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Joint Standing Committee on the National Capital and External Territories - 22/10/2012 - Department of Regional Development, Regional Australia and Local Government annual report 2010-11

ABDULLAH, Mrs Aeysha, Chair, Management Committee, Cocos Islands Co-operative Society

DENIS, Mr Azim, Member, Management Committee, Cocos Islands Co-operative Society

GRANT, Mr Ronald James, General Manager, Cocos Islands Co-operative Society

PIROS, Mr Balmut, Secretary, Cocos Islands Co-operative Society

ANTHONEY, Mr Ratma, Member, Management Committee, Cocos Islands Co-operative Society

[09:37]

CHAIR: I welcome the representatives of the Cocos Islands Co-operative Society Ltd. Thank you very much for joining us. Although the committee does not require you to give evidence under oath, I advise you that these hearings are formal proceedings of parliament and warrant the same respect as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. Evidence today will be recorded in the Hansard and attracts parliamentary privilege. I invite you to make an opening statement to the committee.

Mr Grant : Thank you very much, Chair. My apologies for asking the meeting to be put forward. We have two refugee flights coming in which we have to attend to. We sent, on 15 October 2012, a submission to the secretary. We addressed the key performance indicators of the department in the annual report. I think all the members of the committee have a copy of that letter so, rather than wasting time by having me going through it, I will turn it over to the committee and we will go to the points. If you have had a chance to read through the submission you might like to raise issues on that and then we will respond to them.

CHAIR: Do you want to go through those points just briefly?

Mr Grant : No, thank you. I will just let the committee ask questions.

CHAIR: Okay. I just need to be confident that committee members have got that information in front of them.

Senator CROSSIN: How many flights are there?

Mr Grant : We have two flights coming in—one at 11 o'clock and one at a quarter to four.

Mr BRUCE SCOTT: What do you call 'coming in'? Coming in from where?

Mr Grant : Normally those aircraft are tasked out of Christmas Island to take on the escorted groups, then they will come here and collect the refugees and take them down to Christmas Island.

Mr BRUCE SCOTT: Those that are on the West Island, you will take them down to Christmas Island today?

Mr Grant : That is correct, and there will be another aircraft tomorrow morning.

Mr BRUCE SCOTT: I was not quite sure why you had to take them down to Christmas Island rather than bring them in to stay. How many of those that you have on the island now are going to be transferred?

Mr Grant : At the moment we have 165 people down at the quarantine station waiting to be transported off-island.

Senator CROSSIN: Could you outline for us the range of businesses that the co-op is looking after these days? Apart from your submission, we will have a total picture on record of what you are responsible for.

Mr Grant : The Cocos Islands Co-operative Society was formed in 1978. It has four major divisions: there is the Logistics Group, which covers stevedoring, aircraft services, ferry contracts and bus contracts; the Hospitality Group, which covers the Cocos Beach Motel and the Tropika Restaurant; the Retailing Group, which covers the West Island supermarket and the Home Island hardware store; and the Special Contracts Services Group, which covers everything from the provision of contract labour for teachers' aides, staff at the school and construction maintenance to bank agencies and Centrelink. A final group is Corporate Services, which supports all the other operating groups.

Senator CROSSIN: How many employees are employed by the co-op?

Mr Grant : The average number of employees employed by the co-op is approximately 70, which is full-time permanent, part-time permanent and casual staff.

Senator CROSSIN: We were just having a discussion about skills shortages in the trades area. What do you do about training and upskilling local, particularly young, Cocos Malays to take on these jobs?

Mr Grant : If, for example, we take the Logistics Group and stevedoring, we have had a major contract in just recently which is the resurfacing of the West Island runway. Prior to that we upgraded the skills of all of our stevedores. That included a new certificate III in stevedoring. There was a five-week course to upgrade the skills of crane drivers, and there are occupational health and safety courses, and there are also frontline management courses. We target training at very specific contracts, or very specific operations.

Senator CROSSIN: Are some of the younger people who have finished their high school staying, or going away for training and coming back to work with you?

Mr Grant : We have a number of those. For example, Asim Dennis is a qualified motor mechanic. As he said, he was born on Cocos and has lived on Cocos. He has worked on the mainland, he has returned to Cocos and he is a qualified mechanic working for the cooperative. A lot of our courses are run through specific job requirements. They may be short-term or reasonably long-term. The big problem is apprenticeships. We have looked at apprentice electricians, carpenters and mechanics. To give you an idea, to take on a first-year apprentice through the Indian Ocean Group Training Association, we have been quoted $45,000 a year for one apprentice. Quite frankly, that is just out of the ballpark.

Senator CROSSIN: Do you not think they can travel down to Perth for any of the job training?

Mr Grant : No, that is exclusive of travel costs.

Senator CROSSIN: Is that the salary component under the award?

Mr Grant : That is the salary component, block release, all the fees plus the cost of the administration by Group Training.

Senator CROSSIN: Does it limit the number you can have or does it make it totally prohibitive?

Mr Grant : It just makes it totally out of our reach. The alternative that we look at, when people go down to year 12, is to work closely with TAFE or a university, have the students put through, get the courses done on the mainland, then get them back. It is far more cost efficient.

Senator PARRY: How do you get them back?

Mr Grant : I go back to Azim Denis. He came back. They want to come back. I have one daughter at the moment in third year at Edith Cowan University, doing training. Her ambition is to come back to be a teacher here. Ray Denholm, who is the school principal, is very keen to have her back next year to do her prac here. A lot of the children who are now going to TAFE or university or doing apprenticeships do want to come back.

Senator CROSSIN: I want to ask all of you another question, about the stress factor on the community with the asylum seekers being here. You would see it from the movement in and out, if you are looking after the marine contracts. I am assuming that you have the contract to actually go and get these people off the boat and bring them to West Island? Is that right, or is that done with the AFP?

Mr Grant : We have a very close working relationship with DIAC and Serco. We have a fee we charge per head for a client of DIAC's, as they call them, to transport them from the SIEVs to West Island. We transport them by buses to the quarantine station and transfer them from buses to the aircraft. The two boats that arrived yesterday had 110 people on them. From 1 July to yesterday, we have taken 2,518 refugees in.

Senator CROSSIN: Just arriving at Cocos alone?

Mr Grant : Just arriving at Cocos. That figure is accelerating. In July, the number that came in was 379. In September, it jumped to 811. For October, we are already at 699. It is definitely not going down.

Senator CROSSIN: Mainly Sri Lankans?

Mr Grant : They are all Sri Lankans.

Senator CROSSIN: On the issue about asylum seekers being taken off the island on the commercial aircraft, I am assuming that is not a decision you make; that is a decision DIAC makes. How does that happen? Do they say: 'We need to move 25 today,' so 25 spots are reserved on that commercial aircraft, or are people offloaded to accommodate that?

Mr Grant : I think that you have got to put this in perspective. The flights from Cocos to Christmas are not heavily booked. Even the flights from Christmas to Cocos are normally not at capacity. The flights that are at capacity are where you go from Perth to Christmas and then continue on to Cocos. That is where they have the major problems of people being offloaded. It is not so much from Cocos to Christmas. I think the most people we pick up going from Cocos to Christmas, on an average flight, would be no more than 50, whereas the aircraft can carry roughly 110 people. If DIAC or Serco wish to move Sri Lankans by a commercial flight—which is Virgin Blue—from Cocos to Christmas, they will advise us of the numbers. Normally, the numbers are quite low. It might be between 15 and 25. They will be transported up to the aircraft terminal before the aircraft departs. They will be screened first, taken out first, seated first. Then the normal passengers are loaded on for the flight down to Christmas. What I have got to say is that the number of people being transported on the commercial flight is quite small compared to the over 2,500 that have gone on chartered flights from DIAC.

Senator CROSSIN: From DIAC's point of view, this would be a cheaper way of doing it, rather than hiring a specific aircraft to transport these people.

Mr Grant : I think DIAC look at it as the numbers to be moved. DIAC have given an undertaking to the community here that they will try not to hold people more than 72 hours. If they do not have the numbers to justify a charter flight in and they have got small number to move, they will move them on the commercial flight. But the number of times that have done that, I think is only three since July. I could be wrong, but it is a small number.

Ms BRODTMANN: Just on that comment that you made on DIAC making that commitment: how is that turnaround time working? Can you give us some sort of broad percentage in terms of the 72-hour rule?

Mr Grant : Take the flight last week, for example. We had four chartered DIAC flights in. We moved over 300 people. All of those would have been less than 72 hours here. The longest that they have held somebody currently is when last Friday they flew some people out and they had been here since Sunday. But that was a delay which was very unusual. For example, the flight coming in today will be taking out the people that arrived on Friday, plus some of the people that arrived today. Tomorrow's flight will be taking out the balance that arrived on Sunday.

Ms BRODTMANN: What is the demeanour of the people? You are obviously working with them closely. I understand from others that it is quite calm; there is no sense of threat in terms of loading these people.

Mr Grant : We are quite fortunate they are Sri Lankans. We are very heavily involved in transporting the Sri Lankans from the quarantine station to the airport. We normally move them in groups of 20. They are normally taken to an area outside the airport terminal where they will sit on the ground, and normally there is one female Serco officer controlling 20. At the moment, we have had no incidents. That seems to be a regular thing. When they are transported off island, the escorts are normally about one to six, and the escort group comes in on the aircraft. For escorting them out to the aircraft, in flight and taking them off the aircraft, the escort group is quite heavy. But actually on Cocos it is very light.

Ms BRODTMANN: We are talking all Sri Lankan men? Are there any women?

Mr Grant : Initially, it used to be young Sri Lankan men. Now there is a growing number of women, young girls, young boys. There is an increasing number of very small children. There was one baby born on one of the boats. It is definitely starting to change. We have a number of amputees now coming through, people in wheelchairs.

Ms BRODTMANN: How many? What is the proportion?

Mr Grant : So far, of that 2,500, I would have seen one in a wheelchair and two amputees.

Ms BRODTMANN: These are young men?

Mr Grant : Young men.

Ms BRODTMANN: Are we talking late teens or 20s?

Mr Grant : These would be people between their 20s and 30s, normally.

Ms BRODTMANN: Just going back to children: are the children under 10?

Mr Grant : Children can be babes in arms, just a few months old.

Ms BRODTMANN: Do you know the cause of the amputations?

Mr Grant : The amputations are what is referred to as traumatic amputations, caused by either landmines or explosive devices.

Ms BRODTMANN: Primarily legs or arms?

Mr Grant : They are always legs. The mines tend to take the legs off all the time.

Mr BRUCE SCOTT: Thank you, Mr Grant, for your submission. I notice that item 5 in your submission says:

Grant funding is targeted, supported by the community and fully utilized.

You say that you are going to be shortly applying for two grants?

Mr Grant : That is correct.

Mr BRUCE SCOTT: Can you describe what they relate to?

Mr Grant : There are two grants. Back in November of last year, we developed a strategic plan for the cooperative. Under a special program run by the Australian government, we had a consultant come up from the David Reid Group, who reviewed the strategic plan. The David Reid Group have said it will cost $92,000 to implement the strategic plan. One of the applications that we are putting in through the economic development consultative groups is to apply for some funding to offset the cost of that consultancy. The second one is to do with the Cocos Beach Motel, which we operate. That is a prime site. The co-op owns that freehold. It owns the buildings. We have been approached by a group who would like to joint-venture with the cooperative in redeveloping that site to make it more appealing to the tourist market. Once again, there are some feasibility studies and consultative studies to be done. The second grant application would be based upon that.

Mr BRUCE SCOTT: To do with a joint venture with the cooperative and a private—

Mr Grant : No; a joint venture with a private group.

Senator CROSSIN: I note in your letter to the committee that you talk about the new Western Australian laws governing cooperatives. You are indeed in a different jurisdiction but by proxy they become your de facto laws that provide governance. I want to ask about the suitability of those arrangements in the co-op's view.

Mr Grant : This is specifically the new cooperative act or just generally?

Senator CROSSIN: Both.

Mr Grant : The legal basis for the cooperative at the moment is the old 1905 Singapore ordinance, which was adopted as Commonwealth law here. It is totally and utterly outdated. The new act, which is the Co-operatives Act 2009 of WA, which is being applied as Commonwealth law here, is a very good act. It is going to bring the co-op right back into the mainstream, especially in areas like the role and responsibility of directors, the financial reporting requirements and shareholding requirements. It is going to be a major move forward for the cooperative. Also we will have a registrar, which will be the Western Australian Registrar of Cooperative Societies, who will be responsible for the cooperative. We will have a skilled person as the registrar in that particular area. Also it enables us to join the Cooperative Federation of WA, which is an umbrella organisation, which is extremely good.

In general, having the laws of WA applied as Commonwealth law here has been extremely good. Some of the laws obviously have not been extended because they are just not relevant but at least now we have a very good legal basis, which we never had before. In fact, the new administrator, Jon, was up here as the committee secretary for the report Islands in the Sun, which made the transition from the previous legislative base to the current legislative base. It is really important to have a modern body of law when you start talking to investors or people who want to do business development here. Without the body of law you are really stuck.

CHAIR: In the context of being a major business provider done through a cooperative approach, which clearly suits being able to embed the community interest into the businesses and services on the islands, what are the key challenges for you in both responding to community needs and working out what you can generate an income from?

Mr Grant : The first real challenge that is always there is remoteness. We are very dependent on the shipping cycle and the airfreighter. The real challenge is to be able to deliver services at a reasonable cost. That is your ultimate challenge. As the shire pointed out, in relation to insurance, Lumley has withdrawn from the market and currently SBA Gallagher are looking for alternatives but they have flagged already there will be major increases. Those increases are then passed onto the community. There is always the challenge of remaining profitable while at the same time not becoming too expensive so that people desert you—and they will desert you; for example, quite a lot of people on Home Island and on West Island shop on the internet. People are becoming far more switched on. Why go through the cooperative or another retailer here when you can have your relatives buy something on the mainland, go to the airfreight company and send it up? So there is this real challenge between remaining profitable and providing a service.

The other thing is the ageing population. The younger generation are saying, 'If we want to come back to Cocos, do you have housing for us and do you have jobs for us?' That is another challenge because, unless we have a workforce that comes through that is well trained and well educated, it impacts upon your business all of the time.

CHAIR: We wish you well for the rest of the day. Hopefully, we will manage to meet with you again and have some further discussions later on. If there anything in particular any of you want to put on the record specifically, you are more than welcome.

CHAIR: Is there anything you want to bring to our attention?

Mrs Abdullah : I just want to mention the importance of maintaining some of the major contracts within the co-op and the island workforce. I am sure there are lots of people who can put in tenders for these contracts. Luckily we have recently got the ferry contract and the bus contract. The stevedoring contract is coming up and there will be other people tendering for it.

CHAIR: Clearly as a co-op you are embedded in the local community and local employment. When contracts are out for tender and it might suit the government to contract that out to someone outside because it is cheaper and they can make more money, how does that create a false economy in terms of employment on the island and those kinds of issues?

Mrs Abdullah : I think it is very important to have the ownership. That increases self-esteem and efficacy among the people in the community. People will be outsourcing jobs. Sure they will be providing the service but the people can be encouraged to do the work here, rather than having all the money go offshore.

CHAIR: They are points worth making. They are certainly consistent with the experience of other businesses, whether they be co-ops or small businesses in many remote communities around Australia. When outside tenderers come in they potentially can have a very dislocating impact on the sustainability of whole range of other services on the ground. Who supports your analysis of those issues when you are negotiating with government about those questions?

Mr Grant : If you take the two recent contracts, the ferry and bus contracts, we do not use outside people; we use our own staff. So for all the submissions, whether they are tenders, supporting documentation or requests for further information, it falls upon her own staff to provide that information.

Senator CROSSIN: Do you have any representatives at all on the economic development consultative committees? I can see names but I am not sure whether they are attached to the co-op.

Mr Grant : No. All the members of those committees are appointed by the minister.

Senator CROSSIN: Yes, I understand that. I just wondered whether anyone from your organisation was among that group.

Mr Grant : No.

Senator CROSSIN: I cannot recognise that there is. I just wanted you to confirm that. Does interaction occur between the co-op and the economic development consultative groups? Is it effective? Do you have anything to do with them?

Mr Grant : We talk to them regularly. For example, we have just recently had the Economic Development Summit on Cocos. Our people attended that. There is always feedback but the major feedback comes from either the administrator or the economic development officer, with whom we have regular contact—it would be weekly.

CHAIR: Thank you all. It is terrific to have those views on the record.