Light on the Hill: Industrial Relations Reform in Australia

The Newport Power Station: A History of Conflict

Jack Johnson, OBE

This paper briefly describes how the misuse of union power and the militant action of environmental pressure groups were used in an attempt to prevent the construction of the 1,000 megawatt (MW) gas-fired power station at Newport, a bayside suburb of Melbourne. It outlines the conflict on environmental issues and the use of premium resources for the generation of electricity; the bans by trade unions against the construction fi the station; the various public inquiries into environmental and other aspects of the station leading to the halving of the size of the station; and finally the ultimate construction by workers who were individually opposed to the union bans. It concludes by discussing the diverse reasons behind the opposition, none of which had any material justification, and indicates the very substantial financial penalties suffered by the people of Victoria as a result of attempts to override the plans of the Victorian Government and the State Electricity Commission of Victoria (SEC) plans which had been duly and properly authorised by the State Parliament in the relevant legislation.


Newport Power Station: Its Role in the Victorian System

In 1971 the SEC recommended to the Victorian Government the construction of a natural gas-fired power station at Newport, comprising two units each of 500 MW capacity. The site proposed was adjacent to an existing coal and oil-fired power station which had been progressively in service since 1918. The old station was to be retired and dismantled on completion of the new gas-fired one.

The role of the station was to support those in the Latrobe Valley by providing most of the variable component of the daily load, principally in winter, bearing in mind that the brown coal-fired stations in the Latrobe Valley, for operational and economic reasons, were best suited to run at a constant high load level. The proposed Newport Power Station also could operate continuously for long periods to cover prolonged outages of brown coal plant in the Latrobe Valley, due to breakdowns or lengthy maintenance work, and to support the system when delays occurred in the commissioning of new plant.

The Commission had very limited options for this type of power station operating in the role for which it was needed and intended.

Most of the economic hydro potential of the State had already been developed, and, in any case, very large water storages would be required to permit the sustained operation needed to substitute for Latrobe Valley units.

A black coal-fired station could well operate in the role required but its capital and operational costs would be significantly higher than those of a gas-fired station; in addition, it would require the dependence on fuel imported from interstate. The gas-fired station proposed had all the advantages of low capital cost (about half that of a brown coal station); ease of operation on a daily start up and shut down duty; ability to operate over protracted periods; and the use of a fuel indigenous to Victoria and, in 1971, capable of being purchased at an attractive price on a long-term contract for the life of the station. In addition the location of the station at Newport at the mouth of the Yarra River eliminated the need for the consumption of freshwater for power station cooling and, being in the main load centre of Melbourne, obviated the requirement of additional transmission lines from the Latrobe Valley. The proposal for the Newport Power Station was the most economic option available to the Commission and was, therefore, in the best interests of the Victorian community, having regard to the Commission's statutory responsibility of keeping electricity costs as low as practicable.

Furthermore, the use of natural gas to fuel the station was considered to be a wise use of this premium fuel, having regard to the necessary flexibility of operation which could thereby be achieved---which was not economically practicable with brown coal plant.

Following some 5 years of research into environmental control measures adopted overseas, the Commission believed that it could design the station in a manner which would have no significant deleterious effect upon the surrounding environment, by incorporating the most up-to-date technology in emission controls, and by burning a fuel---natural gas---which was already in widespread use in the metropolitan area.

The cost of the Newport Power Station was estimated, in 1971, to be some $145m, i.e. $145 per kW in 1971 dollars ($600m, or $600 per kW, in 1986 dollars).


Legislation

The State Government accepted the recommendation of the Commission and, in 1971, put before the Victorian Parliament the enabling legislation to authorise the SEC to construct and operate the 1,000 MW station at Newport. As Hansard will show, all parties in the Parliament strongly supported the proposal, and the relevant Act passed through both Houses without amendment. It received Governor-in-Council Assent in November 1971, thus becoming legislation binding upon the SEC and the State.


Initial Construction

The service dates nominated for the station were 1976 for the first 500 MW unit and 1978 for the second.

A Letter of Intent, authorised by Government, was exchanged in late 1971 between the SEC and the gas suppliers establishing a basic gas supply of up to 800 billion cubic feet for the period up to 1996, and a normal contract, to this effect, ensued in 1974. The contract contained a provision for cancellation if written notice of the firm date of commercial operation at Newport was not received by January 1976. The contract also defined the point of supply as being Newport, and was not valid for any other location.

The SEC acted at once to implement the design and construction of the station, and placed orders for the generators and boilers, together with the civil works for the foundations. Civil works commenced on site, and manufacture of plant proceeded, elsewhere, in the normal manner.


The Bans

In the months following the passage of legislation for the station, an increasing ground swell of opposition to the station at Newport built up from conservation and environmental groups, and from some local residents. The main objections were that it would be harmful to health, it would improperly and inefficiently use large quantities of gas (a premium resource), and it would adversely affect Melbourne and the neighbouring residential areas. Demands were made for the station to be located elsewhere and for the whole proposal to be referred to the Parliamentary Public Works Committee. Clearly this latter requirement could not be met, as it was quite untenable for a subordinate Committee of Parliament to review the legislation which had been enacted by the Parliament. The Government refused to review its decision to build Newport Power Station.

In 1972, after site works had started, several unions placed bans on the construction of the station in support of the conservation pressure groups, contending that the station would be harmful to the environment. Work at site virtually ceased by the end of that year. Several meetings were held with those unions in an attempt to have the bans removed, without success.

The Government then announced that the newly-formed Environmental Protection Authority (EPA) would hold a public inquiry into the licensing of the station to operate.


EPA Inquiry

At the time that the Newport project was submitted to Government for legislation the Environment Protection Act had only just been proclaimed and then only in that part covering the setting up of the EPA. The sections of the Act covering the licensing of emissions to air, land, and water, and the appeals procedures were not proclaimed until 1973.

In the absence of any future guidelines, the Commission had prescribed, for plant and station performance, environmental standards more onerous than those adopted elsewhere in the world.

At the public hearing conducted by the EPA in March 1973, a great deal of evidence was presented, by the SEC, in support of its contention that Newport Power Station would not be harmful to the environment of Melbourne. Counter claims from a number of environmental pressure groups were the subject of investigation and debate before the Authority.

The end result of the Inquiry was the presentation of the EPA Report of August 1973 to the Minister for Conservation and the subsequent issue of licences to the SEC for the operation of the station---subject to the conditions of the licences being met.

However, the Report was most damaging to the SEC as it provided a basis for increased opposition by the conservationists and the left-wing trade unions who supported them.

The Report was a most contradictory document in that it contained sections, written by EPA officers, which were highly critical of the SEC and the proposed station, and which could only be interpreted as giving strong views that Newport would be harmful to the environment; a further section much more moderate in its outlook, but nevertheless still critical of the station; and finally, in the forwarding memorandum from the Chairman of the Authority, an unequivocal statement that the power station 'can be made an acceptable neighbour'.

However, a statement in the Report by EPA's Chairman, Dr A Gilpin, drew attention to the fact that;

    'it had not taken into account, or explored, certain issues which, though relevant to the power station, fall outside the Authority's current terms of reference. These issues include land use (whether the area of land to be used for the new power station could be better devoted to some other purpose); resource use (whether, for example, natural gas should be utilised in a possibly inefficient manner for electricity generation); the economics of electricity generation; decentralisation of industry in Victoria, and aesthetics. Clearly, reasons could be advanced by others for rejecting the Newport site on grounds other than those considered by the Authority'.

This statement, coupled with the highly critical comments in the body of the Report, created the impression in the minds of most readers, not least the media, the conservationists, and the trade unions, that the EPA condemned the Newport proposal, and it provided ammunition for increasing the efforts to defeat the construction of the station.

In line with the provisions of the Environmental Protection Act, which gave 30 days from the issue of licences for the lodging of appeals, the conservation groups appealed on the basis that the Authority had acted incorrectly in issuing licences against the contrary opinion of its own officers, and the SEC appealed against the stringency of some of the conditions of the licences.


Interim Period

In the period leading up to the hearing of the appeals, the SEC had a number of meetings with the involved unions in attempts to lift the bans on work at site---without avail.

The unions informed the SEC that they had consulted with their own environmental expert---a Mr Skiotas, lecturer in chemistry at the Royal Melbourne Institute of Technology---who had advised them that the station would be harmful to the environment. Furthermore, they now objected to the station on the grounds of siting, use of the limited reserves of natural gas, inefficiency of energy production by conversion of natural gas to electricity instead of direct usage, decentralisation of industry, and the like---in fact all the matters referred to in the EPA Report. It was stated that the only conclusion which could be drawn from the issue of licences against the clear opinions of EPA officers was that the Government had directed the Authority to do so.

The SEC then approached the Victorian Trades Hall Council Executive to seek its support in resolving the bans. The Executive put a recommendation to this effect to the full Council; but although it obtained support from some unions, a majority vote in favour could not be obtained: the left wing was too powerful. The Victorian Labor Party now withdrew its support for the station and declared its opposition to its construction.

By February 1974 the SEC had placed orders for plant and works at Newport to the value of $92m ($300m in 1986 figures), with expenditure on site works some $10m ($32m). Manufacture was still proceeding off-site as the bans were only in force on-site where the civil work was the province of certain unions. Paradoxically, manufacture of plant, equipment, and steel work for the stations could proceed, but not actual construction.


Implications of Newport Delay

The SEC was gravely concerned about the delays in constructing Newport and the consequential effect it would have upon its ability to maintain adequate supplies to its consumers, despite the somewhat lower load growth than it had forecast.

Studies were done of the situation, postulating 1-4 years delay at Newport and a 5-year delay if the station was to be located elsewhere. It was clear that all metropolitan power stations would have to be brought into service from reserve; Latrobe Valley stations would have to be run on 3 shift/7 day operation; all available water reserves at Snowy would be utilised; and maximum use would have to be made of purchased power from New South Wales. Even then, there would be insufficient power available in the event of delays beyond 2 years, and up to 500 MW of gas turbines might have to be installed on an emergency basis to break even with the new load forecast.

If the use of natural gas was to be denied to the Commission, then those gas turbines would have to operate on high-cost oil and a 7-year delay would be incurred in substituting a brown coal station in the Latrobe Valley to offset the loss of Newport.

Penalty costs could be as high as $200m ($640m in 1986 prices) for a 4-year delay at Newport, rising to nearly $500m ($1,600m) for substitution of a brown coal station. Substantial quantities of oil and briquettes would be required for operation of the metropolitan stations and up to 450 additional skilled personnel would have to be obtained to man the stations.

These matters were reported to Government and to the Victorian Trades Hall Council. The unions and the conservationists claimed that this was sabre-rattling and that their own experts disputed the load forecasts .


Appeals Board Hearing

In May 1974 the Environment Protection Appeals Board commenced hearing the appeals which had been lodged against the issue of licences and certain conditions of those licences.

The hearing was an exceedingly comprehensive one, lasting 29 days and taking evidence from a total of 35 witnesses. The SEC brought in experts from the United Kingdom and the United States to testify in the fields of environmental control, as well as medical and marine biology specialists to give evidence on the aspects of health and the marine environment. The counter-claims of the opposition were also wide-ranging and well argued, and the whole matter of the environmental effects of the station was exhaustively examined by the Board.

In July 1974 the Appeals Board brought down its determination broadly in favour of the SEC, stating, inter alia, that:

    'In the present appeals, the third parties have focused public attention on the proposed station in a manner which has called upon the Commission to justify to the fullest extent its proposed activity and to demonstrate that such activity will present no threat to the environment or to public health. That the Commission was forced to do so should result in a public awareness that the power station is not to be feared under the very stringent conditions of operation which have been imposed under the licences'.

Following the upholding of the licences by the Appeals Board, the SEC again approached the Trades Hall Council Executive to try and achieve a lifting of the bans. The matter was put once more to the full Trades Hall Council but was again rejected by a small majority vote. It is understood that the basic argument put forward by the left wing was that the Appeals Board was appointed by Government and was thus not impartial, being subject to Government direction in the matter. The Victorian Labor Party continued to oppose the station.

Efforts continued to attempt to resolve the issue through 1975.


Emergency Action

As it was now clear that, even if the bans were lifted in 1975, it would not be possible to have the first Newport unit in service before 1979 (some 3 years later than originally scheduled), the SEC commenced to implement the emergency action of bringing the metropolitan power stations into operation, and to increase, to the maximum, output from the Latrobe Valley.

Designs were put in hand for a 200 MW gas turbine station for location in the Latrobe Valley, as an optimum site with proximity to the gas pipeline and electricity transmission lines to Melbourne. Discussions with the EPA evidenced considerable opposition to the gas turbine proposal on the grounds that pollution of the Latrobe Valley environment would occur, despite the excessively stringent emission standards which the SEC proposed for the plant. A 2-year lead-time was anticipated for the manufacture and istallation of the gas turbines, and the estimated cost was some $30m ($73m in 1986 prices).

During the course of this work, the Government attempted to resolve the Newport dispute by offering to cut the allocation of natural gas to the SEC by some 25 per cent and to reduce consumption of gas further by authorising the SEC to build a pumped storage hydro scheme. It was hoped that this would ameliorate the concern over the use of a premium resource. The Executive of the Trades Hall Council undertook to reconsider its stand and to put the matter to the full Council. This proposal was under consideration until early 1976 when it was rejected by the full Council.

The Government then moved to put pressure on the unions by progressively reducing expenditure on, and contractual commitment to, major public works. It also introduced, and had passed in Parliament, the Vital State Projects Act, the 'essential feature of which was to penalise unions and unionists who 'unlawfully' banned the construction of projects declared by the Government to be vital State projects'.

This Act brought forth an immediate and hostile reaction from the trade union movement. Although formal proclamation was withheld, the Government threatened the unions with its enforcement if the bans on Newport were not lifted. A confrontation which could have had serious consequences for both parties thus became imminent.

It was in this explosive atmosphere that an agreement was negotiated between the Government and the Trades Hall Council providing, inter alia, that a review panel be established, with appropriate terms of reference, to reconsider the SEC proposal to build the power station at Newport. The Panel was to hold a public inquiry into the matter and it was agreed that both the SEC and the unions would abide by its determinations.


Newport Review Panel

In December 1976 the Newport Review Panel was constituted under the Chairmanship of Sir Louis Matheson (ex Vice-Chancellor of Monash University) and members included Mr N Smith (Chairman of the Gas and Fuel Corporation), Mr J Fraser (Chairman of the EPA), and Mr J Ellis (President of the Victorian Trades Hall Council).

Broadly the terms of reference of the Panel were to investigate what detrimental environmental effects, if any, would result from the operation of the proposed power station at Newport, the desirability of locating the station at an alternative site having regard to Victoria's current and future needs for power, and whether any factors had arisen which made it desirable to vary any aspect of the project.

The Panel subjected the SEC to a very rigorous examination on the environmental and other aspects of the Newport station, and a number of alternative sites were examined and costed, both by the SEC and consultants employed by the Panel. The consequential effects of the costs of relocation and the renegotiation of the gas contract on electricity tariffs were also examined. The Panel obtained advice on the environmental effects of Newport from other parties. Submissions were made by the unions and environmental and conservation groups.

It must be stated that the Panel contravened the rules of evidence which ensure natural justice, in that it took some evidence, in camera, which was not made available to the principal party, the SEC, for comment and rebuttal. This unfortunate situation led to the Panel apparently accepting contentions which were clearly invalid, which were not tested, and which apparently influenced the Panel in its determinations.

In April 1977 the Review Panel submitted its Reports which concluded that only one of the two 500 MW units should be built at Newport, and that certain limitations should be placed on its operation. This was not a unanimous determination, as one member submitted a minority report which called for the station to be built at an alternative site which was environmentally acceptable, and again limited in capacity to 500 MW.

In its Reports the Panel was highly critical of the SEC and stated that:

    'We have been greatly concerned, throughout this very serious and difficult review, by the attitude of the State Electricity Commission which to say the least has not been in keeping with the way in which the Panel has endeavoured to conduct its proceedings.

    The SEC has appeared to be most reluctant to concede that any of its decisions, whether technical, commercial, financial or environmental were open to challenge.

    Such an inflexible attitude does not bode well for the future'

If one recognises that the SEC was attempting to justify, before the Panel, that the premises on which Newport Power Station was proposed were, in fact, soundly based, and that, on the other hand, the Panel seemed determined to develop reasons why the station should be located somewhere else, then it is understandable that such comments should eventuate.

The Panel cast doubts on the Commission's load forecasts, the financial penalties and delays to be incurred in locating the station elsewhere, the findings of the EPA and the Environment Protection Appeals Board, the contention of the SEC that the gas contract was not valid for a location other than Newport, and the claim that such factors would have a deleterious effect on electricity tariffs. Subsequent events have shown that the Commission's predictions were in fact correct.

Cost penalties of up to $600m (1986 prices) could well be incurred in the reduction of Newport to a single unit and the substitution of 400 MUT of gas turbines in the Latrobe Valley for the second unit.

Load growth was such that, despite the provision of gas turbines and other emergency measures, water storages at Snowy were fully drawn down and there were a number of occasions when the system was fully extended and load shedding was imminent. It was proven that the gas contract was valid only for supply at Newport and, with a single unit, 400 billion cubic feet of gas at a very favourable price was lost to the SEC. The cost of gas for the markedly less efficient gas turbines, ordered under a new contract, was very substantially higher. Higher operating charges for gas turbines, and the amortisation of capital and delay charges, reflected in increases in electricity tariffs. Subsequent tests showed that Newport would have negligible effect on the environment.


Construction of Newport

The Government accepted the recommendations of the Review Panel; but although the Executive of the Trades Hall Council recommended to its Council that the Panel's Reports be accepted, and that a 500 MW station be built at Newport, the Council repudiated the agreement given by its Executive by voting to continue the work bans imposed on the station.

The Government then proclaimed the Vital State Projects Act and brought down amending legislation to reduce the size of the Newport Power Station to a single 500 MW unit, accepting, for its part, the recommendations of the Review Panel.

The cost of the 500 MW station was now estimated to be some 65 per cent of the cost of a 2-unit station, because certain works such as the cooling water system, station auxiliaries, services, and the like were common factors in both proposals.

The SEC believed that it would be possible to build the station with workers who were willing to repudiate the bans, and the Government met with the major contractors to seek their support in restarting the work. Only one contractor expressed willingness to make the attempt and all sought an indemnity from the Government for any disruptive action to their overall business activities which might thereby ensue.

The Government decided to proceed with the station, and in mid-1977 site works recommenced using day labour forces provided by the Victorian Public Works Department and the single contractor who had expressed willingness to start.

The site was well fenced and protected by the police but some intimidation of the workforce took place from militant environmentalists and students. This intimidation was not condoned by the unions. Extraordinary measures were taken to get around the union bans, for example the use of owner operators with mobile plant, timber jinkers to transport steel, the use of a 'roll on-roll off' ship to bring the generator from Switzerland to overcome the ban on the use of the floating crane, and the like. As confidence built up more contractors started work, directly recruiting labour, and the Public Works Department withdrew its day labour forces.

Work proceeded with remarkable efficiency---far more so than on other major construction projects---and the workforce rose to a peak of some 1,200 during the stages of construction. It is interesting to note that the accident rate was virtually negligible, there was no lost time over disputes, morale was very high, and none of the demarcation disputes, common in the construction industry, occurred at the site.

The SEC considered it desirable for the workforce to participate in the management of the project, and to this end sought nominations for membership of a Site Committee chaired by the SEC site engineer. This led to suggestions from the workforce on how to expedite work and how to improve construction techniques and safety procedures, all of which expedited the construction work. An example of this was in the building of the annexes for auxiliary plant. The contractor for this work estimated a completion time of 7 weeks, but after work had started the workforce proposed alternative construction methods which, they claimed, would cut construction time to 4 weeks. These methods were adopted and, as a result, actual completion was effected in 3 weeks. The workforce set their own target of one concrete pour per day and, when the weather was inclement and delayed work, voluntarily worked extended hours to achieve their target. This was despite the fact that no productivity bonuses were paid on the job. In pressure-welding on the boiler, again targets were set by the men, which were mostly achieved. These targets were about twice the welding rates current on construction sites in the Latrobe Valley.

All those employed on the site were fully paid up union members and award rates were paid. However, it was usual on other major power station sites for over-award allowances to be paid, such as height money, for dirty conditions, special project allowances, and the like, as normally determined by application to the Arbitration Commission. Recognising that the site workforce would have no right of application to the Arbitration Commission, it was mutually agreed that a member of the Arbitration Commission would act, ex Officio, to determine these allowances---which were then paid.

No access to site was granted to union organisers, on the grounds that the work was not officially recognised by the unions, but arrangements were made for individual men to meet organisers, outside the gates, to sign up for union membership and to pay union dues. The only conflict which took place on the project was when the station was nearing completion, when the men sought a severance allowance on the basis that they would need financial support for a period when attempting to find new work---bearing in mind that, in union eyes, they were 'scab' labour. This was violently opposed by the MBAV and the MTIA on the grounds that it would set a precedent in the construction industry. The SEC negotiated a settlement of this dispute on the basis of granting up to 3 weeks of paid leave to men employed in the last 6 months of the project to allow them to re-establish themselves in work elsewhere. This was only agreed to on the basis of the special circumstances of the project and was considered to be a re-establishment allowance, not severance pay. No lost time was incurred in the settlement of this dispute.

Construction of the station was virtually completed by mid-1980 and, after testing and commission, Newport went into operation later that year. Construction time was very appreciably less than that experienced in the Latrobe Valley and there were no significant cost overruns; in fact the station was completed at some $20m below estimate. Bowing to the inevitable, the Trades Hall Council lifted the bans on Newport at the completion of the station.


Environmental Effects of Newport

After Newport went into operation, the EPA conducted measurements on emissions from the station and confirmed that they were within the requirements of the licences. Subsequent detailed CSIRO investigations confirmed that the probability of Newport contributing to metropolitan oxidant incidents was very low.

All this validated the assertion of the SEC that the Newport Power Station would have no harmful effects upon the environment.

When the media reported on the results of the CSIRO studies, the Chairman of the Review Panel, Sir Louis Matheson, wrote to the Press stating that had this information been available to the Panel at the time of its deliberations it would have recommended that the full 1,000 MW station be built at Newport.


Penalty Costs

The SEC was faced with an untenable situation in attempting to maintain an adequate supply of electricity until Newport came on-stream, and it was clear that the installation of gas turbines was necessary in addition to all other measures such as operating the metropolitan power stations.

In mid-1977 the Commission recommended to Government the installation of 200 MW of gas turbines in the Latrobe Valley. This location was strenuously opposed by the EPA but it was overruled by the Premier, and Governor-in-Council Assent was given to the recommendation. Those gas turbines went into service early in 1979 at a cost of around $30m ($49m in 1986 prices).

Following the determination of the Review Panel and the continuance of the bans, the SEC recommended to Government that the gas turbine station in the Latrobe Valley be increased to 400 MW. This was again opposed by the EPA, and it was resolved that the proposed siting should be reviewed by the Parliamentary Public Works Committee. In mid-1978 that Committee, after a public inquiry, endorsed the recommendation of the SEC, and Governor-in-Council Assent for the extension was obtained. The second block of gas turbines went into service in 1980 at a cost of around $35m ($52m in 1986 prices).

A special levy was introduced in electricity tariffs to pay for the capital cost of the gas turbines; but in respect of operating charges, the ongoing cost of gas for these turbines is very substantially greater than that pertaining at Newport. Cancellation charges were incurred for the unusable plant for the second Newport unit and the second turbo generator, already manufactured, was incorporated as the first unit at Loy Yang power station.

The total incurred and future costs of the Newport debacle could be as much as $600m (1986 prices). In addition the delayed and supplementary expenditure posed severe problems for the SEC in funding its capital works program. High operating expenses from the emergency measures inhibited the raising of capital from revenue, and the telescoping of capital requirements into the early stages of Loy Yang posed severe problems in raising and servicing the necessary funds in the light of higher interest rates. This was further exacerbated by the need to accelerate the Loy Yang project to meet the expected load of the Portland aluminium smelter.

The whole of the orderly planning of the Commission's works was thrown into disarray.


Reasons Behind the Bans

There were a multiplicity of reasons behind the bans and there were constraints which impeded a actions which could be taken to resolve them. Some of these are set out below.

(a) The Climate

1971 saw the end of the traditional system whereby the Government and its statutory bodies simply determined the nature of developments within the State, in accordance with the responsibilities defined in the respective Acts. Parliament was no longer seen as the sole determinant of these matters, and public review and pressure by militant groups were seen to be more appropriate, at least by these groups. The general public, by and large, was indifferent and not mobilised except in its selection of political party.

The conservation/environmental groups were becoming increasingly active with their simplistic, and dogmatic, views that conservation was the prohibition of the use of non-renewable resources and pollution was any change, however small, in the environment. The concept of wise use for the benefit of mankind and the conservation of the resource of money was an anathema to them.

The Communist Party of Australia, with its membership drawn from industrial workers, white collar and professional workers, academics, and radical students had been very active in the period from 1969 through to 1971 in promoting its goal of achieving a revolutionary transformation of society, to replace capitalism with a socialist system. It had much ammunition to work with--- the Vietnam War, the penal clauses of the arbitration system, the ecology (spearheaded by Jack Munday and his greenies), and the like. Worker control of industry was the avowed objective of the Party.

The Party has always seen revolution as the instrument of change, and it had little time for the gradual liberalisation of society which takes place over decades in more democratic ways. The First Conference of Left Action, held in 1969, was to be the springboard for radical change, although, in fact, its extreme views alarmed many of the more moderate unionists, and really sowed the seeds for the later decline of the Party.

At this time Jack Munday was a very powerful voice in the movement, and it is important to note his views, as quoted in the 'Australian Left Review' (December 1973):

    'I feel my main future is trying to take Communist Party policy, particularly in the ecology area, into other Unions and getting action amongst workers.

    I think that the phenomenon of having Unionists come together with people, with residents, in concerted action, formed a new alliance which was so powerful, and is potentially still more powerful, that governments haven't found the way to handle it'

In the light of these views one should take note of a very significant statement made by him, as published earlier in the same journal (August/September 1970):

    'With the removal of some of the teeth from the penal powers in May 1969, longer strikes are likely to become the order of the day. Real economic and political gains are achieved when industry is brought to a halt. Lightning strikes and guerrilla tactics at job level have their place, but when the crunch comes it is the ability of the Unions to 'stop everything' that can force a strike victory at higher levels'.

The Left had recognised the potential obtaining in this climate and in 1971 the Communist Party, in effect, resolved to utilise the environmental/conservation movement to bring about the downfall of capitalistic government. To this end it had infiltrated the teaching profession, academia, and the media, to initiate an era of militancy in these fields. There was an anti-establishment intolerance pervading the youth, nurtured by much of the teaching profession in their formative years.

The role of the media had changed: it no longer appeared to be concerned with the responsible reporting of facts and making unbiased comment on them. It had become dedicated to the promotion of conflict, some of its younger members were tainted with the attitudes of the militant environmentalists, reporting was often strongly biased and selective editing of interviews was used to distort the weight of argument. Investigative journalism was becoming the new vogue, and trial by media the appropriate method of influencing public attitudes.

Loyalties within organisations was becoming a thing of the past and it was becoming quite acceptable for staff to publicly express opinions inimical to the management of the organisations for whom they worked. Leakage of confidential documents was quite appropriate, under the catch cry of 'the right to know'.

The SEC, and Government, had failed to perceive the strength of these trends and a fundamental error was made in not holding a public inquiry into Newport before bringing in the legislation. However, it is improbable that such an inquiry would have done other than recommend the Newport Power Station and conflict would still have occurred. The authority of the elected Parliament was under challenge.

(b) The Unions

There seemed to be a number of factors behind union opposition and basic reasons For the bans. Firstly, and most importantly, there was the objective of the left-wing unions to bring about the downfall of capitalistic government. If Newport could not be built, then the Government would have to repeal the Act. This Act was legislatively binding on the SEC, which could not, of its own volition, halt or amend the project. A repeal of the Act could well have led to the fall of the Liberal Government.

Some of the unions regarded Newport as a threat to their power base in the Latrobe Valley, as they saw this station, in conjunction with Snowy, and support from New South Wales, as a means whereby supply could be maintained during power strikes in the Valley. This was nonsense, as Newport could not be operated without white collar staff who were members of unions which would presumably support their blue collar brethren, and who were equally militant in their attitudes.

The construction unions in the Latrobe Valley saw Newport as a threat to their continuity of employment. Although construction work is, of necessity, mobile and of a 'follow the job' nature and is recognised as such in the higher pay of the awards, the Valley construction unions were seeking continuous employment in power station construction, albeit with higher rates of pay than those enjoyed by SEC workers who often did similar types of work.

There may well have been an element of the struggle for worker control in industry, as, at the time, there was strong evidence of this in the NSW electricity industry and it was being pursued vigorously overseas in Germany and the United Kingdom.

(c) Resource Usage

Although the left-wing unions strongly agreed that the use of natural gas at Newport was wasteful of a limited premium resource it is known that their real objection was their paranoid hate of multi-national companies--- the gas suppliers, in their eyes, being one of them. They claimed that huge profits would be made from the supply of gas and it was not possible to refute this because of the confidentiality of the price agreement between the parties. The Labour Party was very active in its attempts to get the Government to disclose the price to be paid for the gas and, at that time, took a similar attitude on the use of the resource.

The conservationists were also opposed to the use of gas, in line with their avowed policy of sole use of renewable resources. Wise use meant nothing to them, and they could not or would not understand the economic merit of its use in the role for which Newport was designed.

(d) Conservation and Environmentalists

The conservation movement mounted a very strong campaign against Newport, it being stated by them that they had lost the battle for Lake Pedder, in Tasmania, and Newport was going to be their big win. They based their attack on the emotive issues of threats to the health of people and the destruction of the marine environment of Port Phillip Bay.

The environmental arena is a most difficult one, peopled with pseudo-scientific experts and researchers whose claims, made on unsubstantiated bases, became regarded as immutable facts. Those more closely involved in the application of environmental control are seen, by the environmentalists, to have little knowledge whereas the academics, by virtue of their titles and profession, are regarded by many, including the media, as acclaimed experts in all matters, irrespective of in what field.

The real problem is that resources cannot be used for the benefit of mankind without some change taking place either in the environment or in the quantum of the resources. Wise use is the goal and in the matter of health the World Health Organisation has very clearly set down guidelines which, in effect, state that the standards which should be prescribed, above those to prevent mortality, should have regard to the cost which the community can afford. This view is rarely accepted by the environmentalists.

(e) Environment Protection Authority

There is no doubt that the attitude of the EPA at that time was a major contributing factor in the conflict over Newport, and that it provided the screen behind which the unions operated.

The potential conflict was set in the drafting of the new Environment Protection Act which deemed that pollution was any change to the natural environment and which deleted the consideration of the factor of economics included in the prescriptions of the superseded Clean Air Regulations. This and the absence of any standards in the Act set the scene for an adversary climate between the Authority and the SEC.

At that time the EPA, and the Ministry for Conservation to which it belonged, appeared to consider that they should be the final arbiters in the ways by which the SEC should develop its system, rather than that they should ensure that proposed SEC works conformed to environmental standards set in accord with Government policies. Furthermore, their contention that their Act precluded them from considering the factor of economics produced an untenable situation in attempts by the SEC to bring about mutual co-operation.

It is noted that the Government had authorised the Newport Power Station by the instrument of legislation and, thereafter, the responsibility of the EPA should have been solely to determine the basis on which it would license its operation.


Alternative Courses of Action

Before resorting to the use of rebel ('scab') labour to build the station, alternative courses of action had been considered and rejected.

An approach could have been made to the Arbitration Commission to seek the lifting of the bans. Such an approach was deemed inappropriate until the matter of licences had been resolved by the Appeals Board and the Newport Review Panel. However, in the opinion of SEC Counsel, the Arbitration Commission would seek to avoid intervening in the matter, because of the political aspects, and would evade the issue on the grounds that the Commission may not rule on a matter which is one properly to be dealt with by civil Court action, contending that there had been a conspiracy to impose bans by multiple unions.

Consideration was given to civil Court action on the grounds that the unions were acting outside their Articles of Association in imposing bans for environmental reasons and that there had been a conspiracy to impose such bans. In the opinion of Counsel, the Courts would make every effort to avoid ruling in the matter---because of the political overtones. Certainly they would not move until all the processes of the Environmental Appeals Board---and presumably those of the Review Panel---had been finalised, since this would establish whether or not, in fact, Newport would be harmful to the environment, and thus whether or not the bans were justified. In the event that Court action did proceed, and the unions were found to be in default by imposing the bans, Counsel believed that damages could be negligible and the unions could lift their collective bans and reimpose rolling bans by single unions, which is not a civil Court offence but which could be equally effective in stopping construction of the station.

Furthermore, recourse to civil Court action could well inflame the unions to the extent that electricity production would stop in the Latrobe Valley, with very serious consequences for the State, although it could ultimately lead to a resolution of the matter at some political and financial cost. Conclusion

The conflict over Newport was a long drawn out, expensive situation which had serious repercussions for the SEC and the State, the extent of which is probably not fully appreciated by the general public. It highlights the damage which can be imposed by militant pressure groups and unions, acting in concert, and yet is an indication of the high productivity and harmonious working which can be obtained from Australian workers freed from manipulation by union organisers. These matters represent a challenge for the future as to how community involvement and industrial relations can be established on an equitable and more rational basis for the benefit of the community as a whole and Australian industry in particular.

In the environmental and conservation arena it must be recognised that the individual has an innate right to be heard on these issues, and to have his views taken into account. Nevertheless, it must also be recognised that an appropriate balance has to be set between the vitally important factor of the 'human environment: with its connotations of the economic and social well-being of the people, and the change to the 'physical environment' brought about by the use of resources. It is the responsibility of the elected government to make the determination in these matters, in consultation with the properly qualified authorities appointed by it, and, thereafter, in a democratic society, this is deemed to be the wishes of the majority of the people.

On the trade union side it must also be recognised that although they have an important and valuable role to play in ensuring the well-being of their members, they are not elected by the people to act in the role of government. To exercise their undoubted power to overthrow the determinations of the elected Parliament, and its duly constituted agencies, for reasons outside their activities of association, is clearly a misuse of this power, and to do so to achieve political ends can be deemed to be tantamount to anarchy. In the case of Newport it must be said that by no means all of the respective unions were in favour of the bans; in fact, Ken Stone, then Secretary of the Trades Hall Council, worked tirelessly to oppose such bans and to have them lifted. However, it is claimed that the trade union movement is a democratic one and acceptance of a majority vote was binding on all members. Democracy in the union movement apparently took precedence over democracy of the people as vested in the elected government.

Democracy per se must allow free debate by the people on matters of concern to them, but in a democratic society the majority views of the people are expressed in the workings of a freely-elected Parliament. To overthrow the determinations of a democratic government in ways other than through the Parliamentary process is to defy the law and will bring democracy to an end. Newport appears to have been a classic example of a revolutionary attempt to bring about the downfall of the incumbent government.

That Newport was able to be built at all resulted from a revolt within the union membership and those who worked on the station are to be commended for their courage in withstanding the pressures brought to bear on them by union organisers and student activists. I have a great respect for them and their achievements. Many were of migrant origins and no doubt had a greater awareness of a totalitarian regime.

In a matter as complex as the Newport one, it is very difficult to put before the people all the facts, the issues, and the underlying reasons for the conflict, particularly at the time when it occurs. Even when it is brought out at public inquiries, by and large the information is disseminated to the very few who attend such inquiries. Until such time that the media exercises a more responsible role in reporting on such issues, there is little prospect that the general public will be properly informed. Furthermore, in the case of major State works such as the Newport Power Station, all Parliamentary parties should consider the project on its essential merits, and once approved should consider matters of conflict in a similar vein and not solely as an avenue to exercise political advantage. Unless this is done, the Parliamentary process will inevitably be seen to lack credibility.

Why HR Nicholls?

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