New research has highlighted how contracting hiring for cost reduction creates safety risks in mining, prompting calls for stronger regulatory oversight. Michael Quinlan, Emeritus Professor in the School of Management and Governance at UNSW Business School, said there is an urgent need for governments and regulators to provide more effective oversight of contractor safety in the mining industry. In mining jurisdictions like Western Australia and Queensland, Quinlan said there is evidence that contractors are over-represented in mine fatalities.
“This may well help explain why the incidence/frequency of mine fatalities has not improved, at best, in the past decade or more,” Quinlan said.
Quinlan’s comments come off the back of new research which explores how traditional approaches to contractor management, focused on cost reduction and operational flexibility, can create unforeseen risks and potentially catastrophic outcomes. The study analysed decades of quantitative and qualitative research across multiple countries and industries.
Conducted by Quinlan and University of Newcastle School of Health Sciences graduate Heather Jackson, the research examined 120 publications, focusing on 65 key studies that investigated safety outcomes in mining operations. The research spanned developed and developing economies, with particular focus on Australia, South Africa, the United States, Turkey and various South American mining regions.
The research revealed how contracting practices have transformed traditional work arrangements, creating new challenges for workforce management and safety. The growth of contracting has been associated with other shifts in work practices, including the increasing use of fly-in, fly-out (FIFO) and drive-in-drive-out (DIDO), whereby workers live remotely from the mine rather than a nearby mining town and live in barracks while they are onsite.
These changes extended beyond simple employment arrangements, and the researchers said there has been a growing trend towards the practice of ‘hot-bedding’ — analogous to hot-desking among service workers. This practice, where workers share accommodation on different shifts, created additional fatigue management challenges and potential safety risks.
The impact on working hours is a significant concern, with contract workers working longer hours. One study showed contractors averaging 65.85 hours compared to direct employees at 52.40 hours. The research identified that these extended hours created heightened safety risks. “Being a contractor was a risk factor for injuries associated with long working hours,” the researchers found.
The research revealed that cost reduction is the primary driver for increased contracting, though the economic rationale proved more complex than surface-level savings. The primary drivers for this growth are economic, as contract labour is typically paid less than directly engaged mineworkers. “Contractors can be more easily ‘discharged’ in a downturn, and if self-employed will not have access to workers’ compensation or other regulatory entitlements, are less likely to be unionised or to raise complaints onsite,” the researchers found.
A McKell Institute report also found that contractors were paid up to $30,000 less per year than direct employees. However, these apparent savings often led to increased costs in other areas. The study found that responsibility for meeting compliance costs was distributed unequally, with the majority borne by contractors and exacerbated by competitive tendering processes. The financial pressures on contractors created cascading effects throughout operations.
“Mining companies identify failure of the contracting company to take responsibility for supervising their employees and ambiguous OHS regulatory responsibilities,” the study said.
