Potential social impacts of extractive industries in Central-West Queensland:Lessons from other regions

Forum - CSG: What does it mean for our region?

Desert Channels Group and Remote Area Planning and Development Board

April 2012©

Seven lessons from other regions with extractive industries1. Any industry brings benefits, risks and costs

2. Social impacts are hard to define and measure

3. It’s never all good (or all bad)

4. Resource extraction creates jobs but can deplete the labour pool

5. Mining and CSG bring benefits but they are not equally spread

6. Mining and CSG provide infrastructure but “soft” infrastructure is often neglected

7. The social changes accompanying extractive industries can affect social fabric and psycho-social well-being

Applying the lessons – Towards positive transformation

Today’s presentation

The conventional proposition that all a region needs is an industry that brings jobs, economic growth and

better infrastructure no longer secures a social licence to operate

Sustaining regional communities

WA Qld NSW Vic NT SA0

102030405060

2010 Value of production $bn.

MiningAgriculture $121

$ 27

• Sustainable development maintains (and where possible increases) stocks of these various kinds of capital so that we live off the ‘flows’ without depleting the stock of capital itself.

• Development is not sustainable if we ‘liquidate’ our assets rather than add value to them

Assets-based, sustainable developmentPentagon (sexagon) of assets / Five capitals (or six)

Natural

Hum

an Social

Built

Economic

Cultu

ral

• Occupy land, disrupt natural ecosystems, use water etc = environmental impact

• Employ people, pay taxes and earn export dollars = economic impact

• Affect people’s quality of life - how they live, work, relax and interact with each other = social impact

Lesson 1: Any industries bring both benefits and costs

Because they involve human experiences of change:

• Need to measure what counts not what can be counted → indicators of community assets & well-being

• Social responses less predictable, objective and standardised than biophysical ones → qualitative measures

• Harder to isolate variables from each other and the context → systems approach

• Aggregate and interact with each other → cumulative measures not discrete ones

Lesson 2:Social impacts are hard to define and measure

MINE

Business Opportunities

Job creation

Education and training

Workforce drawdown

Economic Diversity

Economic benefits

Demand for housing

Housing Supply

Cost of housing

Cost of living

Perceived crime etc

Dust, noise, amenity

Cultural Heritage

Transport and traffic

Health and OH&S

Shift schedules

Demand for services

Availability of services

Recruitment of staff

Social character/ID

Community cohesion

Olympic Dam Roxby Downs SA

↑ x x x ↑ x x

Alcan Gove Nhulunbuy NT

↑ x x x x x x ↑ x

Port Hedland Pilbara WA

↑ x ↑ x x ↑ x x ↑ ↑ x ↑ x x x

Newmont Gold Kalgoorlie WA

Ravensthorpe WA x ↑ x ↑ x x x

Bowen Basin Coal QLD

x x ↑ x x x x x x x x ↑ x x x x

Crinum Coal Emerald QLD

x x x x x

Centennial Muswellbrook

x x x ↑ x

Drayton Muswellbrook

↑ x x

Alberta Oil SandsCanada

x x x

Lesson 3: It’s never all good (or all bad)

Case Study – Upper Hunter Valley (NSW)

• Upper Hunter Valley – 3 shire councils Upper Hunter, Muswellbrook (pop 16,000) and Singleton (pop 21,900)

• Population of ~50,000

• N-W of Sydney in NSW

• 15km wide and 100km long

• Main towns – Muswellbrook (10,500), Denman, Singleton (21,900), Camberwell, Scone and Aberdeen

Background

Land Use: Mines, thoroughbreds, vineyards

•Major NSW coal region

•20 mines with 8 new ones and expansions under way

•75+ horse studs

•30+ wineries

• Both industry sectors also provide indirect and induced employment

• 27% Upper Hunter businesses rely on providing support services to mining industry

• Almost 20% people engage in voluntary work

Mining Agriculture

Number employed (Hunter) 19,500 7,300

% Employment (Hunter) 5.1% 3.3%

% Employment (Australia) 1.5% 2.7%

% Muswellbrook workforce 15% 8.9%% Singleton’s workforce 19.6% 5%

% Upper Hunter Shire workforce 6% 24%

Labour impacts

Opportunities

• Created over 10,000 extra jobs in the last decade and set to create 25,000 new jobs in the Hunter 2010-2014

• Increases youth employment opportunities

• Provides off farm employment• supplements farm incomes • eases peaks & troughs of

agricultural cycles

Challenges

• Unequal potential between mining and agriculture to compete for labour• high paying mining v. farms

• Surplus labour absorbed into mining or driven out by high accommodation costs

• Difficulties recruiting and retaining staff for essential community service jobs

Lesson 4: Mining creates jobs but depletes the labour pool

Not everyone can work for the mines – but we’re left with the drongos and the

drug addicts

• Increased wealth differential. Av. weekly earnings (Hunter) = $1720 (Mining); $808 (Agric.)

• Cost of living rises hit the poor• Problems associated with

wealth (gambling, drinking, credit use and debt)

• Regional communities lack range of services found in cities

• Some people earn high incomes

• Mining employees contribute $20 million to Hunter region

• Industry will pay $6.8 billion in royalties 2010-2014

Opportunities Challenges

Lesson 5: Mining brings benefits but they’re not evenly spread

Mining is beneficial because of the relatively high income for mine workers but it also provides a gap between the miners and the lower income earners. The local economy is geared for the mineworkers for example, rent, house prices etc

• The New England Highway follows the valley• 24 rail load points, 15,000 loaded rail trips / year• 2 coal-fired power stations • Mines re-using water from Muswellbrook sewage • Sites of heritage significance • Housing infrastructure and extra pressure from population• Services e.g. health (6 hospitals) and education (8 /10

primary schools, 3 /4 secondary schools and 1 TAFE campus in each of Muswellbrook and Singleton)

• Soft infrastructure – including community networks, family life

Impacts on infrastructure and services

Opportunities

• Injection of Government and private sector funds into regional infrastructure development

• Development of multi-user infrastructure (e.g. Sports venues, roads, water treatment)

• Support for regional community and business development (e.g Forestry plantation; Crops for the Hunter)

Challenges

• Scale of population increase places excessive demand on infrastructure (e.g. Water supplies)

• Long lead times for infrastructure development

• Shortage of affordable housing

• Essential services understaffed

• Maintaining social capital

Lesson 6: Mining brings infrastructure but soft infrastructure and services often neglected

The mines provide scholarships and traineeships for our young students and we have them to thank for our pool, the PCYC, hospital upgrades

and the cycling velodrome. They’ve helped the show association, the

pistol club and the youth homelessness service as well as local

service clubs, charities and arts societies. They invest a lot here

• Polarising of communities• Psychosocial impacts – feelings

reported include fear, anger, stress, grief, violation, loss, hopelessness and depression

• Feelings of social dislocation with shifting economic activities, rapid turnover of neighbours, relocations and changed social composition

• Changing community identity ( ‘Solastalgia’)

Impacts on identity and psycho-social impacts

These effects manifest in community opposition

and action

• Opportunities• Diversification of social

networks through increased population and community diversity

• Re-invigoration of connection to the land by community members

• Community proactive and united for collective action

• Exploration of multiple land uses and functions of landscape

• Community fragmentation – the split between us and them, old and new residents

• Erosion of the farming ethos and community identity

• Conflict between miners’ farmers’ and community visions for the community

• Deteriorating trust between mines and communities

Lesson 7: The social changes accompanying mining can mobilise communities

• Challenges

How resources can contribute to sustainability

Resource Value

VALUE

TRANSFORMATION

RegionalValue

Source: Adapted from Newman, Armstrong and McGrath, 2005 p. 7

FOCUS:Inter-

weaving of

functions

Asset EnhancementEconomic

• Profits and returns to shareholders

• Supply chain benefits to regional businesses

Human• Higher education, skills and

training• Good health and safety

Social• Adequate social services• More recreation options • Vibrant volunteering

Built• Physical infrastructure

(transport, IT, public buildings, water, power)

• Housing Natural

• Rich biodiversity• Restored landscapes and

ecosystemsCultural

• Protected heritage• Local identity reinforced• Indigenous values and culture

revitalised

• Mutual respect

• On-going, open communication

• Transparent and equitable regulation and planning systems

• Collaboration and collective action

• Integrated landscape management approaches

• Commitment to enhancing community assets

Applying the lessons - Paths to Transformation

Strongly disagree

Disagree Neither Agree Strongly agree

Don't know0

5

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20

25

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35

20062009

“The benefits of the coal industry for our region (the upper Hunter Valley) outweigh the negative impacts”

What’s needed?

Negative Impacts

Livelihoods and local economy undermined

Safety and security decrease

Health and education standards deteriorate

Social divisions increase

Culture eroded

Displace government infrastructure & services

Corporate policies and practices

Benefits distribution

Behaviour

Side Effects

Positive Impacts

Livelihoods and local economy enhanced

Safety and security increase

Improved health and education

Social cohesion and cooperation increase

Culture enriched

Increased capacity of government to provide

infrastructure & services

Company impacts on communities

Adapted from Luc Zandvliet & Mary B. Anderson (2009) Getting it Right. Making Corporate-Community Relations Work

Fairness

Respect

Accountability

Transparency

Caring

THANK YOUJo-Anne Everingham

j.everingham@uq.edu.au

Ph: 07 3346 3496