FIFO and global production networks: exploring the issues.

• Author: Rainnie, Al
• Position: Contributed Article - Fly-in fly-out - Column

Abstract

In this introductory article, we provide a context for subsequent articles in this special edition. We do not intend to provide a comprehensive overview of the costs and benefits of FIFO. This ground is covered in other articles here (see also Morris 2012). We argue that FIFO represents the third wave in a series of spatial fixes, whereby resource companies mining in far north Western Australia sought to manage relationships between themselves, their workforces, and the communities in which these workers live. We are responding to the demands of Coe (2013) and Kelly (2013) who wish to see Global Production Network analysis move beyond a narrow workplace focus to incorporate issues such as environmental landscapes, households and livelihoods, and social and spatial unevenness of development. In so doing, we develop the form of analysis of CPNs, labour, and uneven development outlined in Rainnie et al. (2011; 2013).

1. Introduction

   The 'resource curse' literature has re-emerged around the globe often casting the resources sector as a pariah of regional development (Bridge 2008). However, we want to develop a Global Production Network (GPN) framework of analysis to investigate a phenomenon new to the resources boom in Western Australia--the emergence of the Fly-In Fly-Out (FIFO) worker. We argue that this represents the third wave in a series of spatial fixes, whereby resource companies mining in far north Western Australia have sought to manage relationships between themselves, their workforces, and the communities in which these workers live. In so doing, we are responding to the demands of Coe (2013) and Kelly (2013) who wish to see GPN analysis move beyond a narrow workplace focus to incorporate issues such as environmental landscapes, households and livelihoods, and social and spatial unevenness of development. We develop the form of analysis of GPNs, labour, and uneven development outlined in Rainnie et al. (2011; 2013). However, before we proceed it is worth putting our discussion into some sort of context by referring to the conclusions of a recent study of the sustainability of the current WA mining boom:

   The dominant economic story of the mining boom broadly demonstrates that financial and social benefits accrue to some Western Australians. In this regard the sector contributes to sustainable development only in a very narrow sense of the term. The overview of the environmental, Indigenous and community consequences of the rapid expansion of resource extraction in WA demonstrates that these benefits are not only unevenly distributed but are attended by far-reaching, unevenly borne and ultimately unsustainable costs. Furthermore, these consequences are closely and complexly interwoven and generate substantial conflict. The damaging impacts on biodiversity, depletion of water reservoirs, and the cumulative effects of extensive infrastructure including roads and ports extends to quality of life impacts for not only local and Indigenous communities but also WA residents more broadly. Equally importantly, such impacts have much wider reach than the immediate area of a given mine site.... Just as the current developmental agenda tends to present the 'boom' as a 'cure' for socio-economic disadvantage, not all communities are affected in the same way. Indigenous communities, for example, are simultaneously excluded and subject to mainstreaming practices, which can reproduce if not entrench existing structural inequalities. Crucially, these consequences which have further racial, gendered and class dimensions are for the most part poorly understood. (Brueckner et al. 2013, pp. 120-121)

   It is not surprising to discover that the debate around FIFO in particular and Long Distance Commuting in general is complex and contested. FIFO is not in fact a new phenomenon. Armed forces worldwide have been involved in a version of this relationship for decades. Further, the Federal House of Representatives Report (hereafter FHRE 2013) on FIFO acknowledged that FIFO is fundamental to the provision of a range of services--particularly medical services--in remote areas of Australia. Nevertheless, the current interest and controversy, driven by the resources boom in parts of Australia, has raised interest in this form of labour migration to new heights. Therefore, the articles in this special edition of the Australian Bulletin of Labour can make an important contribution to the contemporary discussion.

   In this introductory article we provide a context for the other articles. We do not intend to provide a comprehensive overview of the costs and benefits of FIFO. This ground is covered in the other articles here (see also Morris 2012). In the first section, we outline an analysis of the dynamics of resource-based regions based on CPN analysis. Next, we develop a theoretical background for our study of work in GPNs based on labour-process theory. We then examine the origins and development of the FIFO phenomenon.

2. Global Production Networks, Resources, and Western Australia

   The dominance of a handful of transnational corporations (TNCs) such as BHP-Billiton, Rio Tinto, BP, Chevron, ExxonMobil, and Shell is even more conspicuous than it was in previous resources booms in Western Australia. Measham et al. (2013 p. 191) argue that the role of mining in the economy has changed distinctively since the start of the present boom:

   The economic importance of mining is stronger than in previous mining booms, most visibly in the dominance of exports. This has led to unprecedented mining investment and the development of resource projects that are larger by an order of magnitude. These investments have not translated into substantially larger workforces, with mining employment remaining a small proportion of the national labour force. In many ways the resources sector globally represents a classic case of dominance by a small number of major corporations and their attendant production networks. In diagnosing the characteristics of contemporary capitalism and the role of TNCs in particular, Dicken (2011, p. 52) argues that 'connectivity' is a useful concept. This simply means that components of the world economy are increasingly interconnected, and in different ways from in the past. TNCs are themselves the main force in this change, as coordinators of GPNs. TNCs can then be viewed as networks of networks. In Dicken (2011, p. 56), GPNs are understood as circuits of interconnected functions, operations, and transactions through which a specific commodity, good, or service is produced, distributed, and consumed. For Coe and Hess (2011, p. 130), GPNs are best understood by analysing the processes of value creation, enhancement and capture, the distribution and operation of power within them, and how they come to be embedded in particular places. Accordingly, a place's development is an outcome of the interaction between its local social relations and its links with other places through GPNs. GPNs are therefore seen to act as global pipelines between locally based firms or clusters of firms and selected partners in other regions (Coe and Hess 2011).

   In the resources sector, these networks are increasingly becoming global with design of projects being moved to low-cost centres such as India, Thailand, China, and South Korea. The highest-end design and engineering work is undertaken in a handful of engineering hubs, specifically Houston, Reading, and Yokohama (SGS 2013 p. 67). Further, with varying degrees of intensity, the major resource companies until very recently have outsourced or subcontracted areas of specialism and have increasingly relied on labour hire companies for recruitment. There has been a growing utilisation of Engineering, Procurement, and Contract Management (EPCM) companies that draw on their own global linkages (SGS 2013, p. 67). Across the resources sector more generally, outsourcing and rationalisation by the majors have promoted the formation of several highly capable service companies with global reach (Bridge 2008, pp.406; 409). Arias et al. (2014, p.85) point to the strong increase in subcontracting in mining in both labour-hire and process activities. This has made it increasingly difficult for local firms to penetrate either the technically sophisticated sectors or indeed the globally sourced. This has led to vocal 'Keep it Local' campaigns in Western Australia, uniting trade unions and smaller regionally based firms (see Rainnie et al. 2014).

   This is not restricted to resource companies and has been described as the rise of the networked organisation. This has important implications for the nature of work and employment in general, and for FIFO in particular. Analysis of work and employment has traditionally assumed a relatively straightforward employer: employee relationship to exist within the walls of any particular workplace. However, the rise of outsourcing, subcontracting, and the use of labour-hire firms has made this picture more complex. A single workplace can house large numbers of separate' employers'--people doing the same job at the same establishment can be employed by different organisations. This has complex and important implications for questions of career, commitment, training, and OH and S (see Rubery et al. 2010; Bahn and Rainnie 2013).

   Although much analysis has focused upon the actions of TNCs as the coordinators of GPNs, MacKinnon (2012) suggests that regional institutions-- which vary...