June 17, 2022
The energy industry has been making headlines in recent weeks. We have seen threats about state-wide blackouts, announcements about coal-fired power stations shutting down early, as well as witnessing a hostile takeover of AGL, Australia’s biggest energy generator.
In this coverage, there is something glaringly missing from the debate, which is that we must put workers at the centre and ensure that workers and communities are not left to pay the price during this period of massive upheaval.
I wrote an opinion piece for The Australian that was published on 7 June that I want to share with you. I wrote this to put the focus back on workers and ensure that our coal communities are not left behind. You can read below:
The spectacular collapse of AGL’s planned demerger has commentators speculating about the future of the company’s high-emitting stable of coal and gas-fired power plants.
But we don’t need a tech billionaire takeover to tell us that our domestic energy industry is undergoing massive upheaval. Ask any power station worker who has been told their workplace is closing years earlier than expected, or who watches the value of the coal-fired-power they pump into the grid plummet as suburbs full of solar panels kick into gear on a sunny day. Change isn’t just coming, it’s here. And while debate rages over targets and technologies, the question workers have is: what about us?
A decade of policy failure means that we have lost valuable time in dealing with the basics of setting a national emissions reduction target and shoring up the energy grid to deal with the influx of renewables. These issues have been largely left to state government while the federal Coalition has been paralysed by the climate culture war it started.
The question of what happens to workers and communities has been neglected, with any suggestion of supporting workers affected by energy transition shamefully weaponised as being anti-coal.
Feelings about coal don’t change the fact that 10 Australian coal-fired power stations have already closed and the only thing yet to be determined for the remaining power stations is their eventual closure date. As we recently saw at Origin’s Eraring power station, these dates can be brought forward substantially from their forecasts, with the three year notice requirement the only guarantee.
The question of what becomes of existing workforces and the communities reliant on high-emissions industries has come to be known in the global climate change dialogue as Just Transition. In fact, at the Glasgow summit last year it was agreed, including by the then Prime Minister Scott Morrison with the support of his National party coalition partners, that each country would report how it was integrating Just Transition into their national emissions reduction strategies.
As the principal union for workers in coal-fired power stations, we have taken a deep interest in protecting workers’ interests when closures are inevitable.
We commissioned Professor Peter Sheldon at the University of New South Wales to research Australian and international examples of coal restructuring and the impact on workers and their communities. The gold standard is clearly Germany where the closure of their chronically unprofitable but huge black coal mining industry over three decades was managed by a tripartite Government enterprise called Ruhrkohle AG. As each mine closed those workers not ready for retirement were redeployed to neighbouring mines. If there were not sufficient vacancies, voluntary redundancies were offered at the destination mines. If a worker preferred to retire but was short of the retirement age funding was available to bridge the gap.
Germany is now going to the next stage – phasing out its brown coal industry and all coal power generation (with the Russia-Ukraine war complicating but not changing that strategy). To buttress regional communities billions of Euros is being invested to create alternative employment and replace the income lost. This was all done with Government, companies and unions working together to reach consensus through the German Coal Commission.
In Germany they view industry restructuring as a shared problem to be dealt with by collective action.
Australia’s record of industry restructuring is that once you get a redundancy cheque you are on your own. The consequences of this strategy can be seen in places like the Appalachian region of the United States, where proud coal communities have been left to descend into poverty and dysfunction.
So how likely is a Just Transition in Australia? Right now the signs are terrible, which is why regional communities are so cynical about the term. None of the energy companies have a plan for the workforce and the host communities. None of the companies have regular dialogue at corporate level with unions. The one exception was AGL under Andy Vesey who agreed to a union request for no forced redundancies when Liddell power station closed. They had the benefit of being able to transfer workers to the nearby Bayswater power station. Of course, that was several CEOs ago. The most recently-departed crowd thought consultation was a phone call just as the announcements about earlier closure dates were made.
If workers are facing uncertainty in the highly-regulated domestic electricity sector, any change in the export coal market will be even more brutal. BHP is busy absolving itself of any responsibility by divesting its thermal coal assets like the massive Mt Arthur mine in the Hunter Valley. That leaves workers, communities and governments to deal with second and third tier companies without the wherewithal to deal adequately with such a massive economic dislocation.
Which brings me to the role of investors. Those pushing divestment are just offering company executives the coward’s way out. Leaving the social and economic problems of regional communities to smaller companies and government to deal with. With the massive funds available in the investment community they could play a much more constructive role.
The German coal scheme was based on the principle that no one was left behind. We heard that same phrase often in the election campaign. To achieve that principle we need a national tripartite authority with the power and finance to look after workers till retirement and to diversify regional communities and economies. How we achieve this should be should be just as prominent in our national energy debate as targets and technologies.
This article first appeared in The Australian on 7 June 2022.