Australian Geographer, Vol. 32, No. 2, pp. 133–148, 2001
Fly-in/Fly-out and Fly-over: mining and
regional development in Western Australia
KEITH STOREY, Memorial University of Newfoundland, Canada
Adoption of  y-in/ y-out (FIFO) or commute work systems in the Western
Australian mining industry has increased rapidly over the last decade, with metropolitan Perth
becoming the main source of labour and the base for major mining supply and service
companies in the state. This situation has led to increasing concern on the part of many regional
authorities about the loss of local beneŽ ts through ‘ y-over’ effects, and implications for
regional development in their smaller resource-based communities. To date, the state government has paid little attention to these issues, but, at the same time, the regions have done
relatively little to help themselves. The paper explores the reasons for the growth of this work
system, the nature of the regions’ concerns, the measures taken to address them, and options for
future action.
ABSTRACT
Fly-in/ y-out (FIFO); commute work systems;  y-over; mining; regional
development; Western Australia.
KEY WORDS
Introduction
Western Australia (WA) is one of the most productive and diversiŽ ed mineral regions
in the world (Figure 1). About 50 different minerals are in commercial production, with
iron ore (production value over A$4 billion in 1998), gold (A$3.4 billion), bauxite
(A$2.3 billion) and nickel (A$1.1 billion) the main minerals produced. In 1998, the
total value of mineral and petroleum production exceeded A$17 billion. The state
accounts for about 50 per cent of the nation’s total mineral and petroleum production;
minerals and petroleum for about 30 per cent of the gross state product and for more
than 70 per cent of the state’s exports. The mining industry provides direct employment for more than 40 000 people, and indirectly for another 120 000 — totalling
about 20 per cent of all employment in WA (Department of Resources Development
2000).
Within the state, mineral extraction activity varies considerably. The Pilbara (Figure
1), is the major iron ore producer, while the GoldŽ elds–Esperance and Mid West
regions are home to many of the major gold- and nickel-mining operations. The
Kimberley is a major producer of diamonds and zinc/lead, while coal, bauxite and some
signiŽ cant mineral sands activities are concentrated in the South West and Peel regions.
In the past, mineral development was traditionally accompanied by the growth of
permanent settlement, and many of the state’s interior communities have a mining
heritage. Kalgoorlie–Boulder, for example, developed following the discoveries of gold
ISSN 0004-9182 print/ISSN 1465-3311 online/01/020133-16 Ó 2001 Geographical Society of New South Wales Inc.
DOI: 10.1080/00049180120066616
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FIGURE 1. Western Australia regions and location map.
in the 1890s, and now has a population of some 30 000. It is, however, an exception;
most of the towns away from the coast, in the interior of the state, have small
populations and are relatively remote. Finding labour to staff a growing mining industry
in the interior has proved problematic. A solution that has been increasingly adopted
Fly-in/Fly-out and Fly-over
135
over the past 20 years has been the use of ‘commute mining’ as an alternative to the
development of new, permanent communities.
Data from a 1991 survey indicated that there were 34 381 people directly employed
in the mining industry in the state. Of these, an estimated 4215 worked at 26
commute-based mine sites (Department of Mines 1991, p. 6). There have been no
subsequent attempts at a comprehensive survey, but by 1998 there were more than 40
such operations, with several others in the planning stage, and perhaps 15–20 per cent
of the direct mining workforce in the state now work at commute operations.
While this still represents only a minority of the total workforce and mining operations, commute operations are regionally concentrated in a broad north–south interior
band from the Kimberley, through the Pilbara, to the eastern Mid West and western
GoldŽ elds–Esperance regions. As such, their effects have been experienced disproportionately within the state. It is the implications of these commute operations for
regional development in the smaller resource-based communities and interior of WA
that form the focus for this paper.
Commute mining, which is more commonly known as  y-in/ y-out1, or FIFO, has
grown particularly over the past decade, and has become the preferred system in WA
for new mines developed at a distance from established population centres. Moreover,
in recent years, new operations in or near existing centres have also been established as
commute operations, while some existing operations based in single-industry communities have changed from residential to commute operations. Most of the workforce
and many of the companies supplying and servicing commute operations are based in
Perth, giving rise to concerns by WA regional centres that they are being ‘ own-over’,
and are losing the local beneŽ ts from mining activity in their regions in favour of the
metropolitan centre.
The issue of  y-over effects is not new; regional centres in WA have been expressing
their concerns since the late 1980s. However, with the increase in the number of
commute-based mines in the last few years, the level of attention given to the issue has
increased signiŽ cantly. This paper summarises the reasons for the growth of this work
system, the  y-over issue and its implications for regional development, and the
constraints and opportunities that in uence actions to address the perceived problem.
Fly-in/ y-out operations
Fly-in/ y-out mining operations are those which involve work in relatively remote
locations where food and lodging accommodation is provided for workers at the work
site, but not for their families. Schedules are established whereby employees spend a
Ž xed number of days working at the site, followed by a Ž xed number of days at home.2
What differentiates this form of organisation from other work involving periodic
absences from home is the regular pattern of work on-site followed by a period off-site,
and the nature of the accommodation arrangements.
FIFO operations have their origins during the 1950s in the Gulf of Mexico’s
off-shore oil sector, where the establishment of permanent communities was not an
option (Gramling et al. 1995, p. 6). The system has since been increasingly adopted by
mining and other on-shore resource sectors as a means of stafŽ ng remote operations at
minimum cost.
SigniŽ cant resource development in the north-western part of WA began in the
1960s, and was accompanied by the development of residential towns. Companies built
communities such as Newman and Goldsworthy to accommodate mine workers and
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their families, and contributed to the cost of infrastructure development in places like
Port Hedland. In return, mining companies received beneŽ ts from government in the
form of lower rates and taxes.
Over the past 20 years few such towns have been constructed. The higher costs of
town construction and maintenance, costs and difŽ culties of providing social overhead
capital, industrial disputes, worker preferences for the opportunities offered by larger
metropolitan areas, structural changes within the mining industry, and changing taxation arrangements have all contributed to making the FIFO alternative increasingly
attractive to mining companies in WA and other ‘remote’ areas.
The cost-beneŽ ts of commute operations are well documented (see, for example,
Storey & Shrimpton 1989; Kinhill Engineers 1991). By using this system instead of
building a permanent townsite, the Argyle diamond operation in north-east WA was
estimated to have saved some A$50–70 million in capital expenditures. Companies
opting for commute arrangements could write off the costs of mine-site camps and
avoid paying capital gains on the properties ‘developed’. Over a relatively short period,
this has become the model which many companies have chosen to follow; the corollary
has been that few new, purpose-built mining towns have been constructed in the past
20 years.3
The number of commute operations in WA has increased dramatically of late, and
these are mainly associated with an increase in the number of short-life gold-mining
operations. In 1991, there were some 31 FIFO operations in WA (Storey & Shrimpton
1991). By 1998 there were 34 gold operations alone (Maxwell 1997, p. 11), together
with at least six mines of other types. In addition, several other commute-based
developments were approved or underway, including Hamersley Iron’s Yandicoogina
iron ore project, and Anaconda’s Murrin Murrin nickel project. As a result, there are
now probably more FIFO mining operations in WA than in any other region or
country.
The Department of Mines survey of 26 FIFO mines indicated that, of Ž ve nominated
reasons for the adoption of the commute option, the isolation (44 per cent), and the
short life of the project (31 per cent), were most important (Department of Mines
1991, p. 23). Several mines (12 percent) indicated that these factors were of equal
importance. These, and other contributory factors, are discussed below.
Isolation
Over the past decade, signiŽ cant changes have occurred in absolute and relative costs
which tend to favour commute arrangements over new town construction. Factors
inhibiting the development of new communities include:
·
·
·
·
·
·
the cost of building and operating new resource towns;
absence of government Ž nancial support for new town development;
longer lead time required for new town approvals and construction;
environmental implications of new town construction;
administrative implications of managing a town, as well as a mine; and
increased costs associated with town closure, once the resource is exhausted or is no
longer economic.
Factors encouraging commuting include:
· improved quality and relative decline in communication costs;
Fly-in/Fly-out and Fly-over
·
·
·
·
137
improvements in aircraft and aircraft safety, and relatively lower air-travel costs;
lower turnover and absenteeism levels than in resource towns;
access to a larger supply of qualiŽ ed labour; and
preference for metropolitan over rural living by many workers and their families.
Short-term gold-mining operations
Most of the new commute operations developed over the past decade have been gold
mines. Gold production in WA rose from 11.2 t in 1980 to 146.6 t in 1989. Between
1990 and 1995, annual production  uctuated somewhat, but showed an overall
increase from 180.8 to 189.8 t, while the years 1995–97 saw another signiŽ cant
increase to 238 t (ABARE 1998, p. 270).
Growth in output in the 1980s was characterised by the development of relatively
high-cost, short-life operations associated with: strong gold prices, and the drive to
develop mines to reap beneŽ ts before the introduction of the 1991 gold tax; and the
development of carbon-in-pulp (CIP) and carbon-in-leach (CIL) processing, which
lowered production costs and increased extraction levels. The result was that ore bodies
with grades of 2.3 g/t were able to achieve payback in 2–3 years. If the up-front costs
of mine development could be minimised, mines with 5 years of reserves or less thus
became economically feasible. As a result, in the 1980s and mid-1990s, several
operations came on stream with no more than 3–5 years of reserves conŽ rmed. Where
such mines were in relatively remote locations, FIFO was by far the most cost-effective
development option.
In the past, the view has been that large-scale and long-term projects are more costly
to operate as FIFO operations than as traditional townships (see Kinhill Engineers
1991, for example). Clearly, the industry no longer sees it this way, since a number of
new, large-scale, long-term commute projects have gone ahead, or are being proposed.
Anaconda Nickel’s Murrin Murrin mine in the Eastern GoldŽ elds region is a case in
point. This A$1 billion project, with a planned annual output of 45 000 t/year of nickel,
and 3000 t/year of cobalt,4 has a life expectancy of 25–30 years. The majority of the
operations workforce of 600 will be accommodated on-site and will  y in and out from
Perth. While some workers may choose to live in the area, the company has no plans
to build a township.
Structural changes in the industry
The nature of employment in the mining industry has been changing. In the attempt
to maintain or improve proŽ t margins, operations over the past decade have become
‘leaner and meaner’ with signiŽ cant reductions in the workforce. Other areas of
potential saving and cost control have included increased outsourcing and the use of
contractor labour. With contractor labour, work rosters are often signiŽ cantly longer
than for company personnel,5 thereby requiring fewer FIFO trips to and from the mine.
Short-term contracts may also give companies greater  exibility to modify the size of
the workforce as necessary.
Search for qualiŽ ed labour
Industry growth has generally resulted in a shortage of skilled labour. In the 1996
Census, the total population of WA was 1 726 100, of whom 1 096 800 (63.5 per cent)
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K. Storey
lived in the Perth metropolitan area. Outside the South West, and other than
Kalgoorlie–Boulder (28 100) and Geraldton (25 250), the populations of the regional
centres are relatively small. Finding sufŽ cient skilled and experienced local labour, or
Ž nding labour which is willing to relocate on a permanent basis to the regions, has
proved extremely difŽ cult. Operators argue that stafŽ ng operations out of Perth on a
rotational basis is unavoidable.
Taxation
The current tax structure tends to penalise companies operating in remote areas.
Intermediate input taxes, such as fuel, are viewed negatively by export-oriented,
price-taker industries such as mining, since the costs cannot usually be shifted forward
onto their international customers. The limited depreciation allowances and denial of
capital cost deductions for infrastructure such as airstrips and housing places activities
in remote areas at a disadvantage.
No tax issue raises more ire in the regions than that of the Fringe BeneŽ ts Tax
(FBT). It was introduced in 1986 to discourage companies from providing nonmonetary income, such as subsidised housing and travel beneŽ ts to employees. The
majority of these recipients worked in large population centres where markets provided
competitively priced goods and services. In remote areas, however, FBT takes on a
different meaning. The goods and services provided by remote-area industries are not
viewed as ‘beneŽ ts’ by the inhabitants of remote areas, but as ‘necessities’ provided by
companies in the absence of appropriate markets. Housing, subsidised electricity,
board, and other so-called ‘beneŽ ts’ take on a unique importance in remote areas where
climatic conditions are often harsh, and where, without them, the quality of life would
otherwise be signiŽ cantly reduced. The FBT has thus been accused of being ‘a city tax,
taking no account of the unique characteristics of remote area resource development’
(Ian Taylor, Media Statement, 1992, cited in Pilbara Development Commission 1993,
p. 5). Both state and regional authorities have argued that there would likely be an
increase in employment, exploration, provision of social infrastructure, downstream
processing, and a general increase in regional development if the tax were abolished.
Mining companies, which were obligated under State Agreements to construct
townships in remote areas at a time when the state government wanted to develop
regional communities, have been particularly penalised. These arrangements, put in
place at the insistence of the state government prior to the federal FBT, are now subject
to tax. The response of the federal government to provide a 50 per cent FBT
concession for remote-area housing, holiday-travel beneŽ ts, and  y-in/ y-out travel
acknowledges that these are not typical beneŽ ts; however, even with the concession,
‘traditional’ community-based operations are at a relative disadvantage, a point seen as
particularly inequitable. In light of this, regional and state authorities have long
campaigned for the removal of FBT from remote-area conditions of service.
Tax reform in general has been high on the federal agenda for some time. Establishment of a goods and services tax (GST) in mid-2000 might address the issue of
intermediate input taxes. Other new regulations are anticipated which will address the
anomalies resulting from the FBT. Even so, changes are unlikely to have signiŽ cant
impacts on the use of FIFO. The FBT is an issue that the regions have seized upon
because of its obvious inequities, but it is not as important in mining company decisions
as regional representatives appear to believe.6 Changes may well beneŽ t operators with
Fly-in/Fly-out and Fly-over
139
town sites, but abolition of the tax is unlikely to be sufŽ cient to encourage the building
of new towns.
Regional concerns
The regional centres in WA have become increasingly concerned about the effects of
FIFO. A review of regional strategy documents, media reports and other materials
indicates that criticisms fall into three overlapping areas: the health and well-being of
the individual and the family; the economic impacts of FIFO on local businesses; and
the economic and social vitality of regional communities. More speciŽ cally:
· FIFO has negative social consequences for individuals, families, and the communities where they live, contributing to greater abuses of alcohol and drugs, family
violence and break-ups, parenting problems, and reduced community involvement;
· companies beneŽ t from resources in the regions, but, by basing their workforces in
Perth, give little back to those regions;
· businesses in the regions fail to beneŽ t from FIFO, as most of the beneŽ ts go to
service and supply companies in Perth; and
· FIFO arrangements harm the regions by contributing to population decline and
associated federal grant decreases, and negative business decisions such as the
closure of bank branches.
From the regional perspective, the disadvantages of commute arrangements are
perceived to include:
· the failure of the system to provide employment or training opportunities for people
in the area;
· the need for young people (the children of those who settled in the mining towns of
the 1960s) to leave the area in order to Ž nd work which, ironically, could be situated
in their own region;
· the inhibition of population growth in the area;
· the receipt by the region of only a small share of the beneŽ ts of the development of
regional resources;
· the problem that the approach shows no concern for regional or community social
development; and
· the undermining of government policy with respect to decentralisation and regional
growth.
Regional development policy and FIFO
Most of the blame for the loss of beneŽ ts to the regions and calls for action have been
directed at the state government. In the past, state regional development policy has had
four main goals:
· promotion of natural advantages and new opportunities in the regions;
· identiŽ cation and elimination of impediments to the efŽ cient operation of regional
economies;
· encouragement of regions to specialise according to their comparative advantages;
and
· broadening of the economic base of regional economies through the growth of
regional centres.
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K. Storey
The regions want the state to make good on these decentralisation aims and to:
· ensure that the home base for commute operations is in the same region as the
project;
· return resource royalties to the regions in the form of infrastructure investment; and
· develop policies which would see social and community development take precedence over proŽ t maximisation.
Yet the state has had no policy on FIFO and, with a general disinclination on the part
of government towards intervention, little has been done to help achieve regional
development goals. While maintaining that it wants to bring greater beneŽ ts to the
regions, to date the state government has simply stated its preferences which, in
descending order, would see companies:
· use the local workforce;
· use existing regional centres as FIFO bases; and
· use Perth as a home base.
With the majority of workers  ying in and out of Perth, it is clear that the Ž rst two of
these preferences are not re ected in the actions of most of the companies which use
FIFO.
In the past, FIFO has been treated by government as a minor issue. Limerick et al.
(1991) attempted to put it into perspective, noting that, though commute operations
might not signiŽ cantly beneŽ t the regions, the number of workers involved was small
and the mines would probably not have been developed at all unless they used a FIFO
system. Their paper further notes that the percentage of mine workers involved in
commute operations:
is not expected to increase rapidly while FIFO is limited to small, short-life
operations. Its adoption for large scale operations is of greater concern.
(Limerick et al. 1991, p. 10)
Given the use of FIFO by large long-term operations like Murrin Murrin, the time for
that concern may now have arrived.
Limerick and his co-authors go on to note that increased use of FIFO for long-life,
large-scale operations poses a dilemma for the state. While it does not want to constrain
companies from extracting resources in the most cost-effective way, it nonetheless ‘has
a responsibility to ensure that the development of the State’s major resources is done
in a way which returns the greatest overall beneŽ ts to the community’(p. 18). To
accomplish this, the authors suggest that government needs to:
· assist local and regional communities to understand the opportunities and limitations
associated with mine and resource projects being developed in their region;
· make local labour and services attractive to developers; and
· work with developers to make recruitment from regional centres more attractive by
establishing training centres (p. 19).
In spite of the increased use of commute mining for many new, and even some
traditional ‘residential’ mining operations, the state government so far appears to have
ignored its own advice. The present state government has tended to favour limited
intervention in industrial and commercial activity. While WA can be described as
‘pro-development’, the focus has been at the state rather than the regional level. ‘Local’
Fly-in/Fly-out and Fly-over
141
in the context of Local Content Policy, for example, has meant the state, and there has
been no attempt speciŽ cally to encourage regional manufacturers and suppliers.
While government appears to have generally turned its back on the issue, the regions
have done little to help themselves. One of the suggestions by the Department of State
Development was that ‘local communities should themselves seriously evaluate and
promote the comparative advantages that each possesses’ (Limerick et al. 1991, p. 19).
So far, there has been limited take-up. While each region has recently produced
strategic economic development plans, most of the comments regarding FIFO have
been limited to noting that:
· FIFO is a problem;
· the problem should be further examined;
· the state government should encourage/require companies to base all or part of their
workforces in regional centres; and
· the federal government should abolish the Fringe BeneŽ ts Tax.
There are exceptions to this general lack of action, but, for the most part, regionally
initiated efforts have been piecemeal and uncoordinated, and re ect the view that it is
the responsibility of the state to act on behalf of the regions in this matter.
Future options
Over the past several years, FIFO has become something of a rallying call for WA’s
mining-dominated regions. While the root causes of their problems go far beyond
FIFO, the issue has become symptomatic of the concerns of the regions, which see
themselves as victims of both metropolitanism and government neglect.
There is every reason to believe that FIFO will continue to grow in importance, and
that most of the beneŽ ts will continue to  ow to metropolitan Perth. Perth and its
hinterland will grow as long as the perceived beneŽ ts of climate, living costs, services,
employment and other opportunities continue to draw people there, rather than to
other parts of the state. As the report Living in the regions (Department of Commerce
and Trade 1999) indicates, some might choose to live in the regions, but, with nearly
two-thirds of the state population living in the Perth area, the majority clearly Ž nd
metropolitan life preferable.
The state government has made a commitment to deliver services to all areas of the
state in an equitable manner, and recently regional development has been given higher
priority. The question remains, however, as to how the negative consequences of FIFO
can be avoided or mitigated, while at the same time maintaining industry efŽ ciency and
proŽ tability. Mining contributes 70 per cent of the state’s total export income, most of
which comes from WA’s regions. It makes little sense to kill the goose that lays these
particular golden eggs, but those in the regions want the beneŽ ts to be distributed more
widely. The potential roles of the main players in this equation are discussed below.
Government
In general terms, regional policy makers have a number of policy options at their
disposal. These can be grouped under three main headings: micro-policy; macropolicy; and the coordination of instruments and policies within and between regions
(Armstrong & Taylor 1985, p. 188). Micro-policy instruments are generally concerned
with attempts to reallocate labour or capital among regions, while macro-instruments
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K. Storey
include the devolution of policy powers to the regions, or use of centrally controlled
policies in a regionally discriminating manner. The coordination between different
micro-policy instruments, between micro- and macro-policies, and between national
and regional policies is important to avoid inconsistency and achieve efŽ ciency.
The state’s ability to in uence regional development is primarily through the application of micro-policy instruments. The Department of Resources Development, for
example, acts to facilitate development, though, as argued above, the instruments used
tend to be of a broader-brush variety, and have not been targeted speciŽ cally at FIFO
issues. While government might prefer that mining companies base their FIFO workforces in the regions, it is unrealistic to expect they will implement policies which require
companies to do so. Policy instruments, many of which are already in place, could,
however, be used to encourage mining companies to try to ensure that greater levels of
economic beneŽ t from their projects accrue to the regions. Government can, for
example, facilitate approvals, negotiate infrastructure improvements, and assist developers to overcome various development obstacles, if companies can demonstrate that
they attempt to use labour, supplies and services from the regions.
To illustrate, companies proposing large-scale projects may be required to sign a
State Agreement Act, one of the main objectives being to secure high levels of local (i.e.
state) content in resource projects. Sixty-four Acts are currently in place, most of which
are related to mining or minerals processing. In the case of the Iron Ore (Yandicoogina)
Agreement Act 1996, for example, the developer, Hamersley Iron, is permitted to use a
FIFO system, but there is provision for consideration of the development of a permanent town site or similar housing and accommodation arrangements if production
exceeds 15 Mt per annum, and the workforce more than 150 (Western Australia 1996,
p. 13). State Agreements are typically complex in terms of their design, implementation
and monitoring, and tend to be reserved for larger projects. Alternative mechanisms
might be developed to achieve similar ends more efŽ ciently for the numerous, and often
smaller, FIFO projects that are subject to approval.
The department also facilitates regional development through planning and infrastructure improvements. Planning for the development of the Oakajee industrial estate
and deepwater port near Geraldton, the development of the Mungari heavy industrial
estate near Kalgoorlie–Boulder, and port development studies for Dampier, Port
Hedland and the Kimberley are recent examples of the types of projects designed to
improve regional capacities and strategic planning. While they are undoubtedly of
beneŽ t to the regions, it seems that project-speciŽ c arrangements for FIFO mine
developments are rarely negotiated in return for local beneŽ ts commitments.
Should it choose to, the state could also make greater use of existing regulatory
processes to in uence regional development objectives. For example, all developers are
required to prepare an environmental assessment of the potential implications of their
projects, and to describe how they would manage the impacts. However, the social and
economic costs and beneŽ ts of projects, as they affect local areas, are rarely treated in
a detailed fashion. The assessment required for the Murrin Murrin nickel project serves
as an illustration.
Murrin Murrin was subject to a Consultative Environmental Review (CER).7 The
social and economic assessment component of the report (Dames & Moore 1996,
pp. 7–40) can at best be described as brief. Three main elements were ‘addressed’: the
existing environment, Aboriginal heritage, and socio-economic impacts. The entire
socio-economic impact section comprised only two paragraphs; one giving the estimated workforce requirements, the other indicating that on-site accommodation would
Fly-in/Fly-out and Fly-over
143
be provided. No attempt was made to consider what the contribution to the regional
economy might be, or, more to the point, how the proponent would seek to maximise
this contribution.
Mine developers could be required to show that, other things being equal, they will
give local labour and local supply and service companies Ž rst opportunity with respect
to securing work or contracts. In Canada, where local beneŽ ts issues are also high on
the agenda, it is now common practice for developers to adopt an ‘adjacency principle’,
whereby workers and companies in communities closest to the site will have Ž rst
opportunity for jobs and supply and service contracts where they are capable and
competitive (see, for example, VBNC 1998, p. 6).
What is perhaps surprising about the Murrin Murrin assessment is that not only did
government seem disinterested in this question, but so, too, were the regional centres
that stood to gain from the project. Public response to the CER was limited to 15
submitted letters, most of which came from government agencies, local authorities, and
pastoralists. The submission from the Town of Laverton was the only one which raised
any socio-economic questions relating to local beneŽ t issues (EPA 1996). Even though
Murrin Murrin is a large-scale FIFO project based in Perth, there were no interventions
from Kalgoorlie–Boulder, the nearest regional centre.
In approving the project, government might have negotiated the use of additional
pick-up points as a means of spreading employment beneŽ ts. Kalgoorlie–Boulder, for
example, could have been so designated, giving the community the opportunity to
capture some of the beneŽ ts to which it feels entitled. Similarly, government might have
‘encouraged’ companies to adopt local preference practices with respect to construction, supplies and services, offering in return beneŽ ts such as improvements to roads or
other local infrastructure used by the mine. If regional development is an objective,
greater attention must be given to securing business for the region, not just for the state.
If State Agreements are signed, government can require greater regional commitments. For example, in the 1996 Iron Ore Yandicoogina Agreement, the company,
unless it can be demonstrated to be impracticable, is required to use ‘labour available
within Western Australia (using all reasonable endeavours to ensure that as many as
possible of the contractor’s workforce be recruited from the Pilbara)’ (Western Australia 1996, p. 26).8 There have been instances in which the procurement ofŽ ces of
mining companies and their major contractors involved in new projects have not even
been located in the state. In such cases, they are unlikely to be aware of regional
capabilities and will tend to look to established companies with which they have dealt
before, many of which are likely to be Perth based. A requirement that company
procurement ofŽ ces at least be located in the state would not seem unreasonable.
Policy coordination represents another option for action. In 1996, for example,
the Regional Development Council and the Department of Commerce and Trade
published a discussion paper Regional futures: challenges and opportunities for Western
Australia’s regions (RDC 1996). The challenges relating to FIFO identiŽ ed by the
regions included the following:
· Kimberley Region: maximisation of economic returns to the region from current and
future mining operations is of concern as currently ‘the majority of labour and
supplies for mining operations are sourced from outside the region’ (p. 25).
· Pilbara region: ‘The practice of  y-in  y-out is an ongoing factor limiting the
expansion of the region’s population. Fly-in  y-out should be encouraged from
regional centres such as Karratha and Port Hedland’ (p. 29).
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K. Storey
· Mid West region: ‘Fly-in  y-out is impacting negatively on smaller communities. Ways
of alleviating its effects need to be explored’ (p. 38).
· GoldŽ elds–Esperance region: ‘Mining companies should be encouraged to … redirect
these [FIFO] employees to spend their weeks off in Kalgoorlie Boulder. This will go
a long way towards eliminating perceptions and realities that the region is based on
a transient population’ (p. 46).
Whether the last of these suggestions, in particular, is realistic is one question;
nevertheless, the perception at the regional level is that FIFO is a problem that current
policy makers have failed to address. The role of the Regional Development Council is
to promote development in all regions and facilitate coordination between local, state
and Commonwealth bodies on regional issues. However, many of the relevant policy
instruments to address this issue fall within the mandate of other departments, such as
Resources Development, for which the issue does not appear to be a priority, and
whose focus tends more towards sectoral and state-scale issues than regionally speciŽ c
ones.
Macro-policy options are primarily the responsibility of the federal government, with
federal tax policy being perhaps the most obvious candidate for change. As noted
above, however, while changes to the FBT and intermediate inputs might beneŽ t the
industry, they are unlikely to have any signiŽ cant impact on the use of FIFO.
The regions
There are few examples in which the regions have taken the initiative to try to capture
more of the beneŽ ts from FIFO operations. More often, they have made unrealistic
demands for action by the state, re ecting a poor level of understanding of what the
industry requires and of what their communities have to offer.
Illustrative of this are the demands that the workforce be based in the regional
centres. While from the community perspective beneŽ ts would accrue if the workforce
were to be located there, most workers and their families prefer to live in the
metropolitan area. Companies simply are unable to Ž nd or attract sufŽ cient skilled and
experienced workers to the regional centres and retain them when families can live in
the Perth metropolitan area and the mine workers can commute. Some will choose the
regional centre, but most will not. Those who advocate living in the regions must
acknowledge other preferences.
Many regions often have little idea of the quantity and quality of their available
labour supply, or of local supply and service capabilities. The GoldŽ elds Esperance
Development Commission (GEDC) has recognised this point and recently undertook
a number of initiatives to improve their understanding of what they have to offer mining
companies operating in the area. The GEDC has published an Industry Capability
Directory — a register of companies in the region — designed to help promote and
maximise local content in new and existing resources projects (GEDC 1998a). Plans
are to complement this move with the establishment of a Resource and Trade Opportunities Centre, and with the appointment of an industrial promotion ofŽ cer.
To learn more about the demand side of the equation, the GEDC also surveyed
mining operations within its jurisdiction (GEDC 1998b). While representatives of only
22 of 67 mines in the area responded, the information represents the beginning of a
database. By improving its understanding of industry activity, the GEDC will be better
Fly-in/Fly-out and Fly-over
145
able to develop a strategy to identify those regional beneŽ ts from FIFO which are
both signiŽ cant and achievable. Working collaboratively with industry to ‘sell’ the
region is more likely to yield positive results than simply demanding changes to state
policy.
The Gascoyne Regional Development Commission has also adopted a more direct
approach. It recognised that the mining industry had a shortage of labour, and
commissioned a study to consider whether a purpose-built training centre could be
created for the area. The Ž ndings were that a ‘bricks and mortar’ solution to the
problem was not appropriate, and that other, more established, centres might be able
to deliver programs more effectively. These conclusions notwithstanding, the initiative
was important in that it recognised the need to Ž nd ways to work with industry to meet
both industry and community needs, rather than relying solely on government to
regulate a solution to the perceived problem.
In many cases, mining companies and major contractors may be unaware of local
capabilities, or they might have already established supplier/service relationships, usually with Ž rms in the larger centres. These patterns will not change unless the regions
promote themselves. Promotion, however, requires resources. The state can help in this
regard, whether directly though regulation or Ž nancial support, or indirectly through
promotion of the regions, rather than the state as a whole.
However, those promoting the capture of regional beneŽ ts need to assess the
potential associated costs and beneŽ ts before committing the necessary resources. In
the case of the GoldŽ elds–Esperance region, mining is the major component of the
economic base in the Kalgoorlie–Boulder area; trying to ensure that their supply and
service sectors capture the ‘local’ business is likely to be a development priority. On the
other hand, the Mid West region, while its largest source of income does come from
mining, has a more diverse economy, with agricultural, horticultural,  oricultural and
Ž shing interests, and an increasing emphasis on downstream processing of mineral
resources. This broad range of opportunities could mean that capturing greater beneŽ ts
from FIFO activity is not a top priority in terms of resource commitments.
Mining companies and contractors
While the Ž rst responsibility of most companies is to its shareholders, adoption of
responsible environmental and social practices should not be precluded. Originally
driven by regulatory requirements, but now accepted by most companies as ‘standard’
business practices, are those environmental management policies and programs in
keeping with the ethic of sustainable development. On the social side of the equation,
companies already negotiate with Aboriginal claimants to resolve Native Title issues,
and often adopt programs which support local Aboriginal training, and provide funding
for education, health and other programs.
From here it is only a small step to the idea that companies also have a responsibility
to the broader community in the regions in which they operate. If a company mines in
a region for an extended period, it will become an established part of the economic and
social fabric of that area. As such, it is in its best interests to establish good, ongoing,
local relationships. This need not be a high-cost matter. By keeping regional authorities, the business community, and other stakeholders informed about company plans,
potential con icts can be avoided. By giving Ž rst opportunity for area institutions and
businesses to supply labour, goods and services, industry beneŽ ts can be captured
146
K. Storey
locally and goodwill generated. Convincing companies that these steps are in their
interests may not be easy. As with environmental regulations, it may be necessary to
employ a (small) stick to initiate the process until the beneŽ ts become apparent and the
practice is adopted as the norm.
Conclusions
The FIFO system in WA is well established and is likely to remain so. A signiŽ cant
change in recent years has been that large, long-life projects have increasingly adopted
these arrangements, and it is possible that, in the future, more of the existing residential
operations could switch to FIFO. These decisions have beneŽ ted the Perth metropolitan area in particular. The smaller regional centres have not only failed to capture
many of the beneŽ ts of resource development within their regions, but have sometimes
experienced additional cost burdens resulting from the need to provide services for
transient workers and operators with little or no return for their investment.
The loss of regional beneŽ ts could be reduced through a variety of government,
region and industry initiatives. Government policy would need to become more
interventionist than is presently the case, and the rationale for regional, rather than just
state, development policies more generally accepted. A strategy formulation initiative
launched in 1998 could lead to changes in state policy in respect to the ways in which
the regions share in the beneŽ ts of resource developments. What other incentive or
regulatory initiatives government might choose depends on the priority given to FIFO
issues. To this point, there has been little government concern over FIFO, even though
it has been a priority for those regions with mining-dominated economies.
If change is to be effected, it is most likely that the initiative will have to come from
the regions themselves. The battle over where the FIFO workforce should live has, for
the most part, been lost; the beneŽ ts war, more generally, need not be. The recent
promotional attempts by the GEDC are examples of the ways by which the mining
industry, and indeed the region itself, can be better informed about capabilities in the
local supply and service sector. Regional companies will have to be capable and
cost-competitive if they are to capture business, and they may need help from the state
to persuade mining companies to give them the chance to demonstrate these points.
While a healthy dose of realism needs to be taken by some regional representatives, it
does appear that efforts to secure supply and service contracts offer the greatest
opportunities to capture regional beneŽ ts. An ongoing dialogue between mining companies and regional and state representatives could more precisely establish the match
between industry needs and regional capabilities, and provide the basis for the state to
assist both groups where mutual advantage is identiŽ ed.
Changes which beneŽ t the regions will not of course be felt uniformly. If Perth
captures most of the gains at the state level, the larger centres will win out from
initiatives at the regional level. Kalgoorlie–Boulder, for example, has received, and will
continue to capture, more of the beneŽ ts in the Northern GoldŽ elds region than
Leonora and Laverton, simply by virtue of the size and breadth of its economic base.
The smaller centres will always feel that they lose out to the larger. However, if the
general principle is adopted whereby Ž rst opportunity is given to the nearest supplier or
service company, where that Ž rm is competitive in terms of cost, quality, timeliness and
so on, then some levelling of the playing Ž eld can be achieved, and perhaps some of the
perceived negative impacts of  y-over reduced.
Fly-in/Fly-out and Fly-over
147
Correspondence: Keith Storey, Department of Geography, Memorial University of
Newfoundland, St. John’s, Newfoundland, Canada, A1B 3X9. E-mail: kstorey@
morgan.ucs.mun.ca
NOTES
[1] The system has also been described as Long Distance Commuting (LDC). Neither FIFO nor
LDC is an entirely satisfactory term, since both the mode of transportation and the distance of the
commute can vary considerably. While aircraft, particularly in Australia, are most commonly used
for the commute, some workers drive in to the work site, others are bussed in, and occasionally
boats and even hovercraft have been used for transport. While there are many examples of long
commute distances, both domestically and internationally, the system is now being increasingly
used when the work site may be only tens of kilometres from established communities. Commuting
in these cases has been encouraged by the increased adoption of the extended work day, and the
difŽ culty of incorporating the time for even relatively short commutes into the working day.
[2] In Western Australia, the work/rest roster for commute mining operations is typically 2 weeks on
and 1 week off (2/1) for company personnel, though it can vary by operation, and for different
groups of workers within individual operations. Contractor personnel tend to work longer rosters,
6/1 being typical.
[3] Roxby Downs in South Australia, 560 km north of Adelaide, built to house workers at Western
Mining’s Olympic Dam operation, is the main exception to this pattern.
[4] Anaconda Nickel and Glencore International have since proposed to expand Murrin Murrin to
produce 115 000 t/year nickel and 9000 t/year cobalt. The cost of the expansion is estimated at
A$1 billion, with construction possibly beginning in the second quarter of 1999 and Ž rst
production in 2000 (Department of Resources Development 2000, p. 15).
[5] There have been serious concerns that contractors have been signiŽ cantly extending the work
roster. In a notice to mine managers in June 1996, J.M. Torlach, State Mining Engineer, points
out that mine managers, as principal employers, would, under Duty of Care regulations, need to
be able to justify allowing their contractors’ employees to work 12 hours per day on extended work
cycles, in some cases up to 13 weeks on and one off.
[6] Surveys by both the Department of Mines (1991)and the GoldŽ elds Esperance Development
Commission (GEDC 1998b) found that the FBT was a minor factor in the decision to use FIFO.
[7] Where the potential impacts of a project are considered to be signiŽ cant, or where the project is
controversial, the state government will undertake a formal review. Formal reviews can be of three
types: a Consultative Environmental Review (CER), a Public Environmental Review (PER), or an
Environmental Review and Management Program (ERMP). Of these, the CER has the fewest
requirements and is undertaken when potential project impacts are considered signiŽ cant, but can
be easily managed, and where the impacts are of local interest.
[8] Interestingly, the hiring of service and supplier contractors refers only to a requirement to hire from
within WA; no reference is made to the region at all (Western Australia 1996, p. 26).
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