May 15, 2019

Resource bosses welcome talk of ‘life-of-project agreements’

Resource bosses welcome talk of ‘life-of-project agreements’

Australia’s resources and energy employers have welcomed an announcement by Bill Shorten that an ALP Government would consider allowing enterprise agreements to cover the full length of major project construction.
The AMMA said it had argued the case for ‘life-of-project agreements’ since before the Fair Work Act commenced in 2009.

Chief executive Steve Knott said much of what the AMMA warned would eventuate without such agreements came to pass during the recent investment and construction boom period.

This included:

  • Construction, engineering and related employers being exposed to protected industrial action (strikes) in the middle of project construction.
  • Project proponents having multi-billion dollar investments threatened by uncertainty, cost blow-outs and delays through potential mid-project construction strikes. 
  • Employers needing to renegotiate agreements often when there were only months left to project construction – delaying completion of nationally-significant energy projects.
  • Australia’s attractiveness as an investment destination for new major resources and energy projects being significantly impacted by these absurd, yet foreseeable, scenarios.

“The need for life-of-project agreements was a key feature of AMMA’s submission to the 2015 Productivity Commission review of Australia’s workplace relations system,” Mr Knott said.

In a 2018 survey of resources and energy employers, 89% agreed life-of-project agreements would significantly reduce Australia’s industrial relations risk profile, he said.

“Nation-building resources and energy projects often have lead-times of up to a decade, and take on average seven years to build,” Mr Knott said.

“Certainty around cost and timing is the most critical element to ensuring such projects go ahead.

“For this reason, life-of-project agreements are critical for Australia to secure the next wave of resources and energy projects. This is a position AMMA has gathered some support for within the Coalition in recent years, notwithstanding lack of a legislative fix to date.

“We welcome Bill Shorten’s announcement today, which indicates that whichever party forms government following this Saturday’s Federal Election, there should be bipartisan support for life-of-project construction agreements in the 46th Parliament of Australia.”

The Minerals Council of Australia said improvements in productivity, cost competitiveness and enterprise flexibility were necessary if Australia is to unlock the growth potential across current and future mining projects.

The announcement by Labor foreshadowing reforms to greenfields agreements would provide greater certainty for new projects, chief executive officer Tania Constable said.

“This is vital in providing investors with confidence and making Australia an attractive destination for new capital investment,” she said.

“It is essential Australia has a modern workplace system that supports productivity to sustain economic growth and the prosperity of all Australians.”

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