21/08/2013 - 07:07

No short cuts in good policy

21/08/2013 - 07:07

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Government failures at James Price Point can teach us many lessons, around long-term planning, due process and adapting to change.

No short cuts in good policy

Government failures at James Price Point can teach us many lessons, around long-term planning, due process and adapting to change.

When Colin Barnett won power five years ago he focused on achieving rapid progress on some of the state’s big development projects.

Since then he has been mugged by reality, and in a way that puts his predecessors in a much more flattering light.

One of his first decisions was to commit taxpayer dollars to the Oakajee port project.

That project has failed to move ahead, with no imminent sign of progress.

Another early decision was the selection of James Price Point as the site for a gas hub in the Kimberley.

That headed off a review process the former Labor government had been running, to evaluate potential sites and reach a considered view.

Mr Barnett had no interest in taking that slow and cautious approach, especially after Japanese group Inpex decided to shift its Ichthys LNG plant from the Kimberley coast to Darwin.

The loss of the Ichthys project was a blow for Western Australia, as has the fall-out from Mr Barnett’s push for James Price Point.

The community has been deeply divided, with many business people in Broome (and elsewhere) joining with environmental and Aboriginal activists in opposing the development.

The money sunk by Woodside and its project partners in project planning has, to a significant degree, been written off as they pursue plans for a floating LNG plant.

To cap it off, the Supreme Court ruled this week that the state’s environmental assessment process – which was a product of the government’s desire to hasten the project – was illegal.

Compare that outcome to what is happening further north, in the Ord River irrigation area, which has attracted private sector investment in agriculture following a major taxpayer-funded upgrade of infrastructure.

This has been possible only because the former Labor government put in the hard yards, negotiating a comprehensive native title agreement with the area’s indigenous population.

The work was slow and painful at times, but Labor reached an outcome.

That is more than what can be said for Oakajee or James Price Point.

The lessons from this are multiple, but surely one of the most important is the priority that needs to be given to long-term planning.

The reality of a modern democracy is that the government of the day needs to take account of numerous stakeholders.

While many people in business hanker for bold, decisive action, the James Price Point saga shows that such behaviour can blow up in the government’s face – and their business partners, if they are not careful.

Following due process is another important lesson. Some people might not like the law as it stands, but it cannot be ignored.

Mr Barnett has responded to setbacks at James Price Point by stubbornly sticking to his guns. He is adamant that an onshore development must go ahead and that the environmental approvals will be obtained.

Unfortunately for the premier, the industry has moved on. Woodside has recommended a floating LNG plant as the best option, and the Browse joint venturers are likely to agree.

The challenge for WA is to make the most of this opportunity by ensuring the state becomes a global leader in designing, managing and operating floating LNG projects.

Two developments on that front give cause for optimism.

Plans for an oil and gas industry innovation precinct, which Woodside put together with broad industry backing, won federal government funding last week.

And Prime Minister Kevin Rudd announced funding for a floating system research centre, to be based in Perth.

Let’s hope Australia’s next government supports both initiatives.

 


STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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