Glencore coal boss says workplace relations need reform

Glencore’s Australian coal boss says workplace relation policies need to move away from conflict-driven and rights based to a system that is responsibility based.

Speaking at conference in Beijing, Glencore’s coal president Peter Freyberg said reforms to current industrial relations practices were required to ensure Australia’s competitiveness as a coal producer remained intact.

He said industry, businesses and communities needed to work together to “find a path forward”.

Freyberg said rising costs coupled with lower commodity prices were putting a squeeze on margins across the industry, with companies seeking greater efficiencies and productivity in all areas.

“The challenge is to ensure good governance while not over-regulating industry which would increase costs or stifle investment,” he said.

“There are also challenges with the availability of skilled labour and in Australia moving away from a conflict-driven approach to workplace relations towards a mechanism that is responsibility rather than rights-based.”

“To remain viable through the cycle we need to reach ever increasing levels of efficiency and productivity.”

He said Australia faces competition from emerging coal producers who can export the commodity to China at a lower cost.

“From an Australian perspective, we need to be clear that we are competing on cost with other resource-rich countries which also see the wider economic benefits of supplying Chinese demand,” he said.

Last week BHP Billiton director Malcolm Broomhead also flagged the need for community support in order to fix labour productivity issues in Australia.

Broomhead said that labour productivity has “dropped enormously” and the Abbott government, while fully aware of the problems, has “locked itself out of major reform in that area”.

The government recently introduced changes to Fair Work laws that toughen right-of-entry rules for unions, allow employees to trade penalty rates for flexible hours and remove ''strike first, talk later'' loopholes.

However it was hoped more wide-sweeping reforms would have been undertaken by the Coalition government, with union involvement, high labour costs, and falling productivity long being bugbears of the mining industry.

Broomhead told The Australian it is electoral backlash as seen when Work Choices was introduced that stopped the government from acting.

“It is trying to do what it can within the constraints of the commitments it made. But as a country we need to get back on that bandwagon. And it really needs community support. It is the kind of thing you need community understanding around,’’ he said.

“Productivity doesn’t necessarily mean wages. It is about doing things more efficiently.”

BHP’s coal boss also highlighted the need for a “good industrial relations system” in a speech last week.

Dean Dalla Valle said stability was needed across all levels of governments to provide certainty to the mining industry.


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