The ACTU supports ratification of the Paris Agreement.

The Agreement raises a number of issues, which we are sure other organisations will raise, such as the absence of a long term emissions pathway framework and policies that will be needed if Australia is to meet the agreed commitment to keep global temperatures to less than 2°C above pre-industrial levels.

As the voice of working people, we propose to limit our brief submission to consideration of the Agreement’s Preamble which recognised the need for a Just Transition for workers and communities as we move to a clean energy economy.

In particular, we note that the Agreement requires parties to:

“[take] into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.”

From the ACTU’s perspective the key principles underpinning a Just Transition include:

• equitable sharing of responsibilities and fair distribution of the costs across society;

• institutionalised, formal consultations with relevant stakeholders including trade unions, employers and communities, at national, regional and sectoral levels;

• the promotion of clean job opportunities and the greening of existing jobs and industries through public and private investment in low carbon development strategies and technologies in all nations;

• formal education, training, retraining, and life-long learning for working people, their families, and their communities;

• organised economic and employment diversification policies within sectors and communities at risk;

• social protection measures (active labour market policies, access to health services, social insurances, among others); and

• respect for, and protection, of human and labour rights.

  Australia’s transition to a clean energy economy will have profound impacts for working people across a number of industries including fossil fuels, manufacturing and forestry. 

  These impacts are likely to see thousands of workers lose their jobs – resulting in the devastation of both families and regional communities. Despite these impacts, we note that there is currently no national policy in place to ensure a just transition for workers in affected industries that supports workers obtain new secure jobs.

  This is deeply concerning as domestic literature and case studies in the manufacturing, forestry and textiles, clothing and footwear (TCF) sectors all suggest that Australia’s previous ad-hoc and ill-prepared responses to large firm closures and industry restructures have been largely unsuccessful in their efforts to support workers transition into secure employment following their retrenchment.

  In the car manufacturing sector for example, Professor Andrew Beer’s research found that two years after their retrenchment from Mitsubishi only‘one-third found full-time equivalent work, one-third left the labour force and one-third were either unemployed or under-employed.’^[1]      

  Further, Armstrong et al’s review of the closure of the Adelaide Mitsubishi and United Kingdom MG plants concluded:

  ‘that despite the rhetoric of flexible labour markets and successful adjustment from the effects of plant closure for both ex-Mitsubishi and ex-MGR workers, it is evident that the majority of workers in both countries have not experienced an improvement in their labour market status. Rather, for many, the experience of adjustment has been overwhelmingly negative, with a loss of income and a rise in employment insecurity’.^[2]

  Armstrong et al were particularly critical of the Australian Government’s response to the Mitsubishi closure noting that despite there being clear warning signs of the imminent closure for years:

  ‘[t]he government response to the closure of Mitsubishi at Lonsdale was rushed and ad-hoc and not very effective. Yet despite this, the package of assistance for Mitsubishi has become the standard ‘roll out’ government response to redundancies that have occurred in Australia such as Holden Motors, Electrolux and Ford.’^[3]

  Similarly in the forestry industry, a review by ForestWorks of the Tasmanian Pulp and Forestry Workers Assistance Project found that:

  ‘at the completion of the contract period, 55% and 40% of the total pulp and paper participants and forestry participants, respectively, occupied a new job … [m]ore than 50% of the employed workers managed to secure a full time (over 39%) or part time (over 14%) position.’^[4]

These undesirable employment outcomes were also reflected in a longitudinal study of 600 retrenched workers in the TCF industry, which found that ‘about one third of the workers found a secure new job of similar or better status and conditions to their TCF jobs, about a third were relegated to insecure, intermittent employment, and the other third did not work again after retrenchment.’^[5] As Webber and Weller note ‘many retrenched TCF workers who returned to the labour force have suffered a long-term disadvantage and have been relegated to a precarious status, only marginally attached to the labour force.’^[6]

If Australia does not have a plan for achieving a Just Transition, the cost of inaction is likely to have ripple effects across the economy and mean that Australia misses out on the job opportunities that are created from the clean energy economy. For example renewable energy equipment manufacturing is a growing high tech manufacturing industry that if effectively supported can serve as both a new export industry and assist other countries in meeting the challenges of climate change.

In light of the above employment outcomes, the ACTU believes that a transition to a clean energy economy without significant government planning risks recreating this pattern and will fail to transition working people into secure employment. History shows that workers and communities often bear the brunt of such transitions suffering hardship, unemployment and generations of economic and social depression. This is an unacceptable outcome.

In considering Australia’s previous policy responses to industry restructures, a number of lessons can be learnt. Evidence suggests that the most successful policy responses involve early planning, proper engagement with the workforce and local communities, and specific measures that target both demand (protecting and creating new jobs) and supply sides (helping people find new jobs) of the labour market.

The ACTU recommends that, to avoid these negative outcomes for workers and to meet the requirement in the Paris Agreement, the government undertake a series of actions including:

1. A transition plan – ensuring that Australia’s transition is managed in a fair and just manner, where affected workers and communities are supported to find secure and decent jobs in a clean energy economy.
2. A jobs plan – focusing on creating new jobs in a clean energy economy; and
3. An energy plan – setting out a sustainable future energy mix that ensures affordable and secure supply of electricity.

As part of these national strategies, efforts will also need to focus on the communities and workers most affected through the development and administration of a labour adjustment package that supports workers transition into new decent and secure jobs. The main labour market policies should include:

1. Job placement and information services;

2. Retraining with an option for this to be undertaken whilst still employed;

3. Financial and personal support; and

4. Travel subsidies and relocation assistance. 

   Unions are not alone in their call for a transition plan. Regional communities have been crying out for a plan for some time, with the Committee for Gippsland the most recent to join these calls.[7] If the Australian Government is to meet its obligation under this agreement to ensure that workers and communities are able to experience a just transition, it needs to begin working with unions, industry and communities to develop a national plan to transition Australia to a clean energy economy.

[1] Professor Andrew Beer quoted in Michael Owen and Verity Edwards, Sacked car workers shift gear, The Australian, 28 January 2012, accessed at http://www.theaustralian.com.au/news/inquirer/sacked-car-workers-shift-gear/story-e6frg6z6-1226255730999

[2] Kathy Armstrong, David Bailey, Alex de Ruyter, Michelle Mahdon and Holli Thomas, Auto Plant Closures, Policy Responses and Labour Market Outcomes: a comparison of MG Rover in the UK and Mitsubishi in Australia, p. 9

[3] Ibid, p.10

[4] Forestworks Learning and Skill Development, Forestworks report, Tasmanian Pulp and Forestry Workers Assistance Project: Evaluation Report, p.21

[5] Michael J. Webber and Sally A. Weller (2001) Re-fashioning the Rag Trade, Sydney: University of New South Wales Press, p.7

[6] Ibid, p.272

[7] Committee for Gippsland, Our Region Our Future Securing an Economic Future for Gippsland and Latrobe Valley, July 2016.