About risk management at the coalface

Jim Knowles GAICD, chair of Margaret Jurd College and non-executive director of Centennial Coal, has seen a lot of change after 50 years in the resources business, but says effective risk assessment is easier if you have frontline experience.

I started out as a coal miner at South Bulli Colliery near Wollongong in 1974, and worked underground for 20 years. I come from a coal mining family — my father, brother and uncle also worked in the mines. I was part of the rescue and recovery team after an explosion at Appin Coal Mine in 1979 that killed 14 miners. It changed me — it put me on the track of wanting to go down the safety path in mining.

In 1986, I was offered the role of safety officer at Clarence Colliery, a mine near Lithgow. I said, “I’ll take the job on one proviso: I need to get some formal qualifications.’” I went to the University of Newcastle and was later promoted to safety manager at the mine, which meant I could attend meetings on an equal footing with other managers in the room and learn from them.

Risk management

A consultant who’d worked for me at Clarence started his risk management business in the early 1990s and asked me to come and work for him. I did that for three years and in 1997 started my own business, Jim Knowles Consulting. At one point, we had 12 consultants working with us and offices in Sydney, the Hunter Valley and Queensland. We travelled to different parts of the world conducting risk assessments and investigations and training. We trained more than 20,000 miners in Australia, and several hundred more in Asia and North America — a source of great satisfaction because we helped improve the safety culture in mining.

In 1995, I was recruited by the International Labour Organization (ILO) after a mining disaster in Pakistan where 29 miners were killed. My job was to review the mine rescue facilities in a region of Baluchistan province with a Russian mining engineer from the ILO. The work conditions and rescue facilities were reminiscent of 19th- century Europe. This highlighted for me how far we had come in Australia in 50 years of promoting health and safety.

In 2013, after the Pike River mine disaster in the South Island of New Zealand — where a methane explosion killed 29 miners — the company that owned the mine asked me to facilitate the risk assessments for re-entry into the mine. That took more than 12 months but, in the end, the company decided that re-entry was still too risky.

Later, I was part of a group of experts from around the world charged with reassessing the risks of re-entry into the mine. The Ardern government had formed the Pike River Recovery Agency on an election promise. Eventually, the mines rescue teams reached about 2.4km into the mine, but unfortunately couldn’t recover any bodies due to a rockfall. It was a tough job and demonstrated that when prevention fails it can be so costly in terms of lives, money and reputation. It’s so much better to prevent such tragedies in the first place.

Afterwards, I was appointed to the NZ Extractive Industries Advisory Group, tasked with reviewing the mining regulations and making recommendations to the NZ WorkSafe Board. This ultimately led to changes in occupational health and safety legislation, with the passing of the Health and Safety at Work Act 2015 (NZ) and the re-establishment of a dedicated mines inspectorate.

New direction

That experience sparked my interest in becoming a board member. I completed the AICD course and would recommend any prospective board members do so. It makes a difference when all board members understand the various aspects of organisational governance and where their duties and responsibilities begin and end.

I was attending an AICD workshop in Newcastle and found myself sitting next to a former lecturer from Newcastle University. He was on the Margaret Jurd College (MJC) board and asked if I might be interested in joining. MJC is a college in Newcastle for children in years 9-12 who have fallen through the cracks in the mainstream educational system. Most of the students’ diagnoses in the college are trauma-based, leading to behavioural disorders and emotional disregulation. Many have been expelled from other schools. Some are even living on the street.

There are 40 teachers, teachers’ aides, caseworkers and administration staff to manage the 72 students. Class sizes are around 10 and we provide students with meals, uniforms, shoes and computers in order to keep them engaged. We give them a comfortable environment where they feel secure. There are lockdowns and fights, but we don’t consider the students as naughty, we see them as crying out for help. At the board level, our focus is on the children, their wellbeing and their future.

I joined the MJC board in February 2017, becoming chair of the finance, audit and risk committee and then a member of the governance, legal and nomination committee. There’s a diverse group of board members — two accountants, a Uniting Church minister, an Indigenous archaeologist, a family lawyer, a town planner, a semi-retired professor of psychology and another risk manager. They all like to have their say, which is stimulating.

In April 2018, I was asked to take on the role of chair. It takes up a lot of my time attending separate subcommittee meetings, normal board meetings and strategic planning days. The board sets strategy, while the principal is responsible for making sure the strategy is converted into action.

We rely on state and federal funding, along with donations and support from strategic partnerships. It’s an ongoing challenge.

Each student place is associated with an allocation of government funding and if we do not attract the full allocation of 72 students every year, we lose funding. This makes it harder to keep the teachers and caseworkers employed. With growing demand for the sort of education that MJC can offer, we intend to expand our model into other regional areas of the state.

Coal comfort

I am also a non-executive director of Centennial Coal, a wholly- owned subsidiary of Thai company Banpu. It has a pre-board meeting and a board meeting each month. The two boards are so different. When you’re working with an NFP, you’re dealing with hundreds of thousands of dollars, but with an organisation like Centennial Coal, the decision-making potentially involves hundreds of millions of dollars. The company has five active coal mines in NSW, all underground, and employs about 1700 people.

Finance is a big issue for coal at present because banks in Australia are very reluctant to lend to fossil fuel companies. Centennial has completely refinanced through offshore banks and that will set it up for the next decade — or until we have completed the transition out of fossil fuels.

For now, we provide an essential service in NSW — keeping the lights on. We supply power stations, which in turn supply about 30 per cent of the state’s electricity. Centennial is taking an active role in the transition to a low-carbon society. It is almost impossible for a coal mine to be totally green, but we are reducing our emissions and taking other steps, such as decarbonising operations and upcycling our land assets. For example, we have solar farms and an eight-megawatt gas power station using the gas from the methane emissions from a mine.

What keeps me awake at night? Coal mining is hard work. What worries me is receiving a phone call from the CEO saying there has been an incident or an accident.

I try to visit each of the mines on a quarterly basis — I go underground, visit the mine workers and talk to the management and safety teams. I start a shift with the crew and listen to them to get an understanding of what is happening on the mine site — literally at the coalface. Just attending board meetings is not the sole responsibility of a director, you’ve got to be seen and heard.

It’s taken just over a year for the mines to become comfortable with my site visits. Now when I arrive, they see it as a positive, not a negative. I’m there to listen to their concerns and report back to the board. I’ve just been appointed chair of the health, safety and environment committee for Centennial Coal, which puts me in a strong position to make recommendations.

Next steps

I’d recommend anyone considering a board position to work on an NFP board first. It gives you a real grounding because NFPs must attract funds from different sources to do what they do. They need to sell the benefits of their work and its worth to society. It’s a real challenge for directors — are we going in the right direction and making the right decisions to support our goals?

My most important jobs are good communication and consultation with board members on direction and decisions, and to ensure there is the right mix of experience.