspectrum CEO doesn’t revert to operational matters across the resources, property, transports, industrial, telco or defence sectors, but rather starts with the common element – its people.

“Managing people is what some call the ‘soft stuff’, but our human capital is actually the hardest stuff to manage in my experience, and is critical to sustainable performance,” Hunt says.

“It can also be the most rewarding thing that we do as executives.

“Understanding our people, the measure of the economic value of our workforce, and evaluating employee skill sets has occupied a large part of what my leadership team has been doing during

Broadspectrum employs 25,000 people across nine industries

the last few years.”

To survive and indeed thrive in what he describes as a ‘dynamic and challenging environment’, Hunt believes the most universally important attribute is creativity.

Not only does he motivate Broadspectrum’s people to innovate and adapt at the operational level, Hunt also explains the importance of ‘adaptive leadership’ in today’s evolving marketplace.

“Adaptive leadership is about knowing when you are in new or uncharted territory and then determining how best to respond,” explains Hunt, whose background in mining extends some 30-odd years.

“Recognising when you are in this situation becomes an essential skill because you cannot rely on what you’ve done in the past – that’s too often inadequate or just plain inappropriate.”

To demonstrate his point, Hunt speaks of the shift in the mining services sector from traditional ‘cost-plus contracts’ to fixed fees for service.

“Under cost-plus, the commercial model actually encourages you to be inefficient, because the more it costs to deliver a service, the more you get paid,” he continues.

“Under a fixed fee, it’s the exact opposite.

“Getting leaders to understand that change, to behave appropriately and to drive their teams for that change is not an easy task when they have been rewarded under that old paradigm for such a long period of time.

“Adaptive leadership is about expecting and embracing the constant disruption that’s around us. This is what breeds agility.”

As a large service provider, Hunt says Broadspectrum has a significant role to play in helping transform the resource industry.

This includes increasing the industrial

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

Graeme Hunt

capabilities available to producers, working with operators to develop more efficient commercial arrangements and reduce costs, and creating ‘win-win’ scenarios.

Hunt also sees opportunities for Broadspectrum to drive industry engagement and collaboration.

“We’re trying to see how we can integrate services where we often operate in similar environments for completely different clients,” he says.

“For example, in the coal seam gas sector in Queensland, we’re operating for a number of clients in the same geography.

There is a great opportunity for us to provide better solutions if our clients are prepared to cooperate with each other, and to achieve that we need early engagement.

“So we’re trying to drive more innovation to deliver a better service, and we’re very open to the idea of this being a continuing journey.

We’re looking for lean-based activities, smart labour solutions and embedded technology to make a difference.” RP

40

LEADERSHIP

Orica goes

back to basics In less than two years as CEO of Orica, Alberto Calderon has led a ‘back to basics’ review of everything from operating systems to culture, with the aim to create a leaner company that is better prepared for future upturns.

SINCE being appointed Orica’s managing director and CEO in May 2015, Alberto Calderon has wasted no time addressing the challenges faced by the explosives and blasting systems provider.

Through business improvement and savings measures implemented in response to tough market conditions, Calderon was able to announce $52 million in net benefits as part of the company’s half-year 2016 results.

“We have taken decisive action at Orica to control those elements that we can.

Our forecast is to deliver benefits of $70$80m by the end of this financial year,” says Calderon, a former BHP Billiton executive.

“At the same time, we have continued to strengthen our contract profile, locking in volumes through the down-cycle for better certainty.

“Last year, in response to a continued oversupply of ammonium nitrate in Australia, we rationalised our supply from our Yarwun operation in Queensland to effectively balance the Australian east coast supply.”

Orica employee loads a booster down a blast hole

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

Alberto Calderon

LEADERSHIP

Part of Calderon’s approach also involved re-establishing the company’s Minova ground support business with a view to target new markets, saying Orica had learnt from a previous decision to close the businesses sales division.

“This significantly affected our ability to compete in the profitable ‘non-mining’ natural market for Minova, and while we benefitted from the cost reduction in the short-term, it actually destroyed value.

And trust me, rebuilding value is harder than maintaining it,” he says.

The starting point for Orica’s growth, in Calderon’s view, is to go ‘back to basics’, turning the company’s attention to a stringent and disciplined approach to capital management.

“Now, more than ever before, we have to ensure that every dollar invested in the business delivers a satisfactory return,” he says.

“For our people, this heralded the reintroduction of discipline and rigour as baseline expectations throughout Orica.”

Launched last year, a new operating

model is delivering greater visibility to every part of the organisation through common processes, systems and data in what Calderon expects will unlock the value of Orica’s ‘unrivalled manufacturing network’.

“We have people in more locations than anyone else – some 450 mine sites across every type of market and operation. We undertake around 1500 blasts around the world, every day. This means we have an expansive ‘big data’ collection and knowledge base that can be fully leveraged to link customers’ sites and regions and enable the very best in knowledge transfer,” he says.

“We see this as a key differentiator for us and continue to leverage it further by investing around three times more than our competitors in research and development.

“We consider this investment necessary and can demonstrate how this leads to improved productivity for our customers through advanced blasting services, data recording, management and analysis for optimal

41

productive blasting results.”

In the end, however, Calderon understands that all this is wasted without the right people and culture.

“Initially, the focus was getting the right people in the right roles to support our new operating model. In a little more than 12 months, we refreshed our senior leadership team. In fact, around 60 per cent of our senior leadership team is new, either to the organisation or to their roles,” he says.

“Culture is a priority for me and my leadership team. We want to build an organisational culture that is a magnet for the best people and the best ideas, and one that reflects the appropriate values and behaviours in our interactions with each other, and with our customers.”

Although he sees some stabilisation in the mining sector, Calderon stops short of calling the end of the market downturn.

“We are still operating in fragile times,” he says.

“But we are confident that we are focusing on the right things for both the downtimes and the up-cycle, when it comes.” RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

42

LEADERSHIP

‘Ideas boom’ must

embrace mining: Costello Former Howard government treasurer Peter Costello has defended the resource industry’s role in Australia’s innovation agenda and warned against labelling mining as an ‘old economy’ industry.

The chairman of Australia’s Future Fund recently spoke of how at the turn of the century, mining was considered ‘in the doldrums’ before it experienced an unprecedented investment boom that now sees the industry generate 50 per cent of Australia’s exports.

“The view that we needed to chase technology to restore the currency could not have been further from the mark,” Costello says.

“The dollar would double. It had nothing to do with technology. It

was that old ‘hamstring’ – the mining industry – that recovered and sprinted off, taking the Aussie dollar with it.”

Arguing that Australia’s ‘ideas boom’, as coined by Prime Minister Malcolm Turnbull, should not be a case of tech versus mining, Costello uses ride-sharing app Uber as an example of how digital innovations can enhance industries rather than replace them.

“This kind of innovation has already transformed mining. Mining today does not involve a man climbing down a deep shaft to dig out rock with a pickaxe,” he says.

“State-of-the-art mining comprises an open-cut mine where automated trucks run from global positioning satellites and carry production to driverless trains,

which carry it hundreds of kilometres under operation from a control-room using sophisticated software and GPS.” “The ‘new’ technology has re-organised many aspects of mining and enhanced productivity. It has not replaced it.

Costello warns that the real threat to mining is growing environmental activism.

“The enemies of mining thrive at the theatre of public debate. Miners tend to avoid it, which means that although the mining industry has a good story to tell, it rarely tells it as well as it could,” he says.

“In the clash of ideas to influence public opinion and through that, the actions of lawmakers there will be a constant need to argue the case for mining over and over. It’s a cost that is not going to fall any time soon.” RP

Ombudsman warns advisers

over workplace breaches The Fair Work Ombudsman (FWO) is taking a tough stance against human resources and employee relations personnel who are found to have played a role in company breaches of workplace law.

“In the case of workplace laws, if you are involved in facilitating a breach of the law, you are personally at risk of being found to be an accessory,” Natalie James of the FWO says.

“The Fair Work Ombudsman always carefully considers the role of individuals in breaches of workplace laws, and considers whether any enforcement action should be extended to them.”

James says the FWO is increasingly using section 550 of the Fair Work Act, which extends responsibility to others

who are involved in a contravention, to ensure that ‘someone is held to account’ when vulnerable workers have been deliberately exploited.

Last financial year, 46 out of the 50 matters the FWO filed in court sought orders against accessories. This was up from 36 out of 50 the year before.

“Accessories have included human resources staff, administration or day-today managers, staff engaged to assist with recruitment and supervision, and other companies involved through a supply chain for franchise network,” she says.

“When do we consider such personnel should be held legally accountable? We consider the part they have played, the conduct that has led to underpayment of

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

employees and, as is always case, whether the conduct was deliberate.”

The FWO has also changed its approach of not seeking to recover back pay from an accessory. The first person to experience this new approach was a former director of a now wound-up Queensland security operation who was ordered to pay a penalty of $51,400 as well as personally repay eight employees almost $23,000 in lost wages. RP

Last financial year, 46 out of the 50 matters the FWO filed in court sought orders against accessories.

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INNOVATION

Compass

transforms village life The award-winning ‘Village Life’ initiative is raising the bar on the traditional mine site accommodation experience.

COMPASS Group was already at the top of its game before it embarked on its Village Life concept.

Through its offshore and remote sector subsidiary ESS, the company is a major provider of food and facilities management services to the resource industry.

“We just knew there was a better way,” Compass Group’s executive director, offshore and remote John Sheridan explains of the company’s motivation.

“So we ended up challenging the established norms and traditional perceptions of mine site accommodation.

We wanted to discover what really mattered to customers.”

In developing a concept that would enhance resident quality of life, Compass

AMMA CEO Steve Knott with Compass Group’s executive director – offshore and remote, John Sheridan

Room ambience contributes to residents’ quality of life

The reason wall reminds residents of the importance of staying safe at work

We ended up challenging the established norms and traditional perceptions of mine site accommodation.

We wanted to discover what really mattered to customers.

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INNOVATION

45

A variety of quality food choices are important to FIFO workers

Group undertook surveys, interviews and focus groups with residents at a crosssection of ESS sites throughout Australia.

Going a step further, the company partnered with Edith Cowan University in a formal research study investigating the evolving needs and expectations of fly-in, fly-out (FIFO) workers and the impact of village services on fitness for work and the attraction and retention of key personnel.

“What came back was a pretty high level of consensus on what was important to a FIFO worker,” Sheridan says.

“It came down to quite specific things that we could develop Village Life around such as food choices, internet connectivity, room ambience, sport and recreation options.”

Compass knew that the key to fostering a safer, more engaged and productive workforce was to create a shared sense of community – something Sheridan admits doesn’t always come easy.

“Creating community is challenging because it depends on a combination of

inputs that all need to align,” he says.

“Some aspects can’t be controlled, such as whether a dining area or tavern overlooks a beautiful landscape. However, creating a welcoming feel to a village can go a long way in building a sense of community.”

Much of the concept involves ‘refreshes’ of communal areas by focusing on paint, furnishings, merchandise and food presentation.

Subtle but effective focus points including an ‘activities wall’ and ‘reason wall’ help to bring residents together.

“Designed to invoke social connection, the activities wall displays a suite of interests such as financial programs, health and wellness, positive thinking, and cooking masterclasses,” Sheridan says.

“Residents can see at a glance what can be planned during the swing.

“The reason wall reminds residents of the importance of staying safe at work by showcasing the things that matter most in their lives – families, friends, pets and more.

“The concept is designed to be agile

and adaptive with services tailored to each client’s environment and scaled up or down according to size and scope, whether its healthy food options, retail outlets or sport and recreation options.”

The Village Life concept has so far been integrated across a selection of sites in Western Australia and Queensland, with eight in 10 residents agreeing the change has improved their overall experience.

Reinforcing this feedback, Village Life recently topped a record number of nominees to win the 2016 AMMA Industry Award for ‘Workforce Innovation’.

“It’s great for Compass Group to show clients that industry groups like AMMA recognise Village Life as a leading innovation,” Sheridan says.

“For us, however, Village Life is a constant evolution. Receiving industry awards reaffirms that we’re on the right track but we’re not sitting back, we’re constantly adapting and evolving the concept to support our clients’ primary goals of employee safety and retention.” RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

46

INNOVATION

Shaking up the

world of workforce resourcing When the University of Western Australia estimates that a new workforce management platform could reduce the administrative costs of resourcing by 76 per cent, the industry sits up and takes notice.

There is no lack of contemporary examples when considering how disruptive technologies can shake up traditional business paradigms and transform industries for the better.

For instance Uber, the world’s largest taxi company, owns no vehicles. Similarly, the world’s largest retailer Alibaba holds no stock and global travel phenomenon Airbnb owns no properties.

Matthew Smith, founding director of MyPass, doesn’t put his technology brainchild in such revered company,

but his concept does raise an intriguing question: what if similar principles were applied to workforce management and project resourcing within the mining, oil and gas sectors?

MyPass is making waves with asset owners, operators, contractors and labour providers alike due to its capacity to significantly reduce the inefficiencies that come with managing thousands of employees across multiple sites, particularly for project-based or shutdown work.

By storing an individual’s qualifications,

Matthew Smith

MyPass platform in action

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

tickets, licences, compliance documents and work history in one secure online platform, resource employers of all shapes and sizes could soon do away with multiple spreadsheets and single-site human resourcing systems.

The cost saving, according to the University of Western Australia’s study on MyPass, could be as high as 76 per cent.

“The fact that documentation is handled multiple times creates a very large administrative burden on the entire resourcing supply chain,” Smith explains.

“The whole core of what we’re solving is that duplication of data across asset owner sites and contractor databases.

We’re offering a new way of thinking about the platforms the industry uses for collaboration on compliance management, worker qualifications, training and skills competencies.

“It would be pretty optimistic to put ourselves in the same category as the Uber’s and Alibaba’s of the world, but it’s that type of business model we’re going for. We don’t want to ‘own’ the workers

INNOVATION

or the resources, instead we are creating a platform where those parties can come together in the most efficient way.”

The inspiration for MyPass came to Smith around four years ago when working for one of Australia’s largest suppliers of specialist labour hire to the resource industry.

As an operational manager specialising in maintenance and construction, he was heavily exposed to large-scale workforce resourcing and soon realised there must be a better way to mobilise hundreds of employees at time.

Partnering up with a friend in IT development, they set about finding a solution.

“I was amazed that within an ASX200 company employing 50,000 people per year, we were still working off incomplete databases, multiple spreadsheets and systems that didn’t talk to each other,” says Smith, a mechanical engineer by trade.

“You can get away with that to a point, but with 300 shutdown projects a year, each involving up to 500 people at a time, you start to get serious creaks in your systems.

“We started developing a platform that

The MyPass solution in numbers

30-40: Number of emails typically exchanged between employer and employee to become site ready.

79: Average number of process steps between resource being requested and employee leaving their home for work (MyPass can reduce this to below 25).

76%: Estimated reduction in cost of resourcing for employers (source: UWA).

78%: Level of communication between employer and employer occurring via phone and email (source: AKSPAR Workforce Resourcing Survey 2014)

47

MyPass drastically reduces the processes required for an employee to get on site

could see a pool of job-ready workers being managed proactively, rather than the reactive cycle of getting your requirements in from site, throwing an advert up on a job board and then wading through the applications.”

The early version of what would become MyPass was a proof of concept for Smith’s then-employer, focusing on matching job-ready employees with real-time requirements of shutdown projects.

Since then, MyPass has become far more sophisticated and broad reaching.

It allows workers to store all their data in one place through their individual portal, provides employers access to information when workers apply for projects, and enables a common set of worker information to be utilised for mobilisation, right through to the gate.

Integral to the platform’s development was its acceptance into the Australian Government’s Entrepreneurs’ program, involving a Commonwealth commercialisation grant for promising businesses, which only intakes around 5 per cent of applicants.

The active support of the government is also proving vital to the next phase of MyPass. Nearing completion of its rebuild and relaunch, MyPass is now being pitched directly to those industry stakeholders with

the most to gain from collaboration around workforce resourcing.

For instance, the platform is gaining traction with a number of peak body industry groups who are looking for opportunities to build capability and innovate. Smith says both contractors and operators have much to gain in risk reduction and increased transparency.

“It is quite revolutionary for the oil and gas industry to be bringing together contractor groups and creating an environment where there is trust and collaboration to strip out some major inefficiencies and make the industry more competitive,” he says.

“The gas sector is leading the charge here, but it will require ongoing industry-level collaboration. It won’t happen if each company wants to keep operating in silos and using individual systems and databases.”

As for Smith personally, when reflecting on the decision to leave a burgeoning management career to enter the exciting yet uncertain world of technology entrepreneurism, there are no regrets.

“Having experienced the frustrations first-hand, I saw an opportunity to do things in a way that could be transformative for the industry and make a very real impact.” RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

48

INNOVATION

Ground-breaking remotely piloted aircraft monitoring QGC wells in western Qld

Shell drone

research takes flight Shell has welcomed $1 million in Queensland Government support for a major research project that builds on its adoption of drones.

The Advance Queensland project follows a partnership between Shell’s QGC LNG project and Boeing that has developed the world’s first commercial use of beyond-line-of-sight remotely piloted aircraft systems, or drones.

The drones, which have a three-metre wingspan and fly at 1500-2000 feet, monitor natural gas wells and associated infrastructure previously inspected by four-wheel-drive.

Shell’s vice president QGC Tony Nunan says the emerging technology will benefit both the resources and agriculture sectors.

“Landowners will benefit, over time, from fewer visits to their properties while QGC and the community will benefit from fewer vehicles on the roads,”

Nunan says.

“Our remotely piloted aircraft is operated by a world leader in this field in strict compliance with air safety regulations and following 18 months of successful trials.”

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

The Advance Queensland project will also involve development of technology to enable a wider range of uses of data gathered. This will enable broader adoption of the drones by other industries including agriculture. RP Launch of a remotely piloted aircraft monitoring QGC project wells near Wandoan in western Qld

INNOVATION

49

Innovation centre

to solve sector challenges Woodside has partnered with Monash University to advance commercial opportunities and solve challenges in the energy sector through a new innovation centre.

The newly launched Woodside Innovation Centre incorporates state-ofthe-art technology to rapidly accelerate advances in materials engineering, additive manufacturing and data science.

In the largest corporate philanthropic gift in the university’s history, Woodside will contribute $10 million throughout five years towards the centre.

Woodside engineers and Monash researchers together will develop and test prototypes in the laboratory, aiming to lead to new applications for the energy industry and other industries.

Technology in use includes a selective laser melting (SLM) 3D printer – the most precise and dimensionally correct 3D printer available – capable of manufacturing components used in oil and gas plants.

Monash University professor and deputy vice-chancellor Frieder Seible, says the innovation centre demonstrates the capability of Monash researchers to collaborate with industry Woodside engineers will transfer technology back to the workplace

specialists Woodside.

“Today’s important innovation drivers are new materials, new manufacturing methods and data analytics – exactly the three pillars of the Woodside Innovation Centre,” Seible says.

“Monash engineering and information technology research and expertise is leading in all three areas, in particular in the additive manufacturing of duplex and super duplex stainless steels.

“With 3D-printed components rapidly coming online, Monash is at the forefront of the next generation of manufacturing capability in Australia.

“In addition, Monash has Australia’s most advanced 3D visualisation environment for fully immersive analytics of big data sets. These leading capabilities provide Woodside engineers, embedded at the centre’s lab, the opportunity to transfer that technology back to the workplace.

“Through this partnership, we will train the next generation of exceptional

engineers and IT professionals to deal with tomorrow’s challenges and advances.”

The Innovation Centre forms part of Woodside’s FutureLab network throughout Australia including at Curtin University and the University of Western Australia.

“Launched last year, our FutureLabs are building an ecosystem of scientific and technological innovation through collaborations with research institutions, start-ups, entrepreneurs and adjacent leading industries,” Woodside’s senior vice president and chief technology officer Shaun Gregory says.

“Our vision for our Monash centre is for us to rapidly advance commercial opportunities through materials engineering, additive manufacturing and data science.

“We are really excited about collaborating with researchers and experts from Monash to identify opportunities to solve real-life challenges we face at Woodside.” RP The Woodside Innovation Centre is now operating at Monash University

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

50

ECONOMY & FINANCE

Market stabilises,

geopolitical risk remains As detailed in this extract of the Spring 2016 AMMA Resource Industry Market Outlook, further rises in commodity prices are expected, but low exploration spend and geopolitical events risk impacting investment growth.

Signs of commodity prices stability

Commodity prices – especially iron ore, zinc and metallurgical coal – are forecast to fall in the second half of this year. However, as we move into 2017, it is expected the majority of Australia’s key commodities will see a positive upswing in price.

While it is premature to announce the worst will be over for commodity prices, it would appear that prices are stabilising into a new normal range.

Over time, this ‘new normal’ will hopefully result in reduced daily spot price volatility, and increased longer-term certainty and predictability for resource project proponents and investors.

Exports to remain a key economic pillar

In the 2016-17 financial year, the federal government forecasts Australia’s resources and energy exports to rise by $5.2 billion to $163.4bn. This is, however, $2.74bn lower than the level the government was projecting just a quarter ago.

While each commodity has its own growth trajectory and idiosyncrasies, the main concerns driving this pessimistic outlook relate to suppressed consumption levels, fears relating to slowing Chinese growth, mounting fear of a European debt crisis, speculation on the US Federal Reserve delaying projected interest rate rises, and continued supply gluts in many commodity markets.

It’s important to note, however, that the mining industry in 2014-15 still made the highest contribution of all industry sectors to Australia’s overall GDP, at $118.3bn.

Exploration: Gold shines while others fall

While recent federal and state government initiatives to stimulate exploration activity are welcome steps in the right direction, the realisation of the potential benefits of these initiatives will take time and will be curtailed by headwinds in commodity prices, confidence and uncertainty levels.

Exploration levels fell across most commodities over the past quarter, led by coal, which is down 63 per cent to $23.4 million. The only exception was

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

ECONOMY & FINANCE

copper, with positive policy developments in conjunction with rising price forecasts creating some greenshoot exploration activity, up $5.2m to $36.6m.

Looking at the year to March 2016, gold exploration was the shining performer, up 30 per cent from $91.6m to $119.3m.

The gold price rose four per cent in the same period and many analysts bucking the trend by forecasting sustainable or buoyant future gold prices, has led to enhanced gold exploration confidence and activity in Australia.

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AMMA’s Volatility Index Spring 2016 Autumn 2016 Summer 2015/16

Spring 2015

Petroleum exploration plummets

During the same annual period, onshore and offshore petroleum exploration plummeted.

In original terms, the March 2016 quarter-end for onshore drilling/other petroleum exploration fell by 71 per cent or $200.9m to $81m compared to the same period a year ago.

Similarly, the March 2016 quarter-end for offshore drilling/other petroleum exploration decreased by 49 per cent or by $311.8m to $346.9m, compared to the same period a year ago.

The significant fall in the oil price is a key factor in the decline of petroleum exploration, with the immensity and rapidity of the fall creating elevated levels of anxiety and caution among investors and explorers.

However, oil demand is forecast to rise in the second half of 2016 and into 2017. This is expected to reduce oil inventories and see a gradual return to higher oil prices. When confidence in petroleum starts to rebound and the levels of uncertainty subside, this will likely translate into gradual improvement in petroleum exploration spend.

HIGHLY VOLATILE

Average wage increases

Investor confidence is beginning to rise as resource employers continue to focus on reducing operational costs. While all costs are under continuous examination, larger expenditures such as labour costs have been under particular scrutiny.

Over the past year, the total labour and wages costs (excluding bonuses) across the Australian resource industry fell by $689m to $28.9bn.

Moving forward into 2017, it is forecast that resource-related wage inflation will soften towards the range of 0.5 per cent to 2.5 per cent per year.

This is due to the trifecta of low price inflation, low wage growth and uncertain economic conditions globally.

Impacts of Brexit and the US election

Uncertainty is plateauing

AMMA’s volatility index is a forwardlooking short-term tracker that gauges levels of volatility and investor confidence in resource stocks. It tracks events and developments that impact on investor sentiment and market realities.

The period since the previous AMMA Market Outlook (Autumn 2016) has seen a further moderate shift away from volatile towards ‘confident’ using AMMA’s Volatility Index. Notable contributing factors include three resource companies recently listed on the ASX, and a number of commodity prices exceeding market expectations.

HIGHLY CONFIDENT

While the long-term effects of Britain’s exit from the European Union are uncertain, the short-term impacts were immediate, severe and textbook in nature. The pound fell to its lowest level in 31 years, while AUD $2.7 trillion in stocks was wiped off the market globally (AUD $50bn in Australia alone).

With Britain holding significant stakes in current resource and energy projects in Australia, the timing and investment implications of ‘Brexit’ is less than ideal. There have also been escalating concerns of a European debt crisis, which, if it transpires, would have

implications dwarfing developments following Brexit. As a result, investors have sought to safeguard their money in safe assets and jurisdictions. Australia has not been immune from the spill-over effects of this trend.

With the two US presidential candidates having polar opposite approaches to renewable energy and climate change, the United States election may also have implications for Australian commodity producers, investors and manufacturers.

Republican nominee Donald Trump has signalled an intention to ‘cancel’ the Paris Climate Change Agreement and roll back energy regulations and strengthen the US coal industry.

Democratic presidential nominee Hillary Clinton has a very different position on climate change and energy policy. Under a Clinton presidency, the focus on renewable energies may open up increased supply capacity for greater US exports of energy commodities (including renewables and non-renewables). As a result, this could create tougher competition for Australian producers and energy exporters.

The AMMA Resource Industry Market Outlook is a quarterly publication breaking down key economic, financial, market analysis and statistical data for the benefit of AMMA members. The full Spring 2016 edition can be downloaded at amma.org.au. RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

52

ECONOMY & FINANCE

‘Nasty surprise’

tax plan slammed Leader of Western Australia’s National Party, Brendon Grylls, has received little support for his proposal to lump an additional tax on the state’s biggest iron ore miners.

Grylls’s bid to increase the current 25-cent-per-tonne fee BHP Billiton and Rio Tinto pay on iron ore production to five-dollars-per-tonne would reportedly generate an additional $7.2 billion in state government revenue over four years.

Both companies oppose the proposal, concerned about the impact the higher tax would have on their businesses and Australia’s reputation as an investment destination.

“Stable government policy is vital for the economic security of WA and the nation. We do not understand why a proposal that is so discriminatory and uneconomic would be targeted at two companies,” BHP Billiton says.

“More than 90 per cent of the state’s royalties come from iron ore. BHP Billiton has paid AUD $65bn in taxes and royalties

in Australia throughout the past 10 years, including AUS $10.6bn in royalties to the West Australian government. In addition, BHP Billiton has invested more than US $25bn into the Pilbara in the last decade.

“Miners in Western Australia are operating in an international market and we have to be able to compete or will lose market share. BHP Billiton

You need to carry favour over a long period of time with investors – nasty surprises are not a good idea...

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

wants to grow our contribution to WA and the best way of doing this is to make sure it remains a great place to invest and do business.”

Although Grylls’s proposal doesn’t target iron ore miner Roy Hill, the company’s chief executive officer Barry Fitzgerald is concerned about the wider implications of the tax.

“While it does not apply to Roy Hill, it will most certainly lead to reduced jobs and investment in West Australia,” Fitzgerald says.

“The most compelling and significant issue holding back growth and jobs, is the increasing size of both levels of government in Australia and the very high cost of their approvals permits, licences and compliance.

“Instead of adding new taxes I would welcome a concerted effort by government to reduce the regulatory burden and associated costs and imposts to help generate much-needed jobs and growth.”

Grylls also faces opposition in the political arena, with WA Premier Colin Barnett saying he has ‘no inclination’ to support the tax regardless of the NationalsLiberal Party alliance in the state.

Despite initially remaining quiet on the issue, federal Minister for Resources and Northern Australia, Senator Matthew Canavan admits having ‘grave concerns that the proposal damages our reputation as a stable destination for attracting investment and jobs’.

“You need to carry favour over a long period of time with investors – nasty surprises are not a good idea,” the minister told reporters after a recent meeting with the Grylls.

“This is considered a nasty surprise for the industry and it’s something we have to be concerned about.” RP

ECONOMY & FINANCE

53

Uranium project

one step closer Toro Energy is one step closer to becoming Australia’s next new uranium producer after the Western Australian Environmental Protection Authority recommended approval for the extension of the company’s Wiluna project.

The recommendation expands WA and federal government approvals to incorporate mining of the Millipede (located adjacent to Centipede) and Lake Maitland deposits, and construction of a haul road between Lake Maitland and the approved processing facility at Centipede.

Toro managing director Vanessa Guthrie, says the recommendation represents a further significant advance in the project following completion of a mining agreement with the Wiluna People

Drilling takes place at Wiluna

in July.

“Toro initiated the environmental assessment of the extended project in early 2014, which has been undertaken by the EPA in a very comprehensive and rigorous manner,” Guthrie says.

“The assessment represents a further two-and-a-half years of substantive

scientific studies including those key environmental factors identified by both government and through public submissions as being of importance to the community and environment.

“Toro now awaits the decision of the WA environment minister following review of any appeals that are raised.” RP

RESOURCEPEOPLE | SPRING 2016 | www.amma.org.au

EVENTS 54

EVENTS CALENDAR

OCTOBER

Mon 24 – Tues 25

AMMA INDUSTRY BRIEFINGS

15TH ANNUAL LONGWALL CONFERENCE

AMMA Industry Briefings bring together all the leading workplace relations and industry outcomes from the preceding 12 months and provide the information resource employers need to prepare for the year ahead. Featuring key personnel from AMMA’s team of experts, the briefings are opportune for networking with both AMMA representatives and industry peers. Appearing one time only at the Brisbane briefing, Australia’s leading workplace design, leadership and motivation specialist, Dr Jason Fox will deliver a special presentation on how to build for the future of work in his typical high-energy and engaging style.

Oct 25: Newcastle Nov 17: Townsville Nov 22: Perth Nov 29: Gladstone Dec 1: Strahan Dec 2: Melbourne Dec 8: Brisbane Book your place via amma.org.au.

As the annual meeting point for Australia’s underground coal industry representatives, the Longwall Conference provides a key platform to discuss longwall design and operations and enjoy the opportunity to meet and network.

Held at Crowne Plaza, Hunter Valley More info at: www.informa.com.au

Mon 24 – Thurs 27 6th ANNUAL SAFETY PSYCHOLOGY CONFERENCE 2016

This is a professional development event for safety leaders and experts to share new and innovative concepts and tools in global safety psychology to build an organisation-wide commitment to improved safety and health.

Held at Primus Hotel Sydney More info at: www.ohscareer.com.au

Hear from Dr Jason Fox at the Brisbane AMMA Industry Briefing

NOVEMBER AWRA WORKSHOPS

Mon 7 – Fri 11

Wed 16, Tues 22, Thurs 24AWRA WORKSHOPS

IMARC 2016

Supported by Biz Better Together and facilitated by resource industry employer group AMMA, the Australian Women in Resources Alliance (AWRA) is this November hosting three unique half-day workshops aimed at “Enhancing Workplace Diversity” in Australia’s resource industry.

The workshops will bring together the leading authorities on workplace diversity in the resource industry, discussing topics such as the Global Diversity and Inclusion Benchmarks and strategies for achieving your diversity and equality goals.

Nov 16: Melbourne Nov 22: Perth Nov 24: Brisbane Book your place via amma.org.au/awra-workshops.

This year’s International Mining and Resources Conference (IMARC) program will cover all aspects of mining from exploration to investment, production to optimisation through to technology, health and safety, future energy, policy and governance.

Held at Melbourne Convention and Exhibition Centre More info at: www.imarcmelbourne.com

Tues 15 – Wed 16 LOW EMISSIONS & TECHNOLOGY MINERALS CONFERENCE

Incorporating the 12th annual Australian Uranium Conference, this event will look at minerals such as rare earths elements, lithium, graphite, zinc, cobalt and others relevant to cleaner energy and energy storage.

Held at Hyatt Regency Hotel, Perth More info at: www.verticalevents.com.au

Thurs 24 CRISIS & EMERGENCY MANAGEMENT CONFERENCE

This conference will focus on the unprecedented increase in potential risk and exposure to major emergency events with themes around preparedness, response and recovery for organisations in an unstable global environment.

Held at Pan Pacific, Perth More info at: www.ifasp.asn.au/resilience

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

SAVE THE DATE – AMMA 2017 NATIONAL CONFERENCE

Mark the dates in your calendars – the 2017 AMMA National Conference will take place at Sea World Resort, Gold Coast on May 31 – June 1. This annual conference is a not to be missed event for all ‘people professionals’ in Australia’s resource industry.

Set among the world famous sun, sand and surf of Queensland’s Gold Coast, and with a special AMMA Gala Dinner and Industry Awards ceremony taking place in Sea World’s Dolphin Cove, the 2017 AMMA National Conference will feature the nation’s leading human resources and workplace relations-based speakers directly relevant to the Australian resource industry.

More information to come.

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.

56

BUSINESS PARTNER DIRECTORY

www.amma.org.au | SPRING 2016 | RESOURCEPEOPLE

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