Are foreign workers really the answer to the resources skills shortage?

There has been a concerted push for foreign workers to fill the gaps in the resources industry. AAP

Within the much publicised debate of labour shortages in the resources sector, there is now a concerted push to open up employment to larger numbers of skilled foreign workers.

Large employers such as Gina Rinehart’s Hancock Prospecting have applied to be allowed to bring in more temporary workers under the federal government’s Enterprise Migration Agreement, introduced in the 2011 Federal Budget to tackle skills shortages in the resources sector.

Forms of industry-specific guest worker programs such as these, as well as the existing 457 visa program, are designed to provide resources employers with a key form of numerical labour flexibility to address current labour shortages and future labour demand as new operations are brought on stream.

Equally, if demand slackens in the future - as is always possible given the boom/bust nature of the mining industry - atypical forms of employment such as 457 visa workers are a means by which employers can more easily manage contraction, compared to permanent employees who have some measure of employment protection.

But if the benefits to employers seem apparent, there are a number of concerns that surround expansion of this form of employment.

An important policy question is how desirable it is to increase ex-pat labour, when labour demand in the resources sector provides an opportunity to address underemployment in other sectors of the economy.

A related concern is that this might limit opportunities for employment of those indigenous Australians who live in close proximity to mining ventures, and indeed who may have native title rights to the mining land. Across employment equity indicators Indigenous employment reveals the widest disparity in employment opportunity (unemployment), and employment outcome (wage disparity).

Thus, in order to “close the gap”, the debate about 457 visa workers must also consider the complex issues surrounding native title and mining leases, and the critical question of how to increase Indigenous labour force participation and make Indigenous employment more sustainable.

Some employers in the industry, notably Fortescue Minerals chief Andrew Forrest, have supported measures to guarantee Indigenous employment (through the Australian Employment Covenant) and to provide on the job training to enhance sustainability of indigenous employment. Measures such as this are clearly to be encouraged.

While there has been much publicity of job opportunities in mining, there remains the question of the extent of training necessary (job readiness) for potential workers without industry experience, and the question of relocation of workers to remote minesites. 457 visas have the potential to address the issue of job readiness but involve substantial relocation costs.

Aside from 457 visa workers, relocation is being achieved by a combination of permanent relocation of workers to mining centres, the increased use of fly-in fly-out operations (which involve financial costs that are largely bourne by employers) and drive-in drive-out workers, who often live in coastal communities and commute long distances to and from work.

Recent media reporting has pointed out that fatigue is an important safety concern for fly-in fly-out workers. Is it also worth noting that research shows that fatigue is also a very serious, albeit under-reported, health and safety issue for drive-in drive-out workers.

This risk is not only a workplace health and safety issue but also a community concern as the safety risk from fatigue is extended to other road users.

While fatigue is an important precondition for increased safety risk, especially in heavy industries such as mining, the employment of 457 visa workers raises other safety concerns. Language barriers represent clear impediments to the comprehension of health and safety risk, and even simple precautions like safety signing may not alert foreign workers to potential risk.

A broader concern about the employment of 457 visa workers is the lack of cultural context for these semi-skilled workers who are likely to have poor if any English language proficiency. It is to be expected that mining communities, which are often remote, will have few familiarities for foreign workers compared to employment in more urbanised areas.

A final consideration is the long-term capacity of foreign labour if greatly expanded to undercut local employment conditions. In a sense this would be a further extension of what has already occurred in mining with the influx of contract labour from the 1990s onwards, and the impact that this has had on weakening the control of unionised workers in key sectors such as the coal industry.

Thus, while potentially offering a remedy to acute labour shortage, any 457 solution to the current mining boom will require careful consideration of the management of these workers both in the community and workplace.

An expansion of this employment must also be considered against broader labour market policy in terms of how the employment opportunities of the boom are distributed across the economy, and what impact it is likely to have on existing mining workforces.