Deloitte: Miners “drowning in their own rules”

The share of compliance workers in the mining sector is growing faster than in any other industry, with one in every ten workers in the mining sector now in a compliance role, according to analyst Deloitte.

Mining companies are drowning in red tape, according to the Deloitte report. Photo: Shutterstock

The share of compliance workers as part of the mining employment sector has grown roughly 17% since 2006, outstripping sectors including construction, education, transport, finance and professional services, according to Deloitte.

It means roughly 10% of all mining industry employees are now compliance workers – still less than the almost 20% of professional services and finance workers working in compliance, but more than the share of employees in construction, education, transport and manufacturing, among other industries.

Deloitte says an over-abundance of rules is weighing down the sector.

“Particularly with the mining industry moving from construction to operational phases, there have been huge increases in the relative size of the compliance workforce in Australia’s mining sector,” Deloitte national leader for energy and resources Michael Rath said.

While the amount of jobs in the mining sector has climbed as a whole in recent years, jobs in compliance have outpaced jobs in other fields.

“This has, of course, generated benefits, particularly on the safety front,” Rath said.

“But as much as miners have good reason to complain about the impact on them of government regulations, the good profits evident over much of the last decade lulled many in the mining sector into a false sense of security, and we imposed on ourselves many new rules across HR, IT, finance, marketing, legal and governance processes.”

One example of a “dumb” rule Deloitte mentions in its latest report are “ineffective and unproductive” FIFO rosters, which feature no work on fly-in days, regardless of distance travelled or mode of transport.

Mines where OH&S managers fill in different reports for each contractor and subcontractor, rather than filling out a single standardised report, were also highlighted by Deloitte.

“These have come at an enormous cost, and it isn’t clear that they were worth it,” Rath said of the various rules and regulations.

Deloitte says it’s taken a dose of its own medicine on the compliance front.

“Every few years over the past decade we have asked our people ‘What are the dumb things we do? What is stopping you doing your job?’ and each time we identify a disappointing level of unnecessary rules,” Rath continued.

“Where rules don’t exist, we create them,” Deloitte’s report co-author Chris Richardson said. “Where they already do, we make more.

“They overlap, they contradict, they eat our time and they weigh us down,” he said.

“We’ve created a ‘compliance sector’ that employs three times more people than mining.  Taking a long, hard look at the rules that individual organisations operate within will reduce the cost and complexity of doing business in Australia.”