Arbitration In Contempt
Preface to the 2nd Edition
Less than six years after the inaugural seminar which
led to the founding of the H R Nicholls Society, the
stock of the proceedings of that seminar has been exhausted.
The first edition of 'Arbitration in Contempt' had
been selling as a collector's item for some time. When,
at last, Australia discovers the political will to
accomplish the institutional reforms in our labour
market which will enable us to compete in global markets,
unencumbered with leg irons, the significance of that
first edition will ensure that its value, as a collector's
item, will be maintained.
Demand for 'Arbitration in Contempt' has increased
rather than diminished, and in printing a second, expanded
paperback edition in A4 size, the Society has seized
the opportunity to include two papers given at its
launching on 30 September, 1986, in Melbourne, at the
Southern Cross Hotel. The papers were given by John
Stone, the foundation President of the Society, and
Professor Geoffrey Blainey, who launched the book.
The launching of 'Arbitration in Contempt' turned
out to be a major political event. Nearly three hundred
people attended the dinner, and the then Leader of
the Opposition, John Howard, despite strong criticism
from within his own ranks, was in attendance, and moved
the vote of thanks to Professor Blainey.
In the lead-up to that occasion the book was reviewed
and criticised in the media in an unprecedented way.
Geoffrey Blainey observed wryly that he wished that
his own books had obtained just some of the attention
which 'Arbitration in Contempt' had received.
A major reason behind that furore was Robe River and
- inseparable from that company---Charles Copeman.
Charles Copeman, then Managing Director of Peko-Wallsend,
had attended the inaugural seminar of the Society in
February 1986 and had been greatly stimulated by the
debate and the argument which the participants enjoyed.
Shortly before that date his company had become the
majority shareholder in Robe River Iron Ore Associates,
and therefore had to assume responsibility for the
management of the project.
Peko found Robe River to be a loss making operation,
operating well below capacity (actual output 14 million
tonnes versus 20 million tonnes capacity), and in danger
of losing contracts because of poor performance. Robe
River had become an important experiment in syndicalism,
a political system under which the trade unions are
in control either of the country as a sovereign state,
or of business enterprises in which the property rights
of shareholders are effectively abolished. Prior to
the takeover by Peko, Robe River had effectively been
run by the unions for the principal benefit of the
work-force and, in particular, the officials of the
Syndicalism as a political ideal has been overshadowed
historically by Marxian Bolshevism but it has had,
nevertheless, a long history of complete economic failure
in various parts of the world, notably in Spain, in
Yugoslavia, and in Argentina. When, partly as a result
of the previous weak management, Robe River fell into
syndicalist hands it too moved rapidly towards economic
Charles Copeman soon came to the view that if Peko
was to properly discharge its responsibilities as manager
and majority shareholder at Robe River, this syndicalism
had to be overthrown, and the proprietary rights of
the shareholders to manage (and benefit from) the operation
had to be upheld. His first action was to dismiss all
but one of his first-line executives. Then, with the
loyal support of his remaining managers and a large
proportion of his work-force, Charles Copeman succeeded
in achieving that aim. Today, output from Robe River
is nearly 30 million tonnes, output per employee has
increased threefold and time lost through injury (real
or claimed) has been reduced to 10% of the 1986 figure.
By challenging syndicalism head-on, Charles Copeman
became the centre of a political storm. Some saw the
H R Nicholls Society, by association with Charles Copeman,
and to some extent John Stone, who had become a Director
of Peko-Wallsend in May, 1986, as a sinister cabal.
The then Prime Minister, Mr Hawke, described its members
as 'political lunatics and economic troglodytes'. The
then Minister for Administrative Services, Mr Michael
Jerome Young, now a director of Qantas, attacked the
Society as a key part of what he catted 'The New Right'.
In this way the Society suddenly became a rallying
point for many who previously had lost hope for the
future of industrial relations in Australia---and thus
for the economic future of Australia itself.
Looking back, it is worthwhile pondering why it was
that Robe River became such a pivotal issue, and why
the H R Nicholls Society was perceived by its opponents
to be much more important than, at the time, its founders
believed it to be.
With the benefit of hindsight and reflection it is
clear that Robe River was misunderstood by key politicians
to be a microcosm of Australia as a whole. With the
Accord Mark I, the ACTU particularly, and the trade
union movement generally, became, in 1983, a partner
in government. As time elapsed the ACTU first had a
veto power over all government policy, and then assumed
the position of senior partner. Australia had, during
the eighties, become a syndicalist society and the
H R Nicholls Society generally, and Charles Copeman
particularly, had challenged the foundations of the
entire syndicalist structure.
Robe River, like all syndicalist enterprises, was
quickly moving towards bankruptcy. Charles Copeman
was able, despite the best (and in many instances,
worst!) efforts of government at state and federal
level, and the ACTU, to throw off the syndicalist yoke.
In doing so he transformed Robe River from a state
of imminent bankruptcy into a highly productive, highly
profitable, internationally competitive mining operation.
If that could happen at Robe River, what would happen
if the H R Nicholls agenda was taken up by the whole
country? The beneficiaries of syndicalism had good
reason to be appalled at such a prospect.
As the nineties progress the inevitable results of
syndicalism are increasingly evident throughout Australia:-
rising unemployment, declining living standards, declining
business investment, more frequent ministerial promises
concerning 'job creation', more learned investigations
and reports into solutions for this or that manifestation
(but never into the underlying causes) of economic
In a democracy, debates which culminate in epochal
institutional change require the participation of many
people and must take place over a long period of time.
There can be no doubt that, during the past six years,
there has been a major shift in public thinking about
the imperative of labour market reform, and this shift
is now evident in statements by political and business
leaders, as well as by some more enlightened trade
unionists. Equally there can be no doubt that there
is still a long way to go if the transformation which
took place at Robe River in 1986 is to be replicated
in mines, factories, schools and other workplaces,
all over Australia.
Members of the H R Nicholls Society are, generally,
optimistic about Australia's future, because they believe
that in the end, common sense will prevail. Syndicalism
at Robe River was an affront not only to that common
sense, but also to Australian standards of propriety
and decency. Syndicalism in Australia generally will
likewise fall when challenged in a sustained, effective
and determined way, by dedicated people arguing from
principles and prepared to stand up for those principles.
This second edition of 'Arbitration in Contempt' contributes
to that challenge.
N R Evans
Why HR Nicholls?