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Legislative Council - Fifty-Second Parliament, First Session (52-1)
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ROXBY DOWNS (INDENTURE RATIFICATION) (AMENDMENT OF INDENTURE) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 22 November 2011.)

The Hon. T.J. STEPHENS (11:05): I rise to speak briefly—and people do know that when I say 'briefly' it will be brief—on this extremely important bill. What I will not do is trawl over the ground in the excellent contributions from my colleagues the Hon. David Ridgway, the Hon. Michelle Lensink, the Hon. Stephen Wade and, of course, the Hon. Rob Lucas. I know that the Hon. John Dawkins is to follow me. For the record, this is an incredibly important bill.

My concerns, and I still have them, obviously being a Whyalla person, are the Spencer Gulf and the desal plant. I register my disappointment that the desal plant will not, in fact, at this point supply potable water to Eyre Peninsula, which I thought was going to be a massive plus for Whyalla and Eyre Peninsula. I hope that is something that perhaps a future government may be able to investigate, because I certainly spent a long time in Whyalla drinking water that was pretty average at best, through the pipeline we have historically had there.

I still have concerns about the desal plant, even though there have been modifications and improvements. I have certainly heard, loud and clear, the concerns of the people of Spencer Gulf, in particular from the professional fishing fraternity and the recreational fishing fraternity. I am still concerned but the reality, with this bill, is that it is not take part of this or part of that and change part of this and part of that: it is either agree or disagree. The overwhelming decision that has to be made, and one that, as a group, we have decided upon, is to support the bill because of its overall importance to the people of South Australia.

The Hon. Michael O'Brien said, I think last year, that this government is in such dire financial straits that it is borrowing money to pay the wages of the Public Service. This would indicate to the people of South Australia how important this particular project is. We do not have an option. Yes, BHP has played hard ball; it has extracted from this government what I think one could only describe as a 'juicy' deal for BHP. I would have liked to have seen stronger and stricter imposts on how much was processed here and on how many South Australians were actually employed in the project, but the reality is that I do not see that we have the option of dictating those terms. With those few words, I indicate my disappointment on a number of the components of this particular indenture but also my full support for the project, knowing how important it is for the people of South Australia.

The Hon. K.L. VINCENT (11:08): I would like to very briefly put on record a couple of comments about the Roxby Downs amendment bill. Firstly, I would like to say that I acknowledge and understand the very real and positive economic impacts that this project could have, and no doubt will have, for the state for a great many generations to come—possibly outliving me as the youngest member of parliament, despite the fact that the Hon. Mr Parnell seems to think that this will not be the case. Unfortunately, I beg to differ.

However, with significant economic impact comes equal environmental and social impact that needs to be taken into consideration. On the issue of environmental impact, accountability and transparency, I would like to thank the Hon. Mr Parnell for his contribution. As a former lawyer at the Environmental Defenders Office and a long-time activist in this area, I very much appreciate his expertise on the potential impacts mining developments and built infrastructure can have on our precious natural environment, both in our arid northern desert regions in South Australia, and also the Spencer Gulf marine area as a result of the desalination plant.

I think his message that we must not get caught up in the excitement of this development is very sage advice to all in this chamber. We see so many projects, so much legislation and so many policies where, once they are implemented and underway, it is very difficult, if not impossible, to change direction. So for this, the biggest development in this state's history, this is surely true. If we now get this wrong it will be difficult to undo. All the threats from the government about BHP walking away, the idea that rushing this legislation through is somehow essential—I do not see how a week or two can be truly critical when we are talking about a century-long project.

Therefore, we must not err in our analysis of the possible longer-term issues of this development and we should remain vigilant once the bill passes through the house to ensure that BHP Billiton stick to its promises and continue to improve its outcomes in all aspects of its mining operations, whether it be revegetation of mine sites, native title consideration or diversity of the workforce.

This brings me to a point on the workforce. Clause 12 of schedule 1 of this bill refers to the use of local professional services, labour and materials. There is reference to BHP needing to furnish the minister with an industry and workforce participation plan. Subclause (5)(a) refers to 'opportunities for employment and workforce development, especially for young people and Aboriginal people'. I am also concerned that within clause 12 is reference to commercial consideration being the only thing they need to consider and that this overwhelms everything else in the clause. I believe one of the Hon. Mr Mark Parnell's amendments seeks to strike out this part of the clause, and that is worth looking at in my opinion.

It seems that employment for people with disabilities was not on the radar when BHP and the government were negotiating this issue. I also wonder what other areas of social disadvantage were not considered in the workforce plan and the possibility that they could be opportunities for BHP. Given that it is my understanding that we do not have enough appropriately trained available workforce in Adelaide to undertake this project, I would like to know what other innovative recruitment methods BHP is looking at to employ the right people to get this happening.

For example, South Australia accepts a significant number of humanitarian entrants or refugees to this state every year. At present many of them are young men from war-torn countries such as Sudan, the Congo, Afghanistan and other countries in the Middle East and Africa. Often they arrive as unaccompanied minors. These young men will often have spent time, many years, in refugee camps, such as Kakuma in Northern Kenya, struggling to survive and having had very limited nutrition, education and health care. Some of them have amazing stories and life experience of survival and perseverance, and I think that these attributes could be an incredible asset to a company like BHP.

When they arrive in Adelaide they attempt to get some education and enter the workforce. I think it will be wonderful to see BHP taking a pro-active approach to looking at getting these young men into training for BHP's labour workforce and into full-time employment once they finish school. It could be a ground-breaking project for BHP to undertake.

My researcher has been assured this morning by Kym Winter-Dewhirst from BHP that the company has a comprehensive diversity policy. However, I am a little concerned to hear that BHP does not currently collect statistics to date on how many people in its workforce have a disability. What I am concerned about is that people within BHP are somehow scared of identifying that they have a disability because they will be stigmatised or disadvantaged, and I would like to see that changed.

I think that BHP should know what the make-up of its workforce is in all aspects, whether it be women, disability, Indigenous or youth. It may be that BHP needs to change the culture within the workforce so that people will feel that it is okay to identify as having a disability and possibly needing additional support within the workplace. I would also add that, to my mind, BHP is potentially even stigmatising by the simple virtue of the fact that it does not collect this data and therefore behaving as if disability is something to hide.

I would also like to see the government insisting that BHP, through its social management framework and joint government/BHP task force, that there is an investigation of an employment project for people with disabilities—perhaps with a partnership with a company like Orana or like organisations. In Mount Gambier there is quite an innovative project which a sawmill is running with Orana which employs people with an intellectual disability. I would like to query the government on what undertakings and assurances it has from BHP that there will be an innovative workforce program in place. I seek leave to conclude my remarks.

The PRESIDENT: Did the honourable member seek leave to conclude?

The Hon. K.L. VINCENT: Yes.

The PRESIDENT: Well, there are other speakers after the Hon. Ms Vincent. If the Hon. Ms Vincent wants to make a short contribution to clause 1 when the bill goes into committee, I would be happy to allow that.

The Hon. K.L. VINCENT: Having spoken to minister Gago, I am happy to proceed that way.

The PRESIDENT: So, the Hon. Ms Vincent withdraws her seeking leave to conclude her remarks?

The Hon. K.L. VINCENT: Yes.

The Hon. J.S.L. DAWKINS (11:18): I rise to support this bill and also to add to the comments made by my colleagues on the Liberal side of this chamber. I hope to elaborate on a matter that is probably a bit different from some others have covered so far. However, I should first declare to the chamber that my daughter, Leah Grantham, has worked for BHP Billiton since the middle of 2006 and is currently employed as Senior Stakeholder Relations Adviser with the Uranium Customer Sector Group in BHP Billiton. Since her employment by the company, she has been heavily involved in community relations with many aspects of the project.

I did open my remarks by saying that I thought I would come to this project with a different perspective, and I do in the nature of what I believe the expansion of the Olympic Dam mine will do for the growth of our regional communities. Since coming to this chamber, I have had a number of different roles in the area of regional development, both in government initially and in opposition. While 'regional development' are a couple of words that are put together and roll off the tongue fairly easily, they are things that do not happen with the snap of the fingers and do not happen by people trying to force people to go to live in areas where they would not otherwise live. However, the development of regions and regional centres will happen if there is economic growth to facilitate that and the expansion of the Roxby Downs project and the work that we are doing at the moment on the indenture is very important in that.

One of the things that I am particularly passionate about is developing the growth of regional centres in South Australia and also some of the smaller population centres that surround them and are, in many cases, reliant on them. I think BHP Billiton is to be commended for the work that it has done in developing a community at Roxby Downs.

We see a number of cases of large mines in other parts of Australia and some in this state where the most appropriate way for the mine to be run is to be almost entirely fly-in and fly-out—and I recognise that. Recently I was at Moomba and that is the way Santos has always operated, and because of its relative isolation that makes some sense. However, as I said, I give BHP Billiton (and its predecessor Western Mining Corporation) credit for developing the community that is Roxby Downs. We have seen that not only has Roxby grown to service the community and provide homes for a lot of the staff and a community for them to live in but it has also become a regional centre for a lot of the pastoral areas that surround it. That has also been an important thing for the Far North of South Australia.

The expansion of the mine is an enormous project. I think other colleagues have gone through some of the figures and some of the benefits that that project will have, just through its enormity, for the economy of South Australia. I see the expansion of Roxby Downs going into what will probably make it eligible to become, under our rules in South Australia, a city if it goes above 10,000 people. I think it will continue to become an important regional centre not only for economic matters but for government services in that part of the state.

Just over 12 months ago the Liberal Party shadow cabinet was invited to meet in Roxby Downs and to tour Olympic Dam and be shown the potential of this new project. I must say, as the secretary of the shadow cabinet, I welcomed the opportunity to do that. I think it showed us that day not only the scale of the changes at the Olympic Dam mine site but also how it will impact in relation to the new airport, the new construction village at Hiltaba and, of course, the development of the residential community of Roxby Downs.

I will elaborate on that because I think there has been a trend in South Australia for the population to become more orientated towards the metropolitan and inner rural areas of South Australia. Any measure that is going to add to the population of our communities further away from the capital city is to be commended and welcomed. In that sense, I think we cannot stress highly enough the impact that this project will have, not only on Roxby Downs but on many other regional centres in other parts of the state.

I am aware of the efforts that are being taken by BHP Billiton in coordination with the Regional Development Australia bodies and other interested parties to organise briefings in a range of regional centres and in the metropolitan area for businesses that have the potential to be involved in delivering the services and assisting in all of the work that needs to be done to make this project successful.

Another aspect that I would like to raise briefly is the matter of Yorkeys Crossing, and I noted that the Hon. Dennis Hood raised this yesterday. I brought the situation at Yorkeys Crossing to the attention of this chamber earlier in the year—I think it was the last sitting week before we broke up in July through August—and I did ask the Minister for Regional Development at the time to familiarise herself with the current state of Yorkeys Crossing.

I am not sure whether you, Mr President, in your days in the pastoral areas have ever gone across Yorkeys Crossing; it seems that you have. You would understand that while it is a relatively basic bit of unsealed road, it does serve a significant purpose and would be absolutely crucial if anything ever happened to the bridge in Port Augusta.

I think the government needs to take that more on notice than it has to date because, with the amount of construction material and many other facets of goods that need to be transported to Roxby Downs, that bridge across the gulf is vital, and equally vital is the only alternative we have, and that is Yorkeys Crossing. I urge the minister, if she has not since been there—and I do not think she has, because I think she might have told me—to familiarise herself with it because it is a significant issue.

In concluding my remarks, I wish to indicate that this project has my absolute support and it has the absolute support of this party. As my colleague the Hon. Mr Lucas said last night, the Liberal Party has always supported Roxby Downs and the Olympic Dam project. It would not have happened if it had not been for the Tonkin government and my great friend and mentor, the Hon. Roger Goldsworthy AO, and for the work that they did to ensure that it got off the ground back in the early eighties.

As others have said here, we should never forget the role of the Hon. Norm Foster in having the absolute courage to cross the floor, knowing that he would have to leave his party, because he saw that South Australia's future depended on Roxby Downs being a vital part of this state, and we can say that again.

Having had the opportunity to visit Roxby Downs on a number of occasions, we see that that community is waiting. It is on the verge of something that is, I think, unprecedented in this state and, as I said earlier, I am excited by the future it holds for that centre. It is a vibrant area. There are a lot of young people, a lot of children. It is a very sporting-minded community, as anybody knows who has had involvement with the Far North Football League and other sports that are played there.

The community is one that I think most people are impressed with and, as I said, I think we need to give great credit to BHP Billiton for continuing to support that. It is an interesting community with two newspapers, and it is always a good read to examine what is happening in that community. I urge members to have a look at the two papers that are available in the library because they give a snapshot of that community, what happens there and how proud those people are to be part of what is happening at Olympic Dam. With those words, I add to the comments of my Liberal colleagues and others and support the bill with great pleasure.

The Hon. J.S. LEE (11:31): I also rise to speak to the Roxby Downs (Indenture Ratification) (Amendment of Indenture) Amendment Bill 2011. Joining with the Leader of the Opposition, Isobel Redmond, and the Leader of the Opposition in the Legislative Council, the Hon. David Ridgway, and my esteemed Liberal colleagues, I am pleased to support this bill.

I am very humbled to be given the opportunity to speak about the bill because I believe it will probably be the most important legislation that goes through the parliament in my political career. This type of project does not come around very often. The magnitude of such a project is unique and it happens to be in our backyard. It is indeed an opportunity of a lifetime.

The indenture and its ratifying bill has been exhaustively negotiated, where members have taken into account the economic, social and environmental impact with regard to the need to ensure proper protection of community interests, the environment and the maximum financial return to the people of this state.

I am grateful for the high level of work that was put in by the Liberal leadership committee came which worked diligently and tirelessly to fully access and understand all aspects of the documentation relating to the indenture and the possible ramifications. This small committee consisted of the Leader of the Opposition, Isobel Redmond; the Deputy Leader of the Opposition, Mitch Williams; the shadow treasurer, the Hon. Iain Evans; together with the Leader of the Opposition in the Legislative Council, the Hon. David Ridgway; and deputy leader and shadow environment minister, the Hon. Michelle Lensink. All worked in good faith with the government to put the Olympic Dam project beyond politics.

It is essentially the role of the government of the day to negotiate these indenture agreements with BHP Billiton. It is the role of the opposition, of course, to scrutinise and question. I am proud that the Liberal opposition acted in the best interests of the people of South Australia with the knowledge that this project offers exciting opportunities and significant benefits to the state. When we offered bipartisan support, it was a welcome sight to see former treasurer the Hon. Kevin Foley being so complimentary in acknowledging the outstanding leadership displayed by the Liberal opposition team throughout the process.

As our shadow treasurer, the Hon. Iain Evans, in the other place has rightly pointed out, the decision for bipartisan support from the opposition is sending a very strong message about the alternative government. The message is that we are beyond politics and we are very serious about the economic development and employment creation of this state.

As we are here to debate a historic indenture bill, I thank many members from both houses who have gone back in time to provide me with so many fascinating history lessons. These lessons help us to reflect on the development of the mining industry in our state and how legislation has come into this parliament that paved the way for the development of the mining industry in South Australia.

Being a very proud Liberal, I am delighted to learn that it was under the Liberal Tonkin government that the original indenture was passed through this parliament which saw the beginning of mining activity at Olympic Dam. Today, let us acknowledge and remember the hard work undertaken by the former premier, the Hon. David Tonkin, and the Liberal government in 1982.

The Tonkin government and the mining minister of the day, the Hon. Roger Goldsworthy (the father of the current member for Kavel, Mark Goldsworthy, in the other place) led the debate at that time on the original Roxby Downs indenture and began the development of the mining industry in South Australia. As many honourable members have already mentioned, it was achieved through the actions of the courageous Hon. Norm Foster, an honourable member in the upper house who crossed the floor and played a significant role in helping the Tonkin government in the establishment of the Roxby Downs indenture bill.

There is a strong perception that the mining boom has the potential to deliver significant benefits for the South Australian economy, including more jobs, exports and tax revenues and for the people working in the industry, higher incomes, a high standard of living and other flow-on stimulus to secondary industries. It is time to turn this perception into reality.

I would like to put on the record my appreciation of BHP Billiton and its team for the opportunity to visit Roxby Downs and Olympic Dam, together with the Leader of the Opposition and a number of my Liberal colleagues, in April of this year. During the site visit and briefing session, we gained significant insight into the proposed Olympic Dam expansion plans, the massive scope of the operations, the processing facilities, staff accommodation on site, community facilities and amenities and services that are central to the wellbeing of the local community in Roxby Downs.

Today, the bill we are debating will underpin the state's economy for many years to come and provide a sound base for the economy for many generations for many decades to come. So, whether I am speaking to members of the South Australian community or visitors to our state, there is considerable interest throughout the state, Australia and overseas countries in the development of this massive, unique mine.

We are talking about a scale of investment and longevity of the mine that puts Olympic Dam into a league of its own. It is going to become the world's largest uranium deposit and the fourth largest gold resource on the planet. It is also the world's fourth largest copper deposit, currently producing around 180,000 tonnes of copper each year. By 2050—I had to take my map out because I was told that the size of the pit would grow to about 4.1 kilometres long, 3.5 kilometres wide and one kilometre deep. I am thinking: that is huge. The entire mine, when you look at it, will eventually stretch the equivalent distance of Gepps Cross to Flagstaff Hill. That is pretty amazing.

Many members in the council have brought to our attention a number of key issues that this project will offer that we have to deal with. There is: employment participation and training; a skilled migration scheme that needs to be introduced; the issues about fly-in/fly-out; and what about the opportunity that could be offered to local industry and local businesses. We are trusting that BHP Billiton will become a corporate citizen that will handle and provide equal and better opportunities for local businesses, and perhaps look into investing in research and development and social development for this state. I trust that BHP will do the right thing by the citizens of South Australia.

In conclusion, this is a long-term project and the proposed expansion will be a progressive development. The project schedule will ultimately depend on the timing and nature of government approvals and the final investment decision of the BHP Billiton board. Timing is a key factor and, hence, throughout this debate we can see why members of the opposition in both houses are supporting this bill and would like to see the passage of the bill move diligently through parliament without delay and without political games. With those words, I offer my support also to this bill.

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (11:40): I believe that there are no further second reading contributions that have been indicated so I will take this opportunity to make a few concluding remarks. I have been provided with some of the answers to questions asked during the second reading debate. I am happy to put those that I have available on the record now and those outstanding I commit to provide through the committee stage.

Indeed, a great deal has been said about this project so I do not want to go over those statements. This is about BHP Billiton's proposal to expand the Olympic Dam mine, and we know that this is going to provide significant benefits to South Australia. It will be a significant driver here in Australia, the nation, and it certainly will be recognised worldwide. It will have significant long-term impacts, and I think each and every one of us in this chamber should feel very proud to be part of an initiative that will have such an enormous impact on the prosperity of this state, our children, our children's children, and so on.

I thank each member for their second reading contribution. The debate has been quite significant and a wide range of different issues have been raised. I particularly want to thank the opposition for their bipartisan support for this bill. By way of providing some specific answers to questions, I will particularly deal with those asked by the Hon. David Ridgway. He asked the question: why was 20 December chosen for the sunset date? I have been advised that this date was chosen so that the board of BHP Billiton had commercial certainty of the ratifying act and the amended indenture before the end of the year. This will allow BHP to begin its precommitment spending of $US1.2 billion and to finalise its proposal to the board to consider this major investment decision on the project expansion by mid-2012.

He also asked the question: how much additional ore will be processed by the new concentrator and the hydrometallurgical plants, and how does this fit with the expansion of the existing on-site smelter? I have been advised that the new concentrator and hydrometallurgical plant will have an ultimate capacity equivalent to 60 mtpa of ore—I am not too sure what that is—together with the existing plant. This will take the total capacity to 72 mtpa, sufficient to process all ore taken from the mine. This will result in a total concentration of copper concentrate of 2.4 mtpa. The increase of on-site smelter capacity to 800,000 tpa of copper concentrate is a doubling of on-site production of refined metal, and a further 1.6 mtpa of copper concentrate is proposed to be exported for further processing.

It was asked: what is the government doing to address the unsavoury elements that potentially will be attracted to the town of Andamooka? I have been advised that SAPOL will monitor policing requirements in Andamooka as a matter of core business, and a newly constructed police station at Roxby Downs will be able to accommodate staff requirements during the expansion. A condition of BHP's development approval was that it must work with SAPOL in assisting in crime and antisocial behaviours. In addition, BHPB will develop a social management plan in partnership with the government to address these issues.

In relation to the question about when the government expects the BHP Billiton board to actually make the decision, I have been advised that it is expected that the board will be presented with a detailed investment proposal by mid-2012, and provision has been made for the board decision to take up to 12 months after proclamation of the ratification act, anticipated to be the end of 2012.

In relation to the question of whether the project stage will be notified via a project notice or whether the first one will suffice, I have been advised that project notices are designed so that the company must give appropriate notification of certain details associated with the work that it intends to carry out. I note that, once the company gives a project notice, clause 8 puts a positive obligation on the company to implement the project.

The indenture contemplates that the company will submit a number of project notices as the overall project proceeds. It also gives the company the freedom to carry out the project in stages, as it sees fit. If a stage has been fully covered by an existing project notice that stage would not need an additional project notice. However, clause 6(3) is very specific about what must be notified to the minister. If relevant aspects of a stage are not appropriately covered in a previous project notice, then another project notice would have to be provided to the minister covering all the specified aspects.

Regarding the question of when BHPB has to do the mitigation plan and why it does not have to be publicly notified, I am advised that the indenture specifically permits the minister to make a mitigation plan available for public inspection. Clause 11(13) gives the minister the power to publicly release a range of documents, including an approved mitigation plan.

In relation to clause 11(12) and the question of where the independent expert comes from, given the size of the project and whether experts on a similar-sized project, such as Chile, are likely to be expert in environmental matters to the same standard as in Australia, I have been advised that clause 11(12) provides that, if the minister reasonably believes that an incorrect statement as to the achievement, or likely achievement, of an outcome has been made, either in an annual report or a report against the approved mitigation plan, an independent expert will be engaged to conduct the audit. The independent expert is not expected to be an expert in the specific field of environmental management; that is the subject of the outcome in question. The independent expert will be expected to have expert skills in environmental auditing, so that it can be verified whether the statement under review is indeed correct, as the minister believes.

Clause 11(12) provides that the independent expert must be approved by the minister. The decision about whether the proffered expert is acceptable to the government or otherwise will be made by the minister, most probably after taking into account advice from appropriate experts within the Public Service, including the EPA.

In relation to the question of whether there are penalties if the plan is not achieved, and what reporting is required, I am advised that preparation and implementation of a greenhouse gas and energy management plan is a condition on the development authorisation. The development authorisation has been granted under section 48(2) of the Development Act 1993, and accordingly the enforcement provisions under section 48(13) could be applied to any noncompliance or breach of a condition by the proponent or its contractor. Penalties are imposed by the court on a criminal conviction. Whether proceedings are brought in relation to the breach of a condition will depend on the circumstances of the case.

In regard to reporting, BHPB must produce and make available to the indenture minister an annual road map that reports on progress to meet targets determined in the plan and quantifies emissions reduction opportunities and achievements.

In relation to the question of why it is not mandated under clause 12(7) to make the industry and workforce participation plan public, the government has adopted the principle in matters such as this that release of information is to be at the minister's discretion. The indenture minster has a ready said in the House of Assembly that he will publicly release the plan and the annual report. The environmental management program clause in the existing indenture contains similar wording, and the government has made this program, and the yearly reports, available since Olympic Dam commenced operating. So, we have a proven track record in that respect.

The government places a high degree of importance on BHP's plan for procurement of services, labour and material. However, it does not support elevating this matter to an obligation under the indenture; thus, one could potentially result in its termination. Transparency, good information and a collaborative approach will be some of the important factors in this state achieving its objectives. A failure to implement the plan does not release BHP from its obligations required by subclause (1), to use labour, industry and workforce. If BHP does happen to fail to implement the plan, then it will become publicly known by the release of that annual report.

Under clause 12(9), what happens if the state's Economic Development Board (the EDB) no longer exists when the indenture provides for the company to biannually meet with the chairperson to discuss the plan? I have been advised that the company would still meet with the relevant chief executives of state government departments and also are provided for in subclause (9). In terms of the availability of diesel fuel and why this clause is in the indenture, the answer is that the response of this clause is to mitigate against the risk of the state running out of diesel fuel due to BHP's demand. This can be a matter of particular concern due to periods of high seasonal demand associated with planting and harvesting of agricultural crops.

In relation to water requirements and the question why does clause 39 provide for BHPB to search for new additional underground water sources with a view to restoring or ensuring full quantity of the mine water requirements when a desal plant has been approved, I have been advised that the right exists under the current indenture and this date has agreed to its retention.

In relation to the question why does clause 13(17C)(b) make provision that, if BHPB has not built a desal plant in 30 years, the government has the option to buy back the site, there appears to be a risk that it will not be built. Is there a contingency plan in 20 or 30 years if the state site has not been developed? I have been advised that, while the government does want the option for the site to return to the state in the unlikely event that the desal plant is not built, a key matter with regard to construction of the desalination plant is the period of its development approval. BHPB's development authorisation will lapse after a 12-year period.

In relation to the question whether there are links between ODP stages 1 to 5, water consumption and the 30-year time frame for the desalination plant site, I have been advised that, no, water supply from the desal plant is needed at the commencement of processing of the first ore from the open-cut mine.

In relation to airstrip facilities and the question that if a proposal is put to the company and there is capacity in that bit of infrastructure and it does not put their operations at risk, would it be prepared to enter into commercial negotiations with other people who might want to access these facilities, I have been advised that BHPB is the owner and operator of the airport and other airline operators or private operators wanting to use the facilities would be required to obtain permission from BHP Billiton. I have been advised that they already have commercial agreements in place with other commercial operators. As with the existing airport, the new facility will be primarily established to service and facilitate the conduct of the Olympic Dam operations.

In relation to clause 18, power, and the question whether this indenture or the agreement limits the third party to building just a 600 megawatt power plant, etc., I have been advised that the indenture confers on the company a right to install and operate any plant and equipment to generate, transmit and reticulate electricity for the purposes of indenture operations. There is no limit in the indenture on the capacity of a power plant that the company may construct, so long as the plant is for the company's indenture operations. If BHP Billiton wants to sell power to the grid, it cannot rely on the indenture. In relation to the pipeline licence and the question of who will own the pipeline and is it being put in by the company, or potentially by a gas company or someone tied up with the provision of a power plant, I have been advised that the indenture confers a right on the company to construct, operate and maintain a petroleum pipeline and associated infrastructure.

'The Company' is a defined term in the indenture, and it is defined to mean 'ODC and includes its successors and permitted assigns'. ODC is the name given to BHP Billiton Olympic Dam Corporation Pty Ltd, the owner and operator of Olympic Dam, under clause 36. BHP Billiton will assign its rights to a third party with the consent of the indenture minister. It is therefore possible for BHP Billiton to choose to assign the rights to another company, and it is also possible that another company may or may not also have contractual arrangements with BHP Billiton in relation to power supply infrastructure.

BHP Billiton, or a company to which it has assigned the appropriate rights, may construct and operate a pipeline but may also do so in accordance with the conditions on the development approval granted as a result of the comprehensive EIS process that was recently concluded by the state and federal governments. In addition, the company would also have to apply for a pipeline licence under the provisions of clause 19A of the indenture and would be granted pursuant to the Petroleum and Geothermal Energy Act 2000. Once the company receives the necessary licence, it will then be required to construct and operate the pipeline in accordance with the conditions of that pipeline licence, including conforming to a detailed statement of environmental objectives, which would be developed and approved as part of the licensing process.

In relation to questions on infrastructure cost, in answer to the question whether the minister can provide costs and time frames for the items listed in clause 22(2) around additional facilities and expenditure over the next 10 to 15 years, I have been advised that a preliminary estimate of $200 million for state government infrastructure has been provided by the government previously, but the final cost is expected to be less. In addition, the state is responsible for provision of certain civic and community facilities and infrastructure, with the preliminary estimated cost of $35 million to $50 million.

The impact of the expansion on the provision of government services to Roxby Downs was described in BHP Billiton's EIS. Treasury and the Olympic Dam task force, in conjunction with agencies providing services to Roxby Downs, are now planning to review previous work done on service models and associated financial impacts. The time frame will depend on the confirmation of BHP's workforce projections.

In relation to some of the general comments, particularly those of the Hon. Mark Parnell, about being given adequate time to scrutinise and revise the indenture and comments such as BHP Billiton's dictating the time frame for the passage of the bill through parliament and such like, I believe that some members in this place see a benefit in delaying the ratification of this indenture. However, I want to put on the record that this is not being rushed.

Six years have passed since BHP Billiton raised the prospect of expanding the existing mine into an open pit. In that time, the state, federal and Northern Territory governments have required BHP Billiton to produce an environmental impact statement, the largest environmental assessment of its kind in South Australia's history. In tandem with that approval process, the government has been negotiating the terms of the revised indenture agreement. This has been a lengthy and thorough process, culminating in environmental improvements by the commonwealth and state governments and the signing of the revised indenture with BHP Billiton.

The government is providing sufficient time to scrutinise the agreement, including arrangements for a select committee in the House of Assembly, which examined both the ratification bill and variation deed. We are confident that we have struck an appropriate balance between ensuring that parliament has ample time to examine the revised indenture and avoiding unnecessary delay that would hinder the prospects of the expansion being approved by the BHP Billiton Board.

After many years of painstaking work by the negotiating team (and I congratulate that team) and the hundreds of people involved in preparing the environmental assessment, it is really quite ridiculous to suggest that this process has been rushed. However, having arrived at this point, the government sees no reason why we should necessarily delay the billions of dollars of investment, the thousands of jobs and the huge boost to our state's economy and the standard of living that we can expect to flow from this project.

We are talking about billions of dollars of investment in infrastructure, including the new airport, a 105-kilometre rail line, an intermodal facility at Pimba, a 280-megalitre a day desal plant, a 320-kilometre pipeline, a 270-kilometre electricity transmission line, a new concentrator and hydrometallurgical plant.

We are talking about doubling the workforce at the Olympic Dam mine site and flow-on jobs and any service and manufacturing sectors that will support the mine and its associated infrastructure. We are talking about a $6.9 million boost to the state's GSP above the business as usual case for the mine. With all those positives stacked in our state's favour, we certainly hope that the project can proceed at the first available moment.

We know that the BHP Billiton board will now have to be convinced to support this approval expansion. This project clearly has risks: huge up-front costs and a long period before the investment returns a profit to the company. Of course, that decision is also being made against a backdrop of fairly uncertain global times. However, the benefits to South Australia are almost immediate: $1.2 billion worth of precommitment funding which will provide opportunities for jobs and commercial opportunities here in South Australian businesses.

After six years, I believe South Australians have waited long enough. South Australians are eager for this long-awaited project to begin and any unwarranted delay means the benefits to our state could unnecessarily be jeopardised. I think it is very much in the public interest that we provide a proper level of scrutiny to this indenture but, equally, it is in the public interest that we push forward with a timetable that ensures the highest likelihood of approval.

I have just been given some further answers to questions. I think it is probably in our interests to put as many of these on the record now as possible. I have received some answers in response to the Hon. Dennis Hood in relation to how many South Australians are projected to actually be employed from this mine directly and indirectly. I have been advised that in the EIS, BHP Billiton estimated that the OD expansion will generate up to 6,000 new jobs during construction, a further 4,000 full-time positions at the expanded open-pit mine, and an estimated 15,000 new indirect jobs. These numbers are in addition to the approximately 4,150 people that the Olympic Dam operations currently employ.

The Hon. A. Bressington: How many South Australians?

The Hon. G.E. GAGO: In relation to how many South Australian workers, I hear from the Hon. Ann Bressington, are currently trained to a level suitable for work once this mine is under way and it progresses—I have been advised to defer this until the committee stage.

In relation to the question what efforts has the government made in relation to training South Australians to ensure that we have an adequate workforce to meet employment requirements, I have been advised that the state government and industry is well positioned to respond to the future skill needs of the state.

The government has been working for many years to put in place policies and programs to ensure that the state has the skilled workers required to realise our potential. The state government is making the biggest single investment in vocational education and training in the state's history, committing $194 million which, combined with the existing investment in Productivity Places Program, will support an additional 100,000 training places.

The government has also committed $3.5 million in funding to the Resources and Engineering Skills Alliance (RESA) over 2010-14 to provide good intelligence on the skill needs of the resources sector. RESA works closely with the industry, government and training providers to facilitate enhanced and targeted education, training and employment opportunities in the industry. With respect to higher education, DFEEST has provided funding support to the University of Adelaide to train mining engineers as part of a coalition of universities involved in Mining Education Australia. In addition, DFEEST has established university scholarships in geology, electronics and mining engineering.

In relation to the question of how many South Australian manufacturers and companies are to get work or contracts under this indenture, I have been advised that this cannot be specifically quantified. An Olympic Dam expansion project portal has been set up on the Industry Capability Network (ICN) website by South Australia's ICN and BHP Billiton where companies can register their interest in supplying to both the existing operation and the proposed expanded operation, access information about likely pre-qualification requirements and also view details about supplier work packages.

In relation to what percentage of profit the government proposes to spend per annum on regional development within South Australia and on what basis the government will determine how to spend money on regional development, I will respond to this matter when addressing the amendment proposed by the Hon. Robert Brokenshire regarding the percentage of royalties being allocated to regions.

In relation to what specific regional development the state has planned for Whyalla, etc., I have been advised that the government's 2010 discussion paper on the State Strategic Plan for SA provides updated priorities for capital investment in the USG for both the state and other sectors. In terms of managing the growth of regional communities, the state has key responsibility together with local government in the provision of well located and serviced land.

With regard to Yorkeys Crossing, the Department for Planning, Transport and Infrastructure has undertaken a preliminary economic analysis for its sealing, including the installation of active control in the existing road/rail crossing, and the estimated project cost was $40 million in 2009. DPTI's position is that BHPB's forecast additional road traffic generated by the proposed Olympic Dam mine expansion does not justify an upgrade or sealing of Yorkeys Crossing.

In terms of the question what is the estimated benefit to the state in the first five years and in the next five to 10-year period and ongoing, I have been advised that BHP Billiton, in its EIS, estimates that the project will contribute $45.7 billion in net present value to South Australia's gross state product (GSP) over a 30-year time frame from the start of the expansion. In the EIS, the average annual increase to GSP is estimated in years 0 to 6 to be $650 million (a 1 per cent increase over business as usual); in years 7 to 11, $4.3 billion (a 6.4 per cent increase); and in years 12 to 30, $6.9 billion (an 8.7 per cent increase).

In terms of the question what is the net benefit to the state of South Australia if we did in fact decide in this country to export uranium to India, I have been advised that the sale of uranium to India is a matter being dealt with at the federal level, and it would be premature to provide estimates on net benefits to the state if that current policy is changed. Currently BHPB sells all uranium oxide produced at Olympic Dam to other markets, and Canada supplies the Indian market.

In relation to the estimated impact of fly-in fly-out, I have been advised that the Roxby Downs Draft Master Plan has been prepared by BHPB to plan for housing, services and facilities for an estimated population in Roxby Downs of 10,000 people, including permanent residents and long-distance commuter operational workers, comprising both fly-in fly-out and drive-in drive-out employees.

The draft master plan forecasts a long-term operational workforce of fifty-fifty residentially-based and LDC workers but has flexibility to allow for variances in this ratio. BHPB is committed to the sustainability of the town, particularly as factors such as housing, perceptions of lifestyle and community are important in attracting employees to the OD mining operations.

In relation to the question, what are the reasons the government has identified for the decrease in cuttlefish population in South Australia, if it is not through these sorts of activities?: I have been advised that on 28 August the previous fisheries minister the Hon. Michael O'Brien announced moves to further protect the giant cuttlefish in the upper Spencer Gulf. He announced that the government is determined to ensure a maximum level of protection while research is undertaken to explain the cause of the decline. He stated that:

A number of explanations have been put forward but all are speculative until we have quality data from which to draw informed conclusions. In the meantime, I am invoking the precautionary principle, which underpins the Fisheries Management Act.

He stated that the government will convert the existing temporary closure of False Bay to become a permanent and ongoing closure, close an additional small area immediately adjacent to the Point Lowly headland that is a known breeding area but not currently included in the closed area and implement a more comprehensive monitoring program for cuttlefish.

The monitoring program will span a time period that is sufficient to pick up seasonal and dynamic changes in the cuttlefish population. Seasonal variation of giant cuttlefish numbers in the upper Spencer Gulf may be caused by environmental conditions. We note that the giant cuttlefish populations are characterised by high natural variation from year to year. These are linked to changes in environmental factors such as water temperature, salinity, water circulation and weather patterns.

What recorded effects have similar desal plants had on their surrounding environments? I have been advised that there are now seven major seawater desal plants either recently constructed or under construction around Australia. All but one have relied on the ANZECC and the ARMCANZ guidelines for ecotoxicity testing procedures. The approach is deemed satisfactory by the Australian and New Zealand whole of governments and a similar approach is used in other developed nations. The same approach has been used by BHP Billiton. Given the rigorous procedures to assess the impacts and the operating conditions set for each plant, it is not anticipated that there will be any significant observable effects. The oldest operating plant at Kwinana since 2006 has not shown any observable effects.

In relation to the question what is the percentage of permeate water that will be produced from the desal plant, I am advised a maximum capacity approved the total intake from the ocean is 650 megalitres a day (100 per cent). Product water permeate is 280 megalitres a day (43 per cent). Brine discharge to ocean is 370 megalitres a day (57 per cent).

In relation to the questions what is the estimated salinity of brine waste and the estimated variation of water salinity in the ocean once the brine has been dumped, and does the government agree with BHP's figures, and can you confirm them, I have been advised that the salinity and return water is 78 gigalitres while the receiving environment ranges from 40.5 gigalitres to 42.8 gigalitres.

The EIS and the assessment report do not describe the salinity effects in the mixing zone surrounding the diffuser with concentration units but rather use dilutions. For example, 1:55 means one part of return water diluted with 55 parts of seawater. The safe dilution determined for giant cuttlefish is 1:55 but the EPA decided to make the condition for protection of cuttlefish more conservative and increased the dilution factor to 1:85 at the nearest cuttlefish breeding grounds. The assessment report has recommended this condition as it will protect the cuttlefish breeding grounds.

I also have some responses to questions asked by the Hon. Michelle Lensink in relation to the Environmental Management Program. The question was: is the annual compliance plan to be made available to the public? I have been advised that section 96 of the Petroleum and Geothermal Energy Act 2000 states that:

A licensee must not carry out regulated activities unless a statement of environmental objectives is in force for the relevant activities under this part.

One of the purposes of an SEO is to manage competing interests. This means that where a tenement overlaps the SML the owner of that tenement, in preparing the SEO, has to consult with affected stakeholders (i.e., BHPB) before he can seek ministerial approval for the SEO. A number of stipulations are set out in the indenture that must also be included in the SEO. This ensures that the tenement holder's activities are in harmony with those of BHPB.

In relation to the question about authorised officers and whether these officers are already authorised officers under another act or are they exclusively appointed, I have been advised that authorised officers will have to be specifically appointed for the purposes of part 5 of the ratification act once part 5 is in operation. The Mining Act contains a similar provision for the appointment of authorised officers to regulate other mines in South Australia. In practice, it is likely that these authorised officers will be appointed under both acts so that they can perform a dual role.

In relation to the question whether NRM native vegetation authorised officers' powers still apply to BHP, I have been advised, yes. In relation to the question: are opportunities being fully explored in relation to geothermal energy? I have been advised, yes, discussions have been held with a number of geothermal companies. Geothermal energy is also mentioned as a possible technology for greenhouse mitigation as part of BHP Billiton's greenhouse mitigation program.

With those answers and those few comments, as I indicated, I am aware that there are a number of outstanding questions and I will be happy to provide answers to those through the committee stage. So, with those few words, I thank honourable members for their contributions, particularly the bipartisan approach of the Liberal opposition, and look forward to dealing with this very important bill expeditiously through the committee stage.

Bill read a second time.

Referred to Select Committee

The Hon. M. PARNELL (12:18): I move:

1. That this bill be referred to a select committee for inquiry and report;

2. That standing order No. 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only; and

3. That this council permits the select committee to authorise the disclosure or publication, as it thinks fit, of any evidence presented to the committee prior to such evidence being reported to the council.

I gave contingent notice last month, so members will not have been taken by surprise by this motion. What members may be curious to know is: how did I know that the process of inquiry into this bill in another place would have been so poor as to require this house to itself move a select committee? The answer to that question is: a lucky guess, if you like. I suspected that the other place would go through the motions—that they would comply in a minimalist way with their standing orders and that they would form a select committee (as they were required to do, the bill having been declared by the Speaker of that chamber a hybrid bill)—and I also suspected that they probably would not do as thorough a job as this bill I think demands.

As I said yesterday, the select committee of the House of Assembly originally chose only to hear from the cheer squad. They only heard from the company, from government officials who were involved with the project, and from the mining lobby. At the very last minute they were shamed into hearing from the Conservation Council of South Australia. But, as I also pointed out yesterday, there were a number of other interested South Australians who took the trouble to write to the committee and ask to give evidence, and the committee chose not to accede to those requests.

In her summing up, the minister referred to the bipartisan support that this bill has had by the Liberal Party and Labor Party, and I certainly acknowledge that is the case. If I heard the Hon. Jing Lee correctly, the Liberal Party was invited to Olympic Dam to inspect the facilities and ask questions. I also put on the record that a number of months ago the Greens sought a similar visit and it will probably surprise no-one here to find out that it was not convenient. As a result, the visit that we went to some lengths to try to organise, Senator Scott Ludlam and myself, did not come to pass. There were always operational reasons why we were not able to go up. I can see that the bipartisan support was acknowledged very early on by the company, and we are seeing it now reflected in the debate in this place.

If the council is minded to establish a select committee, I would propose that, at the least, it should again get BHP Billiton back in to ask some harder questions than the members of the committee in the House of Assembly asked. There is still a great deal more I think that we need to find out about before we can be satisfied that the project as proposed is in the best interests of South Australia. I think we should get BHP Billiton back in.

I think we should also get in Doctors for the Environment. We should hear from Professor David Shearman and his colleagues. We should get Professor Jochen Kaempf in, who is probably the most knowledgeable expert on water movement in the Upper Spencer Gulf. We should also get in some of the commercial interests who have shown an interest in this project, such as the West Coast prawn fishers, for example. We should hear from Friends of the Earth, a group that has been working with Aboriginal people—the Arabunna people, for example, up in the Mound Springs area—and they have been doing it for a number of decades. I think the committee should also hear from Mr David Noonan, who is one of the most knowledgeable people on the nuclear industry in this state. He has worked exclusively in that field on behalf of the Australian Conservation Foundation for 16 years. I think his knowledge would be of great assistance to the committee.

I can predict the response already from the government, and perhaps also from the opposition, that this is a delaying tactic. What I would say is that this notice of motion has been on the Notice Paper for a month or so and, if the committee is successfully established, I would propose that it meet today, that it meet as a matter of urgency. We do have time to hear some witnesses this week. We could hear witnesses on Friday and on Monday. I am certainly prepared—

The Hon. T.A. Franks: What about Saturday and Sunday?

The Hon. M. PARNELL: My colleague says, 'What about Saturday and Sunday?' I am certainly prepared to make my weekend available. If you were to reflect on the rhetoric that we have heard about the importance of this project to the state, I am sure many other honourable members would themselves put any weekend plans they had on hold in order to give this project the scrutiny that it deserves.

I further propose that this committee could report back to the parliament on Tuesday, and that would give us the whole of the optional sitting week in order to dispose of this bill. I remind members that the time frame in the indenture is 20 December. It is several weeks away. This is not a proposal that drags this into next year: it is a proposal that gives this project the scrutiny it deserves.

Really, I think the motion I have now moved is a test of how seriously the Legislative Council treats its task, of how seriously we believe this legislation is important for the people of South Australia, and I urge all honourable members to take their job seriously and support the motion. Let's get this select committee up and running straight away, let's get some witnesses in and ask some questions, and we will hear back from the committee next week.

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (12:25): The government opposes the motion. This is clearly a delaying tactic, and not only is it unnecessary but, as I have already outlined, it is downright irresponsible. As well, not only do I take personal offence, but I am sure each and every other honourable member sitting in this chamber takes offence at the Hon. Mark Parnell's suggestion that we are not taking our job seriously. That is an extremely offensive remark. We may disagree on the policy content of what is before us, but to suggest that we are not taking our job seriously is downright offensive.

I have already outlined that this process has been an extremely lengthy and arduous one. It has taken six years, during which we have conducted talks with the commonwealth and other state governments in a very open and transparent way, according to law and incorporating widespread public consultation. The government has provided sufficient time for the scrutiny of this indenture agreement including, as I have said, the select committee of the House of Assembly, which took evidence from the Olympic Dam task force, BHP Billiton and the Conservation Council. The bipartisan committee unanimously recommended ratifying the indenture—it unanimously recommended that.

An honourable member: That's not true.

The Hon. G.E. GAGO: Well, that is what I have been advised. If that is incorrect, then I am happy to stand corrected, but that is the information—

An honourable member: They had to consult their party room.

The Hon. G.E. GAGO: I have been advised that the bipartisan committee unanimously recommended ratifying the indenture, but I have been told through interjection that that is not actually so. As I said, I am prepared to stand corrected, but that is the information I have been advised.

We are confident that we have struck an appropriate balance between ensuring the parliament has ample time to examine the indenture process while avoiding unnecessary delay that would hinder the prospects of the BHP Billiton board making its decision to progress. As I said, it has been many years of very painstaking work. Clearly, given that very rigorous process, there is no reason for us to delay this any further.

We are talking about billions of dollars of investment; as I have put on the record before, BHP Billiton has indicated a spend of $1.2 billion in precommitment funding, and we know that BHP Billiton is making this decision against a backdrop of very uncertain global economic times. So, it is most critical that this parliament sends a very clear message, and that we do so as expeditiously as possible, while still maintaining rigorous scrutiny, so that we are able to send that message to BHP Billiton so that it can finalise its decision early in the new year. As I said, the government opposes this delaying strategy.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (12:30): I rise on behalf of the opposition to indicate that we will not support the Hon. Mark Parnell's move for a select committee. As members would be aware, and as the minister outlined, there was a select committee in the House of Assembly that took evidence over a number of days from a wide range of interested stakeholders and parties. Listening to the Hon. Mark Parnell's comments in moving his motion, it appears that he almost wants to revisit the whole EIS process. Naturally, you would expect the Hon. Mark Parnell to have a large environmental focus on the types of people he thinks should be called to the select committee. I am sure that no new information would be provided to this select committee that has not already been provided in submissions through the whole EIS process.

I hear the Hon. Mark Parnell say that he is not wanting to delay this beyond 20 December, but I suspect that he wants to maximise his opportunities in a media sense over the next few days, but really at the end of the day provide us with no new information. As members are well aware, it has been an exhaustive process and a bit frustrating for the opposition and all the non-government parties that the negotiations have been undertaken by the government over a five or six-year period, and at lots of times we would all like to have been involved a little more, but that is the nature of the democracy we live in. We have a government of the day that is charged with doing that, and the rest of us are interested observers, and where possible we can participate.

The whole EIS process was where all the environmental issues were considered, and to have a further select committee in the Legislative Council, following one that was in the House of Assembly, would, as my father once put to me, be just a bit like sawing sawdust and at the end of the day all you still end up with is a handful of sawdust. With those few words, I indicate that the opposition will not support the Hon. Mark Parnell.

The Hon. M. PARNELL (12:32): To sum up the debate, I thank the minister and the Hon. David Ridgway for their contributions to this motion. Certainly I am not taken by surprise by the positions they have taken. I maintain that this is the best way for us to proceed, and I am amazed that the minister can use the word 'irresponsible', that it would somehow be irresponsible to seek further information about the biggest industrial project in this state's history, the biggest hole in the ground ever dug on the face of the planet, that working within the time frame set by the government, wanted by BHP, that working hard to get answers to questions, is somehow irresponsible. Maybe the minister and I share different views on the potential of this parliament to seek information and make better decisions.

With those brief words, I can see that on this particular occasion the numbers are not with me, and I look forward now to the committee stage of the debate when we will be able to ask some further questions.

Motion negatived.

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