Foreign investors wary of unions’ power plays

INTERNATIONAL companies are steering away from Western Australia because of industrial relations instability and confrontational unions, the WA Business News forum has been told.

A roundtable of oil and gas service companies has criticised Australia's unions and their firebrand leaders, claiming WA's union branches in particular were deterring foreign companies from operating in the state.

Although international oil and gas service firms such as Aker Solutions, Hallin Marine, FMC Technologies and Fugro are making their way to Perth, the forum was told that a significant portion of work was being lost to the Asia-Pacific region.

While there was some agreement that the union movement had become more professional over the past decade, the forum heard that unions in Australia were a reality and inevitably part of the oil and gas framework.

Earlier this year the National Offshore Petroleum Safety Authority undertook an independent review of safety in the offshore oil and gas industry and the level of union representation within the sector.

The Maritime Union of Australia and the Australian Workers' Union have been lobbying the federal government and NOPSA, outlining concerns in regards to industry membership.

MUA national lead organiser Bernie Farrelly said the unions had argued that there should be greater interaction with stakeholders, such as unions and employee representatives.

However, the forum criticised the propensity of unions in WA to shut down a work site for trivial reasons, disrupting project schedules and adding to already skyrocketing cost pressures.

"I recall going back 15 years ago when my former employer tried to bring a drilling rig down from Singapore and they got shut down because the shampoo was the wrong brand," Neptune Marine managing director Christian Lange said.

"That sort of stuff generally doesn't happen too much today, but it still happens."

Australian Marine Complex (WA) general manager Richard Clark said although the oil and gas sector was already one of the state's major export industries, the potential to become an even larger contributor was being thwarted by union intervention in large-scale operations.

"Part of why it happens, why companies don't come here, is it's easier to do business in Asia, by not having to deal with unions and bits and pieces," he told the WA Business News forum.

"That usually creates enough of an issue where they'll say 'we're not going to go down there, if we do we know we're going to have headaches'."

Mr Clark said AMC - a world-class centre providing manufacturing, fabrication, assembly, maintenance and technology development for the marine, defence, oil and gas, and resource industries - was a tight operation because only 20 per cent of its 1,000 yard workers were members of a union.

"The rest are on individual workplace agreements and that works well for us," he said.

Nick Palmer, vice-president of facilities and engineering at Technip Oceania in Perth, said foreign companies were afraid of the state's unions.

"The industrial relations trouble in Australia was only on the radar as far as specialist subsea work goes, maybe 10 years ago," he said.

"Big LNG companies from overseas that build plants are not interested in coming over here at all.

"They came in six or seven years ago and did a plant in Kwinana and had some union troubles, and then they went away again.

"Since then that mindsets still there to be honest. The French are scared of us in Australia; they're scared of the unions and the various industrial relations troubles that have afflicted various projects over the years."

Mr Lange agreed, saying countries such as France in particular were "somewhat reticent to operate in Australia because of the socio-political issues".

"One of the things we play on is if you can build a successful business and operate in Western Australia, given the current regulatory issues, unions, lack of people, the logistics difficulties, then you can make a successful business in any offshore region because their degree of difficulty is much less than it is here overall," he told the forum. "But it all depends on how well you engage the union."

Jeff Weber, managing director of Mermaid Marine Australia Ltd, said while industrial relations issues were common in the oil and gas sector, unions were inevitably part of the equation.

"There's no doubt that...the most part all, the unions these days, are far, far more professional than they were 30 years ago," he said.

"We find they are a reality. There's no point whinging about them, you've got to just go ahead with it, get on with it, and it's part of the challenge.

"From my perspective, if anybody can't deal with the maritime union in Australia, change industries because they're part of the framework in which we work.

"I think they are more flexible with companies than they were, five, 10 years ago and certainly in the oil and gas industry they get looked after quite well, but nearly everybody gets looked after quite well in the oil and gas industry.

"No matter which way you look at it, they are part of the structure we work in."

PricewaterhouseCoopers resources assurance partner Nick Henry said while the unions were trying to claw their way back into other industries, they had always remained a factor in the oil and gas sector.

"If you go up to an iron ore mine the unions under the new government are trying to find their way back in there, but they never got out of the oil and gas industry," he said.

Australia's biggest resource and energy union, the Australian Workers' Union, has begun an aggressive campaign to re-establish itself "back into Western Australia's heartland" with the election of new WA branch secretary Stephen Price.

"The extraordinary boom that we are witnessing in WA in our resource industry is delivering big profits to the companies, but the workers are concerned that it is sometimes happening at the cost of workplace safety considerations," Mr Price said.

"The resource industry is an inherently dangerous workplace. I want to hold profitable employers to account, ensuring they understand their workplace safety responsibilities.

"I want to hold the state government to account to ensure their occupational health and safety laws deliver transparency and accountability for working families.

"The AWU will...re-establish itself back in our mining heartland in the north-west and Goldfields, as well as in construction-related work."