Mine Safety (Cost Recovery) Bill
Debate resumed from 29 November 2005.
Ms LEE RHIANNON [11:25 a.m.]: I am pleased to join my colleague the Hon. Ian Macdonald in supporting this bill. When the Minister presented the bill he said it was a great achievement of his and a great achievement of his Government. I acknowledge that this bill is positive, but it is dubious that the Minister should regard it as a feather in his cap. It should be remembered that the Minister failed to explain to the House why he took so long to introduce the bill. In July this year the mining division of the Construction, Forestry, Mining and Energy Union [CFMEU] warned the New South Wales Government to honour its commitment to a more vigorous pursuit of safety standards and action in the coal industry.
The report of the Wran review was brought down on 10 April. Honourable members would be aware that that review contains important recommendations on mine safety. Up until July nothing had been done—the months continue to drag by—and that is why the warning was issued. Former Premier Wran recommended a properly resourced inquiry into fatality and injury rates backed up by action to prosecute and enforce penalties for those whose breaches of safety regulations lead to fatalities and injuries. Throughout that period scores of coalminers continued—as they do right now—to be seriously injured at work. Action should have been taken in the weeks, not months, after former Premier Wran brought down his report.
This Government reaps hundreds of millions of dollars a year in royalties from the New South Wales coal industry. The Greens support the call by the CFMEU for sufficient funding to pursue prosecutions for breaches of safety standards. That should not just be limited to those who are responsible for deaths in the industry; we also need adequate funding to ensure the enforcement of penalties against those whose breaches of safety laws have led to the spate of serious injuries plaguing the State's coal industry. The CFMEU made a huge effort to get the Government to take action on this issue. When I read the Minister's speech I was therefore very surprised that he made no mention of the CFMEU, or of the hard work that it has done in this place. The Minister quite gleefully tried to misrepresent my position on mining issues. I am happy to again state the Greens' position: We do not support new coalmines or new coal-fired power plants.
The Hon. Duncan Gay: You do not support any coalmines.
Ms LEE RHIANNON: I acknowledge the interjection of the Deputy Leader of the Opposition, who said we do not support any coalmines. That is not true. We continually state what is our policy and it is available for all honourable members and members of the public to read—something that is not possible when it comes to the major parties. People are able to read our policies.
The Hon. Amanda Fazio: Rubbish!
Ms LEE RHIANNON: I acknowledge the interjection of the Hon. Amanda Fazio, who just said it is rubbish. If it is rubbish where is this Government's policies? We are not able to see its policies on any of these matters. That is the Greens' clear position on this matter. We are very committed to the rights and safety of workers at existing coalmines and power stations. I checked the Minister's speech using the control-F function on my computer to see whether I had missed a reference to the CFMEU, but he did not mention it. That is very disappointing considering the huge efforts the union has made—
The Hon. Duncan Gay: He was closely involved with it. He's probably trying to hide it.
Ms LEE RHIANNON: I acknowledge the interjection. I obviously cannot speak for the Minister on that front. But the Deputy Leader of the Opposition raises an interesting point. Over the years I have watched the Minister—who was a Parliamentary Secretary during my first four years in this place—act duplicitously. He worked closely with the right wing of his party in Parliament but when on the hustings he worked closely with the unions and promised to represent them in the House. So I was shocked and disappointed when the Minister failed to acknowledge the hard work of the union in prompting the Government to do the right thing and introduce this legislation.
I acknowledge the speech of the Deputy Leader of the Opposition, who led for the Opposition in this debate. He revealed the Opposition's true colours. For all my criticism of the Minister, at least he has done the right thing. If the Coalition were in power this bill would not be before the House today. That is an important point. I must admit I wondered about the Minister's speech. Perhaps he was desperate to have a win after Essendon failed even to make the Australian Football League semi-finals and was searching for some good news.
Reverend the Hon. Dr GORDON MOYES [11.31 a.m.]: I lead on behalf of the Christian Democratic Party in debate on the Mine Safety (Cost Recovery) Amendment Bill. The purpose of this bill is to provide for the payment of contributions by mining industry insurers to fund the costs incurred by the Department of Primary Industries [DPI] in carrying out its regulatory activities under mine safety legislation and in generally administering the legislation. The contributions made by mining industry insurers will be paid into a mine safety fund to be administered by the director general of the department.
Every employer ought to be concerned with the safety and welfare of his or her employees in the workplace. The provision of a safe workplace by employers should be a non-negotiable aspect of the work environment. Depending on the nature of the work required to be performed, employees will be exposed to varying degrees of risk in their jobs. Notwithstanding this, every reasonable measure should be taken to mitigate the risk of danger to employees. Even if risks are inherent in the task involved they should not be tolerated. Judge Boland in Rodney Morrison v Wambo Coal Pty Ltd said:
… there might be a view … in relation to the coal mining industry that work in coal mines should be regarded differently from work in other industries in terms of defendant's liability under the occupational health and safety legislation. The legislation makes no such distinction. The liability of an employer under the legislation, regardless of the industry in which it operates, is absolute; the notion of some risks being acceptable because of the nature of the work of coal mining is a notion that should not be countenanced.
This view is worthy of support. On 14 November 1996 Gretley Colliery became a site that would be remembered for all the wrong reasons. Miners inadvertently broke through into the flooded workings of an old abandoned mine and four miners died in the inrush of water. The miners had struck through in that particular area because they had been given maps that inaccurately described where the old workings were located. The disaster at Gretley prompted an inquiry into mine safety, which was conducted in 1997 alongside a mine safety review. The New South Wales Industrial Relations Commission fined Xstrata $1.5 million and three mine managers a total of $100,000 over the death of the four miners. Xstrata is appealing the commission's decision to the Court of Criminal Appeal.
Mining is one of those industries where, unfortunately, risks to life and safety have been realised. Across Australia about 4,000 deaths have been recorded in the mining industry. Between 1980 and 2004 104 fatalities occurred in New South Wales mines. On a positive note, between 2004 and 2005 no fatalities were recorded. However, in the first to the third quarters of 2004-05 there were four permanent total-partial disablements, 10 temporary disablements lasting for greater than six months and 1,264 temporary disablements lasting less than six months in the New South Wales coalmining industry. In metalliferous-extractive mining there were 47 total disablements. Notably, the number of disablements has decreased considerably over the past six years.
In the realm of serious injury within the coal sector, in 1997-98 61 serious injuries were recorded and the figure for 2004-05 stands at 18. There has been a progressive decrease in the number of serious bodily injuries recorded. Under the Coal Mines (General) Regulation 1999 clause 85 defines "serious bodily injuries" as including amputation, asphyxia, burns requiring hospital treatment, dislocation, fractures, internal haemorrhaging requiring hospital treatment and the loss of sight in at least one eye. All in all, we must think of these figures not as statistics but as real lives that have been taken prematurely or affected tragically. Our heart goes out to the families affected by these calamities. The New South Wales minerals industry currently employs about 15,000 people, mainly in rural and regional areas. We hope that risks will be mitigated to such an extent that none of those workers will ever be affected by tragedies of the kind that I have described.
The Government requested that former Premier the Hon. Neville Wran, QC, conduct a review on the steps that the Government had taken to improve mine safety. The Wran report looked particularly at whether the recommendations in the 1997 mine safety review and the Gretley inquiry report had been implemented. The Wran review found that the majority of recommendations arising from the review and suggested in the report had been carried out but that a number of matters that were the subject of recommendations in the earlier reports remained to be dealt with and/or completed. The review made an assortment of recommendations—31 in total. For example, recommendation No. 6 is that the responsibility for the regulation of mine health and safety issues be brought together under the DPI rather than overseen by separate agencies, as occurs at present. Recommendation No. 10 insists that a:
… new, strengthened Mine Safety Advisory Council should take forward future examination and progression of mine safety and health issues.
The advisory council has been established and is governed under the Mining Act 1992. It is made up of representatives from industry, unions and government. Another fundamental recommendation was to form a board of inquiry under section 94A of the Coal Mines Regulation Act 1982. The board will be given the responsibility of examining the issues of safety enforcement policy and implementation and will assess the adequacy of current enforcement policies. A number of recommendations will be referred to the Mine Safety Advisory Council while others will be referred to the Department of Primary Industries for implementation. These recommendations relate to the preparation and implementation of safety and health regulations and the benchmarking and improvement of safety data systems to international best practice. It is hoped that recommendation No. 2 will be heeded by the department. It states:
Regulations, proposed under the Coal Mine Health and Safety Act 2002, should be introduced without delay.
The Department of Primary Industries will also be given responsibility for identifying, monitoring and reporting on mine health hazards. One salient review recommendation was the call for a levy on the mining industry to:
This bill seeks to provide a platform for the Government to recover costs for its mine safety functions from the mining industry. The Minister's second reading speech indicates:
… help provide funds necessary to enhance inspectorial resources and mine safety initiatives in NSW.
… the cost of regulating mine safety and implementing the Wran recommendations is estimated to be at least $13.5 million per year.
It is also said that the Government has provided the majority of the financial resources to support the mine safety functions of the Department of Primary Industries. The Government has argued that, as the earnings of the mining industry have been extensive—for example, in 2004-05 the value of mineral production in New South Wales is expected to be more than $9 billion—the industry is in a good position to pay the levy. In fact, the industry is equivalent in size to the State's entire farming sector, including wool, crops and livestock. The levy is estimated to add merely about 11¢ a tonne to the cost of producing coal. An illustration is given in the second reading speech to demonstrate the impact of the levy on coal profits. Average free-on-board cash costs in New South Wales coalmines are between $40 and $45 a tonne.
By comparison, the average price in 2004-05 for export thermal coal prices was a little over $61 per tonne and for export hard coking coal the price was more than $83 per tonne. However, that does not take into account the money that the minerals industry contributes to the Government in royalty payments and State and Federal taxes, quoted at $1.2 billion in the 2004-05 financial year. According to the New South Wales Minerals Council, the New South Wales Government is by far the largest single beneficiary and receives approximately 50 per cent of the pre-tax profits. The Federal Government receives a further 25 per cent. The levy will apply to mining, oil, gas and extractive industries.
The idea of levying an industry to cover workers compensation costs is not a novel one. In fact, the proposed levy will be modelled on other levies in place in the workers compensation system, such as the dust diseases levy. The dust diseases levy is charged as a small percentage of an employer's wages bill. It is proposed that this levy will begin operation in the first half of next year. As pointed out in the second reading speech to the bill, the manner in which the levy will be collected in the mining industry will be similar to the collection system in place for the dust diseases levy. The dust diseases levy is added to relevant workers compensation premiums and collected when these premiums are paid.
Coal Mines Insurance Pty Ltd, a separate specialised workers compensation insurer, will implement a similar system for the coal industry. In order to collect the levy, the bill will establish a Mine Safety Fund to be administered by the director general. The amounts that will be paid out of the fund include payments required to meet the costs incurred in the Department of Primary Industries in administering the mine safety legislation and money required to reimburse the WorkCover Authority for expenses incurred when it exercises functions under an arrangement with the director general.
The Hon. Duncan Gay: There is no process to cap it.
Reverend the Hon. Dr GORDON MOYES: The Mine Safety Fund will be based upon an amount estimated by the director general. As the Deputy Leader of the Opposition indicates, there are no caps on the funds and a possibility of their being loaded. Contributions to the Mine Safety Fund will be based on an amount estimated by the director general. Each estimate will be in respect of a financial year commencing 1 July. In spite of that one reservation, the Christian Democratic Party supports the Mine Safety (Cost Recovery) Bill.
The Hon. IAN MACDONALD (Minister for Natural Resources, Minister for Primary Industries, and Minister for Mineral Resources) [11.42 a.m.], in reply: I thank honourable members for their contributions to the debate, particularly Reverend the Hon. Dr Gordon Moyes and the Deputy Leader of the Opposition, both of whom made intelligent and clear-cut speeches debating the merits of the Mine Safety (Cost Recovery) Bill. Ms Lee Rhiannon's comments were of a different nature: they were gratuitous insults. I remind Ms Lee Rhiannon that I assumed responsibility for this portfolio only in August this year. I have engaged in more or less weekly consultations with the Construction, Forestry, Mining and Energy Union [CFMEU] Mining Division, at many different levels, the Minerals Council and WorkCover to discuss the issues.
The CFMEU Mining Division is very supportive of this bill. If Ms Lee Rhiannon had asked, rather than try to make a gratuitous point, I would have explained that I meet with unions regularly, from the national secretary of the CFMEU, to State officers, to the national president of the mining union. Ms Lee Rhiannon's comment was stupid. The Mine Safety (Cost Recovery) Bill introduces a levy on mining industry employers to pay for the implementation of the recommendations of the Wran review into mine safety. The levy will also cover the costs associated with the safety regulation of mine workplaces undertaken by the Department of Primary Industries. In relation to the points raised by the Deputy Leader of the Opposition, the bill sets out clearly that the levy contributions must be paid into a special Mine Safety Fund.
The bill also specifies what payments can be made out of the levy fund. These specified payments are for the Department of Primary Industries' regulatory activities under or in connection with mine safety legislation, the administration or execution of the mine safety legislation, the administrative expenses related to the fund and money directed or authorised to be paid from the levy fund under the bill or any other Act or regulations to the bill. Those provisions ensure that the levy funds can be spent only on regulating and improving mine safety and costs associated with the fund. The Government will accept the amendment foreshadowed by the Deputy Leader of the Opposition on that point.
In relation to a further point raised by the Deputy Leader of the Opposition, the estimate of mine safety costs will be discussed each year with the Mine Safety Advisory Council. The council has representatives from industry, unions and government, as well as independent experts. The council will advise the Minister on the estimate, and the Minister will have to give approval before the levy can be raised. Further, a special set of accounts for the levy will be drawn up each year, which will show the amount of money collected and how it has been spent. I want to place on the record some further information about this bill and its operation. The bill provides for the director general to determine which insurers, or classes of insurers, are liable to contribute to the Mine Safety Fund. Insurers who can be the subject of those determinations are those who provide workers compensation cover to employers operating or partly operating in the mining industry.
Self-insurers operating or partly operating in that industry may also be liable to contribute. In the context of the bill, the mining industry includes employers in coalmining, metalliferous and extractive sectors, as well as those engaged in oil or gas exploration or extraction. The bill enables insurers to adjust premiums payable by mining industry employers to add amounts referrable to the mine safety levy. In the case of employers insured under the main WorkCover premium scheme, those adjustments will be determined in accordance with detailed provisions to be contained in insurance premiums orders under the Workers Compensation Act. In the case of specialised insurers, which include Coal Mines Insurance Pty Ltd, the bill gives the insurer the power to adjust premiums by adding an amount to take account of the levy.
That power of adjustment is intended to give the specialised insurer all necessary scope and discretion to determine the additional premium amount, if any, that particular employers are to be charged. The adjusted amount would become subject to normal arrangements applicable to payment and recovery of premiums under policies issued by the specialised insurer. The proposed wide premium adjustment power of specialised insurers would also allow the insurer to make any necessary alteration to those arrangements, including in relation to notifying the employer, requiring payment at specified times and, if necessary, taking recovery action. This bill is an important step in making sure that mine safety continues to improve. It is also important in bringing the mining industry into line with other industries, which pay for all their workplace safety regulation through the WorkCover scheme. It is responsible legislation with an important purpose.
Motion agreed to.
Bill read a second time.
Clauses 1 to 5 agreed to.
The Hon. DUNCAN GAY (Deputy Leader of the Opposition) [11.48 a.m.]: During my contribution to the second reading debate I asked the Minister for Mineral Resources for a guarantee that the fund would not go out of control because it was not capped. The Minister quite properly indicated that he would answer that in his reply to the second reading debate. In his reply the Minister indicated that he had that power, and it goes before a committee. However, that power is vested with the director general and the committee is only an advisory committee. The industry and I want an indication as to how it can be controlled and a commitment from the Minister for restraint on his behalf in the next two years.
The Hon. IAN MACDONALD (Minister for Natural Resources, Minister for Primary Industries, and Minister for Mineral Resources) [11.50 a.m.]: The confusion is fairly easy to clear up. Division 2, contributions to mine safety fund, clause 9 (3) states that the director general's estimate for the relevant period has no effect unless it is approved by the Minister. The director general makes the estimate and the Minister has to approve it.
The Hon. Duncan Gay: So you will not approve any increases?
The Hon. IAN MACDONALD: I cannot give a commitment not to approve any increases because there could be problems that lead to some increases. I hope it does not happen. The intention is that the advisory committee will give advice to the director general about the level for the levy and the purposes for which it is spent, which are outlined in the bill. I give a commitment that, other than necessary costs that might arise from time to time, I will not crank up the levy to any degree.
Clause 6 agreed to.
The Hon. DUNCAN GAY (Deputy Leader of the Opposition) [11.51 a.m.], by leave: I move Coalition amendments Nos 1 and 2 in globo:
No. 1 Page 5, clause 7 (1) (e), line 30. Omit "or any other".
No. 2 Page 5, clause 7 (2), line 32. After "Fund", insert "nor can they be applied for any purpose by any other Act".
As the Minister indicated in his reply and in reply to my question a moment ago, he will accept the amendments, which I appreciate. The amendments are simple and will clarify that the money raised from the industry will apply to the costs of looking after mine safety and will remain in that area. The temptation for the Minister to move that money elsewhere has been removed. Those who are paying the money can rest assured that it will go to the area it is meant for.
The Hon. IAN MACDONALD (Minister for Natural Resources, Minister for Primary Industries, and Minister for Mineral Resources) [11.52 a.m.]: Clearly, the purposes of the levy are specified. It is not as though the levy is open-ended. Its purpose is defined in the bill. We accept the amendments. A transparent set-up has been arranged with the advisory council and representatives from the Minerals Council and the industry. The money is to go into a separate trust account. I am happy to accept the amendments.
Amendments agreed to.
Clause 7 as amended agreed to.
Clauses 8 to 19 agreed to.
Title agreed to.
Bill reported from Committee with amendments and passed through remaining stages.