Industrial conflict in paradise: Making the Bougainville copper project construction agreement 1970

Abstract

In 1969, construction began on Conzinc Riotinto Australia’s huge copper and gold mine at Panguna on the island of Bougainville in what was then the Australian-administered Territory of Papua New Guinea. The mining project was unlike any Australians had previously undertaken, and its construction created complexities which Australian managers and industrial relations systems had not previously encountered. The complexity of employment relations on this project was increased by the political environment of colonial rule and the responses of Australian workers and unions. This article looks at the development of the first industrial agreement during the mine’s construction phase and places it in the context of the creation of a sustainable bargaining structure, which succeeded in mitigating industrial conflict for two decades before the outbreak of a wider armed conflict.

Introduction

International commentary has identified a complex series of risks facing the construction of a new mine in a remote Third-World location (Bosson and Varnon, 1977). The technological flexibility required for operating in difficult and unfamiliar physical environments and the problems of raising international finance for enterprises in politically sensitive situations have been extensively canvassed in academic literature (Cobbe, 1979; Kumar and Walrond, 1985; Radetzki and Zorn, 1979). It has, however, been land-owner issues which have attracted most attention for having created conflict at mining sites. This has been particularly true of mining in Papua New Guinea (PNG) and in Bougainville (Banks, 1993; Regan, 1998). By contrast, the commentary on mining in PNG has, with an occasional exception (Imbun, 1999), overlooked industrial relations as a potential source of conflict. This is a strange neglect because, internationally, mining has been notoriously prone to industrial conflict, with a long history of scholarly commentary attempting to explain this prevalence (Church et al., 1990; Conell and Cohn, 1995).

This article focuses attention on how initial conflict between the parties involved in the establishment of the copper mine in Bougainville resulted in an industrial agreement and the creation of a bargaining structure. A detailed account of industrial conflict during the initial construction phase of the Panguna mine, 1969–1970, is drawn from original documents in the archives of the Australian Department of External Territories (DET), the Australian Council of Trade Unions (ACTU) and the Queensland Trades and Labor Council (QTLC). The research situates the resolution of industrial disputes on Bougainville in a historical context in which PNG’s late colonial administration and its emerging indigenous industrial workforce collided with multi-national corporate project management and the highly organised Australian trade union movement. By examining detailed documentary evidence of the conduct of industrial relations at the mine site in its broader historical context, the research gives a clear indication of the factors which enabled the development of a bargaining structure and consequent conflict resolution in Bougainville. Once in place, this structure was sustained for 20 years until the outbreak of civil war, which ran for over a decade and, at the time of writing, is subject to a peace process, which may or may not enable the re-opening of the mine. In this context, a consideration of how divergent interests were accommodated and industrial conflict was managed during the early life of the mine is timely.

Institutional and locational contexts

Employment on the construction of the Panguna mine and its associated facilities took place within a tension between its physical (and legal) location within Territory of Papua New Guinea (TPNG) and the fact that the majority of the construction workforce was Australian. At this time, the TPNG was administered by Australia under a United Nations mandate. Historically, it had been a low priority for successive Australian Governments, exciting most interest in time of war or because of mining discoveries. Nonetheless, by the late 1960s, areas of market oriented economic activity, especially around coconut plantations, and the growth of administrative centres were creating the beginnings of an indigenous workforce.

The recently established TPNG Department of Labour had, however, no experience of running an industrial relations system and little capacity for overseeing such a large international project. By contrast, the Australian workers who were employed in the mine’s construction were very familiar with an industrial relations system which was simultaneously highly regulated and adversarial. Consequently, there was no established process on Bougainville through which the interests of a large multi-national mining company, with all its contractors and sub-contractors, and these expatriate workers could be brought into agreement. This lack of an accommodation structure was not seen as an obstacle in discussions about the establishment of the mine between CRA, the Australian Government and the TPNG Administration. Neither Australian unions nor the third-party agencies of the Australian industrial relations system were involved in discussions about the feasibility of developing the Panguna mine. Once Australian workers were in Bougainville, however, they made it clear that such an agreement would be necessary. The difficulties in creating one almost brought the mine’s life to an end before any mining had actually begun. The example was not lost on the increasing numbers of Papua New Guineans employed in construction and eventually production who, by the time an agreement with expatriate workers was reached, had formed their own union and begun to learn how to use the levers of power available to them as an organised workforce. These events had a dual background in Australian employment regulation practices and in the politics of very late colonialism in TPNG.

In the late 1960s, Australian workplaces were heavily regulated within State and Commonwealth systems of conciliation and arbitration. Unions had a legally sanctioned role within these systems, exercising considerable power and influence (Dabscheck and Niland, 1981: 131–132). The construction industry in particular was heavily unionised with around 60% of all employees being union members and worksites, especially commercial rather than residential building, being highly regulated. The system of compulsory conciliation and arbitration had created an intricate web of industrial awards, mostly established after negotiation between employers and unions and then rubber stamped by State or Commonwealth Conciliation and Arbitration Commissions. Strikes were not an uncommon part of the process. They were generally short in duration and used as a tactic in negotiation or to create the conditions for intervention by one of the arbitral commissions (Dabscheck and Niland, 1981: 67ff). The debate about the nature of the relationship between unions and the regulatory agencies under this system covers a spectrum from those who saw the unions as dependent on the industrial relations machinery (Howard, 1977: 256) to those who stressed the agency of workers and their organisations within and outside this bureaucracy (Curthoys, 1994: 12–13; Scalmer, 1996: 156–157).

Construction work on Bougainville, however, took place in an environment in which there was neither administration of industrial relations nor organisation of workers. It was outside the Australian systems of award making and unfamiliar alike to Australian unions and third-party agencies. The TPNG had recently enacted ordinances for regulating industrial relations. These were directed at, belatedly, recognising and regulating a growing free local labour market in which a paternalistic colonial approach was giving way to the more flexible arrangements (Isaac, 1970). The new ordinances recognised only those unions registered in TPNG and excluded most expatriate employees (Hess, 1992: 70).

Overlaying these administrative arrangements was a complex political situation. In 1969, despite the fact that self-government and independence were to be achieved quite soon (in 1972 and 1975, respectively), the policies of the Australian Commonwealth Government and the TPNG Administration assumed that colonial rule had many years to run (Griffin et al., 1979: 138ff). Within TPNG, however, nationalist and indeed micro-nationalist sentiment was strong in some areas, including Bougainville, and the Australian labour movement was generally supportive of the aspirations of Papua New Guineans for an independent future. Furthermore, unions registered under the TPNG ordinances were led by young educated nationalists who saw industrial negotiation as part of a broader struggle against colonialism (Amarshi et al., 1979: 135–140; Hess, 1992: 60–77).

Intentions to mine in the rugged and inaccessible Crown Prince Range in the centre of southern Bougainville had been a matter of public debate in Australia since prospecting began in the early 1960s. This debate had focused on the relative rights of mining companies and those of the local people (May and Spriggs, 1990, Spriggs and Denoon, 1992). In Bougainville, local people had been active in opposing prospecting and anti-mining sentiment had begun to merge with longer held views about secession. In 1967, an agreement to mine had been reached between CRA and the colonial administration. There had been little consultation and it seemed that, given the determination of government and the company, further opposition would not prevent the mine from going ahead. One scholar, with a deep engagement in both the area and the issues, commented that the local people were ‘resigned, more or less disconsolately, to what they regard as another example of the white man’s cupidity, deceit and irresistible power’ (Oliver, 1973: 162).

By mid-1969, while the debate in Australia about whether mining should go ahead or not had been clearly resolved to the government’s satisfaction, some public attention was beginning to focus on the difficulties of how the mining could be conducted in such a difficult environment. Several lengthy newspaper commentaries at this time, very likely based on material supplied by CRA sources and reprinted as pamphlets by the company, provide insights into how CRA wanted the Australian public and policymakers to see its endeavours. In general, the light cast was of an epic of engineering and finance in which the company was bringing development to a poor nation despite the huge obstacles to be overcome. There were, however, warnings that it might go wrong.

A contribution by Peter Robinson in the Australian Financial Review (15 July 1969), reprinted by CRA under the title Birth of a Mining Giant, argued that ‘the Bougainville copper project is the most formidable industrial management task ever undertaken by Australians’. The large mining projects then being developed in Western Australia, Hammersley and Mt Newman, while involving similar levels of investment, were not considered comparable in management terms with the situation on Bougainville because of the latter’s ‘unstable amalgam of interacting social and cultural problems, the enormous difficulties of terrain and climate and the volatile and hair-raisingly sensitive political elements involved’ (Robinson, 1969: 3). Other reflective pieces, reprinted by CRA as The Bougainville Mining Project: three articles (Durack and Carlyon, 1969), were also urging caution. Elizabeth Durack pointed to the need for greater understanding of historical context (West Australian, 26 August 1969), while Lesley Clayton identified ‘a clash of cultures in Bougainville’ as the key to understanding that CRA’s activities were creating a ‘social experiment’ (The Australian, 28 and 29 August 1968). Robinson made the portentous comment that ‘Bougainville looms as a watershed which is as important in its own context as Gallipoli was to an emerging Australian sense of nationhood 54 years ago’ (Robinson, 1969: 3).

Concerns about how to manage such huge change and resistance to it were also reflected in private discussions of officials. After the PNG police riot squad used tear gas and batons on land owners at Rorovana, in early August 1969, to forcibly resume their land for construction of the town and port of Kieta, no less a figure than Sir John Gunther, former TPNG Assistant Administrator and Vice-Chancellor of the University of PNG, advised the Board of Bougainville Copper Pty Ltd (BCPL) that the lack of consultation would present problems. He observed that, ‘physical resistance and political organisation had earned villagers the right to negotiation instead of paternalism’ (Gunther, 1969). Prophetically, he went on to note that using force, instead of reaching agreement in this situation, ‘was a turning point in Papua New Guinea politics’.

In this atmosphere, it might be expected that government and industry would draw the conclusion that managing industrial relations would be a significant part of avoiding confrontation. This was not the case. In fact, the Commonwealth Government and the company drew the conclusion that they should seek to avoid industrial negotiation altogether by importing a quiescent workforce.

In June 1969, the DET informed the TPNG Administrator that, in order to meet ‘CRA immigration proposals’, up to 1600 Asian labourers at any one time would be admitted to the Territory during the construction period of the Bougainville mining project from 1969 to 1972 (DET, 1969a). The Australian political context in which this took place was one of the continuing Liberal–Country Party Coalition federal governments since 1949. In pursuit of CRA’s proposal, Charles Barnes, Australian Minister for Territories, with the support of his Department and TPNG Administrator, David Hay, made a series of Cabinet Submissions on the Bougainville Copper Project seeking approval to vary immigration policy to allow for conditional, short-term admission of Asian workers during the construction phase of the project.

Barnes’ submission was circulated on 8 July and deferred by Cabinet on 19 August (decision no. 1209) pending solutions to land use issues in, what was to become, the company town of Arawa. The following month, Barnes received a note from his Departmental Secretary advising of likely opposition from other Departments. Indeed, Sir John Bunting, Secretary, Department of the Cabinet Office, subsequently succeeded in urging that the matter be held over until after the Federal election to be held on 25 October (DET, 1969b). Although the White Australia Policy, which had severely restricted Asian immigration since federation, was losing strength (Collins, 1988: 22–25), it seems likely that potential public opposition to such a large influx of non-white workers was a factor in the minds of policymakers.

From the company’s point of view, there was no question of what was desirable. On 24 September the construction managers, Bechtel–WKE, advised Bougainville Copper that employment of Australian rather than Asian workers on the port/mine road had cost an extra AUD600,000. On 29 September, D.C. Vernon, BCPL Assistant General Manager, informed DET Assistant Secretary, Donald Mentz, that a favourable decision by the government any time up to the end of October would save an additional AUD500,000–AUD600,000 on two contracts due to commence in November (DET, 1969c). On 17 October, Paul Quodling (then employed by CRA and later to become BCPL’s Managing Director) informed the Department that ‘there would still be great advantage in getting approval for Asian workers after the elections’ (DET, 1969d).

Barnes strongly urged Sir John Bunting to ensure that the matter be resolved immediately after the election. DET staff revised the Cabinet Submission on Asian labour for CRA’s Bougainville Project, arguing that

…workers indentured from Asian countries would be more amenable to control and discipline and would be less likely to cause social and political problems in Bougainville than large numbers of Australian construction workers. (DET, 1969e)

Barnes’ proposal was resubmitted, considered and approved by Cabinet on 26 November.

That the argument was approved and the sensitivity of it understood in Cabinet and at the top of the company is indicated by Barnes’ letter to CRA Chairman, Sir Maurice Mawby, confirming the government’s decision and advising him that ‘it is not proposed to make any public statement on this matter’ (DET, 1969f). Sir Maurice replied in the same terms, thanking Barnes for his advice and stating that, ‘we realise that there should be a minimum of publicity’ (DET, 1969g). For an Australian Government to approve the use of Asian indentured labour in TPNG this late in the history of colonial rule would have been politically difficult even if that government had not just been returned to power with a greatly reduced majority. In addition to the unstated political difficulties, however, public service advice to Cabinet was that its implementation would be difficult and run counter to a number of Australia’s international treaty obligations as well as its own immigration regulations. While some Asian labour was used on the project, subsequently, this appears to have been within the restricted terms of existing policy rather than as a result of a new policy allowing large-scale employment of Asian workers.

If the policy framework for employment on the construction site indicates confusion, Australian unions’ engagement in TPNG had done little to prepare themselves to represent the interests of workers on Bougainville. From the early 1960s, the ACTU had expressed only an occasional interest in TPNG industrial regulation and the workers employed under it. For instance, a Tripartite Mission on Labour Matters in 1960, which included ACTU President Albert Monk and Vice-president Bill Evans, concluded that ‘nothing should be done for the present to force the growth of trade unionism’ (DLNS, 1960: 5). Subsequently, in the mid-1960s, the ACTU did assist PNG unionists to establish a Federation of Workers’ Associations. Although the resulting organisation was weak and ineffective, it had the important impacts of encouraging the infant unions and of alerting Australian union officials to the aspirations of some of the PNG union leaders (Hess, 1988a). Some left-wing Australian unions provided direct assistance to their newly formed PNG counterparts (Hess, 1988b). By 1968, when Monk was part of another labour study mission to TPNG (Cook, 1969), his public position was that his organisation should ‘help establish the trade union movement’ in TPNG (Age, 17 April 1968).

The Bougainville Copper construction project, however, was to involve a largely Australian workforce. These workers would be used to working under terms and conditions of employment guaranteed by a long-established system of industrial regulation and, given the highly unionised character of construction and mining industries in Australia, were likely to be union members. Despite the fact of Australian colonial rule, the TPNG was not an Australian jurisdiction, and Australian unions were not registered under the recently enacted TPNG system of industrial regulation. They had no legal right to organise and any officials, who were not in the Territory as employees, would face the hurdle of needing to gain entry permits from a colonial administration not likely to look favourably on potential ‘trouble makers’. This was amply demonstrated when it took Waterside Workers’ Federation (WWF) General Secretary, Charlie Fitzgibbon, 6 months to get permission to visit Port Moresby in 1969 to assist in preparing a log of claim for local stevedores (Maritime Worker, 4 August 1969).

Tensions in employing an Australian construction workforce

In this situation of political and legal uncertainty, major contractors had begun advertising in mid-1969, in quite vague terms, for Australians to work on the construction of the mine and its associated facilities. The industrial relations background of these workers was the dispute-prone Australian mining sector. Particularly interesting in terms of context were the major strikes at Mt Isa in 1961 and 1964–1965 characterised by political intervention and forceful police action (Baker, 2001: 210). It was expected that many of the Panguna construction workforce would come from Queensland and, in May, the Brisbane office of the Department of External Territories issued a public statement which ought to have given Queensland construction workers pause for thought. It pointed out that ‘there is no legislation in Papua and New Guinea setting out minimum conditions of employment for expatriates and Australian awards have no general application’ (DET, 1969h). It further advised Australian citizens that they ought to get a written statement of the terms and conditions of employment from employers before leaving Australia.

In the absence of an appropriate regulatory framework, the construction contractors were developing their own employment documentation. How far this was done in consultation with government is unclear, but the documents themselves seem to have little reference to standards prevailing in Australia. A major contractor was Morrison–Knudsen International (MKI), which operated from an office at 60 Market Street, Melbourne. MKI’s first effort at regularising employment on Bougainville was a brief pro forma letter, including a standard statement of terms and conditions, with only the employee’s actual job, wage, name and signature to be added. The conditions included, as standard, a 60-hour working week, 10 hours a day, 6 days a week. They also included a construction allowance and an attendance allowance, which embedded incentives for employees to complete the long hours of work (MKI, n.d.a). This was quickly superseded by a longer and more legalistic document spelling out the wages of specific job classifications. In the latter, the 60-hour week was maintained with overtime to be paid after 10 hours’ work on any one day. Under this arrangement, the relevant wages for the 60-hour week were as follows: Fitter, AUD121.28; Operator, AUD136.84; Driver, AUD133.75 and Greaser, AUD114.99 (MKI, n.d.b).

Meanwhile, in the public arena, discussion continued to focus on local people’s opposition to the mine and its possible impacts. The publicity given to this debate meant that neither the Australian workers targeted as potential employees nor their unions could have been unaware of the fundamental tensions surrounding the mine. A visit to Bougainville by Senior Australian Labor Party (ALP) Member of Parliament, Gordon Bryant, in July 1969, was a straw in the wind. It was facilitated by prominent local activist, Paul Lapun, and included public meetings in which Bryant was warned of local antagonism. Public reports of Bryant’s visit warned of possible bloodshed if the land were resumed (Sydney Morning Herald, 25 July 1969). Bryant’s own, quite balanced, report of his visit was widely circulated through the ALP and its affiliated unions. It concluded that ‘it is improbable that material gains from the project, as far as the local people are concerned, will outweigh damage done’ to their subsistence lifestyle (Bryant, 1969).

The following month, the Building Workers’ Industrial Union (BWIU) and the WWF engaged in a campaign of letter writing in response to the deployment of the police riot squad to Bougainville. Typical of its tone was a letter to the Prime Minister from Frank Purse, BWIU Federal Secretary, pointing out that, despite many years of planning for the mine and government claims that it would benefit Bougainville and PNG, ‘the people remain unconvinced and strong arm measures have been used’ to get construction started (Purse, 1969a). The BWIU also demanded action from the ACTU including the possibility of ‘imposing an Australia-wide ban on labour for the project’ (Hancock, 1969). At the University of Queensland, a TPNG student, John Kasaipwalova, was supported by local students at a public demonstration claiming that rights were being abused and the Charter of the United Nations (UN Charter) was being breached by the Administration’s measures to force local people to accept the mine (Courier Mail, 15 August 1969).

Left-wing unions and radical students were not the only ones seeking to have a public impact. CRA was also briefing journalists. Several newspaper articles at this time, based on CRA briefings, paint a heroic picture of the tasks the company was undertaking. This enabled ‘the tension on Bougainville’ to be presented as ‘no less than a social revolution … demanding incredible feats of human adaptability’ from the local population (Age, 28 August 1969). Where there was any mention of employment, it was in terms of how the mine might bring benefits to local people, noting that company documentation stated that ‘CRA aims to employ and train as many natives as possible from the outset’ (Age, 29 August 1969).

Despite labour movement involvement in political debate about the mine, Australian unions seem to have been quite unprepared for the work-related enquiries they started to receive from members around August 1969. Jack Egerton, QTLC President, later claimed in a report to Bob Hawke that he started warning the construction project managers, Bechtel-WKE, from ‘the middle of 1969’, that industrial conflict would be likely if they did not enter serious negotiation (Egerton, 1970a: 1). Egerton’s own records, however, indicate that this happened somewhat later and that it was direct complaints from workers on site which galvanised the Queensland unions into action. In view of the letter writing campaign from the Federal offices of left-wing unions, it seems likely that their initial strategy was to try to stop the mine altogether until agreement with landowners was reached and that they were outpaced by workers who took jobs on Bougainville anyway. Egerton, in fact, saw ‘the class of employees engaged on the Bougainville project’ as alienated from their Australian union organisations. They were, he said, typical of construction and mining workers, who ‘flock to sites, accept employment on whatever terms are offering and for some period of time work exorbitant and excessive hours on sub-standard conditions’, undermining the work of the very unions they may later appeal to for help (Egerton, 1970a: 1).

By the time expatriate employees in Bougainville started complaining to their Queensland based unions, road construction in particular was well advanced and issues of terms, conditions and safety were agitating those workers already on Bougainville. In August, the Queensland State Office of the Amalgamated Engineering Union, clearly unaware of how far employment had gone, passed the issue on to the QTLC, suggesting that a meeting of unions be called to apply pressure to the contractors to ‘ascertain what contracts they have and under what conditions labour will be engaged’ and, if necessary, approach the ACTU, ‘in view of the general situation currently on the Island’ (Dearlove, 1969). This seems to be the point at which the issue was first raised at the QTLC in response to direct representations from union members working in Bougainville. While Australian unions had a history of being suspicious of peak councils, there were also arguments for a co-ordinated approach given the complexities of this new type of employment situation. This gave Egerton an opportunity to position the peak councils, pointing to broader implications of employment outside the protection of the Australian regulatory framework and suggesting to affiliated unions ‘that it is quite obvious that the A.C.T.U. should take an interest in this matter’ (Egerton, 1969a).

Mine management also seemed to take notice of the potentially chaotic employment situation which was developing. An undated Bougainville Copper Pty Ltd (BCPL) document notes a meeting at which the Managing Director (F.F. Espie), Project Manager (D.C. Vernon) and Area Manager (C.P. Bishop) agreed upon what appears to have been the company’s preliminary position for possible meetings with the unions. This had only three points: all recruitment would be done from Melbourne; all employment would be on the basis of 12-month contracts; and the fitter’s rate, fixed at AUD5000 per year, would provide the benchmark for all other wages. The notes of this meeting end with the ‘suggestion’ that Don Vernon meet on this basis with the ACTU (BCPL, n.d.). Clearly, the mining management, at least, was preparing for negotiations with Australian unions.

This document found its way to the QTLC, and in September 1969, Jack Egerton wrote a long letter to the ACTU pointing out that Australian unions needed to regard the employment issues as urgent and deal with them independently of any discussion of ‘whether or not C.R.A. should be mining on Bougainville’. In particular, he explained the QTLC’s increasing concerns following complaints from ‘a number of unions … concerning working conditions at the C.R.A. project’. He pointed out that, despite the fact that the expatriate construction workforce was expected to reach 4000 by March 1970, there had been no publicly available statement of employment conditions. The QTLC had tried to clarify the situation but were told ‘that an agreement has been drawn up somewhere or other and the men will be paid in accordance with this’. Egerton had not been able to see this document but focused on the mandatory 60-hour working week as proof that it was ‘not good enough’. He suggested that the ACTU should meet BCPL Managing Director, Vernon, to draw up a comprehensive agreement (Egerton, 1969b).

A widely publicised QTLC resolution then advised ‘that Queensland workers should not accept employment on this project’. The resolution called for the establishment of an ACTU committee to negotiate with the mine management and for the peak national council to include regular visits by officials to Bougainville ‘for the purpose of establishing, maintaining and supervising Union organisation on the Island’ (QTLC, 1969).

As proof of the need for closer union oversight of the construction project, Egerton was able to produce an updated ‘terms and conditions of employment’ document from Hornibrooks, one of the major construction contractors. This now ran to four pages and included the provisions from earlier MKI documents. Management sensitivities are apparent in a new and lengthy provision relating to ‘duties and security’ under which employees were required to undertake that they would not either ‘during or after employment … divulge directly or indirectly … any knowledge’ they had about the company or its operations (Hornibrook, n.d.a). Egerton wrote to the QTLC’s provincial Councils urging that they publicise the fact that these conditions were ‘inferior and greatly inferior, to most of the Project Agreements being negotiated around Australia’ (Egerton, 1969c).

The lack of response from the ACTU continued to provoke discussion at the QTLC. Bob Hawke had recently become President Elect of the national peak council after a concerted campaign by ALP left unions led by the Federated Miscellaneous Workers’ Union. Egerton now wrote to him in this capacity, suggesting that the Hornibrooks document represented a serious development in the contractors’ efforts to fix conditions of employment at sub-standard levels. He also felt that the security clause indicated that the document may have been ‘drawn up by the Government’. His main reaction was, however, that the ‘shocking hours of work …. termination provisions … (and) job classification’ arrangements were well below standards normal in Australian mining construction. Egerton argued that ‘it is a wealthy job – a job in which great fortunes will be made by CRA and contractors and it would seem to me the workers are entitled to a bigger slice of the cake’. He suggested that Hawke would need to take a direct hand if the ACTU was to move quickly enough to prevent these provisions becoming embedded in practice. In a personal note, he added, ‘Bob, I will write to [ACTU Secretary] Harold [Souter] again on this but I think there is some urgency in the matter’ (Egerton, 1969d).

A meeting of 19 federal unions in Sydney in December 1969 produced a log of claims. It was closely modelled on the agreements signed the previous month between the Western Australian Trades and Labour Council and iron ore mining corporations Hammersely and Goldsworthy (ACTU, 1969a). The key provisions were a 30-hour week and an all-in-minimum wage of AUD200 per week (ACTU, 1969b). The gap between this and BCPL’s opening position, a basic fitter’s wage of AUD5000 a year and a 60-hour week, is an indication of just how inferior the unions regarded the previous conditions to be.

In the meantime, the workforce continued to grow. Papua New Guinean workers and the contracted Australians took up work with the various construction companies as well as directly with BCPL. By June 1970, about 4000 expatriates and 2600 indigenous workers were employed on the construction sites in Bougainville. The balance changed rapidly over the following year. In June 1971, BCPL had 6400 indigenous and 4100 non-indigenous employees on Bougainville (Mikesell, 1975: 101). For Australian unions, this raised two issues which were frequently and confusingly conflated. One involved the rights of local workers. The other was the ‘white Australia’ spectre of non-White workers competing for work at lower paid rates. When the BWIU raised its concerns with the ACTU, both issues were present. Federal Secretary, Frank Purse, wrote to Harold Souter late in 1969 pointing out that ‘while the company will agree to Australian unions looking after the rights and interests of their members, there will be no union to look after the interests of the indigenes’ (Purse, 1969b). Behind the principle of his statement, that ‘the job should be 100% union’, lurked the possibility that, with Australians and Papua New Guineans working in the same jobs, the latter’s lack of representation would mean they could be employed, not only with fewer rights, but much more cheaply.

Dangers of an unregulated workplace

That this was no merely hypothetical situation became clear in late January 1970, when an avalanche on the mine’s main access road, being constructed from Loloho to Panguna, killed eight workers, four Papua New Guineans and four Australians. Australian workers who ‘refused to work in dangerous conditions’ following the avalanche were dismissed and an immediate wildcat strike developed with the workplace delegates asking for an ACTU blackban (Egerton, 1970b).

The strike occasioned a rapid visit from new BCPL General Manager, Ray Ballmer. Egerton and Ballmer had a preliminary telephone conversation, which seems to have convinced Egerton that the company would negotiate genuinely. Consequently, he wrote to the delegates in Bougainville advising them to resume work, subject to the reinstatement of the dismissed employees and to set up a negotiating committee to inform the ACTU of their grievances so that the peak council could negotiate on their behalf (Egerton, 1970c). Egerton was able to meet Ballmer in Melbourne and briefed him on his previous reports to the ACTU while driving him to the airport on his way to Kieta. That this was part of a more concerted agenda on the part of the QTLC President is clear in Egerton’s comment that this briefing would ‘help him [Ballmer] to prepare for meetings on return with the A.C.T.U.’ (Egerton, 1970d). Ballmer did meet with Hawke in Melbourne the next week and, following this meeting, Souter was able to inform affiliated unions that the log of claims had been served on the company by the ACTU (Souter, 1970). In the face of the hostility expressed by the striking workers, both the company and the peak council were anxious to make rapid progress, and within a week, a tribunal had been appointed to hear the ACTU log of claims (ACTU, 1970a).

A more direct bargaining strategy was evident in the response on Bougainville, a week-and-a-half later, when the Australian workforce struck in protest against a lack of progress on their outstanding demands (Post Courier, 10 February 1970). This well-organised action was timed to coincide with the arrival in Kieta of a tribunal to hear the ACTU/combined unions’ log of claims. For the local people and TPNG employees alike an astounding event during the strike was a protest march by 1000 expatriate workers through the main residential town of Arawa (Post Courier, 10 February 1970). Folk memory of the incident among Bougainvilleans is that the marchers were ‘loud and frightening’ and ‘they defied the police’. From the local perspective, it was amazing to see Australians protesting and confronting the colonial authorities. The marchers were equally angry with the company and the Australian unions, carrying banners demanding direct representation in negotiations and declaring that the ‘ACTU Stinks’. A photo (Figure 1), which may have been taken by police on the scene, is included in an ACTU file and has attached to it a handwritten note that ‘Quodling might like to show this one to the ACTU’ (ACTU, 1970b).

Figure 1. Striking expatriate workers march through Arawa, 10 February 1970.

Egerton had been delegated to represent both the ACTU before the tribunal and the affiliated unions in relation to the Australian employees on Bougainville. Hawke was now President of the ACTU and had control of its inter-state executive by one vote against the block of rightwing unions. Egerton was among his allies in the state-based peak councils which were also local branches of the ACTU. In a report to Hawke marked ‘confidential’, Egerton noted that the Australian workforce was deeply hostile to the ACTU and suspicious of outsiders negotiating for them (Egerton, 1970a: 3). He personally

received a very hot reception being told that the unanimous votes of the three camps [in which the Australian workers lived] had been that the men were capable of looking after themselves and did not want any A.C.T.U. interference. (Egerton, 1970e: 2)

In Egerton’s discussions with the strikers, it emerged that the employees thought the terms and conditions under which they had been employed by the contractors had in fact been negotiated by the ACTU with the companies. Egerton felt that much of their anger was because ‘the Company had absolutely refused to negotiate with them’. He identified two areas of grievance which could be readily dealt with: recognition of the Site Committee and standardisation of terms and conditions among the various employers (Egerton, 1970e: 3). Egerton then met with the chairs of the camp committees to work out an agreed position, then took this to a meeting with officials of the companies and, finally, reported to mass meetings of the employees. Egerton’s position was that an interim agreement covering a few basic points could secure a return to work and that the ACTU should lead negotiation of a permanent agreement, the provisions of which would be retrospective to the start of the interim agreement.

It took a 2-hour meeting before the Site Committee would agree to this approach. A subsequent meeting with Espie and Vernon, representing BCPL, and various industrial officers, representing the leading contractors, reached agreement on the immediate grievances. There were, however, serious differences among the companies. A particular sticking point emerged in the attitude of representatives of the giant US construction company, Bechtel, which was now operating at Panguna as the construction manager. In late 1969, Bechtel had issued a new set of terms and conditions of employment which it assumed all contractors would follow. Internationally, Bechtel has a deeply anti-union reputation (Lichtenstein, 2003: 228). It is, therefore, hardly surprising that their template for employment sought to keep unions out of the project entirely. Hornibrooks responded by re-writing its terms and conditions to fit the Bechtel view (Hornibrook, n.d.b), but several of the other contractors seem to have ignored the Bechtel instruction. Furthermore, Hornibrooks attempted to discipline its own sub-contractors by requiring them to join the PNG Employers’ Federation, which also had a generally anti-union stance (Childs, 1970). Egerton took the matter up with Bechtel’s Manpower Director in San Francisco pointing out that, given Australian industrial relations history, ‘in the absence of a properly negotiated agreement being drawn up by the contractors and the A.C.T.U. further disputes are inevitable’ (Egerton, 1970f). Egerton reported that his meetings with the Australian workers at Panguna, ‘left me in no doubt that if there was any delay in the A.C.T.U. commencing proceedings that we could expect a lot of strife’ (Egerton, 1970j: 10).

The expatriate construction workers returned to work in mid-February. The employers had made amendments to the union log of claims, some simply inserting their own clauses regardless of the unions’ claims. This meant, among other things, that both a 40-hour and a 60-hour working week were included as standard in the amended log. Egerton pointed out the inconsistencies (Egerton, 1970g). A re-drafted log of claims was agreed between the ACTU and delegates on Bougainville seeking a minimum weekly paid wage of AUD200 for all workers involved in construction, made up of AUD60 basic wage and AUD140 margin (ACTU, 1970c).

In addition to representing the ACTU to Australian workers and the companies, Egerton had also been asked by Hawke to meet with the executive of newly established Bougainville Mining Workers’ Union (BMWU). His brief was that ‘the A.C.T.U. was interested in the problem of the indigenes and that at a future occasion we would be giving more thought to the matter’ (Egerton, 1970e: 9). While this did not amount to a deep commitment, it did indicate an interest beyond those of the immediate circumstances of the log of claims and the strike. Reporting to Hawke, Egerton seems to have been surprised and quite affected by the ‘shocking imbalance concerning [the] Employer-Employee relationship’, where indigenous workers were concerned. As the best means to address the imbalance, he urged the formation of a union to represent both indigenous and non-indigenous workers. His clinching argument was that ‘there are large numbers of Indigenes on Bougainville doing identical work and receiving about 10% of the European pay, inferior overtime rates and allowances’ (Egerton, 1970h: 3–4).

During the negotiations, the BMWU committee was invited to a lunch with Egerton and the Australian workers’ site committee. Egerton recorded, with approval, that he was told by the BMWU officers that there had been a meeting on the construction site, attended by over 800 indigenous employees who ‘wanted to know when white fella went out on strike why black fella didn’t go with him’ (Egerton, 1970e: 9). In terms of organisation, his impression was, however, that the BMWU officers ‘did not appear to have much idea of what was required of them to successfully carry on a trade union organisation’ (Egerton, 1970i).

Egerton also reported to his Australian colleagues that colonial policy stood in the way of realistic negotiation of local workers’ wages. His view was that the management of the company was ‘aware of problems caused by wages being determined on a racial basis’ (Egerton, 1970h: 4). He was told, however, by BCPL manager Espie, ‘that his Company were quite happy to talk about higher rates for indigenes but were being restrained by the Department because of possible affects on plantation workers and the general economy of the Islands’ (Egerton, 1970e: 11).

The agreement

Despite any personal and political commitment Egerton had to issues facing indigenous workers, the ACTU’s priority on Bougainville in this period was to gain an agreement which gave the non-indigenous workforce terms and conditions of employment comparable to those in Australian awards. The ACTU’s other significant aim was to establish a bargaining structure between the mining company, its contractors and the workforce, in which Australian unions were represented and, preferably, represented by the ACTU itself. In all of these endeavours, Egerton played a pivotal role. It was, however, not unchallenged. Despite the role Hawke gave him in the events of February 1970, Egerton was not initially included in the ACTU’s negotiating committee which began meeting after the return to work had been achieved.

In a personal letter to Hawke, Egerton complained of this treatment and suggested that the committee was being dominated by a group of rightwing unions, including the Storemen and Packers, Transport Workers’ and Australian Workers’ Unions. This was not simply a matter of factional alignment; it also had industrial implications. As Egerton put it in his private correspondence with Hawke at this time, these unions were ‘not the union grouping which generally negotiates project agreements in the mining industry’ (Egerton, n.d.). It is likely that Egerton’s antagonistic relationship with these unions in his home state meant that his involvement as a de facto ACTU representative may have become counter-productive for the peak council.

In any case when, in mid-April 1970, the BCPL project was visited by eight Australian union officials, including three Federal Secretaries, the leader was the ACTU Industrial Officer, Len Shurr. Later that month, the construction workers in Bougainville commenced an indefinite strike, which in fact only lasted 3 days but succeeded in galvanising the negotiation process. It also had the effect of throwing indigenous workers on the BCPL sites out of work. Within a few days, it was agreed that the ACTU would ‘set up the necessary machinery to provide responsible union representation for Australian unionists on Bougainville’ (ACTU, 1970d). At the end of June, the Bougainville Copper Project Expatriate Construction Workers’ 1970 Agreement was concluded. The Agreement was based on the Northern Territory Building Industry Award. It covered all relevant Australian unions, but specifically excluded ‘the indigenous people of TPNG’ (BCPL, 1970).

In September 1970, the BCPL Manager, Administration & Finance, Paul Quodling, wrote to the ACTU attaching a 5-page BCPL instruction to contactors, Project Industrial Rules, ‘to ensure that contractors comply’ (Quodling, 1970). Not only was the award generous, but these instructions included many union-friendly elements, such as acknowledging a broad role for delegates in representing members in all work- and living-related issues relevant to expatriate workers on Bougainville, payment for delegates while on union business, provision by the company of office facilities and transport for delegates on union business, a company-enforced closed shop and monthly meetings between delegates and company representatives.

In the meantime, many Papua New Guinean employees of BCPL were earning AUD15 a week, rather than AUD200, lived in poorer conditions and did not have the benefit of strong union representation. While Australian union officials maintained the rhetoric, that the ‘ACTU was committed to assist local indigene [sic] Union organisation’ (ACTU, 1970e), there was little active support in this round of negotiations, and conditions for TPNG employees remained far inferior to those for Australians at Panguna. The ACTU did, however, succeed in protecting TPNG workers from BCPL’s desire to employ non-indigenous workers in an on-going role. During the negotiations, Hawke attacked BCPL over a plan to employ Filipinos instead of Papua New Guineans. Paul Quodling responded that ‘he was not aware of any such contract’ (ACTU, 1970f).

Conclusion

Viewed as an event in Australian labour relations history, the ACTU campaign on wages and conditions for expatriate construction workers on Bougainville was efficient and successful. The peak council had overcome the initial hostility of workers and of affiliated unions to lead the negotiations, which resulted in an extraordinarily generous award. It positioned itself as the lead negotiator on behalf of the expatriate workforce and, in the process, raised issues of significance to indigenous workers.

The wider significance of the agreement, and the process through which it had been reached, is in the style of conflict management it set up and the bargaining structure it put in place. The historical record internationally shows that mining is highly susceptible to industrial conflict. It also shows that corporations and governments have frequently played an inglorious role in exacerbating conflict rather than solving it. This could well have been the case on Bougainville in the late 1960s. The combination of colonial rule and international companies intent on building the world’s largest copper mine was not one in which developing a labour relations structure could be expected to have precedence. In the narrative developed in this article, we have shown that negotiation rather than open conflict was possible. Initially, it was the persistence of Australian unions, particularly the peak councils, which shaped the inchoate anger of workers into a negotiating position. But the emergence of a willingness on the part of the mining company to negotiate effectively was also significant in removing the threats to industrial peace which could have derailed the mine’s construction.

Subsequently, the growth of an indigenous workforce and its unionisation saw this bargaining structure develop the capacity to deal relatively peacefully with complex competing interests over two decades. Current discussions about re-opening the mine do not seem to be taking account of either the successes or the failures of its labour relations history. Unless it may be safely assumed that industrial conflict is unlikely to occur in a re-opened mine, this seems very strange.