Can fracking industry cheerleaders be effective regulators?

By Stephen Easton

April 15, 2015

The role of Western Australia’s Department of Mines and Petroleum as an environment, health and safety regulator is compromised by its promotion of industry expansion and close working relationships with the companies it oversees, according to critics.

Over the weekend, ABC News reported on emails obtained under freedom of information that revealed the department’s close working relationship with shale gas miners on co-ordinated public relations strategies. This included plans to counter potential community concerns over proposed fracking projects before they were approved, on one political analyst’s reading of the emails.

The balancing act of government means individual functions of the public service regularly come into something resembling conflict with one another. Western Australians are far from alone in wanting some public servants to promote economic development, and others to make sure it doesn’t come at the expense of their health or the environment. The question is, should they all work under the same pro-mining roof to streamline processes, or should they be kept apart to maximise independence?

One of the DMP’s main roles is to attract investment in the resources sector, which it does by providing data about where mineral and energy resources are located and managing the title system, according to its website. A separate function, described as “educating the community”, involves selling the benefits of the industry across the state and is the cause of the concerns. The phrase links to a passage bursting with positivity about resources:

“From the moment we wake up, we are using minerals to make our modern lifestyle more comfortable. Coal is fueling your alarm clock and nickel, iron, brass and zinc helps you change stations with the television remote. Have you brushed your teeth today? The toothpaste is made from mineral sands.”

WA Nationals MP Shane Love, whose electorate is being explored for shale gas fracking, does not dispute that promotion is a legitimate role. But he says many of his constituents are concerned that ensuring the sector’s compliance with safety, health and environmental laws is left up to the same agency. Love told the ABC he wants to see the two functions split, as they are in some European nations, to ease those concerns. Unsurprisingly, the Minister for Mining, Bill Marmion, sees no problem in the arrangement at all.

Curtin University business professor David Gilchrist, who has expertise in public administration, governance and reporting, told The Mandarin that generally, concerns about having an agency with both regulatory and promotional roles were “well-founded”.

He noted the risk that “checks and balances like environmental protection” could be weakened such a situation, especially one like in WA where “clearly, government’s ideological perspective is to pursue mining, when there are other longer term issues and questions being dealt with”.

While it is not uncommon for a regulator to also celebrate the relevant industry’s success stories and acknowledge its contribution to the nation, Gilchrist puts the mining and petroleum industry among “sensitive portfolio areas, where splitting of the regulatory and supervisory role from the promotion role is critical”.

“But that splitting is also an issue in itself,” Gilchrist said, “because while you might have, on the face of it, a change to the machinery of government that divides and separates those kinds of activities… there’s also been a proclivity in governments generally, lately, to reduce the funding to the supervisory or regulatory agency, and increase the funding that’s provided to the promotion agency.

“So therefore, it’s not just a case of splitting the two and having an apparent conflict of interest dealt with in that way, but also ensuring that you resource those regulatory and supervisory agencies adequately to be able to respond to the real issues in a medium and longer term focus.”

The professor said the best medicine to cure a perceived conflict of interest was transparency.

“So for instance, clearly ABC had to get access to documentation that identified what the government’s activities had been through the Freedom of Information Act,” he explained.

“Conflict of interest is only a problem where there is not transparency of the nature of that conflict, and so even if you don’t split up the [functions], there is still quite a significant issue in that there is a very close relationship, obviously, between certain companies and government departments, in order to push a particular policy standpoint.

“That’s fine; that’s absolutely fine. What’s not fine is that that is not disclosed, and that makes the conflict of interest more insidious, I think.”

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