But it’s not just the industry association that is fed up. Oil and gas owner/operators have had a “gutful” of unions exploiting the terms of their contracts.
These were the words of former Federal Resources Minister and now Chairman of the APPEA’s advisory committee, Martin Ferguson AM.
Regular strikes, unwarranted changes to contracts and conditions and significant delays to oil and gas projects are damaging Australia’s reputation as an investment destination and discouraging repeat business, Mr Ferguson, also a former head of the ACTU, told Gas Today.
“APPEA members are rightly concerned about the current industrial relations act in terms of the huge knock to investments from anything from AU$10 to AU$30 billion, and then extended the already long lead time in construction for these projects,” he said.
“What investors want is certainty in terms of when you go to [final investment decision], you want to know that the industrial relations framework is set. And then you can properly plan the project based on those costs parameters.”
Mr Ferguson says there is a major weakness in the existing industrial relations framework in that the enterprise agreements are often limited to three or four years at most.
“This effectively means that at very sensitive times of construction [enterprise agreements] are open to be milked by some elements of the union movement. We have seen this in the last 12 to 15 months both at Gladstone and recently at the Gorgon [LNG Project]. It not only creates industrial disputes and disruption, but it also means another cost to the overall project.
“Companies want a new approach which effectively means the Fair Work Act allows for them to negotiate construction agreements for the full term of construction for the project. That way they have got certainty with regard to the conditions of the framework, and therefore it makes it very important for the board to make those final investment decisions.
“Unless this is resolved I actually think there is going to be another additional hurdle for investment in Australia in bringing in new projects.”
Industrial relations and the resources downgrade
Mr Ferguson’s comments come after the Federal Government’s latest Resources and Energy Quarterly revealed that the forecast value of Australia’s exports for 2016–19 were revised down by AU$113 billion, some 14 per cent lower than the value forecast just 12 months ago.