AUSTRALIA’s mining boom is sucking PNG’s best from under the noses of its extractive industries and exposing fault lines which are increasingly hard to ignore. By Mike Butler.

Dr Ben Imbun.

IPI CEO Scott O'Reilly.

A chemist at the lab of the Lihir gold mine in PNG.

Underground at Porgera. Photo by Rocky Roe and courtesy of PNG Chamber of Mines and Petroleum.

Published in the August-September 2012 PNG Report magazine

They’re making multiple times more over there and they’re not coming back – national workers who have left the local industry for the international labour market.

According to the PNG Chamber of Mines and Petroleum, up to 3000 of them are currently working overseas, mainly in Australia. It’s emerging that, for the first time, the industry has got a brain drain on its hands. 

“I was at that conference in Port Moresby when the Chamber of Mines announced it and the size of the figure – they estimate between 1000 and 3000 – came as a real surprise,” University of Western Sydney’s School of Management senior lecturer Dr Ben Imbun has exclusively told PNG Report. 

As one of the world’s leading specialists in employment relations and human resources management within PNG’s extractive sectors, much of his year has been spent researching the new migration trend that industry will find increasingly hard to ignore. 

“In a nutshell, we’re finding that a lot of the PNG guys – geologists, engineers, environmentalists, IT specialists, accountants, operators, etcetera – have fled, been hijacked or recruited, mainly to Australia and now they’re telling colleagues and wantoks, as well as the mining community, across the blogs and social media,” Imbun says. “It’s important to recognise and understand it because this will have significant knock-on effects across the economy. Things like the ongoing skills shortage, wage inflation and the introduction of more foreign workers into PNG will all come into play.” 

The average expat

Imbun’s research presents a revealing portrait of who, how and why the country’s best trained and most experienced are leaving. As a result, it’s putting pressure on the structure of PNG’s mining and petroleum scenes, starting with its two-tiered pay system for expat and national workers. 

According to the results of the 2012 Hays salary guide for the oil and gas industry, expats working in PNG are the highest paid in the world (an average of $US189,000). PNG nationals in this field, however, rated the lowest out of the 53 countries surveyed, with an average of $29,600 in comparison. And with Australian operations begging for workers and the average salary in Australia at $164,000, its no wonder the industry is buzzing with the message – move out into the world and move up.

“It’s a challenge for the companies and will certainly put pressure on pay rates and people’s expectations on the sector,” Imbun says, adding that it is already happening. 

“Recently up at Ok Tedi, one guy, a specialist, was expecting an expat wage. Issues like this are starting to characterise HR.” 

“But it’s a positive sign that our people are skilled and on par with the best in the world,” Imbun says, while pointing out the significance that, overwhelmingly, the PNG expats have done it on their own initiative. 

“It’s not the companies sending them, it’s themselves sending their CVs out,” Imbun says. 

While none of the big miners have publically acknowledged the problem, Imbun says reports of restricting internet access to nationals – “so they can’t lodge their applications online” – are being found in many companies across the sector. 

But Newcrest, which operates Lihir and has a 50% stake in Hidden Valley gold mine, responded to the PNG Report’s enquiries, saying “all Newcrest employees in Papua New Guinea have the same internet access arrangements”.

“Newcrest offers the same opportunities for all of our employees to apply for opportunities both within their existing location and internationally,” it said. 

“Vacant roles for all of Newcrest’s operations are advertised internally each week at all of our operations and corporate offices and employees from our sites can and do apply.” 

While the bigger foreign-based companies officially allude to a level playing field, the reality of the research indicates that employers aren’t giving their PNG nationals the same opportunities. And who could blame them? With PNG nationals working in country being paid a fraction of what they could receive overseas, it doesn’t make financial sense to let them go and work for much higher wages at their mines overseas. 

Take “Jason”, a PNG national now living in Kalgoorlie, who is typical of the average PNG expat. After a number of years working for one of PNG’s major gold miners and submitting several in-company job applications overseas, he nabbed himself an overseas engineering job a couple of years ago, ironically enough with another major miner operating in PNG. 

Now he’s applying for Australian residency and his children, like the growing number of around 15 PNG families living in the gold mining town, are going to school here. The PNG workers have even formed their own local football team.

The motivation? “The money. I didn’t want to leave my company but I’m now earning the same sort of wage that expats make in PNG,” he says. That, combined with the lifestyle, security and opportunities it will give his children, makes Jason wonder why he didn’t do it sooner.

Curtain Bros bucking the trend

One company actually sending PNG nationals overseas to expat-paid jobs is Curtain Brothers. More than a quarter of the 110-man workforce for its Mount Moss iron ore mine outside Townsville are PNG nationals. All are earning $200,000-plus Australian salaries and most significantly all were recruited from within the firm. 

“Primarily because you can’t get the staff down here,” Mt Moss mine plant manager Alan Mathews says. 

“But my PNG staff are excellent and very, very good at their jobs. In many ways they are better than the white fellas.

“We’ve got PNG fitters, boilermakers, chefs, a geologist, surveyors, industrial chemists and safety officers here. They’re all people who have worked for years with the company and we brought them down primarily because you can’t get the workers here. We had 50 at one point before the 457 visa’s literacy requirements were tightened.” 

Importantly, companies like Curtain Bros are challenging the implications that PNG nationals are second-rate workers. 

“There are limitations – supervisory roles over white fellas can be difficult and especially over their wantoks but they’ll do anything for me. These fellows work hard, don’t slack and do the extra hours when needed,” Matthews says, asserting that if and when the wind goes out of the current mining boom, he can’t see his PNG workers going back home. 

“You’ll get rid of the drongos and drug addicts but good workers will always be in demand so the PNG workers over here wont be affected.”

Plugging the gaps

Imbun’s research was conducted with AusAID funding and in conjunction with ANU University. It focuses on the impact of the extractive industries sector job stream on the national labour market and also on the country’s social fabric. 

He estimates the country’s education system can fill only 70% of EIS staff needs as it is and with workforce needs expected to double by 2020, the loss of PNG’s best workers will put an additional strain on training workers to fill those gaps.

How the education system is coping is summed up by IPI chief executive officer Scott O’Reilly.

The transport, catering and logistics company employs around 1200 nationals and O’Reilly says he can spend hours comparing the abundance of stewards for the kitchens versus the constraints in finding great highway drivers. Or the overabundance of well-educated, qualified and competent legal people in the recruitment pool from which to employ, such as company secretaries, versus the difficulty in securing accounting professionals.

While IPI is reacting by providing guest university lecturers and providing its own professional training facilities, it is one of a growing number of companies that are looking to Malaysia, India and the Philippines to fill staff shortages. 

In 2012, when IPI won a contract to provide millions of litres of fuel to the LNG project, O’Reilly looked to Malaysia to fill the gap of 20 drivers needed. 

As a job restricted to nationals, O’Reilly’s solution was to bring in experienced drivers, intending for them to physically drive the trucks as a part of the process of training apprentice PNG drivers on the road. 

“We sought approval from the government departments but the line between drivers and trainers became blurred,” he says.

O’Reilly ended up ditching the plan, instead bringing in two driver trainers from New Zealand but plenty of other companies are following through with recruiting migrant workers to fill PNG jobs. 

“With the LNG [project] we are now getting Malaysians, Indians and Filipinos for things like welding and construction,” Imbun says, adding that they represent a lost opportunity to PNG.

“These workers live in dongas with no socialisation and no linkage to PNG. They’re a fly-in, fly-out mob. 
“It’s a failure in the education system. Our politics has failed us.”

He acknowledges that workers leaving for overseas jobs can only contribute to the sector’s problems.

“Yes, it is a problem but for PNG it represents a positive thing. It’s showing our people are trained, experienced and wanted by overseas employers,” he says with a smile.

Imbun’s research will be included as part of the 2013 World Bank Global Development report on jobs in the extractive sectors.

The workers who have won

THE following picture of the PNG national expat is emerging from Imbun’s research.

Most have university qualifications and their sentiments reflect typical middle-class aspirations and dreams of holding down professional jobs for their lifetime. They reflect an element of dynamism and progressiveness as they realise being expatriates working in a demanding industry puts pressure on them to excel and prosper in their jobs. These themes characterise the rest of Imbun’s observations. 

There is an overwhelming sense of professionalism and commitment that expat PNG extractive industry workers have for their jobs in various workplaces. They are acutely conscious of the skills and experience that have been instrumental in landing them jobs away from PNG. 
To a lot of them, moving away from PNG was in itself a huge achievement both professionally and personally. 

They wished to maximise opportunities presented by their current jobs and in the process consolidate their skills and knowledge of the industry. Some occupied senior positions and took pride in supervising and mentoring subordinates, which brought a lot of satisfaction to them. There were no ambivalent thoughts of trying other livelihood alternatives, such as setting up businesses or returning to subsisting lives in PNG, as they were committed to their jobs. 

Most workers wanted job stability but they also desired mobility. The newly acquired “expatriate” status and ability to earn much more money, while also being acknowledged as possessing much-needed industry skills, knowledge and experience, had given them the confidence to excel and pursue ambitions of landing even bigger jobs in their professions. As a matter of fact, a significant number of Imbun’s mining engineer interviewees wanted nothing short of achieving the ultimate mine manager jobs. 

On average, most of the workers interviewed had swapped jobs in the last three years.

Another trend is how they viewed employment overseas as a means to ensure their children were better educated. 

Many interviewees mentioned the educational needs of children, together with better employment conditions (associated with living standards), as primary reasons for seeking jobs overseas. 

Most of the interviewees – being engineers, geologists and surveyors – viewed educating their children at the forefront of their responsibilities beside their jobs. 

Marvelling at the relatively safe and well-established educational environment of Australia, many of them could not agree more that they had made the right decision to migrate and seek jobs away from PNG for their childrens’ sake. 

Above all, the proceeds of their jobs in the form of higher wages and a highter standard of living had given the expatriate PNG extractive industry workers more personal and professional satisfaction, which was not on par while handling similar jobs in their own country. 

Almost all made a habit of sending a portion of their money in cash and kind to relatives back in PNG, whether for gifts, school fees, compensation contributions, bride price or other miscellaneous needs. 

Their high earnings overseas also enhanced their social status back in PNG and those canvassed spoke with pride in their jobs and of the challenges they were facing.