On 24 March 2020, the Productivity Commission released its draft report on Resources Sector Regulation identifying ways that governments can reduce red tape and other barriers to industry development and investment.
AREEA welcomes the Productivity Commission’s draft report recommending the Fair Work Act should be amended to allow enterprise agreements to operate for the life of major new project construction.
The Australian Government should amend s. 186(5) of the Fair Work Act 2009 (Cth) to allow an enterprise agreement to specify a nominal expiry date that matches the life of a greenfields project. The resulting enterprise agreement could exceed four years, but where it does so, the business would have to satisfy the Fair Work Commission that the longer period was justified.
The call for life of project agreements further supports AREEA’s compelling submission to the Attorney General’s IR discussion paper that facilitating Project Life Agreements is a critical and urgent reform that would significantly improve Australia’s ability to attract global investment into new major resources and energy projects.
The draft report found global and local factors including emissions policies, technological advances, economic development and population growth make it difficult to predict the future level of resources investment in Australia, however it noted the potential for investment would remain substantial.
AREEA’s Workforce Modelling Project has forecast an additional 52 projects in the next four years to 2024 attracting $42 billion of investment.
Given the expected pipeline of resources and energy projects in Australia, it is critical that regulatory processes support continued investment in Australia’s vast minerals and resources.
The inquiry found that despite some developments in recent years, the regulatory processes are becoming more complex to navigate, more protracted and more uncertain, for little if any improvement in regulated outcomes.
The report contains 45 findings and 10 draft recommendations ahead of calls for further submissions.
The draft recommendations relevant to AREEA members include:
- Amending the Fair Work Act to allow enterprise agreements to operate for the life of projects
- Governments should avoid imposing bans or moratoriums on certain resources activities
- Amend the Environment Protection and Biodiversity Conservation Act 1999 (Cth) to enable negotiation of bilateral approval agreements.
- Assess the funding and resourcing of State regulators for timely process of applications
- Regulators to consult with industry groups to develop a program of site visits and induction to enhance technical expertise
- Ministers to establish a forum for regulators to share leading-practice initiatives from their jurisdictions, including those implemented to develop the capabilities and expertise of their agencies
- Review the beneficial ownership of funds and relevant duties arising from native title agreements
The PC is calling for further submissions before the final report is due later this year, and is particularly seeking information on whether there are aspects of mining and petroleum licensing systems that pose a material impediment to investment.
The inquiry noted that there is no one regulatory system here in Australia or overseas that stands out as leading practice in its entirety and that all jurisdictions could learn from one another.
The 12-month inquiry was announced by former Federal Minister for Resources, Matt Canavan in August last year to explore ways to streamline approval processes for job-generating resources projects.
Focusing on streamlining processes is one of six key areas identified in the National Resources Statement, which followed extensive industry consultation of which AREEA and its members were pleased to be heavily involved in.
The Productivity Commission is due to provide the final report to the Government in August this year.
