In his opening address to the MCA’s 2006 Sustainable Development in Perth yesterday, he cautioned that the industry’s newfound public enthusiasm would not only be tempered by the extent and longevity of the current boom, but also by the extent to which the industry contributes to global sustainable development.

“The past 20 months has established a whole new economic paradigm for our industry. We have moved from barely recovering the cost of investment capital to exponential growth in global demand and a new plateau of price cycles depending on the extent to which supply catches up with demand.”

He told the conference that he was confident the industry was in a “super cycle” of demand for minerals products on account of an underlying structural adjustment in the global market.

Hooke said the challenges on the supply side were more structural than cyclical, pointing to the supply capacity constraints to growth.

“We face the underlying structural impediments to growth of a people and skills shortage, limitations in our export corridors, profound shortages in the supply of essential production inputs from diesel contracts to tyres and trucks, an excessively complex and inefficient regulatory project approvals process, and the structural impediments to investment in exploration for the renewal of the national inventory of ore reserves.”

But he also cautioned that he was uncharacteristically nervous about the industry’s contribution to the global pursuit of sustainable development, more so than the industry’s remarkable performance over the last five years would merit.

“There is no question that we are an industry transformed. We have vastly improved the manner in which we conduct our core business – converting natural endowment to societal capital, defined in financial, social and environmental dividends to our operations.”

Notwithstanding, he identified emerging signs of a sense of complacency that the industry had “made it” in recovering its social licence to operate – the industry’s interpretation of corporate social responsibility – even though the imperative for continuous improvement is just that – continuous.

“There is an emerging risk profile where both commitment and capacity to sustainable development are being subordinated by the flux of activity in companies striving to maximise production and minimise costs,” he said.

“Added to this is the risk of a raft of new entrants into the industry understandably seeking to capitalise on the new opportunities without apparent or due regard to the environmental and social stewardship responsibilities that have become a hallmark of this industry, at least, over the last five years.

“As confronting as this potential risk might be”, he said, “we are well placed to pause, take a breath in the current melee of furious activity and reconcile current practices with previous commitments.”

He identified a list of key challenges, and indeed frustrations:

We are frustrated in our inability to achieve our goal of zero harm in the workplace and communities in which we operate;

Our OH&S regulatory systems are outmoded, prescriptive, inconsistent across jurisdictions, often under-resourced and have a tendency to emphasise after the fact retribution more so than before the fact prevention;

Regulatory project approval processes are cumbersome, complex and again, inconsistent, so much so that they have become a capacity constraint in themselves. In many parts of regional and remote Australia minerals operations are the core enterprise to local economic development, but are increasingly frustrated by the incapacity of critical social infrastructure to support enterprise growth and community development;

Governments at all levels are increasingly deferring to minerals companies to be a proxy for governments in providing critical social infrastructure. This notwithstanding that resource rent as taxes, royalties etc are at record levels – so too the industry’s contribution in meeting its platform responsibilities for land access and compensation payments, community development, environmental management, industry training etc;

There is a shortfall in professional community relations practitioners – the industry is today in social competencies where it was a decade ago in environmental competencies – and is focused on building capacity in tertiary institutions;

Though there has been considerable progress in reforming the native title system, we are frustrated in our attempts for adequate performance based resourcing of native title representative bodies and prescribed bodies corporate, and in transcending their traditional responsibilities to provide for a temporary and appropriate aggregation of Indigenous interests beyond native title claimants or holders; and

We welcome the Federal Government’s direction on vocational education and training reforms, but would like to see it faster, and extend what appears to be an eastern seaboard focus on manufacturing and service industries to cater for the specific requirements of remote and regional Australians.

Hooke specifically singled out reconciling energy security with climate change management.

“This is arguably one of the greatest challenges confronting our industry, indeed the globe. We simply have to be part of the solution and yet we continue to be regarded as fundamental to the problem.”

But, he said, unilateral action for a global problem that requires a global solution will only serve to undermine our socio-economic prosperity without associated environmental benefits in the form of reduced greenhouse gas emissions and improved adaptability.

In underscoring the challenge Hooke said, “I don’t know anybody who seriously contests the concept of global warming, the precautionary principle, the step change technology imperative across all energy sources which are complementary not mutually exclusive to meet exponential growth in demand; that there will be a carbon price in a carbon constrained world, and that market mechanisms will be the most efficient means of determining that price.

In identifying the drivers for continuous improvement, Hooke said these will increasingly come from the markets, be that from the product markets, human resource markets, and/or capital and insurance markets.

He considers this to be a seminal issue and one of the more difficult confronting the industry because it requires multi-stakeholder engagement in establishing a platform for a reward relationship for performance in the market. Yet, efforts to date in this regard have tended to gravitate towards a platform for public policy advocacy.

The Sustainable Development Conference has a good record of pointing the way in policy, strategy and leading practices in maximising the industry’s contribution to sustainable development.