Coal Industry Bill
Debate resumed from 28 November.
Ms HODGKINSON (Burrinjuck) [11.33 a.m.]: I lead for the Opposition on the Coal Industry Bill. I am pleased to say at the outset that the Opposition supports the bill. Honourable members will be aware that the New South Wales coal industry is a major employer, with some 9,500 workers involved in the industry. In 1999-2000 coalmining accounted for more than 70 per cent of total income from mining in New South Wales. I have dug up some statistics on coalmining and mining in general. Australia is the world's leading coal exporter. Of those exports, about 45 per cent come for New South Wales. In turn, New South Wales provides 36 per cent of Japan's thermal coal imports and coalmining accounts for $3.75 billion in New South Wales export earnings. New South Wales' total export trade is projected to grow from 76 million tonnes to 83 million tonnes by 2005. A capital investment of $2.2 billion in new coal projects is proposed for New South Wales. It is an exciting time for the New South Wales coal industry.
The engine rooms of the Asian economy—Japan, South Korea and Taiwan—are highly dependent on New South Wales as a provider of coal. People in the Newcastle district will verify that trains measuring up to two kilometres in length often make their way to the ports north of Sydney, as they do into Wollongong, carrying their loads of what is often referred to as black gold, bound for steelmaking and electricity generation plants in Asia. The open-cut and underground mines in the rich vineyard areas of the Hunter Valley north of Sydney provide more than 22 million tonnes of thermal grade coal to Japan and some 7.6 million tonnes to South Korea. Taiwan takes about 7.5 million tonnes of the State's thermal coal each year.
Smaller amounts of coal are exported to countries such as China, Hong Kong, Malaysia, Philippines, India, Israel, Pakistan, Turkey, South Africa, New Caledonia and South America. At 1.3 million tonnes, the United Kingdom is New South Wales' largest European consumer of thermal coal. About 4.3 million tonnes of coking coal come from the coalmines to the south of Sydney and is exported to the steel mills of Japan, South Korea, India and Europe. More than 80 per cent of Hunter Valley coal is extracted under open-cut methods. There are an estimated 10 billion tonnes of recoverable coal reserves in the State. Coalmining is fundamental to the economies of the electorates of many honourable members, including those who represent the Hunter Valley, the Illawarra, Lithgow and Gunnedah. A coal region in Gloucester is also of prime importance to this State.
On the subject of mining, I will recount to the House a little of my personal history. My grandfather, Jack Hodgkinson, known as Hoddy to his mates, was not a coalminer but a goldminer. He came from around the Dalton area. I am told by many of his old mates that he was unsuccessful digging for gold so he ended up marrying instead. The oldtimers love to recount that story to me, so I naturally take an interest in mining. This bill is important. It is essential to get it right for future occupational health and safety, workers compensation and mines rescue functions. The coal industry has had a notorious safety record, and the bill is of great significance to coalminers, their families and their communities. It is also important to the operators, who make a significant contribution to the State and to Australia via local investment and export earnings.
The Minister in his second reading speech referred to the history of the coal industry in New South Wales during the past century. It is important to reflect on the historical perspective when considering this bill. Coal was a critical energy source for growth industries in Australia, particularly after World War II. There was a high demand for coal but that demand was not met. There were many problems in the industry, such as production inefficiencies. Many miners suffered poor health, safety conditions were virtually non-existent and equipment was old and past its use-by date. The whole industry was in serious need of a revamp. At that time the workers took their lives into their own hands when they went to work. Recently there have been serious injuries and deaths among miners. For that reason we need to ensure that the bill goes through, and that it goes through with the support of industry and the workers.
The coal strike in 1949 resulted in a severe restriction on coal, and manufacturing and construction industries were brought to a standstill. At that time coal was recognised as Australia's most important energy source; it provided heat for homes and lighting for businesses and homes. As I said, the working conditions were dreadful and dust diseases were common. Many miners were unable to continue working after their thirtieth birthday due to dust diseases. The working conditions in those days were dreadful, compared with working conditions in 2001. We recognise that it is necessary to continue to support the occupational health and safety of workers and to look after the health of workers. We can look back with horror and learn from that experience, and trust that Australia never sees times like that again.
Joint legislation was brought forward in 1946, and the Joint Coal Board [JCB] was established in 1947 to assist with the modernisation and restructure of the New South Wales coal industry. The Joint Coal Board was efficient in assisting with the health problems experienced by miners, including the eradication of the dreadful disease known as black lung. In 1946 some 15 per cent to 20 per cent of coalminers suffered from that disease, but it has been all but eliminated now. This bill repeals the Mines Rescue Act 1994, which reconstituted the Mines Rescue Board. The board's objectives were to provide a rescue service to deal with emergencies arising at underground coalmines in New South Wales and to use the rescue service in connection with emergencies in other mines.
This bill provides for an approved company, the Mines Rescue Company, to take over the current functions of the Mines Rescue Board. The bill is a significant departure from the current industry structure. It will wind up the operations of the Federal-State administered Joint Coal Board, which currently provides occupational health and safety, mines rescue and workers compensation functions to the coal industry. The Federal Government has signalled its intention to withdraw from the JCB, and the Federal Parliament has already passed the Coal Industry Repeal Bill 2001. That legislation cannot be proclaimed until this bill has been passed through the State Legislature. As I said, this bill repeals two pieces of State legislation, the Coal Industry Act 1946 and the Mines Rescue Act 1994.
Significantly, the bill allows for the establishment of two industry owned and operated companies that are subject to the approval of the relevant Minister of the day. The proposal is a major shift away from a joint government-owned coal board structure to a position in which the industry takes a large step forward into the private provision of critical services with government oversight. The bill dissolves the Joint Coal Board and, by necessity, replaces the core functions essential to the safety and well-being of coalminers across New South Wales. Earlier I recounted the problems experienced by coalminers. The bill repeals the Mines Rescue Act 1994 and, instead, implements an industry-owned company to be known as the Mines Rescue Company which will take over the functions of the Mines Rescue Board and be entirely responsible for the provision of mine rescue services across the coalmining districts of New South Wales. The company will also play a role in rescue operations at mines when the need arises.
I turn now to specific provisions in the bill. Part 2 provides the framework for dissolving the Joint Coal Board and the Mines Rescue Board. Under the dissolution, the assets, rights and liabilities of those boards will transfer to the approved industry-owned companies by way of the ministerial holding corporation that operates under the State Owned Corporations Act 1989. The dissolution of those boards will not adversely affect the staff of the two organisations. Schedules 1 and 4 will ensure that staff are transferred to the approved company, and they specify the retention of current salaries and conditions. I understand that arrangements have been made for employees of the Joint Coal Board to transfer their superannuation to an approved scheme, while the staff of the Mines Rescue Board will remain with their current superannuation scheme.
Part 3 sets out the establishment of the industry owned and operated companies to which I referred earlier. This is an integral part of the legislation, and it is the core tenet of the bill. Part 3 provides for the Minister to approve one or more companies registered under the Commonwealth Corporations Act 2001 for the purpose of exercising one or more of the functions set out in the bill. To put it simply, that is the mechanism for establishing the Mines Rescue Company and the Coal Service Corporation. Importantly, any company proposed under this legislation, firstly, cannot be approved by the Minister unless it is wholly owned in equal shares by the New South Wales Minerals Council, as the Minister pointed out in his second reading speech, the Construction, Forestry, Mining and Energy Union [CFMEU] or a subsidiary thereof, or is a wholly owned subsidiary of another approved company that is so owned.
Secondly, the Minister can approve only one company at a time to provide mines rescue services and only one company at a time to provide workers compensation services. Thirdly, the companies must provide the functions set out in their notice of approval. The functions that can be included in the notice of approval are set out in clause 10 (1) and broadly reflect the current functions of both the JCB and the Mines Rescue Board. Clauses 10 (2) and 11 set out other ancillary functions that the companies may engage in.
Schedule 5 relates to the board of the approved companies that will operate under this legislation. The bill provides that the board of directors for any company operating on the approval of the Minister must comprise two directors nominated by the Minerals Council, two directors nominated by the CFMEU, two directors with appropriate expertise jointly nominated by the Minerals Council and the CFMEU, and a seventh director who will serve as managing director and chief executive officer. That director will be externally recruited from the people nominated by the other directors. All board appointments will be for a period of five years. The bill provides for the Minister for Industrial Relations to appoint, for six months, a transitional managing director and chief executive officer while the recruitment and appointment process is finalised.
The corporate governance arrangements set out in the bill are regarded by the Opposition as the best possible way for the new companies to operate free of government control. The Opposition is satisfied that the companies constituted under this legislation will be financially and legally independent of government, and that the new arrangements leave in place a degree of government oversight which should provide the appropriate degree of scrutiny to ensure that the new arrangements are in the best interests of coalminers and the owners and operators of coalmines. Much of this bill deals with the arrangements that will be put in place for workers compensation for coalminers.
Coal Mines Insurance, which is presently a wholly owned subsidiary of the Joint Coal Board, is the sole provider of workers compensation insurance for the New South Wales coal industry. While in the past the Opposition called for the inclusion of Coal Mines Insurance in the general workers compensation scheme, in this instance we recognise that the structure proposed in this legislation is appropriate. We recognise the need to maintain stability in the coal industry, and we support the need for an industry-specific workers compensation fund. We also recognise the solid support of both employers and unions for the continuation of the current workers compensation scheme for the coal industry.
A key provision in the legislation is the proposal to establish a company to provide rescue services to the coalmining sector. Part 4 deals specifically with the establishment of that company. The bill allows members of the Mines Rescue Brigade, which was established under the Mines Rescue Act 1994, to continue to be members of the brigade that will operate under this legislation. The bill is an appropriate response to the Commonwealth's decision to withdraw from the Joint Coal Board. It will allow industry participants to own the companies that provide core services to the coalmining sector. The legislation represents an important transition for the State and for the coalmining industry as a whole, and the Opposition is happy to support it.
Mr MARKHAM (Wollongong—Parliamentary Secretary) [11.51 a.m.]: It gives me great pleasure to contribute to debate on the Coal Industry Bill. However, it is a sad day when one remembers that the Joint Coal Board has been in operation for 54 years and the bill sounds the demise of that government-sponsored organisation. During those 54 years I have had quite a lot to do with the Joint Coal Board. Prior to being elected as a member of Parliament I worked in the coal industry for 26 years. From 1962 to 1964 I worked at Kemira colliery, and for the following 24 years I worked at Coalcliff colliery. Kemira colliery, or Keira mine as it was known prior to 1954, was a mine in which the sons of family after family worked.
On my mother's side, my grandfather, my great-grandfather and my great-great-grandfather worked at Keira mine. In fact, my great-grandfather was killed in a accident at that mine on my mother's birthday. After being elected as a member of this place I waited until 31 August 1988 to make my inaugural speech so that I could honour my great-grandfather. It was also my mother's birthday and, coincidentally, the anniversary of my father's death. It gave me pleasure to do that, but it also saddened me.
I worked underground as an electrician on the afternoon shift at Kemira mine for a couple of years before I went to Coalcliff colliery. When I was at Coalcliff I worked underground on one of the first longwall units ever established in Australia. It was the worst mining mechanism one could possibly imagine. The 200-metre face of the unit had been installed incorrectly, and the men worked on the return. The dust on that longwall unit was so thick you could not see your hand in front of your face. That unit operated for about nine months before it finally collapsed. The depth of the dust that came out of that longwall unit was unimaginable. I can recall leaving the mine in the afternoon and coughing up black rubbish from my lungs. That went on for many months after I stopped working on the longwall unit.
The commitment of the Joint Coal Board to the control of hazards resulting from the inhalation of dust earned it an international reputation as a pioneer and leader. That commitment will continue when the provisions of the Coal Industry Bill come into operation. I assure the Minister that I will closely monitor the legislation, and there is no way I will stand by and allow any deterioration in the protection afforded to coalminers in this State. During the decade leading up to the establishment of the Joint Coal Board in 1947, the problem of dust-related lung disease among the coalmining population attracted increasing public attention. The Miners Federation embarked on a program of disruptive agitation on the issue. Compensation costs spiralled, placing additional pressures on production in the war and post-war years. As mainstream medicine came into contact with these wider social concerns, medical opinion about coal dust and miners' health began to change. Earlier authoritative opinion that coal dust was not harmful began to move towards a belief that it caused miners' respiratory ill-health.
I worked with miners who were "dusted". The daily suffering of those men was unbelievable They could not walk more than 10 or 12 metres without gasping for breath. I saw those men suffering and I also saw them die. About three years ago legislation was introduced in this Parliament that allowed workers who had contracted a respiratory disease to pursue workers compensation claims. The legislation provided for the worker's family to pursue the claim if the worker had died. For too long the drawn-out process involved was regarded buy miners and their families as a means of not paying compensation; it was hoped that the worker would die before the claim could be resolved. As a result of that legislation, the families of such workers can continue to pursue workers compensation claims.
When I worked in the mines the Joint Coal Board would medically examine miners every two years. The board would perform a full lung capacity test, including an X-ray, to make sure that miners' lungs were not starting to clog up. The last time I had a chest X-ray, it was for the purpose of the parliamentary superannuation scheme. The doctor said to me, "You have a shadow on your lung, we had better do another check." I said, "Yes, I know, it has been there for a long time." That could be the result of exposure to dust; I do not know. I have not had any lung problems so far but there is the possibility that I have something on my lung. The Joint Coal Board never told miners about the risk of lung disease due to dust exposure. I found out about it some time down the track after making inquiries. I was able to secure X-ray prints for the four or five examinations I had had earlier, and those X-rays showed that the shadow had been there for all that time.
I want to relate an amusing story about Bob Parkinson, a story I have related on a number of occasions. Bob was a giant of a man. I recall that when we went for the Joint Coal Board medical examinations we would be asked a series of questions. Every two years we would be asked whether we smoked, how many cigarettes we smoked, whether we drank, how much we drank, and many other questions. On the day that Bobby Parkinson went for his medical examination there was a new doctor. Bob Parkinson liked his beer. Each afternoon after work he had something like 16 or 18 schooners to wash the dust out of his lung and stomach.
Mr Amery: It's as good an excuse as any.
Mr MARKHAM: It is as good an excuse as any. When Bob Parkinson went for his medical examination, the new doctor asked him whether he smoked or drank. He said, "Oh yeah, I don't mind a beer now and then." The doctor said, "How much do you drink?" Bob said, "You know, enough to quench my thirst." The doctor asked, "What would you drink—one beer, two beers, three beers?" Bob said, "Three beers? I would spill that much in an afternoon." That is a story that has been talked about for many years. In 1947 the Joint Coal Board recruited Dr W. E. George from the successful occupational health program at Broken Hill to establish a new medical unit with a focus on disease in the industry. After negotiations with both employers and unions, four separate units were opened in each major district. Those units began the process of conducting medical examinations to assess the prevalence of disease in the work force, to identify and remove "dusted" workers, and to protect those at risk.
At the same time, rehabilitation services were established for those who were ill, and an extensive medical research and post-mortem program was established. Despite some potential areas of industrial conflict over these issues, the board's medical program has operated since its establishment with a high level of trust and co-operation. Participation in the medical examination program has been exceptional over time, resulting in a strong sense of confidence in the claim that the industry is now almost completely free of respiratory diseases. That is not quite true because I know of some old-time mineworkers who still suffer from respiratory diseases. In their early working life they were subjected to very dusty conditions and they are reaching retirement age now. There is evidence that the number of new cases of respiratory diseases has diminished.
In 1943 a dust concentration standard was declared on the recommendation of the 1939 royal commission into health and safety. However, enforcement of the standard was relatively weak and the dust problem continued to exert pressure on the industry. The advent of the Joint Coal Board meant that there was then greater institutional and government commitment to enforcing compliance with the standard. The board began to manage the new amendments to the Coal Mines Regulation Act which mandated the installation of dust-suppression techniques and practices. I can assure honourable members that when dust-suppression programs were put in place at the mine at which I work it was done in a haphazard and hit-and-miss fashion.
On the escarpment of the Illawarra where the coal seams outcrop on the sea, most of the moisture trapped within coal deposits has already leached out over hundreds of thousands of years and the coal is very dry and dusty. An extraordinary amount of water was needed to try to suppress dust and in a lot of instances it did not work effectively. The number of people suffering from diseases from the mining industry in the Illawarra was probably greater than in most other coalmining areas in this country.
In 1954 the board formalised its dust control administration under a unique tripartite committee, the Standing Committee on Dust Research and Control, which was dedicated to the vigilant and strategic monitoring of dust levels and to supporting research on methods of dust suppression. After two decades of smooth and continued decline in dust levels, the committee's efforts have been challenged by the exponential increase during the past decade and a half of longwall mining and its attendant increased dust-make. As I said earlier, it is hard for people who have never worked in the industry to believe the amount of dust that is generated by the longwall process. In fact, there have been many attempts to try to reduce the amount of dust in front of the operation by water infusion of the coal seam. In the Illawarra, not only do they use water infusion, they have also embarked on a massive program of extracting methane gas out of the coal seam prior to production.
Much of the success which the New South Wales industry has experienced with disease eradication can be attributed to the co-operative efforts of this unique regulatory approach. Throughout the 1940s the increase in compensation claims for dust-related disability exerted extreme pressure on individual mines and on the industry as a whole. Apart from the extent of human suffering that such a burden represented, the new Joint Coal Board was also concerned that compensation burdens were preventing mines from investing capital in mechanisation and dust suppression. To ease the burden, the Joint Coal Board took over responsibility for compensation and introduced uniform premiums to spread the costs across the industry. In doing so, it was able to maintain a tight rein on the difficult definitional issues which otherwise extended litigation and unpleasantness in matters of compensation. By easing many of the difficulties associated with compensation, the Joint Coal Board was able to provide a level of certainty in an otherwise deeply uncertain area.
The occupational health efforts of the Joint Coal Board were considered to be so successful that the occupational health program remained as a central focus of the restructured board in the 1990s. Nevertheless, the world in which the program was born and began its operations has changed. New socio-political configurations and new economic imperatives and pressures have all impacted upon regulatory regimes, with renewed emphasis upon self-regulation and user-pay systems. As a result, regulating occupational health in the coal industry is also in flux. As the board looks to the future, the challenge will be to maintain the extraordinary success with occupational health under changing conditions. I hope that the high standard set by the Joint Coal Board is the hallmark of the new organisation that will have the health and lives of coalminers under its jurisdiction.
The honourable member for Burrinjuck, who led for the Opposition, referred to the Mine Rescue Bureau. I have not referred to the bureau, but I can say that without that organisation the number of men that would have died in the past 30 or 40 years would be beyond comprehension. That organisation has to be maintained. The work of the Mine Rescue Bureau is crucial to the viability of the coal industry. We should all applaud the men who work with that bureau and risk their lives going underground to save other mineworkers who might be trapped. This bill takes that into consideration and I will make sure there is no reduction in the powers of that organisation.
Mr MILLS (Wallsend) [12.06 p.m.]: The Coal Industry Bill aims to implement changed arrangements in the New South Wales coal industry for the delivery of services for occupational health and safety, workers compensation, and mines rescue. I will commence my contribution by saying that I consider this both a sad and a happy day. It is sad for the same reason mentioned by the honourable member for Wollongong: that after about 55 years the abolition of the Joint Coal Board marks the end of an era. Many of the community benefits in the area I represent in the Hunter Valley, around Wallsend and surrounding districts and suburbs, resulted from one of the objects of the Joint Coal Board: it gave many donations to community activities. I have seen plaques in halls, parks and health centres with the words, "Funding for this project was donated by the Joint Coal Board", and the contribution of the board is evident in so many other aspects of our lives in the Hunter Valley. The Joint Coal Board obviously became an intimate part of the life, welfare and progress of our mining communities in the Hunter, and of course that will now end.
Of course, the Joint Coal Board was also an advocate for the coalmining industry. One wonders whether the new companies will be willing to advocate for the coalmining industry and those who support the miners and producers of coal. At the beginning of my speech I said this was a sad day and a happy day. The happy side is, I suppose, that the bill will bring to an end more than 10 years of uncertainty in the industry. When I was first elected to this place the Minister for Mines and Energy was the honourable member for Hornsby, Mr Pickard, a Liberal Party member. Even in the late 1980s the Joint Coal Board was under question.
Then during the 1990s the Commonwealth Government announced its intention to withdraw support for the Joint Coal Board, which had been established under the mirror Federal and New South Wales Coal Industry Acts of 1946. The Commonwealth Government said that its basis for that withdrawal was that it considered the Commonwealth had no role to play in the oversight and administration of the New South Wales coal industry. My analysis is that that action came from the development of the Competition Policy as an offshoot of the ideology of small government. The Commonwealth has now passed the Coal Industry Repeal Act of 2000, which repealed its counterpart Commonwealth Act and will transfer the assets, rights and liabilities of the Joint Coal Board to the body to be formed under the bill before this House. The Federal Act's proclaimed commencement awaits the passage of the New South Wales Act.
The New South Wales Government is taking this legislative opportunity to generally rationalise coal industry operations. The bill provides for the dissolution of not only the Joint Coal Board but also the Mines Rescue Board, which was established under the Mines Rescue Act 1994. The Mines Rescue Board exercises rescue co-ordination functions mainly in connection with underground coalmines in this State. The bill generally effects a reform plan supported by the industry parties—the Construction, Forestry, Mining and Energy Union [CFMEU] and the New South Wales Minerals Council—for the transfer of the functions of the Joint Coal Board and the Mines Rescue Board to new industry-owned corporations. Under the bill, those private companies will be subject to strict government scrutiny.
The bill embodies the agreed position of the industry parties in facilitating a scheme of industry self-regulation in the provision of occupational health and safety, workers compensation and mines rescue for the coal industry, with the Government exercising reserve monitoring and regulatory powers to protect the industry's workers and the public interest. This legislation implements the Grellman recommendations, which I will come to a little later. The union has indicated that it supports this measure, and I was pleased to see Ron Land, the secretary of the Northern Region Branch of the Miners Federation, here in Parliament last week. He was wearing his business suit, rather than the kilt that I often see him wearing. That meant he was here on business, which was to hear the Minister give his second reading speech. I was pleased to get Ron's personal assurance that the union was in agreement with the legislation as proposed. He obviously was pleased that it would put an end to all of the uncertainty that had pervaded the industry for far too long.
The bill has a number of major provisions, and I will go through them very briefly. One is to transfer the assets, rights and liabilities of the Joint Coal Board and the Mines Rescue Board to one or more industry-owned private corporations registered under the Corporations Law and approved by the Minister to exercise particular functions set out in the bill. Those functions are currently performed by the Joint Coal Board and the Mines Rescue Board. As a consequence we will have a new company, Coal Services Pty Ltd, whose shares will be distributed equally to the Minerals Council and the CFMEU. The new company will have the same health and welfare objects as the Joint Coal Board. Existing staff members of the Joint Coal Board and the Mines Rescue Board will have their employment and conditions safeguarded. The approved mines rescue company will be responsible for the establishment and operation of the New South Wales Mines Rescue Brigade.
It is proposed that the new company will be Mines Rescue Pty Ltd. Coal industry employers are required to effect workers compensation insurance for their employees with the approved workers compensation company, which is a continuation of the current 1946 Act stipulation involving the monopoly operation of the Joint Coal Board subsidiary company, the name of which is proposed to be Coal Mines Insurance Pty Ltd. The bill provides that the company will be a self-funding and self-regulating insurer outside the scope of WorkCover Authority supervision. The Minister will appoint each company's directors. There will be two CFMEU nominees, two Minerals Council nominees and two independents nominated jointly by the CFMEU and the Minerals Council. The chief executive officer is to be nominated by the other directors. I understand that reviews will be undertaken after one year and two years of the operation of the new Act.
I said earlier that I would expand a little on the workers compensation functions. To understand the future of the Joint Coal Board and the role of workers compensation functions, it is important to consider its history. Coal Mines Insurance Pty Ltd, then known as Mine Owners Insurance Limited, was incorporated in December 1921, and in 1996 it celebrated its diamond jubilee. The company's shareholders at its inception numbered 13 and consisted of individuals and companies which owned and operated coalmines. They included Hebburn Ltd, Rothbury Estates, Scottish Australian Mining Company Ltd, Caledonian Collieries Ltd, J. and A. Brown and Stockton Borehole Collieries Ltd.
The company's aim in 1921 was to underwrite workers compensation risks in the New South Wales coal industry, although within a few years other risks were also underwritten. The original board of directors numbered seven and were nominees of seven of the shareholders. Captain Thomas Langley Webb was the first chairman of directors. He was described as a shipowner and was the nominee of Hebburn Ltd. A subsequent chairman, Mr Thomas Armstrong, was, during a large part of his tenure from 1931 to 1944, a member of the Legislative Council of New South Wales. Business commenced on 1 January 1922. The company was immediately successful and declared a dividend of 10 per cent of paid-up capital at the conclusion of the first year's trading. So successful, in fact, was the company that between 1922 and 1948—the year the Joint Coal Board purchased all the shares in the company—payment of an annual dividend was missed only once. During this period dividends varied between 5 per cent and 25 per cent of paid-up capital.
The company's first policy was issued to the Scottish Australian Mining Company Ltd. Liability under the Workers Compensation Act was unlimited. However, liability at common law was limited to $1,500, in current money values, and the cost of any "one disaster" was limited to $100,000. Declared wages for this policy at the conclusion of its first year was $304,000. Other original policyholders were James and Alexander Brown, at Minmi and Maitland; Newcastle Coal Mining Company Ltd, at Greta and Merewether; and H. F. Maddison, at Wallsend. Each of these policyholders was a shareholder of the company. It is interesting to note the company's business practice in setting premiums during the 1920s as disclosed in this extract of a private memorandum to directors from the company secretary in 1926:
In accordance with the discussion which took place at the last board meeting, I have to advise that I consider that the following premium rates should apply:
Our own shareholders policies 4%.
Other in the North and West 6%.
Southern Mines 8%.
It is clear from the above that the southern coalfields had no shareholding in Mine Owners Insurance Ltd. The company, however, attracted considerable business from colliery proprietors who were not shareholders. Occupational disease is a contentious issue in the 2000s, and it seems the 1920s and 1930s were no different. In 1930 Mine Owners Insurance commissioned an investigation into "miners nystagmus". It appears this condition was brought on by poor lighting in underground mines. What is of interest is a comment in that investigation which is still relevant today:
We all know how quickly a working man out of employment deteriorates, how soon he loses his muscular tone, how frequently he suffers from digestive disorders and sleeplessness brought on by worry. Worry over loss of income, anxiety for the future, inability to occupy his spare time except by standing at street corners discussing his ailments with his fellow sufferers.
Miners nystagmus is no longer a source of claims in the New South Wales coal industry and it is assumed that it was engineered out of the industry years ago. A typical letter to Mine Owners Insurance during the late 1930s from a policyholder—also a shareholder—said:
At a recent board meeting it was decided to approach your company in the matter of the supply to our underground employees with (sic) safety hats so as to reduce the incident of head injuries.
It is my contention that the cost of this equipment should be borne by your company and the employee.
Times have certainly changed since then. In 1947 the Joint Coal Board was formed, with one of its functions being the underwriting of workers compensation liability for the entire New South Wales coal industry. At that point in time Mine Owners Insurance was the largest insurer of workers compensation in the coal industry. The Joint Coal Board offered to purchase all the paid up shares for $4 each. The board of directors of Mine Owners Insurance accepted the offer on 16 June 1948. Soon after that the company's name was changed to Coal Mines Insurance Pty Ltd and risks other than workers compensation ceased to be written. Since then the company has operated as a fully owned subsidiary of the Joint Coal Board.
In recent years the company has not directly underwritten workers compensation risks but it manages the insurance fund on behalf of the Joint Coal Board. Over the years the company has been proactive and innovative in a number of areas. During the 1940s the use of movie film in the investigation of claims was pioneered by Coal Mines Insurance. In recent years the company has been prominent in challenging the actions of service providers, lawyers, doctors and rehabilitation providers who have tried to use the compensation system purely as an opportunity to make easy income for themselves. As a result of these challenges, considerable amounts of money have been saved for the coal industry in New South Wales without taking away any benefit properly due to injured workers in the industry.
Throughout its 75 years, insurance liabilities under the company's management have always been fully funded. It has always been the company's policy to charge realistic premiums and to bring to account the full value of existing liabilities. Despite this, the policy premiums it has charged have been competitive and often lower than those for similar risks underwritten by others. This financial strength has been the result of stable, long-term underwriting and claims management. I am pleased to commend the bill to the House. Whenever honourable members are driving through Cessnock they should take the opportunity to visit the Miners Memorial Wall.
Mr Markham: There is one in Wollongong too.
Mr MILLS: I am told that there is also one in Wollongong. It is important for honourable members to be aware of health and safety issues in the coalmining industry.
Mr PRICE (Maitland) [12.21 p.m.]: I support the Coal Industry Bill and endorse the comments made earlier by my colleagues the honourable member for Wollongong and the honourable member for Wallsend, both of whom have mines in their electorates. I do not have any mines in my electorate now, but I certainly have a lot of miners. These legislative changes are of significance to my family. In 1896 my grandfather, Robert Drylie, was involved in rescuing miners involved in the Stockton mine disaster. I do not know how many people were killed in that disaster, but my grandfather and a number of other members of the then mine rescue team were awarded a Royal Humane Society bronze medal for their rescue efforts.
One has to remember that in those days the only way to get a draft through a mine was to have a furnace down below, so the first people to be killed in any explosion were the furnace men. I think on that occasion seven furnace men perished. It is significant that, even today, mines rescue has to be a key element in any organisation associated with the structure and operation of the mining industry. The Commonwealth Government, which has withdrawn from its responsibility, has passed legislation to that effect. However, the implementation of that legislation is dependent on the passage of this legislation. I understand why the Commonwealth Government has withdrawn from its responsibility. Equally, I understand the State's reticence to rush into agreeing to that legislation without putting in place the right elements, which is what has occurred on this occasion.
The establishment of the Joint Coal Board still stands as the most comprehensive and positive move by two levels of government to reform the coal industry in this State—a significant outcome, given the crucial role of coal in Australian life and in the economy of this nation. At this point it is timely to remind honourable members of the performance of the coal industry in New South Wales over the last five years. For the period 1996-97 to 2000-01, raw coal production has increased by 12.2 per cent, saleable coal has increased by 10.8 per cent, employment has reduced by 31.4 per cent—a pretty significant reduction in any industry's employee level—raw coal output per employee has increased by 69.4 per cent, saleable coal output per employee has increased by 67.2 per cent and the dollar value of New South Wales coal exports increased by 12.9 per cent, from $3.4 billion to $3.8 billion.
The Joint Coal Board can certainly, amongst a number of other activities, claim credit for the elimination in New South Wales coalfields of the illness known as black lung or pneumoconiosis. In 1946 some 16 per cent of miners suffered from the disease. However, that disease has virtually been eliminated. The Joint Coal Board clearly played a significant role in improving the health and welfare of coalminers and their local communities. Today the Joint Coal Board continues to meet its charter through the provision of occupational health and rehabilitation services such as health assessments, injury management, work environment monitoring, health education services and a vocational retraining program.
Furthermore, mine rescue services have also played a significant role in the New South Wales coal industry since 1826—and before, as I alluded earlier. The presently constituted Mines Rescue Board has as its objectives the provision of a rescue service to deal with emergencies arising at underground coalmines in New South Wales, and the use of the rescue service in connection with emergencies at other mines. Under this program, there will be a significant change in the operation of the New South Wales Mines Rescue Brigade. The company will appoint brigade members from mine employees, with breathing and rescue equipment and training requirements to be provided by mine owners.
As is presently the case, levy contributions on mine owners defray the costs of its principal mines rescue functions. The importance of a mines rescue service was brought home to me in my former electorate of Waratah, which covered the area of Kurri Kurri and Cessnock. The influence of retired miners in that area was not insignificant. One very quickly learned how the town operated. We did not just have street meetings about community activities in Kurri Kurri; we had street marches, including bands and parades. The schools, the scouts and everybody else participated in those marches, which were organised by older people in the mining communities who remembered how difficult life was in the past and recalled the problems associated with mines.
If honourable members visit Minmi, where my grandparents lived for many years, and take a walk through the cemetery—which of course now falls within the electorate of the honourable member for Wallsend—they will realise how high the death toll was in that area. Seven members of one family, a not insignificant number, are buried in one grave site—uncles, brothers and sons who were killed on one day. No matter what happens in the mining industry we should never forget that it is one of the most dangerous industries in which anyone can be involved. We must not ignore those dangers, which are ever present no matter what precautions are taken. Retired miners in Kurri Kurri always ensure that their hospital is kept intact, and it would be a brave government that attempted to close down Kurri Kurri District Hospital.
The Coal Industry Bill has as its aim the implementation of reform arrangements in the New South Wales coal industry for the delivery of services for occupational health and safety, workers compensation and mines rescue. The bill effects a reform plan for the transfer of the functions of the Joint Coal Board and the Mines Rescue Board to new industry owned corporations approved by the Minister. Broadly, the functions of this new body will be to provide occupational health and rehabilitation services for coal industry workers; to promote the welfare of coal industry workers, including monitoring and promoting matters, including the approval of training schemes, relating to the health and safety of those workers; to monitor dust in coalmines; to establish, administer or provide workers compensation insurance schemes in relation to coal industry workers; and to establish, administer and provide administrative services in respect of industry superannuation schemes for coal industry workers and employees of approved companies.
Other functions of the body include mine rescue services and the collection, collation and dissemination of industry statistics, including statistics relating to the health and safety of coal industry workers. The Coal Industry Bill is an innovative response by New South Wales to the Commonwealth Government's decision to withdraw from its involvement with the Joint Coal Board. The bill sets in place arrangements for a secure, safe, viable and competitive future for the coal industry in New South Wales. The bill has the clear support of both sides of the coal industry, which is not insignificant. Both the Construction, Forestry, Mining and Energy Union and the Minerals Council are keen to access the largely industry self-regulating scheme that they have negotiated with the Government. I look forward to the implementation of this legislation. I am confident that its mix of public monitoring and industry self-regulation will be successful for coalmining workers, mine owners, and the State and national economies.
I refer to one issue that the honourable member for Wallsend mentioned in his speech: the provision by the Joint Coal Board of funds for facilities for towns that had employed mineworkers. Its generosity, if I can call it that, extended to extraordinary levels. In Beresfield, which is part of the Wallsend electorate, a coalmine was established during the Second World War: the Kent colliery. I was able to demonstrate by fairly heavy research in the area that mineworkers, retired mineworkers and children of mineworkers still lived in that area. Substantial amounts of money were granted to the Beresfield Bowling Club early in its establishment, to a number of sporting bodies in that area, to the local public school and, I suspect, to the Catholic school. A mine had not been established in that area since 1945 and there had been only one mine subsidence job.
This is a piece of our history. The commercial mining of coal had a tremendous impact in those areas. It cannot be ignored in the Hunter Valley. One of my branch members, now deceased, owned a mine. He and his brother worked it for many years and made a substantial amount of money out of that small operation. Mining is integral to the valley; it is like having dirty fingernails. We got past dust on the lung, but dust still remains in the blood of most families in the valley. This is a great piece of legislation, which I commend to the House. I congratulate the Minister on his perseverance.
Mr AMERY (Mount Druitt—Minister for Agriculture, and Minister for Corrective Services) [12.32 p.m.], in reply: My reply shall be brief to accommodate the constraints of the parliamentary program. In saying that, I apologise to honourable members representing the Hunter and the Illawarra who wished to speak to the bill but who, because of time constraints, were not able to do so. Honourable members who spoke supported the bill and the mine industry workers. I thank the honourable member for Burrinjuck for leading for the Opposition and supporting the bill. Her statistics about the extent of the mining industry showed how important the industry is not only to the economy but to the people who work in the industry. Like many honourable members, she referred to a family connection with mining—admittedly, her connection was to goldmining. Her grandfather Jack Hodgkinson worked in the goldmining industry. Her connection to the mining industry is similar to that of many members of this House.
I thank the honourable member for Wollongong, who says that this is a sad day to some extent. The honourable member for Wollongong has the closest relationship to the mining industry. He highlighted his 26 years employment in the industry, as well as his personal and family history. Members' emotional and family connections to mining made this debate moving and interesting. The honourable member for Wollongong told me that for some time after coming to this place the dust still came out of his pores and spoiled his white shirts. One does not get any more direct representation from the mining industry in this House than that! I thank the honourable member for Wallsend and the honourable member for Maitland, who represent the Hunter region. The honourable member for Wallsend spoke about the change this legislation will bring about. He acknowledged the industry's contribution to community projects in various parts of the Hunter, where plaques depict the role of the Joint Coal Board, and the industry's financial contribution to those projects.
The honourable member for Wallsend and the honourable member for Wollongong reminded honourable members of the memorial walls in Cessnock and Wollongong containing the names of mineworkers who have suffered tragedy since the late 1880s. The honourable member for Maitland talked about his grandfather Robert Drylie, who worked in a mines rescue team in the 1800s. His contribution highlighted the connection honourable members have with mineworkers and their affection for them, not only because they represent them but because of family connections. I feel somewhat humbled by that direct representation. I inform the House that my father, Vincent Cronshaw, and his brothers were coalminers. They worked in a Lancashire town called Burnley. My father worked there until about 1927 or 1928. He then became the only member of his family to move to Australia.
The irony is that in 1929 he became a policeman. In one of his first jobs he was part of a large police contingent that was sent to Weston and Rothbury during the lockouts and strikes that are very much a part of this State's history. One can appreciate his role of working in the coalmines of England, then coming here, working in the police force and being involved in a confrontation with the miners who were locked out during that uncomfortable and difficult time. It must have been a difficult job for him. Many honourable members did not contribute to the debate because of time constraints. However, they would have recognised the importance of the industry and the workers within it. I thank honourable members for their support of the bill and for their sometimes emotional contributions to the debate. I commend the bill to the House.
Motion agreed to.
Bill read a second time and passed through remaining stages.