Bills

Whyalla Steel Works (Environmental Authorisation) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 23 September 2015.)

The Hon. M.C. PARNELL (15:36): I rise to oppose this bill. This is a bad bill, it is an unnecessary bill, but that does not mean that that criticism reflects on the Whyalla steelworks because the Whyalla steelworks is an integral part of the economy and the community of Whyalla. I wish the steelworks every success and I hope they continue to employ South Australians long into the future. I want them to succeed. I want to maintain a local manufacturing base, because that is so important to a diverse advanced economy.

However, this bill has nothing whatsoever to do with the ongoing future of the steelworks or the community of Whyalla. It does nothing to guarantee the future of the steelworks, it does nothing to create jobs, and it does nothing to even protect the existing jobs that are already there. This bill is nothing more than pandering to the irrational whims of company officials and nervous nellies in the state government who pander to them, but in the process this bill sends a very dangerous message to the South Australian community that public health and the environment will be sacrificed at the request of industry without a single shred of evidence being presented.

This bill extends for a further 10 years special exemptions that were granted by this parliament to the operators of the Whyalla steelworks back in 2005. Back then it was seen as a vote of no confidence in the EPA. Extending the bill for another 10 years is a further vote of no confidence in the EPA. The purpose of the 2005 legislation was to nobble the EPA and to kill off the environmental legal challenge that was brought by residents of Whyalla who were sick and tired of dangerous pollution levels that were harming their health and their property.

Thankfully the bad old days of massive and dangerous red dust pollution in Whyalla are mostly behind us, so there is now no reason for the steelworks not to be subjected to the same environmental standards as other Australian industries. The effect of this legislation back in 2005, and now to be continued for another 10 years, is to say that the EPA cannot change pollution licence conditions that have already been negotiated between the government and the company. In other words, the so-called independent EPA has lost its independence.

Secondly, any new national pollution standards will not apply to the steelworks; standards that will apply to every other company and every other operation in the country will not apply to the Whyalla steelworks under this bill. In addition, key parts of the Environment Protection Act will not apply to the steelworks. As I say, exempting the steelworks from environmental standards for another 10 years will not guarantee a single job. The problem with the steel industry is the demand for steel and the price of iron ore; it is not environmental standards.

Let me go through some of the history of this legislation and the problems that have beset the steelworks, and why I say that this government's bill does nothing to redress those problems. Before I do that I should just point out that the environmental media has picked up on this story and they agree with my analysis. In fact, I refer to the trade journal—which I know many members are fond of reading—that used to be called Carbon and Environment Daily and is now known as Footprint. The headline from Footprint on 24 September this year was 'Arrium on track for 20 years of EPA-lite.' That media report stated:

Steelmaker Arrium is poised to win a 10-year extension of decade-old legislation that curtails the SA EPA's powers to intervene in its operations.

It goes on:

Passage of the bill, introduced after representations from Arrium, will mean that for another decade the EPA can't tighten environmental controls on the site, as changes can only be made by the Minister for Mineral Resources and Energy.

The history of pollution in Whyalla over the last many decades is well known to many; it is certainly well known to the Hon. Terry Stephens. I am not quite sure how far it goes back, but certainly there has been legislation put in place to facilitate steelmaking and mining operations both at Whyalla and in the Middleback Ranges for many, many decades. There were major indenture acts in 1937 and another one in 1958, but it was not until the year 2000 when BHP Billiton (I think it was just called BHP back then) split off various components and the steelmaking became OneSteel.

It was only in 2000 that this operation was, for the first time, held to be bound by South Australia's pollution laws. Prior to 2000 they had a special exemption—a Playford-era or maybe even earlier exemption—that effectively said they could pollute as much as they wanted to and no-one could do anything about it. However, since 2000 they were brought within the purview of the EPA.

The dust problem, right through the 1960s, 1970s, 1980s and 1990s, was just getting worse and worse. Any visitor to Whyalla would have known it as the red dust capital; in fact, I was even told that the local hardware stores sold a special tint of paint that was red dust coloured so that you could keep your buildings painted and, hopefully, they would not show the red dust because they were painted the same colour.

Certainly, residents had been active over many decades in agitating for BHP to clean up its act and for the state's pollution regulator—and after 1993 that was the EPA—to intervene on their behalf. In fact, back issues of the Whyalla News shows many, many articles, letters and cartoons referring to the serious pollution problem that existed in Whyalla. This problem was not just a matter of local amenity. Sure, it was an inconvenience for members of the public to have to continually clean their homes, and it was inconvenient to have to wipe down your washing line before you attempted to hang out shirts or sheets because otherwise they would become dirty from the dust that had collected on the washing line.

That is all inconvenient. Having discoloured concrete might have affected the houseproud, but the real impact that I was certainly nervous about, and residents became very worried about, was the impact on human health. I would at this point like to acknowledge the work of Dr April Muirden, who was a volunteer scientific research officer at the Environmental Defenders Office for many years. She later went on to work for the Victorian EPA. Dr Muirden's work showed that particulate pollution, which most of us think of as dust, was harmful to health everywhere that it had been studied. In other words, all of the industrial pollution, traffic pollution and even natural dust pollution that had been studied anywhere in the world was shown to have an adverse impact on human health.

There were even some before and after studies of steelworks in the United States, where the health of society was measured at a period when the steelworks were operating and then again during a period of closure and there were noticeable differences—meaning improvements—in health during the period that the steelworks were not operating. The community was agitated and they urged the EPA and they urged the company to do better. At the end of the day, at the end of their tether, the residents came to the Environmental Defenders Office and said that they needed help.

So, on behalf of the local community, I incorporated the Whyalla Red Dust Action Group. I did that for a number of reasons. First and foremost was the fact that the group needed to have some credibility, and they needed the credibility that came from being a legally incorporated organisation. It is probably also fair to say that they were nervous dealing with the Big Australian, dealing with one of the biggest companies in the world—even though OneSteel might not have been, certainly BHP was—and they were nervous about their personal legal liability if they were to take on a major multinational company. And so they were incorporated.

I note at this point the contribution of the member for Giles in another place, Mr Eddie Hughes, who of course represents the area around Whyalla. In his contribution to this debate, he talks about some of the previous executives who were at the OneSteel, as it was then was, works. He talks about the late Jim White and Mark Parry. He goes on to say:

There was that shift away from the old BHP culture of denying the problem and denying any liability to a far more open approach and an approach that put a real value on engaging with the community about environmental and other issues, so it ended up being an incredible positive.

The activist group, as a result of what happened through Project Magnet—

which I will come to shortly—

disbanded itself. There has been a little bit of negative criticism of this amendment in the media of late and I will just share some words from the person who chaired the activist group, Ted Kittel, who fought a very long battle with Rob Hannon to see the dust issue in Whyalla addressed. In response to some of these low-level negative criticisms that have appeared in the media of late, Ted said:

'It is true that the 2005 indenture caused the [Whyalla Red Dust Action Group] litigation to be null and void because the indenture changed the law.

However, on behalf of the [Whyalla Red Dust Action Group], I continued to negotiate with OneSteel with the express desire to find a middle ground.

The negotiations over a period of time resulted in a win, win position for both Parties and launched the beginning of the new partnership between the [Whyalla Red Dust Action Group] and OneSteel/Arrium.

The partnership has flourished and is now strong and progressive.

I have observed throughout the 2005-2015 Indenture period that OneSteel/Arrium has conducted its operations in Whyalla in a most environmentally responsible way.

OneSteel/Arrium has shown good faith by engaging with community representatives…on all issues which relate to environmental impacts, and I have no doubt [that] this will continue for the duration of the 2015-25 Indenture.'

There you have probably public enemy number one in Whyalla for a considerable period of time, Mr Ted Kittel, explaining how relations have improved and how the pollution has improved. I have to say there is nothing that makes me happier on both counts.

But there is often a tendency in these matters to rewrite or to reimagine history, and I cast my mind back to the early 2000s and the frustration that Ted Kittel had in dealing with the company, and ultimately the decision to go to litigation was absolutely a last resort. I have to say that it sticks in the throat a little when you hear company executives after 2005 saying to Mr Kittel and other residents of Whyalla, 'Mate, if only you'd talked to us beforehand. We didn't need to involve the lawyers.' That is absolute rubbish. If it were not for the involvement of lawyers, then the change of heart that the company found and the relationship that developed would never have happened. The residents would have continued to be ignored as they had successfully for decades.

The legal proceedings that I commenced on behalf of the Whyalla Red Dust Action Group were under section 104 of the Environment Protection Act, and that is the provision that is commonly known as the civil enforcement provision. It was the first time in South Australia that a group had used this provision for a serious industrial pollution case. It was not the first time the law had been tried. There was a minor suburban case where a householder, I believe, tried to sue a kindergarten for the noise made by toddlers riding their tricycles into the Colorbond fence between the two properties.

That was hardly the stuff of legend and it certainly was not a major industrial pollution incident, so my case for all intents and purposes was the first case. I lost count, but I think I had over 20 court appearances on behalf of the Whyalla Red Dust Action Group. The usual game plan was that we would go to the Environment, Resources and Development Court and we would win. The court would say, 'I've looked at the evidence. This company has a serious case to answer in relation to the pollution that they are depositing on the homes and in the lungs of the people of Whyalla.' The company would then, being slightly more cashed up than the residents were, go straight to the Supreme Court and argue some esoteric point of law and on a technicality it would be sent back to the environment court where the process would be repeated, and that went on for a number of years.

The court case ultimately died when this parliament in 2005 passed the legislation that we are now being asked to extend for another 10 years. As a result of the community's agitation, the EPA finally realised that doing nothing was not an option. They ultimately issued a number of orders against OneSteel and they imposed a new pollution licence. This was the most reasonable of licences. It did not order the company to immediately clean up their act. It did not order them to shut down. It basically gave them a considerable number of years in which to put in place mechanisms to reduce the pollution. It was a very generous licence and, whilst the residents would have preferred immediate action, in the end they accepted that the company would be given a period of, I think it was four years, to clean up their act.

But the company wasn't prepared to accept that. They went screaming to the Premier and they said to the Premier, 'You need to get the EPA off our back,' and Premier Rann at the time said, 'Don't worry, leave it to us,' and this legislation was a result. As I said before, at the time it was a kick in the teeth for the EPA, but it was clear message to industry in this state that, 'If you are unhappy with the environmental regulator, come to the government and they will fix it for you.' Of course, that is what a number of industries have done since then. Just in recent memory, members would recall that we have discussed the situation at Port Pirie where the company basically hinged their investment with a commitment that they would never be obliged to comply with tougher pollution standards, which they knew were coming down the line.

This has now become the way business works in South Australia: you have a public statute and a set of laws that apply to most companies, but if you are big enough and dirty enough, you go to the government and you get your special exemption.

I probably also need to say that back in 2005 I was not here; I was on the side lines, watching the proceedings in this place. I have to say that it was a fairly significant moment in my personal professional development. I am sure that members often go back to read my inaugural speech, made on 3 May 2006; it is a classic of its genre! If members were to go back to my inaugural speech, basically they would find the following line, where I refer to the 2005 Whyalla Steel Works Act. I said:

It is this type of behaviour that has encouraged me to seek a voice where the laws are made rather than just where the laws are applied.

What, of course, I meant was that, having spent a fair chunk of my professional life trying to apply environmental laws to make the environment and lives better for people, clearly that did not work when the government overrode them with special legislation or special regulation. So, I sought a place in this chamber, and I have never looked back!

The 2005 act, as I said, killed the legal proceedings. The Supreme Court found that the residents had no standing to pursue the case and that the company therefore had no case to answer. The court referred specifically to the legislation that was passed in this parliament as a reason for barring the action. The people of East Whyalla, despite my efforts and despite 20 appearances in court, never even had the chance to have their claims tested in open court before the government had stepped in to protect the company from the consequences of its actions.

It was not long into my term that I discovered that there are certain questions in question time that you save up for special occasions, and the question that commences, 'Did the minister mislead the parliament?' is one of those. I think that it might have been either my first or my second question of minister Holloway. He had said in parliament that the Whyalla Steel Works Act had nothing to do with the dismissal of the Whyalla Red Dust Action Group's court case when, in fact, according to the court itself, it was instrumental. Having said that in parliament, I then asked minister Holloway whether he had misled parliament in making that statement. He denied it. I clearly maintained that it was the fact and that he did mislead the parliament.

The act in 2005 was shortly followed by the implementation of Project Magnet. 'Magnet' is short for magnetite. Magnetite is a different type of iron ore from hematite. The problem in Whyalla was largely around the mining of hematite and the transferring of that ore to Whyalla, where it was crushed and pelletised in a part of the steelworks known as the pelletising plant. That was where the bulk of the dust pollution problem came from. It came from the transport of ore in uncovered wagons, and it came from the pelletising process, which is the part of the plant closest to the residents of East Whyalla.

Project Magnet involved mining a different type of ore, conducting most of the processing at the mine site and then transferring that ore in a wet slurry pipeline to Whyalla, where it was further processed, but in a wet form it did not produce dust. With the transfer of the process under Project Magnet, the red dust problem was largely eliminated, and that is a good thing. In fact, the test of whether or not the project was successful is measured by the levels of particulate pollution found at various monitoring stations in Whyalla.

The monitoring station of most importance was the one known as the Wall Street station, and that was across the road from the town primary school. As members would know, under the national environment protection measure for ambient air pollution, the maximum number of dusty days, if I can use that term, that is allowed in order to ensure a good healthy community is five days per year.

The measuring station across the road from the Whyalla Town Primary School would measure five days in a row above the maximum pollution standard. I am grateful to the Department of State Development who provided me with the latest chart, and what we see is that in the last several years there has been one, two or maybe three days per year where the pollution level has been exceeded. Clearly, Project Magnet has worked. That also must have us asking if the dust pollution is largely fixed, why does the company need the benefit of special exemptions from the normal pollution regulation regime? I maintain that they do not.

This bill was correctly categorised in another place as a hybrid bill. I do not pretend to fully understand the history of private bills and hybrid bills but, to cut to the chase, it is an act of parliament that effectively benefits just one entity, and that is the operators of the Whyalla steelworks. As a consequence the parliamentary rules provide that the bill must go to a select committee. In this case, it went to a select committee of the lower house of parliament, and those proceedings of the committee and the evidence they took is available to members if they have the wherewithal to seek it out.

I just make the point at this stage that in relation to parliamentary process I find it absolutely astounding that a bill that we are called on to debate and to vote upon can be subject to a select committee without us being told. There is no mechanism for a message from the House of Assembly to come to the Legislative Council to say, 'Hey guys, we're debating in a select committee a bill that you're going to eventually be asked to vote upon.' There was no record at all, there was no message, there was nothing that was sent to this chamber. Members might say, 'Well, that's your fault, you should follow their Hansard more closely,' or, 'You should have seen the ad that they put in the newspaper calling for submissions to the select committee.'

I have to say if I had seen an ad, I would have put in a submission to the select committee. Well, why didn't I see it, why wasn't I vigilant enough? I will tell you why: it was in the SaturdayAdvertiser on page 81. On page 81 of The Advertiser there was a public notice, 'Select Committee on the Whyalla Steel Works (Environmental Authorisation) Amendment Bill 2015', and this advertisement gave people six days to put in a submission to the secretary of that select committee.

Just to put this in context, what else is on page 81 of The Advertiser?Well, thePort Pirie Kennel Club was having an AGM, there's a notice about that. There is a cockatiel that was lost—'cinnamon with orange cheeks'—I thought all cockatiels were cinnamon with orange cheeks. Apparently this cockatiel talks and whistles and was lost in the Salisbury area. Also on page 81 there are some companionship ads: 'Athletic lady 65 slim & terrific.' There is a 'Cute nurse 28 petite out-going.' There is an executive guy who is 39 and tall. There is a fun-loving lady who is 43.

What I am saying is that the House of Assembly, whilst clearly wanting to engage as many South Australians as possible in the important legislative program of this state, puts an ad with a six-day time limit on page 81 of the Adelaide Advertiser.

In fact, there was only one submission that was received to that select committee, and the person who made that submission was the only person they did not want to talk to. For the one public submission they declined to bring that person in and ask them any questions. That person, who is known to me, and probably known to many members, is Mr Warren Godson. He is a retired pollution expert and regular correspondent with many members of parliament. He wrote a submission, but they did not want to hear from him.

The select committee was nothing more than a cheer squad for this legislation and, with all due respect, some of the members on the committee did ask some questions that I think perhaps could have been probed a little bit further, but they accepted answers that were, effectively, meaningless.

So the committee hearing went ahead. It heard from the company, it heard from government officials and it heard from the EPA and, ultimately, the conclusion that they came to was that:

Having heard the evidence and receiving only one submission, the Committee considered that there was broad agreement and acceptance for the provisions of the Bill and unanimously recommends that the Whyalla Steel Works (Environmental Authorisation) Bill be returned to the House of Assembly for passage through its remaining stages without amendment.

And that happened and ultimately we have this bill before us now. But it is worth having a bit of a look at some of the evidence that was presented to the select committee, because it goes to the heart of the absence of any evidence as to why this legislation was necessary.

I have to say that when it comes to, say, the Port Pirie special exemptions, I understand it, I get it. They could see the Americans were about to change their lead levels. They have done more health studies and they know lead is more dangerous than we thought. They could see over the horizon lead standards changing, so I get it; I understand why the Port Pirie smelter wanted to lock in old pollution standards—they did not want to be subject to new pollution standards.

However, in the case of the Whyalla steelworks, having largely fixed the environmental problem that everyone was concerned about, the question would be: well, what is on the horizon? Is there some wicked new standard that was going to put them out of business? There was not one skerrick of evidence that there was any environmental pressure on this company of any type at any time that meant that they needed a special exemption. In fact, the best that the company can do, when we look at, say, the evidence of Mr Steve Hamer, the chief executive in the steel division at Arrium Ltd, he says:

The indenture environmental authorisation has brought regulatory certainty to Arrium's operations and investment, and this stability is even more important now in the very challenging current business conditions.

Yes, the price of steel is a problem and the cost of processing might be a problem and a whole range of other things, but not once in all of this evidence did any of the company executives or anyone else say, 'And we're really worried that environmental standards are costing us jobs.' There is not one skerrick of evidence that that is the case. In fact, all they can talk about is this word 'certainty'. They want certainty. They do not want the prospect of anything changing, even though they had no real or rational fear that anything was about to change.

They also go on to sing the praises of the EPA. They think that this is the best EPA in the country. They say how much easier it is to deal with this EPA compared to the EPA in Victoria or New South Wales. Well, of course it is easier to deal with this EPA, because they have been muzzled; they have had their teeth extracted; they cannot do anything of their own volition. Of course they are the best EPA in the country to deal with—what else would you expect them to say? I will go to the evidence of the EPA itself and Mr Andrew Wood, Executive Director of Operations with the EPA. Basically his evidence to the committee was:

We would have preferred to have gone on to a licence under the Environment Protection Act.

That was their preference. Mr Dan van Holst Pellekaan, in another place, put it to the EPA and said:

Essentially the information we received was that while, yes, perhaps the EPA would prefer to have the direct connection that it usually does so it can go about its work in the way that it normally does, it actually doesn't have any objection to this indenture being rolled over and, in fact, sees no negative environmental problems or any increased risks by this happening. Is that a fair summary of the EPA's views?

And the EPA answered, 'Yes, that's a very fair summary; that's exactly how we feel about it.' But it does beg the question that at a practical level the EPA is saying, 'Well, this isn't really going to affect everything because they've fixed their pollution problem.' That then begs the question: why on earth, if the pollution problem is fixed, can't this company be required to comply with the same standards that the rest of South Australian industry has to comply with?

It is just remarkable that not once, in all of the interrogation, was there anything identified, other than for those who have seen The Castle (which I think is all of us), 'the vibe'—it is all about 'the vibe'. There was no practical reason why this legislation was necessary.

I think I have made my views fairly well known by now so I will conclude. I will say that the EPA should be allowed to do its job, protecting the community from pollution, without political interference. This bill in 2005 was political interference. Extending the bill for another 10 years is yet more political interference. The act that this bill seeks to extend is to expire in just a month or so and the position of the Greens is that the 2005 laws should be able to expire disgracefully and not be extended for another decade.

Debate adjourned on motion of Hon. D.W. Ridgway.