Australia: Queensland Act affecting FIFO operations in resources projects passed

WHO SHOULD READ THIS

  • Key stakeholders and owners of Queensland resources projects.

THINGS YOU NEED TO KNOW

  • Additional compliance hurdles will now be in place for 100 per cent FIFO resources projects in Queensland - whether existing or planned - which may also affect the construction phase of projects.

WHAT YOU NEED TO DO

  • Future projects must take the prohibitions into account as part of planning and approvals, including at the construction phase. Existing projects will need to make appropriate operational changes to ensure compliance. Fatigue management for drive-in, drive-out workers and managing employment issues to limit exposure to discrimination claims will also need to be considered.

The Strong and Sustainable Resource Communities Act 2016 (Qld) (Act) was assented to on 31 August 2017. This Act includes:

  • prohibitions affecting Queensland resources projects that utilise 100 per cent fly-in, fly-out (FIFO) workers
  • anti-discrimination provisions aimed at protecting workers in regional communities, and
  • strong powers for the Coordinator-General to administer the Act and ensure compliance.

Background
This Act has a stated object of supporting regional Queensland communities located near large resources projects to ensure that they are able to benefit from these projects. This is being achieved by limiting the use of FIFO workforces in order to provide employment opportunities for those that live in nearby communities.

Details
The prohibition on using 100 per cent FIFO workers applies to all large resources projects in Queensland, both existing and future, that have a nearby regional community, regardless of when the resources project was approved and public notification given of the Environmental Impact Statement (EIS).

Anti-discrimination provisions in the Act also apply to all existing and future resources projects to ensure that discrimination against local workers does not occur as part of future recruitment activities by resources projects, and to also allow FIFO workers to move into the community if they wish to.

The default definition of a 'nearby regional community' is a regional town of at least 200 residents that is located within a 125km radius of the main access of a project site, although the Coordinator-General has discretion to determine a greater or lesser radius. This definition also provides the Coordinator-General with discretion to determine whether to include regional towns with less than 200 people as a 'nearby regional community' to enable a 'case by case' assessment to be performed.

A 'large resource project' has been defined to capture resource projects that hold a site-specific environmental authority or that are projected to have an operational workforce of at least 100 workers. Further, to ensure practical operation of the provisions of the Act, the Coordinator-General has been given discretion to decide that a project with less than 100 workers in the operational workforce is a large resources project. The explanatory notes indicate that this discretion is not intended to capture all projects, but instead to capture projects that would otherwise not have been captured because they came into operation before 2009 and were not subject to an EIS.

Importantly, there will now be a requirement that recruitment of workers must occur from the hierarchy of priority areas, as provided in the workforce management considerations of the social impact assessment (SIA). The hierarchy that appears in the Act requires recruitment of workers from local and regional communities, and then from workers who will live in regional communities. Further, the Act requires the Coordinator-General to make and publish a guideline for the details to be included in the SIA on the Department's website.

Also under the Act, the Coordinator-General can require the owner of a large resources project to prepare an operational workforce management plan (OWMP) if satisfied that the owner has contravened the 100 percent FIFO prohibition. The Coordinator-General can make a guideline for OWMPs, which is to be published on the Department's website.

If the Coordinator-General is satisfied of a contravention of the rule, a notice can be issued to an owner requiring an OWMP to be prepared and provided within three months of receipt of the notice. Failure to submit the notice within this period of time is an offence and an owner may incur a penalty that can exceed $100,000.

In preparing an OWMP, the owner is required to consult with the local government for each local government area within which all or part of the project, or a nearby regional community for the project, is situated. Upon receipt of the OWMP the Coordinator-General may, by written notice to the owner, approve the plan, approve it subject to conditions or impose additional conditions on the plan.

Under the Act, any Coordinator-General stated conditions will be taken to be enforceable conditions, although there is a process that enables an application to be made to the Coordinator-General to amend stated conditions.

Significantly, the Coordinator-General has also been given discretion, as part of the EIS evaluation, to decide whether the provisions of the Act will extend to workers engaged for the construction phase of a project.

The Coordinator-General will have broad powers to monitor compliance with and to administer the Act, including the ability to request information. Where a notice is issued by the Coordinator-General requesting relevant information and a party fails to comply with that notice by providing false and misleading information, a maximum penalty of over $200,000 may be imposed.

Key issues
The Act will obviously affect both existing and future resources projects in Queensland. For existing operations, there will be a need to review current recruitment practices and ensure that they align with the requirements of the Act. For projects still in the planning or approvals phase, there will similarly be a need to review operations in light of these new requirements in order to comply. This may ultimately add both time and cost into projects.

A further impact of the legislation is that there will be a likely increase in drive in, drive out workers from communities located as far as 125km away from sites. This will clearly impact mine sites where, as part of managing fatigue, a decision has been made to require workers to live on site while on shift. An example of a possibly impacted existing mining operation that adopts this approach is the Hail Creek Mine (located 50 km north east of Nebo and 120 km south west of Mackay), which was referred to as a case study in Rio Tinto Coal's submission to the 2015 Parliamentary Committee Inquiry into Fly-in, Fly-out and other long distance commuting practices in regional Queensland. It is understood that Hail Creek is not the only Queensland mine that manages fatigue risks in this manner.

Accordingly, industry operators affected by this change will need to consider the best approach for fatigue management for shift workers driving from regional communities, an issue which was the subject of Coronial Inquest findings handed down on 23 February 2011 – see our 2 March 2011 Focus article on this Inquest here.

Steps for managing potential anti-discrimination claims will also need to be considered. Relevantly, a discrimination claim may be made against the owner or principal contractor for the project where a person alleges that they were not offered work because they were a resident of a nearby community, or that their employment was ended because they were, or became, a resident of a nearby regional community and chose to travel to the project other than as a FIFO worker. In such claims it will be presumed that the alleged discrimination occurred, unless the owner or principal contractor proves otherwise.

Complaints that cannot be resolved by conciliation can be referred to the Queensland Industrial Relations Commission for determination.

Given the strong stance taken by unions supporting these changes, it can be expected that these provisions are likely to be tested. As such, putting in place processes to ensure that decisions made about these matters do not breach these new requirements, and are properly evidenced in case challenged, will be important.

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