Brisbane Economic Series Issue 5

brisbane
economic
series
issue five: oct 2012
energy and resources

2 BRISBANE ECONOMIC SERIES – ISSUE 5: ENERGY AND RESOURCES
foreword
Welcome to the fifth edition of the Brisbane Economic Series, a bi-monthly publication
providing insights into the city’s business, investment and growth opportunities.
Australia’s energy and resources sector and how Brisbane can maximise the economic
opportunities it brings to our city will be the focus of this edition.
We are fortunate to gain insights from industry leaders Mark Ingham and Ben
Hensmann, Geoff Dickie, Keira Brennan and Ben Willis.
Brisbane’s economy is worth $114 billion, of which $25 billion is generated from the
resource industry.
Leveraging this industry and building Brisbane’s capacity and reputation as Australia’s
new world city and a leading global resource hub is one of my key priorities.
In my latest Economic Development Plan, I have outlined a number of initiatives
to ensure Brisbane remains a competitive global resource hub, attracting talent and
investment from this sector.
I have committed to ensuring Council and Brisbane’s economic development agency
Brisbane Marketing are actively focussed on growing Brisbane’s reputation in this industry.
Some initiatives I have endorsed include the planning and delivery of infrastructure to
meet projected population growth; ensuring Brisbane has the capacity to be a global fly-in-
fly-out hub; and proactively encouraging resource companies to choose Brisbane for future
investment, head offices and procurement of goods and services.
Brisbane is headquarters to some of the world’s leading mining and energy companies,
in fact 170 mining companies are currently based in Greater Brisbane, supporting many
other sectors including professional services and technology.
This cluster of mining and energy headquarters represents almost two thirds of the
sector in resource-rich Queensland, and underpins the demands of much of Australia and
many parts of the world.
Now more than ever the City must harness the major opportunities this sector presents
for the future growth of our economy.
Graham Quirk
Lord Mayor of Brisbane
CONTENTS

3 BRISBANE ECONOMIC SERIES – ISSUE 5: ENERGY AND RESOURCES ACKNOWLEDGEMENTS // CREDITS
07
With ever-advancing technology
and an entrepreneurial spirit,
mineral explorers will continue
to be rewarded by Queensland’s
rich lands.
Dr Geoff Dickie
Chairman, Queensland Exploration
Council
05
Queensland’s emergence as a world-leading LNG exporter brings
both opportunities and challenges for Brisbane.
Mark Ingham
Partner, Deloitte Access Economics
Ben Hensman
Analyst, Deloitte Access Economics
Issue five
CONTENTS

Issue five
14
International recruitment in
Queensland’s LNG sector to
leave strong economic legacy.
Ben Willis
Practice Leader and Special Counsel,
Fragomen
11
Common user infrastructure
agreements can deliver
significant advantages if risks
are managed.
Keira Brennan
Partner, Clayton Utz
ACKNOWLEDGEMENTS // CREDITS CONTENTS

Despite the patchwork nature of the Queensland
economy, development expenditure in resources has kept
the state’s economy in positive territory this year, bringing
both challenges and opportunities. While demand
concerns are likely to be prevalent over the short- to
medium-term, the longer-term trend of energy demand
and industrial transition remains in place, particularly
for the economies of India and China. These forces have
seen commodity prices rise to unprecedented levels
in recent years, leading to an equally unprecedented
supply response from market players, particularly in
the coal and LNG space. However, construction-related
commodities demand is now predicted to grow at a
slower rate than in recent years.
The Australian Bureau for Resources and Energy
Economics has forecast annual demand for metallurgical
coal, thermal coal and gas to grow 2.6%, 3.6% and 1.4%,
respectively to 2025, leading to large, long-life projects in
Queensland’s key coal and gas basins. The Galilee Basin
has received particular attention, due to the sheer size of the
proposed projects for the area, as well as the investment
required in infrastructure to bring the product to port.
Between 2015 and 2035, the expansion of the gas
industry is projected to boost Queensland’s real gross
state product by approximately $320 billion (AUD). A key
advantage enjoyed by Australia-based LNG exporters is
the proximity to Asia: shipping costs are usually lower,
particularly compared to the Middle East and the eastern
seaboard of the United States.
The four large Queensland CSG-to-LNG plants in
Gladstone represent approximately US$78.9 billion in
capital expenditure. With a backdrop of increased long
term demand from Asia, these projects do face several
issues including regulatory delays, feed-in gas supply,
cost increases and negative public perceptions around
CSG drilling. An additional challenge is the emergence
of immense domestic gas supply in the United States,
which provides the potential for that country to become a
net exporter of LNG. However, domestic demand for CSG
as a clean fuel source will also drive growth, particularly
for smaller players with less exposure to the CSG-LNG
export market. CSG is likely to become the fuel of choice
for domestic energy generation, particularly for the
traditionally coal-dependent eastern seaboard.
Queensland’s emergence as
a world-leading LNG exporter
brings both opportunities and
challenges for Brisbane.
Mark Ingham
Ben Hensman
CONTENTS

Cost increases, and events such as the scaling
back of the Abbot Point coal port expansion to fit the
new growth profile will continue to make the news,
as will the struggling housing sector. But despite a
slowing of Queensland’s recent record breaking project
investment, there will be continuing investment in the
state. Queensland has a proud history of its economic
growth outpacing that of Australia as a whole, and
Deloitte projects that broad trend to continue over time.
Or, as we often put it, Queensland is on the right side of
history, perfectly positioned to sell its resources, tourism,
agribusiness and other products into the growth of
emerging Asia, which is the dominant driver of today’s
business landscape.
It has been suggested that natural gas as a fuel source
for power generation will play a role in achieving the
Australian Government’s clean energy target of a five
percent cut in carbon emissions from 2000 levels by
2020, and an 80 percent cut by 2050.
Despite slowing growth in the resources sector,
engineering and construction services will continue to
be required. The beneficiaries will be Brisbane-based
professional and financial services firms, particularly
given the presence in Brisbane of the head offices of
many resources firms. In addition to costing, feasibility
and legal assistance, resources firms will likely require
assistance in developing a response to increasing project
costs, especially due to international competition, the
strong Australian dollar and lower commodity prices.
Given the State’s importance to the seaborne coal
industry, Brisbane has become a global resources hub;
this global significance has been recognised through the
choice of Brisbane as host of the next G-20 Summit.
When discussing the economic strength of
Queensland, resources is usually the focal point and
understandably so. While the State is well-positioned to
serve the growing energy and industrial needs of Asia,
another future theme is food security. The global food
supply and demand imbalance has been foreshadowed
by many: by 2050 the world population will grow by a
third and food demand is forecast to increase by 70%.
Food demand in Asia is forecast to double by 2050 due
to changes in diet (an increasing proportion of protein),
increasing affluence (allowing the purchase of more food,
and more expensive food), and population growth.
For more information on the Queensland economy,
please visit www.deloitte.com/au/queensland_index,
or contact:
Mark Ingham
Phone: +61 (7) 3308 7206
Email: mingham@deloitte.com.au
Ben Hensman
Phone: +61 (7) 3308 7389
Email: bhensman@deloitte.com.au
CSG is likely to become the fuel
of choice for domestic energy
generation, particularly for the
traditionally coal-dependent
eastern seaboard.
This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities
(collectively the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking
any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be
responsible for any loss whatsoever sustained by any person who relies on this publication. Deloitte refers to one or more of Deloitte Touche Tohmatsu
Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.
Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited © 2012 Deloitte
Touche Tohmatsu
Mark Ingham is a Partner within Deloitte Access Economics,
and is the leader of the Deloitte Brisbane Economics &
Infrastructure Advisory business.
Ben Hensman is an Analyst within Deloitte Access Economics,
and is the Editor of the Deloitte Queensland Index.
{
CONTENTS

Observing at close quarters the enthusiasm with
which more than 6000 delegates embraced the 34th
International Geological Congress in Brisbane in August
I was reminded of just how far the minerals exploration
story has come and how far it has to run in Queensland.
After more than 150 years of statehood and progress
anchored to mining and agriculture you could be forgiven
for thinking that all Queensland’s minerals and energy
wealth has been discovered.
However, that perception denies a host of variables
underscoring the dynamic environment in which mineral
exploration occurs.
To begin, Queensland is more than 1.7 million sq
km, and only a fraction of that has been explored to any
meaningful extent.
And by ‘meaningful’, I mean that all its possibilities are
known in the context of the era when exploration occurs.
For example, a mineral of marginal or non-economic
value 100, 50 or even five years ago could become the
most sought-after component in the world for the next
wave of technology.
Queensland is more than 1.7
million sq km, and only a fraction
of that has been explored to any
meaningful extent
With ever-advancing technology
and an entrepreneurial spirit,
mineral explorers will
continue to be rewarded by
Queensland’s rich lands.
Dr Geoff Dickie
Chairman, Queensland Exploration
Council
CONTENTS

Silicon makes up more than one quarter of the earth’s
crust and started making its most significant contribution
as a foundation for modern society in the mid 1950s when
it was used to host the first integrated circuit.
Fast forward to the 21st century and the computer-
dependent world is looking for a semi-conductor to
replace the silicon chip.
Graphene and molybdenite are two of the substances
being touted as potential substitutes for silicon. Graphene
is derived from carbon and Molybdenite – the most
important ore of the metal molybdenum – is available in
Queensland in economically demonstrated resources.
Either one of them could become a household name
alongside a growing number of Queensland minerals
being refined and used in highly productive partnerships.
Consider for a moment that the modern compact
energy-efficient fluorescent light bulb is a combination of
bauxite, lead, copper, limestone, nickel and phosphorous.
Even humble toothpaste contains silica, limestone,
aluminium, phosphate, fluoride and titanium.
Another important aspect of the exploration story and
future is technology.
Historical accounts imply that in 1923 John Campbell
Miles was more lucky than observant when he camped
by the banks of Queensland’s Leichhardt River while on a
gold prospecting trip to the Northern Territory.
Literally poking out of the ground he is reported to
have ‘stumbled’ on a heavily mineralised rock outcrop
signposting to one of the world’s richest copper, silver,
lead and zinc ore bodies.
After almost 90 years of continuous production from
Mount Isa Mines, all Australians have something to show
for Miles’ awareness and tenacity.
In the 1980s, it was aerial gravity survey technology
that delivered Queensland and Australia the Cannington
ore body from beneath a paddock south-east of Mount Isa.
Today there’s much enthusiasm among geologists that
the ‘next Mount Isa’ is still waiting to be discovered, but
like Cannington, it will not be found by accident.
Its discovery will demand technology not only capable
of looking beneath landscape but also defining ore bodies
with three-dimensional accuracy. The good news for
Queensland is that this technology is available to the
many geoscience service companies locating in Brisbane.
Exploration’s voracious appetite for goods and services
means that the industry has as much relevance to
metropolitan Queensland as it does to more isolated
parts of the state.
Lorem ipsum
CONTENTS

The QEC also runs monthly investor forums at the
Polo Club to allow exploration companies to attract the
essential investor support to test exploration ideas.
All that said, it takes a special type of individual to be a
mineral explorer.
Coupled with an extensive knowledge of how the
earth was formed (aka geology) and an unbridled thirst
for discovery, a modern mineral explorer’s position
description must also include:
• An intimate knowledge of financial instruments and
risk management
• The ability to live out of suitcases and/or swags for
extended periods
• The skill to move seamlessly between the bush and
boardrooms
• Levels of persistence and optimism far in excess of
any other profession.
The risks are high, but so are the rewards,
as history confirms.
James Nash’s discovery of gold near the Mary River in
1867 was the salvation of the infant colony following closure
Brisbane fits seamlessly into the bigger
exploration picture.
Its business diversity and growth prospects are
inherently linked to innovation – an essential point of
difference with other cities in the Asia-Pacific region.
Brisbane was identified as a ‘hot-spring’ for innovation
in 2009 by McKinsey & Company and since then has
emerged as a leader in knowledge-based industries.
Nowhere is there more demand for ‘high-tech’
services than in exploration and another reason why the
Queensland Exploration Council (QEC) that I chair was
formed under the initial patronage of the Queensland
Resources Council and its Chief Executive Michael Roche.
The QEC’s vision is clear in aiming to make Queensland
a minerals and energy exploration leader by 2020 with
Brisbane as its heart.
The QEC’s membership comprises a ‘who’s who’ of the
resources sector, together with leaders from the worlds
of finance, events and marketing, R&D and government.
Its focus is on influencing perceptions about the
importance of exploration, and promoting Queensland’s
prospectivity to investors and businesses that support the
exploration sector.
Among its flagship events is the Queensland
Exploration Breakfast, which this year is being held on 2
November in conjunction with the Mining 2012 Resources
Convention.
Our keynote speaker is the Chief Executive of the
Australian Stock Exchange Mr Elmer Funke Kupper
whose address will focus on the capital-raising
environment for minerals and energy explorers.
We will also use this opportunity to update
governments and industry on the Queensland Exploration
Scorecard launched in 2011.
It provides a snapshot of the state’s performance
measured by drivers including Queensland’s resources
prospectivity and endowment, resource prices, political
stability, explorer/investor confidence and access to the
essential factors of production (capital, land, skills).
The risks are high, but so are the
rewards, as history confirms.
CONTENTS

of the Bank of Queensland and large scale civil unrest as
thousands of unemployed took to the streets of Brisbane.
A few years later, a gold mine opened at Ironstone
Mountain, south of Rockhampton.
The wealth created from the copper, gold and silver
unearthed at Mount Morgan funded William Knox
D’Arcy’s exploration for oil in Persia, from which the
Burmah Oil Company (later known as BP) was formed.
D’Arcy’s legacy was described at his recent and
overdue induction into the Queensland Business Leaders’
Hall of Fame as ‘instrumental in changing the course of
human history’.
QUT Vice Chancellor Professor Peter Little observed
that had D’Arcy not poured money into the exploration and
mining for gold at Mt Morgan, he would not have had the
funds to explore for oil in the Middle East, thereby giving
Britain access to oil that not only changed the course of
history in World War 2 but also day-to-day life as we know it.
A more recent example was the persistence of Ken
Talbot and his associates to find some of the untapped
coal resources in the Bowen Basin which led to the
formation of Macarthur Coal and the additional value that
created for Brisbane and Queensland.
Similarly, a number of exploration companies
recognised the potential of coal-seam gas in Queensland
over 20 years ago and in spite of many challenges, drilled
the early fields that have translated into the creation of a
liquefied natural gas (LNG) export industry.
As the exploration landscape changes, the
entrepreneurial spirit of mineral explorers will ensure
Queensland’s rich lands will continue to be fruitful.
potential of coal-seam gas in Queensland over 20 years
ago and in spite of many challenges, drilled the early
fields that have translated into the creation of a liquefied
natural gas (LNG) export industry.
As the exploration landscape changes, the
entrepreneurial spirit of mineral explorers will ensure
Queensland’s rich lands will continue to be fruitful.
A number of exploration companies
recognised the potential of coal-
seam gas in Queensland over 20
years ago and in spite of many
challenges, drilled the early fields
that have translated into the
creation of a liquefied natural gas
(LNG) export industry.
Dr Geoff Dickie is a former Queensland Deputy Coordinator-General and now provides advisory services to the resources sector. As Deputy
Coordinator-General his responsibilities included facilitation and impact assessments of significant public and private sector projects, industrial
land planning through State Development Areas, and the commercial aspects of infrastructure provision. Geoff has tertiary qualifications in
economics and geology and worked previously in mining and petroleum exploration and development in Australia and Canada and was Managing
Director of a junior mining company. In ensuing years he managed government resource departments at both commonwealth and state levels,
including as Special Advisor, Native Title and Mining, and Executive Director, Minerals and Petroleum Division in the Department of Natural
Resources and Mines.
{ CONTENTS

COMMON USER INFRASTRUCTURE (CUI)
AND THE RESOURCES INDUSTRY
In recent years, once-in-a-generation highs in
commodity prices have led to a dramatic increase in
demand for additional infrastructure capacity to support
the continuing development of the resources sector. To
meet this demand, companies are considering alternative
ways to fund infrastructure, including the option of
entering a common user agreement, where multiple
organisations commit to a project.
Rail and rolling stock, port facilities, water and power
are essential infrastructure for most resource companies
and common user agreements are providing a viable
option for their development.
Infrastructure which can be utilised by more than one
user has a number of advantages:
• For future infrastructure users (including small
and medium-sized resource project proponents),
it provides an infrastructure solution that they may
otherwise lack the scale or means to provide on their
own (in contrast to some larger resources companies).
Common user infrastructure
agreements can deliver significant
advantages if risks are managed.
Keira Brennan
Partner, Clayton Utz
Companies are considering
alternative ways to fund
infrastructure, including the
option of entering a common
user agreement, where multiple
organisations commit to a project.
CONTENTS

As the company notes: Wiggins Island will be a first for
Queensland - a privately funded terminal owned by the
industry members that will use the terminal to export the
coal they produce.
The Curtis Island Pipeline: publicly-owned and partially
privately funded
This project to deliver water and wastewater services
to the various liquefied natural gas projects under
development on Curtis Island off Gladstone provides an
alternative model. The Gladstone Area Water Board and
Gladstone Regional Council was asked to provide water
and wastewater services to Curtis Island to permit the
construction and operation of the APLNG project (a joint
venture between Origin, ConocoPhillips and Sinopec), on
the understanding that, although the project was partially
financed by the private sector, the infrastructure would
remain in public ownership and be made available for
use by the other LNG project proponents. As the Water
Services Association notes, the resulting Curtis Island
Pipeline will increase the asset base on which the water
board can earn a commercial return and provide an
infrastructure solution for the LNG industry with less
environmental and community impact than would have
been the case had individual desalination plants been
built on Curtis Island for each LNG project.
• For government, CUI allows the procurement of
new infrastructure funded in whole or in part by
future infrastructure users in a way that minimises
the social and environmental impacts otherwise
associated with multiple parallel infrastructure
developments.
Delivery models
The booming central Queensland town of Gladstone
provides two examples of delivery models that may be
used for CUI:
Wiggins Island: industry-owned and privately-funded
Following a similar project owned by the Newcastle
Coal Infrastructure Group that delivered a third coal
export terminal in the Port of Newcastle, the Wiggins
Island Coal Export Terminal project will deliver a new
export coal terminal in the Port of Gladstone with the
capacity to initially export an additional 27 million tonne of
coal per annum (with capability of expanding to 80 million
tonne per annum). A special purpose vehicle (Wiggins
Island Coal Export Terminal Pty Ltd) was incorporated
by a number of coal exporters to procure the project and
deliver the additional export capacity for coal producers
in Central Queensland. Gladstone Ports Corporation
will operate the terminal. The project is being financed
by a combination of preference shares, subordinated
debt and senior debt to be provided by the private sector.
Wiggins Island will be a first for
Queensland - a privately funded
terminal owned by the industry
members that will use the terminal
to export the coal they produce.
CONTENTS

Some issues to consider
As with all projects, a CUI project presents many
issues for resolution and brings with it complex
contractual negotiations, particularly where the interests
of a number of parties need to be considered.
Issues include:
How will the project be structured?
This is a critical question that will have flow-on
effects for the legal relationships of the proponents,
and the manner in which the CUI can be financed.
Options include:
• Incorporated and unincorporated joint ventures
which might involve companies or trusts in which the
users have equity interests
• Provision of infrastructure by government entities
where the users either directly provide finance
or repay all or part of the capital cost through
user charges.
Financiers will be concerned with issues such as
balancing credit risk (which is essentially being assessed
on the viability of a number of different resources
projects) and the interrelationship with other elements
of the logistics chain (for example, an export coal port
requires that the upstream rail and mine facilities to be
constructed on time and to continue to operate).
How will early and late contributions to the project
be managed?
Infrastructure users will seek to become involved with
and fund CUI at different times in a project’s lifespan.
Future users who commit to funding a CUI project early
in its development assume more risk than those that
commit to involvement later in the project’s development,
and generally expect to have some part of their
original contribution reimbursed by late contributors.
Reimbursement principles are often complex, and a
variety of escrow arrangements can be used to manage
the reimbursement process. Ownership stakes
may also have to be adjusted as new users are
introduced, with an adjustment mechanism included
in the project documents.
Who has control over the performance standard the
infrastructure provider must meet?
As the future users of CUI are also funding the project
(whether in whole or in part), they will usually want some
control over, and accountability from the infrastructure
provider about, the scope of the works to be performed,
the cost of the work undertaken and the timeline for the
delivery. Future users may seek to exert some control
over a CUI project by:
• Having an involvement in the development of the
performance specification of the CUI
• Imposing regular reporting obligations on the
infrastructure provider
• Including a requirement that an independent
engineer or verifier certify that the works completed
are consistent with the performance specification
• Having a project implementation committee oversee
the delivery of the project.
The nature of the supervision will depend on the
project structure and delivery model adopted.
Conclusion
CUI can deliver significant advantages to the
economics of a project and also reduce the social
and environmental impacts. There are challenges in
managing the competing interests of infrastructure users
and the appetite of private sector financiers to accept
some of the specific types of risk which apply to CUI.
Keira Brennan is a partner in the Energy and Resources
group at Clayton Utz. Keira is consistently recognised
by various independent legal directories as a leading
practitioner in the energy and resources sector.
Most recently Keira was voted by her peers as one of
Australia’s Best Lawyers in Mining. Keira has built a
reputation for her insight and understanding of the issues
facing the energy and resources industry and her dedication
to finding innovative and pragmatic solutions not only for her
clients’ legal issues but also their commercial concerns.
Keira has extensive experience in mergers and acquisitions
and joint venture arrangements in the resources industry
(particularly the coal, gas, gold and base metals sectors),
as well as extensive knowledge in access to rail and port
infrastructure, the Queensland overlapping tenure regime
and the operational requirements of energy and resources
clients.
The assistance of Nathan Colless, Lawyer,
Clayton Utz, is acknowledged.
{ CONTENTS

Sourcing highly skilled workers internationally is
critical to the growth and development of Queensland’s
burgeoning LNG sector and, properly implemented, will
leave a legacy of positive economic multipliers including
the up-skilling of locals.
Queensland has three mega-LNG projects underway
with a combined value of more than $70 billion (AUD).
These are part of a solid pipeline of work in Australia’s
LNG sector including $80 billion (AUD) worth of
projects in Western Australia and $25 billion (AUD) in
the Northern Territory. Many of these projects have
offtake agreements in place with Asian stakeholders
and will continue to contribute significantly to economic
activity regardless of speculation over mining boom or
bust. In addition the Bureau of Resources and Energy
Economics reports there are currently 98 mining projects
with a combined value of over $260 billion (AUD) under
construction in Australia.
With the Australian industry still in its infancy and this
scale of competing projects requiring niche skill sets,
companies have little or no alternative but to source
specialist skills from abroad, at least in the short term, to
ensure project demands are met.
Fragomen works with local contractors to prepare
workforce plans, often identifying skills shortfalls at
the operator level in project planning. For example, with
large LNG projects, it is often the case that no previous
Australian project will have dealt with the size of pipe
nor the scale of pipe-laying required. Training and up-
skilling of Australian operators for these kinds of projects
can only be done safely in an environment where there
are a number of skilled operators present. Accordingly,
contractors source and recruit overseas skilled operators
while employing and training. In this way, foreign skilled
operators build the critical mass of skills necessary
to move projects forward quickly and also ensure the
success of local training and up-skilling programs.
It is interesting to note the role of Australia’s
Department of Immigration and Citizenship (DIAC) in
the process of obtaining foreign-skilled workers for
Queensland LNG mega-projects. For new skill sets,
such as those discussed above, it may well be that
International recruitment in
Queensland’s LNG sector to leave
strong economic legacy.
Ben Willis
Practice Leader and Special Counsel,
Fragomen
Foreign skilled operators build the
critical mass of skills necessary to
move projects forward quickly and
also ensure the success of local
training and up-skilling programs
CONTENTS

their occupation cannot be found on the current DIAC
list of approved occupations. In such circumstances,
contractors will need to seek a company-specific Labour
Agreement, to be negotiated with DIAC. These labour
agreements should not be confused with the ‘Roy Hill’
type Enterprise Migration Agreements (EMAs) as an
EMA is project specific and the terms are not negotiated
by the contractor. There are only a handful of EMA
qualifying projects in Australia whereas a company-
specific labour agreement is available to any contractor
where the need requires.
Before DIAC will agree to a labour agreement the
negotiating company must address a number of key
requirements which include demonstrating -
• That the company is a good corporate citizen and
is financially sound
• A commitment to training Australians and in
particular training mechanisms to assist in
reducing the reliance on foreign labour
• That the labour market analysis indicates an actual
shortage of the required skills
• That foreign workers will have a minimum standard
of English and qualifications and work experience at
a particular level
• That the foreign worker will be remunerated and
treated no less favourably than an Australian
worker
• That the company has undertaken a consultation
process with the relevant stakeholders including
unions and employer groups.
It should be noted that the above list is not exhaustive
as there are many other terms and conditions that DIAC
may impose in a typical labour agreement. For example,
DIAC requires an independent skills assessment process
which is satisfied if the foreign worker holds an Australian
qualification (typically a Certificate III) awarded by an
Australian Registered Training Organisation (RTO).
providers and equipment hire businesses where
significant long-term benefits can be had from servicing
over the entire lifespan of some the LNG mega-projects.
Most importantly, growth in numbers of our skilled
occupations and professions in Queensland will have
flow-on effects for the training and up-skilling of all
Australians.
The key is to have sufficient numbers of skilled
operators and professionals to permit the right balance
between experienced and trainee operators. This skills
transition is fundamental to the proper management and
deployment of overseas skilled workers in our resources
and mining sectors.
There are only a handful of EMA
qualifying projects in Australia
whereas a company-specific labour
agreement is available to any
contractor where the need requires.
As to future hiring practices in Queensland, including
for LNG mega-projects, a recent Hudson report shows:
• Professional services is the sector with the strongest
positive hiring expectations (56.3%), followed by
construction/property/engineering (40.2%).
• Industries that intend to keep a stable headcount
include manufacturing (66.7%), followed by
financial services/insurance (63.9%), resources
(63.4%) and government (61.7%).
• The sector with the strongest negative hiring
expectations is government (31.7%), followed by
transport (15.2%) and manufacturing (13.6%).
No doubt the strong growth in demand anticipated
in the white collar professional services highlighted
above will continue to have strong and positive economic
flow-on for Queensland, especially for the state’s major
operational resource hub of Brisbane
However, these types of positions are also required in
construction and servicing projects in the regions where
the employment of these professionals, sometimes
foreign workers, will also provide local businesses with
additional income.
The obvious candidates in these locations range
from accommodation providers through to the training
Ben Willis is the Practice Leader and Special Counsel in
the firm’s Brisbane office. Ben is an Accredited Immigration
Law Specialist and has practised exclusively in the area of
immigration law since 2004, largely specialising in corporate
immigration. Ben has a wealth of experience in dealing with
clients operating in all industries and sectors. In addition to
working with clients on temporary and permanent business
entry programs, Ben also provides strategic and commercial
advice on workforce resourcing and planning often
culminating in various types of Agreements including Labour
Agreements, Work Agreements, Enterprise Migration
Agreements between industry and the Commonwealth
Government.
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acknowledgments
SPECIAL THANKS
Brisbane Marketing is indebted to our special contributors for their generous involvement with the Brisbane Economic Series, namely:
Mark Ingham, Partner, Deloitte Access Economics
Ben Hensman, Analyst, Deloitte Access Economics
Dr Geoff Dickie, Chairman, Queensland Exploration Council
Keira Brennan, Partner, Clayton Utz
Ben Willis, Practice Leader and Special Counsel, Fragomen
IMAGE CREDITS
© The State of Queensland. Photographer: Michael Marston. Courtesy of Queensland Government.
© The State of Queensland. Photographer: Aaron Tait. Courtesy of Queensland Government.
© Ray Cash Photography. Courtesy of Queensland Government.
New Hope Group
Queensland Resources Council
CSIRO
CONTACT
Brisbane Marketing’s Investment Attraction division is the city’s inward investment agency. With an international reputation for
success, we work with a diverse group of clients across a range of sectors to help attract new business to Brisbane. By connecting
leaders of industry and providing the critical information and introductions, we’re strategically shaping the future of Brisbane’s
business environment and helping deliver long-term economic growth for the city.
www.investbrisbane.com.au
Level 8, Roy Harvey House, 157 Ann Street, Brisbane, Queensland, Australia, 4000
PO Box 12260, George Street, Brisbane, Queensland, Australia, 4003
Phone: +61 7 3006 6200 Fax: + 61 7 3006 6250 Email: invest@brisbanemarketing.com.au
As a wholly owned subsidiary of Brisbane City Council and the city’s economic development agency, Brisbane Marketing plays a key role in the ongoing evolution and
success of our city. We drive economic and social benefits to residents and business by profiling Brisbane globally as Australia’s new world city and as a destination
for business investment, export, international students, conventions, tourism, major events, and CBD retail.
www.investbrisbane.com.au
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Brisbane Economic Series Issue 5

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Brisbane Economic Series Issue 5