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Some Experiences of the Townsville Waterfront

Ash Forward

I am going to run through a bit of the story of my own company, how it settled its industrial relations, and then I will talk about the Townsville waterfront. When I get to that part, you will all be relieved to know that I am getting near the end of my speech.

I was asked one day by the General Manager of BHP to come into his office, and told I had been doing some good things for a change, and that there was some good news and some bad news. 'Your title is going to be changed Ash, you're now going to be general superintendent industrial relations and personnel.' I said, 'Well, that sounds very impressive, I am very pleased. What's the bad news?' 'There will be no immediate adjustment to your salary.' I think that is pretty typical of BHP.

Queensland Nickel started in 1970 up in Townsville, part of the Poseidon group. Nickel was the order of the day and it was found by a company from Melbourne, Metals Exploration. Metals Exploration wanted to start the mine, which looked as if it had a life of about 20 years, and they looked around for an organisation that could lend them the money and had a bit of expertise in nickel mining. They found a company called Freeport Sulphur in America and they formed a consortium, 50-50 between Australia and the United States.

We built the refinery which cost $270 million at that time---now it would run into billions. We built the township for 500 people, Olympic size swimming pool, nine hole golf course, a motel hotel, 80 beautiful houses, single mens' quarters, and for many years it received the tidy towns award in Queensland, which we were very proud of.

We built the railway line and all the rolling stock and because Queensland is such a successful state economically the law is that once you have done that you hand it over to the government and when they start rolling you start paying. That was the order of the day.

We paid royalties from day one. Although it has been mentioned many times that the Queensland Government put money into Queensland Nickel, the Queensland taxpayers have done very well out of us in the various taxes that we have paid over the years so they are way in front. It is not the image that is often projected about us.

I want to say two good things about the Bond Corporation. One is when they took us over they paid out all the debts which had been hanging over us for many years, and the second thing was they bought out Metals Ex and Freeport so it became a wholly Australian owned company. With all the faults of the Bond Corporation they were very proud of those two things, they made us debt-free and they made us Australian.

Nickel at that stage was about $2 a pound. We were burning 1000 tons of oil per day and it cost us about $17 a ton, so that was a very important part of our operating costs. Wages were about $2 an hour, industrial action in the area was pretty quiet, inflation was low and the political scene was pretty good as well. In 1974 when we opened, everything changed. Inflation went through the roof, oil cost ten times more almost overnight, nickel prices didn't move, wages of course exploded. We were in trouble almost from day one and it looked as though we were going to close. Unions as usual were a great help because they caused absolute industrial mayhem from the moment we started for reasons which we have never really been able to discern.

As a result of this the lenders decided they would pull their money out, but Joh Bjelke Petersen, the Premier, came in and guaranteed the loans to the investors and that was the reason why we managed to survive. We brought a gentleman over from Peko called Lloyd Hennessy, whose political attitudes are a little bit to the right of Saddam Hussein and he took over the company. Then he phoned me to come over and talk to him about taking over the industrial relations portfolio at Queensland Nickel. It was the longest interview I have ever had. It started at 8am in the morning and went on to 9 o'clock at night for three days. In those three days we planned what we would have to do to keep the company going. I had had experience in the iron ore industry, so I knew what we didn't have to do.

My objective was to make the company operate without losing any time whatsoever by the unions. I had to render the unions totally impotent so that we did not at any stage lose any production.

I must tell you this story. Many years ago I was working for a company called Forward Down. We built Kwinana, Western Mining, and of course Kambalda as well in those days. We were a leading construction company working under Bechtel Pacific. We had a terrible time there with industrial relations. I remember we had 268 strikes in five months, which gave rise to the first collective bargaining agreement I think in Western Australia, known as the Kwinana Agreement. A gentleman over there by the name of Gordon Grenfell from the Boiler Makers Union was addressing that morning's strike meeting, on a foggy sort of morning, and the troops were all sitting around with Gordon on the back of a utility addressing them. He had hardly started before a Yugoslav gentleman who was sitting in the toilet came out half asleep, climbed into the utility, started it up and drove off over the hill. There was Gordon hanging on to the side. He tried desperately to get the attention of the driver but he took no notice of him. Gordon looked around, found the spare wheel in the tray of the ute, picked it up, took it over the top of the cabin, rolled it down over the bonnet and it bounced off into the bush. The driver saw this, put the hand brake on and leapt out to see what had happened to his spare wheel. Gordon quickly climbed into the cabin, turned the ute around and returned to the meeting and continued. 'As I was saying brethren'. About ten minutes later a bedraggled digger was seen coming up pushing a spare wheel and swearing in a language which nobody could quite understand. The good old days.

Industrial relations for me has always been a bit of a challenge, and I think there were three significant things that happened in my life. One was when I was in the British colonial police, in Kenya, the Congo and Rhodesia, when I had a lot of experiences, some of which I have never talked about and never intend to. One of the things I did learn is that if you are going to have a contest and the other side plays by the Queensberry rules, you do as well; but if the other side does not play by Queensberry rules and you do, you are going to come second. If the unions are not going to play the game then the gloves are off as far as I am concerned.

Second thing I learned was in the eight years that I was in the Pilbara. There I saw expediency taken to a ridiculous degree, where industrial relations got to the stage where companies were only just keeping production going. Charles Copeman was the gentleman to put an end to that sort of nonsense. Taking expediency so far, you paint yourself into a corner, you've thrown away all your management prerogatives, all your rights, and the company is in trouble. You have no way in which you can talk your way out of that. You have to go right back to basics and start again.

The third thing was I read a book by Robert Townsend called 'Up the Organisation'. He was a guy who took over Avis Rent-a-Car when it had colossal losses and in twelve months he turned it into a profitable organisation. He wrote this little book of anecdotes about companies and people.

I looked at what he said about the personnel department and turned the page over and it said 'Abolish it. The biggest growth industry you ever had in the company.' I looked at industrial relations and one of the things there I thought was good, where right at the end it said, 'If all else fails in industrial relations, try honesty.' You would be surprised how often it works.

At that time Mt Newman Mining was going on to a 40 million tonne operation, and we had to work 7 days a week, and the company did the same sort of thing that the Labor government does now. You get an idea, you throw it into the community, and wait and see what the reaction is.

We sort of hinted that the mine had to go to continuous-shift operation. The reaction was very predictable: it can ruin their social life, their sex life, their religious life and every other thing. The church joined in and we had collections around the place for a fighting fund and people had to sign things to say that they objected to this move by the company.

We were sitting in the Commission one day just after I had read this book. Dave Griffin, the union delegate, stood up and said, 'Oh, this is just another furphy, like this seven day a week operation you were hinting about.' I said, 'Dave it's not a hint. On April the 1st you will be on a continuous-shift system, because there is no other way we are going to be able to produce 40 million tonnes. So there are no ifs and buts about it, that's what we are going to do. You will be part of that.' He stopped, and the union stopped, and they sat down and said, 'That's the first time that somebody in this organisation has come out and been honest about things. Let's sit down and talk about it.' We sat down and talked about it, and worked out our continuous-shift operations. I thanked, very quietly, Robert Townsend.

We had to plan what to do with Queensland Nickel. It was complete anarchy at that stage. We had to produce, otherwise we were going to go under. Then the AWU walked out. I called the other delegates in and said, 'The AWU is on strike and the staff are going to be working in the AWU jobs. You gentlemen can work with them or you can go home and join your mates until this is all over.' They said thank you very much and they went home as well.

We had already found out that we had in the organisation people on the staff who could run the operation. We had 1250 people working for us. One month---5 weeks---the staff ran the place and we broke all production records---with 83 people. The AWU kept going out, and everybody else had to go out at the same time. After a while the other unions came to me and said, 'Look we have had enough of this, we don't like these fellows that keep going out, we are not really part of them. I said, 'Well, stay in.' And so they did. Of course as soon as they did that, the other union also started to have a look at things. We used to divide the staff into 12 hour shifts. We used to pay them $50 for every shift they worked, on top of their normal wages and they loved it. They used to go out waving the money. When the unions came back, they said, 'How are you doing fellows?' They said, 'I have got my AWU bicycle, I have just bought my ETU video' and so on. This was very successful.

The ladies in the organisation started saying that this was discrimination. Every time there was a strike, the male staff got the work, and they couldn't make any extra money. That was fair enough. We decided we would train our people to do jobs too. We got a few of them operating cranes, some to do front end loaders, and so on. They proudly put their certificates up in the office behind where they were sitting.

One of the ladies who we employed was so fed up with being on strike, she publicly left the AWU. An objectionable individual by the name of Hunter was causing a lot of trouble and in the end it was alleged that a crane rigging foreman, who was known as 'Mangler-Mott' was supposed to have hit him, and everybody walked out. In the morning they had a meeting about it. All of a sudden Joanne said, 'Who are we talking about?' They said, 'Why, brother Hunter.' She said, 'This obnoxious little whatever! If that's why they are on strike, I am going back to work, he deserves everything he gets.'

I could see this gaggle of people coming across the car-park led by this large girl with short shorts and big socks and long earrings, and the only two people left on the stage were the union official and Mr Hunter. This group marched into my office and she said, 'I want to leave this union business.' I said, 'What you will have to do, if you are financial, is write in, and you can leave.' So she did. The next time they held a meeting she continued to work. When the union official demanded to see her, I said, 'You can't.' He said, 'I have got the right of access.' I said, 'You haven't.' He said. 'She is a member.' I said, 'No, she is not, that's why you have not got the right of access.'

We went on very well, it hit the National Press and Joanne led the numbers. In fact, at the moment we have 400 people working at Queensland Nickel and I think that about 97 are actually financial in the AWU. The union is not very happy about that. But that is their business. I also stopped, when I went to Queensland Nickel, this nonsense about deducting union fees on behalf of unions. That is their business. We are not there to perpetuate their causes and do their business for them. I also told the female staff that they couldn't be union members if they wanted to work during strikes. So seventeen people left the clerks' union and helped us in the strike action.

Then we decided to take some action at Greenvale Mine. Because of the distance we had to act before the strike happened, so when I knew that there was going to be a strike I used to send people from Townsville, which was a few hundred kilometres away, in advance. They would all be in the pub and the blokes used to say, 'What are you doing here?' They said, 'We are going to do your job after the meeting tomorrow.' That went over very well.

Just after that, somebody saw me in Canberra and said, 'Ash, we have been hearing some funny stories about you. We heard that the unions have actually asked for a 38 hour week. When they went on strike, you put the staff in at the refinery, and then when they went on strike at the mine you put the staff in there, and then when they tried to stop your trains, you have got hold of the Premier Joh Bjelke Petersen and he gave you 38 policeman and 3 helicopters, and they went up and down spotting where the strikers were and the police arrested them, and they were all brought up in front of the local JP, who was the mine manager's wife, and she fined them $30, and then when the AWU appealed, it went back to Joh who increased it to $300. Is that true?' I said, 'No it is not, it was the mine's superintendent's wife.'

The next thing was that we had these stupid stoppages about staff working. It came to a head one day when an engineer in the rain saw the water rushing towards the office, so he got out a spade and dug a little trench to divert the water, and everybody said 'Staff working,' and out they went. I had been hauled up in front of the Queensland Commission on a number of occasions and told. 'You know you are provoking things at Queensland Nickel, Mr Forward.' In the end I had had enough. So when the unions had had the usual moan about what had happened, the Commissioner said, 'Mr Forward, what have you got to say this time?' I said, 'Well, this time, I am just going to give you a statement Mr Commissioner. As from today our company policy has changed. Staff will now carry out whatever duties are to be perceived to be necessary to assist the proper operation and efficiency of my company. They will do the jobs of members of all these unions sitting around this table. The only provisos will be that they are competent to do that job and there is no safety problem by them doing that job. Their primary function is still to supervise, but that is what they will do.' It is a long time since I have sat in the Commission with a four minute silence. That was the end of it.

The funny thing about it was that relationship between us and the work force improved immeasurably overnight. It was incredible. The supervisor in the warehouse would be out there, helping the blokes to load the truck, in the pouring rain. Before he would have sat in the dry and said, 'Get on with it.' Or the electrical foreman would see a guy struggling with a job and would say, 'Now hold on there, just let me just show you how to do that.' Or he would go by and say, 'Is there something I can get you in the store? You carry on, I will go and get it for you. That was what happened. The relationship was great. It established itself before the unions realised what had happened. They were the ones that were being distanced. Our supervisors and our workers had got together. That was the time we were dubbed 'the Queensland Nicholls Society'.

We then decided we had to do something about our absenteeism. I introduced a system where people would be put on a watch and everything was computerised. The one big print-out was to go to the personnel department and each superintendent gets a print-out of the people under his control and each foreman gets a print-out of the people under his control. So he could never argue that he doesn't know what is going on. We put absentees on what is known as a watch, that is, 'You are a naughty boy, we are looking at you.' The aim was that the foreman would get the man in and discuss his absenteeism. 'Have you got a problem at home? Is there anything that we can help you with?' We would take that nice sort of social attitude. The second time we would call him and make a note of him. Step C was a written official warning. When it got to Step D, the man was called in with his delegate, with the superintendent and the foreman and a representative of the personnel department and they all went through the man's history and agreed on the situation. This was the final warning, the next time he was missing he would be out. Through negotiation I have now got it down to three steps: one warning, one final warning, and then you are out. That is in the agreement now with the unions. We do not accept doctor's certificates because if there are too many of them, we always ask the employee. 'Are you cheating the system, or are you too ill or sick to work here?'

At that stage I decided that everybody that started with the company would be put on a month's probation. The foreman would have to fill in a written report on the new employee after 4 weeks. The unions did not like that---the AMWU went on strike for 3 weeks to try and stop me doing it. When they came back I brought all the unions in and announced that as a result of the strike it would now be 6 weeks probation, and had anybody got anything to say about that. They said, 'No.' That went down very well too.

At the moment at Queensland Nickel things are going pretty well. Union officials stay away by agreement. Grievance procedures I found were a farce. They only work if the unions want them to work. They hold the company up with a grievance procedure when it suits them but when it is the other way around they just walk out the door. So what is the point in having them. When we get a log of claims we put the log in first. We don't believe we should sit there and wait for it to come back from the unions. We don't meet regularly with the unions either. We say that if there is a dispute or a problem we want to know about it immediately. We want to have a full discussion about it. If the company is in the wrong it will put it right there and then. If the union has not got a case, after we have discussed it, we will give them an answer there and then, and we don't change that. All this has been possible mainly because I had a chief executive who was tough and supported me. If you have got a chief executive who will stand with you, you know where you are.

We've run out of ore at Greenvale, and we need to import ore from overseas. We bought nickel rights in the Philippines, in Indonesia and in New Caledonia and we had to get it in because the ore would stop for sure in 1993. For the first time Australia saw an opportunity to dig up someone else's dirt and bring it into this country and add value to it, instead of being classified as a giant quarry, as we have in the past. You would think that would be embraced with enthusiasm wouldn't you? We are the second largest exporter in Queensland, in the top twenty in Australia with exports in the value of about $365 million a year. We wanted to dock ships outside the refinery, load the ore from the ships onto barges and bring them in. We spent $7 million on a feasibility study. The Marine Park Authority said 'No'. They are an organisation set up by the Federal Government to protect the marine park. Quite obviously if anybody comes along and threatens that in any shape or form its going to get a carte blanche 'no', and that is what we got. That answer we cannot accept, because we would not have spent that money, and not have decided to go ahead with it if we thought we were going to be an environmental risk. The damages in claims are far too serious for us to contemplate that.

Now we find we have to go through the port. Because the port's controlled by wharfies it will cost $11 million a year to get the ore off the ship and onto the trains. With my own employees it would be less than $4 million. Five supervisors when I would probably need one; people like tally clerks I need like a hole in the head. I don't know why I need to have a first aid man when it's three minutes to the hospital; I have a security guard at the plant on the back shifts for 17 people; there is 50% loading for afternoon shift and so on. They have a meeting every shift to decide who will be the shop steward for the day and all that sort of nonsense.

Waterside reform is just a cosmetic exercise as far as I am concerned. It is getting us absolutely nowhere. The people who are trying to resolve it are the wharfies and the employers of those wharfies. They are the people who cause the problems in the first place. They are going to settle for some figure that they think companies like mine can afford. We don't need them.

Take the case at Cairns. Cairns has 23 wharfies--- they need five but they've got 23. Thirteen of them decide they will take voluntary retirement so off they go, leaving ten. They used to work six hours a week, now they work fourteen and a half hours a week. When they get to the Industrial Relations Commission they say, 'These employers are very unreasonable. We have sacked half of our members and doubled productivity and the employers are asking for more.' The upshot is that Freeport is the only company left to carry the whole burden and they have announced they will leave Australia and operate out of Singapore. So 500 families will find themselves without a job and this to protect five wharfies, who only work fourteen and a half hours a week. If that's reform, when Senator Collins says, 'Even when you've done all this, no one will be competitive---what's the point?' What is the point?

If you are a management man (and why I am on the Economic Council is because, as David said, I don't know economics, so that's why I guess Mr Goss selected me) it seems to me that if you've got work practices and feather-bedding and outdated equipment the solution is pretty obvious. You get rid of the work practices, you get rid of the feather-bedding, you spend a bit of money on your equipment, you update it and make yourself competitive. If we don't do it now, in ten years' time we will be so far out of the world competitive market we might as well forget it. I am just finding everywhere I turn in this business with Queensland Nickel I am running up against a brick wall. With $365 million worth of exports going down the drain, I just cannot understand the attitude.

Thank you for your interest.