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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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PORT PIRIE SMELTING FACILITY (LEAD-IN-AIR CONCENTRATIONS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 6 June 2013.)

Mr HAMILTON-SMITH (Waite) (11:44): I rise to advise the house that the opposition will be supporting this measure and to raise a range of concerns and issues linked to it. As we know, the minister introduced the bill on 6 June and its aim is to 'regulate the variation of conditions and applications of laws relating to lead emissions' from the Nyrstar smelting facility in Port Pirie. The government argues that the effect of the bill will be to provide regulatory certainty for investors for a proposed transformation of the smelting facility. I thank the minister for the departmental briefing that was provided to opposition members on 18 June.

The history of the Port Pirie smelter is one that will focus the attention of the parliament and the community for some months and years to come, because crucial decisions are in the wings that will affect everyone in this state. The Port Pirie smelting facility was established in 1889 and is celebrating its 124 year anniversary. It was originally owned by Broken Hill Associated Smelters to service ore from that project. The smelter later transitioned to Pasminco, then Zinifex, then Nyrstar around six years ago. On a number of occasions the plant has faced receivership or closure.

The smelter currently processes lead, zinc, copper, silver and other precious minerals principally sourced from overseas, with some local provision from the Broken Hill mine. The plant is strategically linked to Nyrstar's overseas mining operations and its Tasmanian smelting operation, which forwards by-products such as paragoethite and leach products from Hobart to Port Pirie. The economic significance of Nyrstar to the South Australian economy is very, very significant.

The future of the plant is in doubt, and has been for some decades. Nyrstar is currently the largest employer in Port Pirie, with around 858 employees and 2,500 indirect jobs in a town with a workforce of about 5,240 and a total population of about 14,000. The closure of the plant would have a dramatic effect on the township and the Upper Spencer Gulf economy, and would be a crushing event in the seat of Frome. Other enterprises include the port, agribusinesses, light engineering and a range of small businesses, but without Nyrstar the core of the community in the Port Pirie precinct would be crushed. According to the company, Nyrstar Port Pirie's value-add to GSP is about $518 million per annum.

I now want to address the transformation proposal upon which this measure hinges. A $350 million reinvestment in new technology is proposed at the Nyrstar plant, with further investment to follow at a later time. A $15 million prefeasibility study into the transformation proposal is currently being conducted, assisted by a $5 million grant from the South Australian government which the South Australian Liberals, on this side of the house, were pleased to support. The transformation will result in Nyrstar becoming an advanced polymetallic processing and recovery facility, to be commissioned in 2016.

The $350 million funding package is to be comprised of a $150 million investment from third-party investors, guaranteed by the commonwealth government's Export Finance and Insurance Corporation, a $100 million sale of silver futures from Nyrstar, and $100 million in investment by Nyrstar. I refer to a public statement made by Nyrstar on 23 May 2013 titled 'Port Pirie Transformation Update', where it confirmed those arrangements. Of course, these are important, and I remind the house of them because without these arrangements successfully proceeding there will be no future for the plant.

The crux of it is that the company has signed an implementation agreement with the Australian Export Finance and Insurance Corporation (EFIC), the export credit agency of the Australian federal government, with respect to the EFIC-supported tranche of the funding package for the proposed transformation of the Port Pirie smelter into an advanced metals recovery centre. There was an announcement about this on 3 December 2012, which indicated that Nyrstar had reached an in-principle agreement with the Australian federal government and the South Australian government with respect to the funding of the transformation.

The capital investment required for the transformation, as I mentioned was $350 million (around €280 million) and is to be financed by the funding package comprised of the $100 million from Nyrstar, the forward sale arrangement ($100 million), and the $150 million via restructured investment to third-party investors benefiting from a guarantee from EFIC.

Nyrstar's announcement on 23 May was a very important milestone in the funding package for the transformation. The implementation agreement provided a framework and a timetable for this component of the funding package. The terms of the agreement remain confidential, but completion was subject to a number of conditions, including final ministerial approval following completion of the final investment case.

The support of EFIC continues to be a crucial element in Nyrstar's investment decision and underlines both Nyrstar and EFIC's contribution to the transformation. This bill is crucial to the success of these arrangements. Without the removal of the regulatory uncertainty that this bill seeks to satisfy, the financial arrangements that underpin the transformation are at risk.

On 28 February this year, the state government announced that the transformation had been awarded major development status, facilitating an efficient development and approval process, and we were happy to support that. Nyrstar announced in its first 2013 interim management statement that on 10 April 2013 it had sold forward to February 2014, which was the expected date by which the transformation funding package would be affected, five million troy ounces of silver at a price of approximately $US28 per troy ounce.

The current intention is that this position would be rolled into an $A100 million forward sale component of the transformation funding package in February 2014. On 24 April, the South Australian government confirmed its contribution of $A5 million towards funding Nyrstar's investment case which, as I mentioned, was expected to be completed by the end of 2013, with a report due in the first quarter of 2014.

In essence, these financial arrangements, if they are to succeed, require the successful passage of this bill. The successful transformation and upgrading of the plant would result in Nyrstar producing a much higher profit margin and significantly reducing its emissions. Nyrstar initially approached the state government, as I mentioned, in 2011 in anticipation of new Environment Protection Authority regulatory arrangements which imposed a more stringent emissions standard for the smelter.

The new EPA standards were introduced in July 2012. The proposed smelting facility will contain contemporary technology that is utilised in only a small number of sites globally. The smelting process can handle much larger, complex and varied ores and therefore will operate at a much higher profit margin. If the transformation proceeds, the facility is expected to be profitable for a conservatively estimated 30 years, with the potential for the technology. These are important points for the house to note.

On my numerous visits to Nyrstar, it has become very, very apparent that no change is not an option. It was put to me that, if you were proposing to build the Nyrstar plant in its current form today at Port Pirie, it would simply never get up. It is a very environmentally unfriendly bit of infrastructure at the moment. That is why we need to assist this transformation. I think the response of the commonwealth and state governments has generally been adequate. In 2011-12, the state government, as I mentioned, was approached by Nyrstar seeking significant capital input to aid in the transformation of the Port Pirie smelter.

In late 2012, the case management for the Nyrstar transformation had been allotted to the Olympic Dam taskforce led by Mr Bruce Carter, with support from DMITRE Deputy Chief Executive, Paul Heithersay. The result is, as I have mentioned, the Commonwealth Export Finance Insurance Corporation's $150 million guarantee; the $5 million state government grant towards the feasibility study, which I have also mentioned; and an in-principle $115 million state government guarantee and indemnity, which was brought to light during the recent budget, and I quote:

...in respect of certain potential environmental, health and property liabilities to assist with the attraction of external financing for the proposed Port Pirie smelter upgrade. The guarantee/indemnity will come into effect once the feasibility study for the upgrade has been finalised and accepted by Nyrstar.

It is important to note that the guarantee will only come into effect if the Nyrstar board approves the transformation proposal. We were initially advised that that approval might occur late this year, 2013. We have since been advised that that approval may now be deferred into the first quarter of 2014. Can I be quite frank with the house in indicating that the opposition has concerns about the time it has taken to advance this matter.

This bill, as I mentioned, was introduced back on 6 June. We feel that it could have been dealt with very expeditiously. There has been a couple of sitting weeks since then, and we could have been having this debate back in June or much earlier in July. Instead, the government has taken until today to bring it forward. I think that that is regrettable because we need to provide to the board of Nyrstar a tick in all the relevant boxes so that they are able to make the corporate decision they need to make in the best interest of the state, their own corporate interests and the people of Port Pirie. In my opinion, we have wasted valuable time.

Of course all of this is occurring in the overlay of a forthcoming federal election, which may or may not see a change of government—I certainly hope it does—but one would assume that the arrangements entered into with EFIC and the federal government authorities will hold no matter what happens during the federal election but, of course, these events are also unfolding in the context of a forthcoming state election in March.

I would certainly hope that we get a decision from the board of Nyrstar prior to the state election, and I would certainly hope that there is no event which seeks to delay the board's decision beyond the March election. I think people need to know before the March election what is going to happen with the Nyrstar plant. I think they need certainty and direction and, if there is to be any point of difference between the major political parties, and any choices to be made, the people of Port Pirie and Frome deserve a right to know the facts and the choices before the election.

So, I would be very concerned if there was any action this parliament, this government or, for that matter, the federal government, might take between now and March that would seek to postpone a decision point. The fact that it has already slipped out to February next year is disappointing. It would have been better to get a decision late this year. Having said that, we certainly will not be looking to delay this in any way whatsoever as an opposition.

I want to go back to the risks to the taxpayer of South Australia and to investors in Nyrstar. The $115 million state government guarantee and indemnity, highlighted in this year's budget for the first time, is being provided to give greater certainty to potential third-party investors in the transformation. In effect, we are providing an indemnity to private investors, which is not something to be baulked at. If all goes well, the opposition has been advised by the government that that indemnity will not be called upon. However, one must assume that things do not always go well, so the reality is that there is $115 million of taxpayers' money on the table here that could potentially vanish. I think that adds weight and gravitas to this debate and members should look at that figure in a very sober way when considering their position on this bill.

Nyrstar may face potential environmental, health and property liabilities in the future that could force the company's Australian operations into difficulty. I think we need to be open in acknowledging that. The bill is an associated measure to mitigate against potential legal actions going forward. Of course, these are problems not unique to Nyrstar that many companies have to square up to.

I remind the house that the opposition has supported the $5 million taxpayer contribution to Nyrstar's feasibility study and that, at every step of this process, we have offered our bipartisan support in the best interests of the state, Nyrstar and the people of South Australia. I just make that point because I remind the house that the opposition and those on this side of the house always put the best interests of the people of South Australia first. We have not sought at any time to play politics with this; we have not sought at any time to try to take points of difference for political reasons. In every decision we have made about Nyrstar, we have thought about what is best for the people of Port Pirie, Frome and South Australia, first and foremost.

Can I just commend the work of the Liberal candidate for Frome, Kendall Jackson, who has done a fantastic job and represented us at the public meeting that was held up there recently when there was a briefing to the community. She has kept me (and our side) very closely informed of concerns within the community as this process has evolved. She is a fantastic representative of her local community and she will be a fantastic champion for the state Liberal Party at the forthcoming state election. I can say to the people of Frome that they would be very well served should she become the member at some point in the future. I am not sure if the current member for Frome would agree with me on that, however, that is my earnest view.

I just want to point the house to the possible options going forward at Nyrstar because I think we need to approach this, as I mentioned, in a very sober way. Option one would be that the Port Pirie plant could close and Nyrstar could walk away. I think we all need to face up to this as a very real prospect. Remediation tasks in that event would be very substantial.

I am advised that Nyrstar's corporate structures are largely located overseas and that the capacity of the state and commonwealth governments to seek remedy from Nyrstar's European offices may create some difficulties in the event of a collapse. I am advised that the remediation responsibility might be left to the state and commonwealth governments either in partnership with Nyrstar or on a stand-alone basis, and that Nyrstar's operations in Hobart might also face closure. I think we all need to face up to the fact there is a chance that the board could decide to walk away.

Can I just signal to the house and to the company that should a state Liberal government form office in March, if Nyrstar decided to close its operations, it could look forward to a very aggressive and energetic pursuit by a future Liberal government to ensure that their obligations with regard to remediation of the site were effected. If we form government in March, we will not see the people of Port Pirie and the taxpayers of South Australia left with the task of cleaning up the site without the financial involvement of the company.

We will use whatever resources are available to us as a state government in cooperation with the federal government, internationally and nationally, to ensure that Nyrstar, as owner of the plant, is held financially accountable for any costs associated with a decision to abandon the site and walk away. I just want to make that signal very clear to the company and very clear to the house, and I would be very disappointed if the current government took a different view.

Of course, by far the preferred option, the second option, would be for the transformation to proceed. In the same breath I say to the company that this side of the house, if we form government in March, will do everything we humanly can to ensure that Nyrstar has a vibrant future at Port Pirie, because in this event the plant could have a future of 30 years of life, it would remain viable, and it could set about a longer time frame using cash revenues from the transformation to build its operations. Port Pirie's future would be secured in the short to medium term, and this is by far the preferred option.

Of course, there is a third option, and that is no change, just to bat on, as we have, with no transformation. I do not really see that as an option. Nyrstar continuing its operations over the short term, with the government forced to ease the regulatory burden upon the company by compromising health and environmental standards for many years to come, I think is not really a viable option. This risks negative impacts on the health of the community and would create a dangerous precedent on environmental and public health grounds. Essentially, there are only two choices: close the plant and walk away or effect this transformation. By far the preferred option is the latter. Our signal from this side of the house to the company is that that is the decision that we want you to make when the board decides this matter, and that is the decision that we will help you to effect.

I want to refer you to the bill directly, because it seeks to vary the application of regulatory and legislative conditions relating to lead emissions from Nyrstar's smelter in Port Pirie. In effect, the government seeks to provide regulatory certainty to Nyrstar by locking down the health and environmental standards which the company must meet. The device used in the bill is to allow the minister for industry to intervene if the Environment Protection Authority seeks to vary the agreed maximum lead-in-air condition without consultation and approval of the manufacturing minister and Nyrstar. The bill will only take effect six months after the completion of the transformation.

I also want to make reference to the likelihood that this matter could be referred to a select committee. There have been discussions between the minister and myself indicating that the government's preference is to refer the matter to such a committee, and perhaps we can deal with that when the minister actually moves that way. In general reference to that proposition, can I say that we will be supporting that. I must say that I initially had misgivings about whether that was even necessary or whether it would add any value to the process. I think in this case the government has clearly negotiated with all the relevant parties and consulted fairly thoroughly; so has the opposition.

I have certainly spoken to the council, to the company, to various stakeholders, and, as mentioned, with Kendall Jackson and the community, and everyone seems to be in support of this measure because it will not only provide jobs and security for the economy of Port Pirie, but it is going to actually reduce health impacts and improve health outcomes for the people of Port Pirie; so I find no dissenting voice to this proposition. I think again that raises questions about whether or not a select committee would add any value to the process by enabling further consultation.

Having said that, I understand that there is a potential argument about whether or not it is a hybrid bill. In my spirited discussions with the clerks about this, can I say that my personal view is that it is not a hybrid bill. I accept there may be a case but, of course, having examined this matter thoroughly, I see the definitions in the 12 December 1912 joint standing orders of the houses of parliament relating to private bills and I note that, in respect of whether or not bills such as this are a hybrid bill, our joint agreement, dated 1912, says this:

The following bill shall not be Private Bills, but every such Bill shall be referred, after the second reading, to a Select Committee of the House in which it originates:—

A. Bills introduced by the Government whose primary and chief object is to promote the interests of one or more municipal corporations or local bodies, and not those of municipal corporations or local bodies generally.

B. Bills introduced by the Government authorising the granting of Crown or waste lands to an individual person, a company, a corporation, or a local body.

It then goes on:

There shall be an Examiner for Private Bills for each House (hereinafter styled 'the Examiner'), who shall be appointed by the President or Speaker, as the case may be.

Based on that definition, I doubt whether this bill would qualify as a hybrid bill. There is an argument that it confers a benefit on a private company but, as the joint standing order specifies, it, as a joint standing order, deals with municipal corporations or local bodies. I think there is a real question mark about whether Nyrstar qualifies as either a municipal corporation, which I would argue it certainly does not qualify as, or a local body, which I would argue it does not qualify as.

Even then, there is no granting of crown or wastelands in this case to an individual person, a company, a corporation or a local body. It is rather that we are dealing with matters to do with environmental controls and, in effect, to do with the minister's ability to direct the EPA. So, I think, in terms of our joint standing orders, this does not qualify, in my opinion, as a hybrid bill, and I would be quite happy to argue that case to you, Mr Speaker, and to the house.

Having said that, and following guidance from the clerks, I readily acknowledge that there is some precedent where the house has chosen to take a broader application of the joint standing order and to include, on a number of occasions, private corporations or companies within the terms of that joint standing order. I think that is a reflection of the fact that this house has, in the past, adopted some sloppy practices.

I am one who believes that two wrongs do not make a right, so I would be inclined to argue to you, Mr Speaker, and to the house that we should stop doing so and make one of two choices: either stop declaring bills as hybrid bills that do not meet the criteria set out in the 1912 joint standing orders of the houses of parliament or, alternatively, do what the other place has done; that is, examine, as an example, their standing order 268, which has extended its interpretation of these arrangements to include any matter which, under subparagraph (b) of that standing order, authorises the 'granting of Crown or waste lands to an individual person, a company, a corporation, or local body,' but which has certainly taken a view under subparagraph (a) that any measure that has:

...for their primary and chief object to promote the interests of one or more Municipal Corporations, District Councils, or public local bodies, rather than those of Municipal Corporations, District Councils, or public local bodies generally.

I think their definition is a little broader and we could consider whether or not we need a separate standing order of our own.

I might have been prepared to argue that if I thought that the select committee was going to slow the matter up for several months, because select committees are notorious for doing that, but the minister, in the spirit of progressing the matter, has assured me that there will not be a delay with the select committee arrangements and that the matter will not be held up. I know we are going to deal with that in due course and so, for that reason, will be supporting that select committee arrangement.

Can I just add that I think the minister has also provided two other very good arguments for a select committee that do have merit. One is that it is highly likely that it would go to a select committee in the upper house, because of their standing order No. 268, and, quite rightly and understandably, the minister and shadow minister in this house would want to be members of a select committee, should it be held, rather than to leave it to the other place.

Secondly—and I think it is probably the most compelling of all arguments—the minister makes the case well that should at some point in the future any issue arise with regard to legal actions against Nyrstar that are health-related, the house would want to demonstrate that it had covered every avenue in respect of thoroughness in the way it deals with this matter, and that a select committee would attest to that. I think that is a very compelling argument. I thank the minister for allaying my concerns about whether a select committee was needed and assuring me that it is. For that reason we will be supporting that.

Can I talk for a moment about the politics of this entire measure, because I think, as with all issues before the house, there is an element of politics involved. A closure of the plant would have a dramatic and far-reaching effect on the economic, social and political future of this state; let there be no mistake. Can I just say that, in light of the problems that General Motors Holden is facing at Elizabeth, with an uncertain future at the moment, the coming together of these two issues would be an economic tsunami for this state. To have both General Motors Holden and Nyrstar leave the state at the same time would transfix the attention of whoever forms government after March for at least a term and possibly longer.

The restructuring packages that might be needed to deal with both issues would be overwhelming in tight budgetary times, and I think all members, before they consider their decision on this bill, need to take that into account. It is quite possible that, if the board decides against the transformation in 2014, a wind-up at Nyrstar could be swift. It is likely that the state and federal governments would be asked to provide significant funds for the restructuring, as I have mentioned. The taxpayer might also be left with a large remediation liability and would then have to tackle Nyrstar at a national and international level to ensure that their obligations were met. This could expose the state budget to hundreds of millions of dollars in contingent liability, something that is not presently budgeted for.

A refusal by state or federal governments to participate financially in the transformation could precipitate a negative decision from the board. A rejection of the bill by the parliament might also put an end to Nyrstar. I think we all need to be just straight up about it. I have mentioned the potential risks of litigation going forward related to health concerns, another reason why this transformation needs to be agreed to. The health and wellbeing of the people of Port Pirie should be our first and principal concern.

I have talked about the timing of the board's decision, originally set for October, now slipped to February. It may well be that it slips further. I hope not, and I would certainly be looking to insist that we get a decision in February, so that we all know where we stand well before the state election.

I have mentioned the extent of consultation by members on this side of the house with, firstly, Glenn Poynter, Nyrstar Port Pirie general manager. I have certainly talked to the local MP, the member for Frome. I know he is very keen to see this matter advanced. I have talked to, at various times, both the mayor and the general manager of the council about this issue. I have mentioned that Kendall Jackson, our candidate up there, has represented the party thoroughly during all of the consultation phases.

The opposition has made numerous visits to Port Pirie. I personally have visited the plant. I know the leader, Steven Marshall, has also visited the plant, along with shadow cabinet members. We have held conferences and party seminars up there, we have been regular visitors and participants in the seat of Frome, and we intend to continue to be. So, we are well versed on this issue and very keen to see the matter acted upon.

In summary, the worst outcome for South Australia would be for Nyrstar to collapse at Port Pirie. It would leave the state government, or any future state government, with the challenge of economic restructuring in the Mid North, combined with a massive remediation liability, and our state government's ability to seek a remedy from Nyrstar would be part of that challenge. I can tell you that, if we are in government, we will be very energetic should that occur. So, my message to Nyrstar is: approve the transformation and get on with the future.

The best outcome for South Australia would be that transformation and to see it proceed smoothly. In this event, a modern plant is likely to continue to be profitable, as I have mentioned, for a very long period to come. Nyrstar's processing capacity would ensure that South Australia's mineral resource industry will add much greater value to the broader economy and potentially make a range of potential resource projects much more cost-effective. The continuation of Nyrstar's current operations is untenable on environmental, public health and economic grounds. Without the transformation, the company's future beyond 2016 is limited.

I think that there has been enough time spent on consultation and preparation for this matter before the house today. What the house needs to do is to decide the issue. I understand that it will go to a select committee in the course of this week, but I would certainly hope that the matter comes back to the house on Thursday, after consideration by the select committee, and that we deal with it and decide the issue here this week. The government, as I have said, has already taken, in my opinion, too long to bring this matter forward.

What we now need to do is to ensure that it is dealt with by the House of Assembly this week so that we can go into the parliamentary recess knowing that it will go to the Legislative Council in the first week of sitting after the break. They then need to deal with it, they then need to decide the issue, and they then need to have it proclaimed so that the board has this matter finalised so that it has the information it needs so that it can make a decision. On this side, we have done everything humanly possible to progress this matter, and we will continue to do so in a spirit of bipartisanship. It is in everybody's interest to see this bill passed swiftly. I commend the bill to the house.

Mr BROCK (Frome) (12:23): I also rise to support this bill. Let me make it quite clear at the start that I am very appreciative of the government's bringing the bill forward. The bill gives certainty not only to Nyrstar's in-principle support for a new plant at Port Pirie but also for potential developers coming in and also for potential partners for funding the shortfall.

The member for Waite has indicated that he has had discussions with me, and I certainly have had meetings with the member for Waite regarding this, and I thank him for that. More importantly, I thank all of the key players in the lead-up to this program (the in-principle agreement between the federal government and Nyrstar), including the state government and also the federal government. It was a very long, very tedious and nervous wait for the people of Port Pirie, in particular, to understand where we would be going with the transformation of a new plant in Port Pirie.

I must also make it public here that I did spend 30 years of my working life at Nyrstar down there, and I have seen from when I first started in 1978 up until my retirement in 2008 the transformation of the technology and the reduction in the lead emissions coming from that plant. That has been a great transformation. The blood lead levels of our children in Port Pirie have been over-exaggerated, in my opinion, over-publicised and unwarranted. The people of Port Pirie have done everything they can, and there have been massive improvements there. I think that the media have not portrayed us fairly and given the people of Port Pirie a fair go.

Also, I publicly acknowledge that two of my stepsons are currently working at Nyrstar and that many of my friends still work at Nyrstar. Many of my friends and associates in Port Pirie and the region are dependent on the success of Nyrstar and its continuation in some form. I am very supportive of its continuation in a new format.

Leading up to the in-principle support, I have to say that I was an annoying factor to the Premier, in particular, to minister Koutsantonis in his role leading up to this, and also to any federal member I came in contact with. Whether it was a member of the federal government or somebody in opposition, every time I had the opportunity I would talk about Nyrstar and the importance of these issues. Sometimes people on the federal side were not aware of the importance Nyrstar has to the community of Port Pirie.

I know that on both sides of the house here everybody understands the importance of this industry, not only to Port Pirie and the region but also to the South Australian economy. I continue to lobby the ministers, the Premier and the senators from both sides of federal politics to ensure that when this is being discussed it is at the forefront of everything, and that is what has happened now. It has gone forward. The in-principle support has been agreed to. I hope that this bill goes through with no objection because integration is very important to the Nyrstar board, Port Pirie and Hobart and, if one goes down, the other goes down. People do not understand that. Both sites need to be vibrant, healthy and profitable, otherwise Hobart will also be a catalyst for Port Pirie to go down.

I want to see this bill go through with tripartisan support, not only bipartisan. We must remember that here we have crossbenches. We are not members of the Liberal Party, we are not members of the government. We are here to represent our communities, so I want to see tripartisan support and for it to be very public from this house here. When it goes to the Legislative Council, I want to be able to see people think seriously about the future direction.

Consider that the current plant is over 130 years old; it is old technology. The centre plant there was a pilot plant. It is still going. What can we expect? Everything changes on a regular basis. I implore the members of the opposition to liaise with their colleagues in the upper house and the government side to ensure that when it gets up there it is debated professionally, honestly, seriously and sensibly. I want to be able to see a positive response go to the Nyrstar board to say that the South Australian government, the South Australian parliament, are all supporting this legislation going through. The last thing we want to see is some member on either side or from whichever party to start to put the negative in there and the uncertainty to the Nyrstar board.

This is very important not only to Port Pirie for economic growth but also for certainty. The people of Port Pirie have been promised many things over many years from both sides of politics, and we have got nothing. We have had promise after promise. The people of Port Pirie are sick and tired of having promises and nothing happening. This is something that even the people of Port Pirie now are saying. I have had to do a lot of convincing and say that I am very positive of this going through.

When it started there was uncertainty to the degree that Nyrstar lost many very valuable and highly qualified tradespeople who moved on. They have gone to the mines, they have gone to the resources sector, they have come to Adelaide. The people who are suffering from this are our community. Nyrstar have many long-term employees who have been very loyal over many years, some people having been there for over 50 years—families, generation after generation. We want to have this new transformation plant to be able to have security in Port Pirie in my community, for my friends and my family, and to say that we are going to be there for another 30 years and having that security.

Also, the lead in the blood of our children is an issue we are all very passionate about. I am sure that whichever side we are on, we consider it important. The lead in the blood of our children is a very big issue, and has been over many years with the smelter. Pasminco was the first one; it went into receivership, and then it started to acknowledge it. Then Zinifex came in, and the general manager said, 'We have an issue with the lead in blood; we have a responsibility.'

Everyone else was saying that it was not their responsibility, but Zinifex took ownership of that and started to deal with it. Then Zinifex itself was sold to Nyrstar. To Nyrstar's credit, it has continued to take ownership of reducing emissions. It has a very strict EPA licence and has regulatory 24 hours a day, seven days a week, 365 days a year monitoring. Nyrstar has its own monitoring facilities there in conjunction with and additional to the EPA's.

I think that for far too long the way Port Pirie has been portrayed in the media is something that is not justified and not warranted. I cannot wait until such time as this new plant gets into Port Pirie and it is announced, because I will lead the charge there with the mayor and the CEO to make certain that this is the new Port Pirie. I do not care what they have been doing before; I want to see a positive attitude and security not only for my family but for the generations to come and for the community and the region of Port Pirie as well.

Whilst at the start there was a fair bit of jostling around with this bill, a bit of uncertainty about it and a bit of political stuff, I must honestly say that there was a bit of confusion about whether the minister should have the final say if the EPA had to change the licence after the settling in period of the new plant. The member for Waite has indicated that he is not playing politics on this side, and I agree. I do not want to play politics with this bill. I want to see this bill in here; it is a very good bill.

In my discussions with minister Kenyon we talked about this; I said that I wanted to have a public forum in Port Pirie, and we had a public forum in Port Pirie. As most of our country members will understand, if you call a public forum in the community sometimes you get only a small number, but we had about 80 people there. We had a very good meeting. The minister came, and we had the professional people and the scientists come up, and they answered questions and explained it very clearly to my community. If my community is okay with this bill, then I am okay with this bill. I do not care what people in Adelaide think about the bill; this bill relates to my community, my people, and if my people in Pirie say, 'Go for it, member for Frome,' I will do that. I have had unwavering support to pass this bill, to make sure it gets through the parliament.

The member for Waite has made a couple of comments. If this bill does not go through, or if the plant transformation does not take place, what is the damage to Port Pirie? First up is if the transformation does not happen. We understand about the economic collapse and so forth; we have so much uncertainty in this country and the world at the moment that the last thing we want to have is some industry go down. The people of Port Pirie have lost confidence, businesses have lost confidence, because of the uncertainty politically and the negativity from the media.

We have people who are looking at coming into Port Pirie to live, and then they see the media stuff about the lead in the blood of children, etc., and they say, 'We're not coming to Port Pirie.' They do not give us a chance. There is just as much pollution in other areas of our state and in Australia, but we seem to be getting the worst scenario. We have people who want to develop in Port Pirie, but as soon as they hear about this lead issue they walk away.

I cannot tolerate this any more. I want to be able to see this new plant go forward. It will reduce the emissions coming out, but at the same time we all have to take ownership of our own health; no matter who it is they need to take ownership of their own health and do all the precautionary stuff. If we continue the way we are the moment, with the same plant and no change, then I believe that the security of the smelters will not be guaranteed. It will not give any confidence to our community, it will not have the economic growth factor, and it will affect lots of issues, including for the Port Pirie Regional Council, because house prices will go down, capital value will down, there will be less in rates and so fewer services.

If we close the site, as the member for Waite has indicated—it is an old site; it is a massive site, and I do not think people understand the enormity of the site until such time as they see it—there would be an enormous clean-up. There would be hundreds and hundreds of millions of dollars' worth of clean-up. The other thing and the best idea is transformation for a new plant. That is the only way to go; it is the answer to all our questions.

I have liaised with the member for Waite, and I appreciate that the member for Waite has come in and we have had some discussions regarding this. I have had the opportunity to put my point of view across to the member, and also to minister Koutsantonis, minister Kenyon and the Premier. I have also done a lot of lobbying in Port Pirie. We have had regular meetings with the general manager of Nyrstar, and I have had meetings with the board.

I have had meetings with the entire Port Pirie Regional Council, the CEO, the mayor and the councillors. I have had meetings with the chamber of commerce—I will make this public: I am on the executive of the Port Pirie Chamber of Commerce. The chamber of commerce has had meetings with all the key stakeholders, including Nyrstar. One of the things we have not mentioned here is Regional Development Australia. We have had meetings with them, because again they are part of the team that needs to push this going forward.

Hopefully, this bill would have gone through this house at the end of this week, or by the end of next month at the very latest; I acknowledge that if there is no objection from the House of Assembly, I would be very grateful for that. I cannot wait until it goes through the Legislative Council, and I cannot wait until the bill comes back here for ratification and is passed, and then we put that to the Nyrstar board and say that this parliament is all for the transformation for the new plant. I am looking forward to that very good day. I commend the bill to the parliament.

Mr GRIFFITHS (Goyder) (12:36): I enjoy being in this chamber and listening to people who know about the implications on a community of the legislation that we debate. I commend the member for Frome for how he put his position and his total support for the bill, and reiterated a lot of the comments and issues raised by the member for Waite in doing that.

I have never lived in Port Pirie; for me, the closest I have lived was about an hour directly east of Port Pirie. In looking for a bigger regional town for the 5½ years I lived in Orroroo, Port Pirie was it. It just dominates the skyline; there is no other way to describe it. When you are heading towards Port Pirie, you look towards the community and it is it.

It is obvious to me that the growth that has occurred in Port Pirie from its very beginnings—and I note that the industry has been located there for 124 years—has occurred around that activity being there. It is intrinsic to its importance there, and it is absolutely critical from a regional and state perspective that we do all that we can to make sure that Nyrstar remains, and that the confidence exists in the community and the surrounding region to be sure that that business is going to be there, and is welcomed there, because of the growth opportunities that it will have.

It is a great town, too, as are the people. I used a lot of the business services there at the time I lived in the Mid North and experienced the helpful attitude that existed amongst the business operators. I think this has been exemplified every time we have ever been to Nyrstar. When we have been shown around the site and talked about the difficulties that they as a business face from their global perspective, their Hobart operations, their international exposure, it has become obvious to me that this is a really important one.

In the seven and a bit years that I have been in parliament, I have been so pleased about the level of support that has existed for its business activities, while also understanding that words have been said about health issues (and we will talk about that later), but it is clear to me that every person in this chamber wants to make sure that it is there.

I have great respect for the health issues. The member for Frome has referred to that, as has the member for Waite. I am aware of the tenby10 project, which started in the early 2000s and which was focused on improving the lead levels to ensure that the younger people in that community were cared for, that the emission level was brought down and that health would not be a concern.

When I look at this bill and note its impacts, yes, I am pleased to see a business operation, but also importantly the emission level that might come out of it and the health result for that community which is an absolute key one. The member for Frome is quite right about the bad press that has been too easily circulated by many, unfortunately, who have not known the place, the people, the community, and the importance that the industry plays, and it has been too easy to speak negatively.

There are some challenges there; there is no doubt about that, and that is why the community has recognised the need to act upon that, and Nyrstar and its predecessors have recognised the need to act upon that and, collectively, they have worked together to try and put in place programs that will help the health of the community. It is coming down, and projections that I have seen show an increasing reduction in emissions and an increasing healthy outlook for young people. I have found Nyrstar to be an exceptionally professional organisation. When you look at the fact that, I think, there are 850 employees and, I believe, from the briefing that I had when I was up there, there are over 1,000 contractors who worked—

An honourable member: 300 contractors.

Mr GRIFFITHS: —300 contractors, sorry—but then it is the multiplier effect of each of those people who work there, and the impact upon employment and job opportunities in the area that really bring it up to several thousand (I think 2½ was an added-on figure that I saw) and, out of a population of about 14,000 people, that is so significant. So, the parliament will debate this, and there will be a variety of opinions expressed in another place, I think it is fair to say, but the level of support that will exist in the House of Assembly is important.

I have noted the indemnity provisions that exist here and the potential for up to $115 million. I am grateful for the fact that the member for Waite arranged a briefing opportunity at which Mr Carter and Mr Heithersay and other staff members came in as a taskforce charged with this one, and they were quite open with us about the details. I can understand the reasons why it is there, and I know it is a gradually reducing indemnity fund on the basis that potentially there might be some form of class action that might be raised in future years, but I think it is an appropriate level of investment from a state government as a sign of the belief that it has in the industry and in the existence of that region.

It does present some challenges; there is no doubt about that, and it is important that it is managed as well as we can but, by doing it—and I think the minister in a private conversation to me mentioned the fact that it is a very creative solution and a good one for the government to take up, and it was a suggestion by Mr Carter—it shows the high level of input that has been sought to try and get right not only the funding situation but also the indemnification and the bill.

The member for Frome has been quite strong about the fact that he is particularly focused on what the people of Port Pirie say about this bill and that it has their total support. I think that, when any member of parliament who might want to come in and debate the pros and cons of legislation hears the message that a community supports its implications, and its outcomes, that is a very strong message. So, hopefully, there are people in other chambers of this parliament who are listening to some of that also.

I know that the next eight months are probably going to be a very challenging time, not only from a political perspective but also from the Nyrstar board's situation. My understanding is that it is in early 2014. All of us are waiting with bated breath that with this commitment of $350 million towards infrastructure and technology improvement opportunities comes a very strong commitment from the board in seeing the level of support that exists for it to make that final decision.

As a state, we have suffered from the Roxby Downs delay that has occurred there for a number of years. It is so important that Nyrstar looks at this, even though they have only owned this facility for a relatively short time, as one of the key ownership businesses that they operate, and that they recognise the linkages it provides to South Australia, Tasmania and the nation. What it does around the world is significant because when you look at its output and the material that is extracted from what is brought to Port Pirie, and you see the value of that—I think it is $518 million for gross state product—that is just so important, and you can not afford to disregard that.

With others, I look forward to the swift passage of the bill. I am sure that the select committee discussion on this, while it might not be a long one, will be briefed in a variety of very important matters, and I hope that it continues to support it. There will be a few more people speak. The interesting debate (which a lot of us will probably listen to) will appear in the upper house in questions and issues that might be raised there but, from an opposition perspective, and as a person who is also regionally based and not that far away from Port Pirie and Frome, I know that people who I have spoken to in my electorate recognise its importance and want to see it supported, and I am pleased that this bill does that.

Mrs VLAHOS (Taylor) (12:44): I would like to speak today to support the Port Pirie Smelting Facility (Lead-In-Air Concentrations) Bill 2013. This bill, as many speakers here this afternoon have already mentioned, is critically important to this state's economic development and future and to the community of Port Pirie.

Nyrstar is a smelter and is the largest employer in Port Pirie, as the member for Frome has already mentioned. Community members have suffered for many years from the uncertainty about this smelter just as many people in the northern suburbs have suffered with the GMH decision. I have great sympathy for the community in that respect because I know how it affects the conversations we have in schools and how it affects the people you meet in community clubs. That is not a great way for our state to move forward, and the member for Frome can attest to the cloud of uncertainty that surrounds this, and he spoke very eloquently about that earlier.

The smelter employs 725 employees and there are about 120 contractors who are affected by this. Roughly, that is about 2,500 people who rely on the smelter for their livelihoods in this town. One in five people in Port Pirie rely directly on the smelter and that has a huge impact on the township. Nyrstar represents 98 per cent of the people employed in the town's manufacturing sector and it is a huge issue.

Investment for the economic future of Port Pirie is vital, not just for this local area but for our whole state. It is part of the idea of a manufacturing future (and an advanced manufacturing future) for our state, and the proposed investment of $350 million to upgrade the smelter is vital.

The bill is instrumental in the transformation of this 120-year-old smelter and making it a modern place. The processing centre is an advanced poly-metallic processing and recovery facility, and the upgrade will allow a diversification into many metal products that are required in the modern world. The proposed technology to be used in the upgrade of the plant is state-of-the-art and proven. It is not an uncertain technology; it is one that will be needed and required throughout the world and has a ready market for its products.

It would be remiss not to talk about the cleaner air that will result from this, the reduced environmental footprint that will help the smelter be economically sustainable, and also the township and the children who are growing up there. The bill introduces a post-upgrade framework for lead-in-air concentrations, and the EPA will have the scope to consult with Nyrstar and the manufacturing minister to enforce this and the EPA will be able to propose changes in lead-in-air concentration limits.

Air lead concentrations are expected to be reduced by at least 50 per cent, which is great news for the community and for the children who are growing up there. As a mother who has young children, I am sure every other family in that township would be grateful for the certainty of job opportunities, but also a healthy future for all of their families and the children who are growing up there.

So my comments are very simple: we need this project to go ahead for our state and for our regional economies, but particularly for Port Pirie. We need to grow our advanced manufacturing in this state and this is the one way that, with simple cross-party support and with the help of the Independents, we can move the state in the right direction through supporting new investment opportunities for the benefit of all and for healthy communities.

Mr PEDERICK (Hammond) (12:48): I, too, rise today to speak to the Port Pirie Smelting Facility (Lead-In-Air Concentrations) Bill 2013. I must say that the chimney stack at Port Pirie has long been something that you look forward to seeing on the road up to Port Augusta—it is certainly something to see when you have gone on the trek through to the north. This is very important to this state, and I note the comments made in this house today, and the member for Waite has put our position very, very well.

I note that, in June, the government introduced this bill, and its aim is to regulate the variation of conditions and application of laws relating to lead emissions from the Nyrstar smelting facility in Port Pirie. What I am pleased about in this bill is that there does seem to be an element of common sense and the element of common sense is that nothing can be done in regard to any change in the maximum lead emissions in the air unless there is consultation between the company, the minister, and the Environment Protection Authority. I think that is absolutely vital to ensure that this plant keeps going. Over its 124-year history it has had several owners, and it has had a varied history. I will continue with my remarks.

The idea of this bill is to make sure that there is investment certainty for any investors who may want to be involved in the proposed transformation of the facility. Members have mentioned today, and the member for Frome mentioned it in here as well, the blood lead level in children. I note the programs that Nyrstar has put in place—the tenby10 program—to try to keep those levels down. I also note that it has been raised in the media many, many times and it has had a negative impact on the Port Pirie area, so anything we can do to make it better for the community, to have a successful production site, the better it is socially, environmentally and, obviously, economically not just for the area but for the state.

As I said, the Port Pirie smelting facility was established back in 1889. It has been around for 124 years. Broken Hill Associated Smelters opened the business, and then it later transitioned through to Pasminco. My wife, in a former life as an environmental scientist with, I think, Kinhill engineers at the time, did some environmental work around the Pasminco site pre 1999. The plant then went to Zinifex and then Nyrstar, who are the current owners, from Belgium took over the establishment about six years ago.

There have obviously been many issues over those years, but you have to congratulate a business that has run for that long in this state. With the current business climate in this state, a lot of businesses do not last 12 months; they just do not make it. Under whatever ownership, even if there has been receivership issues, as there have been in the past, or going into administration, people have seen the need to keep this plant open. Not only does the lead come down from Broken Hill but over the last few years lead from the Terramin Angas mine at Strathalbyn (which, sadly, is winding up its profitable resource) has gone to Port Pirie for smelting as well.

The smelter currently processes lead, zinc, copper, silver and other precious metals. As I said, it is owned by Belgian operators. It is linked to those overseas operations, as well as being very much tied in to the Tasmanian operation. As we have heard today, the future of the plant is in some doubt and has been for many years. As has been noted here today, Nyrstar is currently the largest employer in Port Pirie, with about 858 employees, and that there are 2,500 indirect jobs in a town with a workforce of 5,240 and a total population of 14,000.

The closure of this plant would have a dramatic effect on Port Pirie and the Upper Spencer Gulf economy, and it would be a crushing event in the seat of Frome. We note that there are other businesses that function there. Obviously there is agriculture, agribusiness, the port, light engineering and a range of small businesses, but Nyrstar is the key. Nyrstar is the key in Port Pirie, and it would crush the core of the community if it did not survive.

The $350 million reinvestment in the new technology proposal at the Nyrstar plant would follow at a later date. At the moment, a $15 million pre-feasibility study into the transformation proposal is being conducted. The state government gave a grant of $5 million, and we supported that grant being used for that process. What we are hoping comes out of this whole transformation is that the Nyrstar plant at Port Pirie becomes an advanced polymetallic processing and recovery facility to be commissioned in 2016.

Out of that $350 million funding package, there is $150 million of investment hoped to come from third-party investors. This will be guaranteed by the commonwealth government's Export Finance and Insurance Corporation, a $100 million sale of silver futures from Nyrstar and a $100 million investment by Nyrstar. We have noted that there was supposed to be a decision on this made by the Nyrstar board in October, but that decision has now been put out to February 2014.

Obviously, this transformation is needed so that there can be a higher profit margin and so that the emissions can be reduced. Anyone who has had anything to do with lead, as I have with briefings up at Port Pirie and also in regards to the Terramin silver and lead mine opening up at Strathalbyn again, knows the impact that lead could have on the community. The people who are most at risk here are the children and the very young children from pre-birth onwards.

I certainly know that, with the mining process down at Strathalbyn, none of those actual work clothes go off-site, apart from being washed. The workers do not go home. They have to go to work, get into their work clothes and have showers before they go home so that none of that contaminant can be taken home to the family.

Nyrstar approached the state government in 2011 in anticipation of new regulatory arrangements, and new EPA standards were introduced in July 2012. If there is a new smelting facility built, it will contain contemporary technology that has only been used in a small number of sites globally, and the smelting process will be able to handle much larger, complex and varied ores and will operate at a much higher profit margin.

It is expected that we will see an extra 30-year lifespan from this upgrade, due to the potential of the technology. We note that, in 2011-12, the state government was approached by Nyrstar seeking significant capital input, and the case for the management of the Nyrstar transformation was made to the Olympic Dam Task Force, led by Mr Bruce Carter with support from DMITRE deputy chief executive Paul Heithersay, in late 2012.

We note that, since that has happened, we see the commonwealth's Export Finance and Insurance Corporation's $150 million guarantee to third-party investors, with a $5 million state government grant towards the prefeasibility study and the in-principle $115 million state government guarantee indemnity in respect of certain potential environmental, health and property liabilities to assist with the attraction of external financing for the proposed Port Pirie smelter upgrade. This comes into effect because of any liabilities that might come about. This money may not be needed, but it will be available, if it is needed, under government guarantee.

Obviously, the board of Nyrstar has to approve this proposal. As we have stated today, we have supported the contribution to Nyrstar's feasibility study and we support this bill with the full transformation to go ahead. Of the possible outcomes, especially if things do not change, if the Port Pirie plant closed and Nyrstar walked away, the remediation costs would cripple both state and federal governments. So, we need to get on board and support this bill to make sure it goes ahead. We note that there would also be a risk that the whole Nyrstar operation—not just here in South Australia but also in Tasmania—would come to a close. I seek leave to continue my remarks.

Leave granted; debate adjourned.


[Sitting suspended from 13:00 to 14:00]


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