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FIFO as a solution to the looming skills shortages in the Galilee Basin: pluses and minuses

Galilee Basin Coal and Energy Conference 26th November 2013, Brisbane

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Sustainable Minerals Institute -

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About CSRM

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• Local government, mining companies, and resources development in regional Australia: Meeting the governance challenge – 2 year study by CSRM & the School of Social Science – Funded by the ARC and seven Industry partners

• House Standing Committee of Regional Australia Inquiry into the use of  ‘fly-in, fly-out’  (FIFO)  workforce  practices  in  regional  Australia – CSRM and MISHC submissions and review of submissions and report

• Factors linked to the well-being of Fly-In-Fly-Out (FIFO) workers – 1 year study by CSRM and MISHC – Funded by UQ and SPOTLESS integrated services

• Energy from the Foodbowl – 1 year study of resources development in agricultural regions – Funded and conducted by 4 SMI centres, and agriculture sections of UQ

Relevant University of Qld research projects

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E.g. Sustainable Minerals Institute LDC Survey

Research Team: Associate Professor Philipp Kirsch1 Dr Jill Harris1 Ms Meng Shi1 Dr Susanne Arend2 Mary Anne Barclay2 Dr Jo-Anne Everingham2 Ms Julie Kim2 1Minerals Industry Safety and Health Centre

2 Centre for Social Responsibility in Mining

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What is FIFO?

“Fly-in/•fly-out mining operations are those which involve work in relatively remote locations where food and lodging accommodation is provided for workers at the work site, but not for their families...

What differentiates this form of organisation from other work involving periodic absences from home is the regular pattern of work on-site followed by a period off-site, and the nature  of  the  accommodation  arrangements.” Storey, 2001: 135

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History

• Began 1950s in the offshore oil & gas sector, Gulf of Mexico

• Since the 1980s has been increasingly adopted by on-shore mining companies – Developed in tandem with the move to

continuous 12 hour shifts and the increasing use of contractors

• Prevalent in Australia and Canada • In 2010, FIFO workers comprised 50% of

the WA mining workforce – Projected to increase to 62% by 2020

(AusIMM, 2011) – Resource operations workforce (contract

and direct employees) of Bowen Basin is 53% (41% DIDO + 12% FIFO) non- residential

• Industry expansion – Ever increasing numbers of FIFO/ LDC employees

• No longer restricted to remote communities – Impacts on existing rural communities

• Significant socio-economic impacts – Mining companies – Their employees

• including contractors – Communities

• Host communities • Source communities

– Government • All levels

Why is it in the headlines? (a national obsession)

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• Changing business case drivers –Costs of staffing of remote operations are contained –The demise of the company town –Advent of  ‘fringe  benefits  tax’   – Flexibility

• Workforce recruitment – Only way to attract workers to remote locations – skills shortages –Most effective way of managing a temporary workforce (e.g. construction)

Costs and benefits for resource companies

• Negatives –Handovers –Retention

• 44% were intending to change jobs in the near future for: – Higher salaries – Greater flexibility in managing work and family – Better roster cycle – Career progression

• Over two-thirds of this group indicated they would change in less than 12 months

Worker retention

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• Family – Parenting responsibilities – Relationship breakdown – The  ‘home  and  away’  cycle

• Health and safety – Camp life (food, exercise etc) – Camp culture – Fatigue – Isolation & loneliness (can

create or exacerbate mental health issues)

FIFO workers: the negatives

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Work-Life Balance

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Emotional well being

• 40% lonely or socially isolated to some degree • 14% lonely a large part or most of the time

• Stress levels: normal (86%), mild (9%), moderate (3%), high (2)%

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• 66% of our sample were satisfied with: – Balancing work and family – Training and career progression

• And more than 85% were satisfied with: – Salaries – Commute mode – Their job in general

Job satisfaction

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• Money – High wages, accommodation

and food provided

• Lifestyle – “We  want  the  resources  and  

the riches, but not the lifestyle of  the  interior”  (Bernard Salt, 12 April, 2012)

– FIFO attractive to singles, childless couples, parents of teen-aged children, empty-nesters

– Family opportunities and stable family base in a mobile industry

FIFO workers: the positives

• Job satisfaction – Opportunities for career

advancement

• The good news – Employees are making

informed decisions

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• Where FIFO workers officially reside – Enjoy the economic benefits of well paid residents – Many rural communities with high unemployment rates or declining

populations are keen to become FIFO hubs

BUT – May  have  to  ‘pick  up  the  pieces’  in  cases  of  family  breakdown – FIFO employees are regularly absent and have less time available

for community/ volunteering activities – Emerging  divisions  between  ‘haves’  and  ‘have-nots’

Source Communities

• Where FIFO employees work – Industry diversification – Indirect employment – Some economic benefits – Cushions boom-town/ ghost town cycle – Eases accommodation pressures

BUT – ‘The  flyover  effect’ – Service & infrastructure pressures – Changes the character of existing communities – Distorts population numbers and profile

Host communities

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• Local government – Frustration - bears the brunt of under-

resourcing in infrastructure and services – Lack of voice in decisions

• State government

– WA  ‘Royalties  for  Regions’ – NSW proposed Royalties for Regions scheme – SA Olympic Dam expansion – QLD Caval Ridge – Coordinator  General’s  conditions,  SIMPs.  Now  

Royalties for Regions and outcomes based undertakings

• Federal – Parliamentary inquiry

Costs and benefits for Governments

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• Method – Sorted into stakeholder

type – Extracted content – Grouped into themes

• Health • Water • Environment • Community • Infrastructure

National FIFO Enquiry Analysis - MISHC

Positive, 154

Negative, 940

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A snapshot of the distribution of health concerns

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CommunityStress

Family Stress PersonalSafety

WorkerWellbeing

Mental Health HealthIndustry

Road Safety

Business Commmunity Government

Health Individual Industry

Mining Company Mining Employees Research Institute

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Camp life positives

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• Set to increase in the short term – Roxby Downs, Galilee, WA – In the longer term, automation

• FIFO likely to be the norm for ‘brownfields’  &  exploration – Cost effective for large operations – Worker expectations

• So how can a region get maximum

benefit? – provision of services and

infrastructure for companies and FIFO/DIDO employees

– strategies to optimise FIFO/DIDO experience for employees and their families, communities and industry

The future of FIFO?

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The future of Central West Queensland?

Project Workforce • Alpha Coal (38 km N-W of Alpha) 1970 (Mine, rail & port) (Hancock)

• Carmichael (160 km N-W of Clermont) 3000 (Adani)

• China First (35 km N-W of Alpha) 2460 (Waratah)

• China Stone (160 km N-W of Clermont) >2500 Estimate • Clermont (150 km NE of Alpha in IRC) 825 (Glencore /Rio Tinto)

• Kevin's Corner (56 km N of Alpha) 1600 (Hancock)

• South Galilee (16km S-W of Alpha) 1290 (AMCI & Bandanna) • Rodney Creek (60 km N-W Barcaldine) ?? (CSG) (AGL & Galilee Energy)

• Kyneton1 and Blendon1 (E of Barcaldine) ? (CSG) (Geo Resolve)

• Mycross (65km N of Barcaldine) ?? (CSG) (Eureka)

Projected workforce needs

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The issues

• Costs and benefits for all stakeholders • Problems  associated  with  FIFO  don’t  occur  in  isolation

– Supply of skilled workers – Capacity constraints in mining towns (accommodation crisis, etc) – Gender imbalance – Remoteness

• Factors that can make a difference to the impacts – ‘Swing’  or  roster  patterns   – Style  of  ‘worker  accommodation  village’  (WAV)  – since they differ in

size, location, duration, amenity, and links to local communities • Privacy and personal space • Reliable communication • Peace, quiet and comfort

• What sort of region do we want the Central West to be?

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Thank you

QUESTIONS AND DISCUSSION?

http://www.csrm.uq.edu.au/publications/476-factors-linked-to-the-well-being-of-fly-in-fly-out-fifo-workers