Government of Western Australia

Department of State Development Annual Report 2012-2013 1

Government of Western AustraliaDepartment of Mines and PetroleumMineral Titles

Government of Western AustraliaDepartment of Mines and PetroleumEnvironment

Government of Western AustraliaDepartment of Mines and PetroleumPetroleum

Government of Western AustraliaDepartment of Mines and Petroleum

ANNUAL REPORT

2012/13Government of Western AustraliaDepartment of State Development


About this report

The report is published in electronic format, complete and in sections, with limited use of images to reduce the download time. The online version is available at www.dsd.wa.gov.au

If a printed copy is required, the department encourages the use of recycled paper. If this is a printed copy and you have finished reading and no longer wish to retain it, please give it to other interested readers, or dispose of it in your recycled paper waste.

Front page: (Top) The Perth skyline. (From left) Dampier port; a Liquid Natural Gas sphere at the Pluto project; iron ore mining at Yandicoogina. Photos: Dampier Port Authority, Woodside, Rio Tinto.


CONTENTSStatement of Compliance < 5

Section 1 - OVERVIEW < 7

Director General’s review < 7

Introducing the Department of State Development < 9

Who we are < 9

The business we do < 9

The way we do business < 9

Values < 10

Organisational structure < 11

Executive teams < 12

Key legislation < 13

Performance Management Framework < 14

Strategic Plan < 14

Shared responsibilities with other agencies < 15

SECTION 2 - PERFORMANCE < 19

Summary < 19

Report of Operations < 19

Lead Agency overview < 19

Major resource projects < 20

New and proposed project approvals < 20

State Agreements < 24

Case study: Ord East Kimberley Expansion Project < 25

Strategic Industrial Lands < 26

International trade and investment activities < 27

Significant issues < 31

Performance overview < 33

Key performance indicators < 33

Effectiveness indicators < 34

Efficiency indicators < 35

Financial performance < 36

Our people < 38

Workforce planning < 38

Career development < 38

Comparative FTE allocation by category < 38

Industrial relations < 39

Employee performance and review < 39

Asia-ready learning program < 39

Youth employment initiatives < 39

Substantive Equality < 40

Disability Access and Inclusion Plan < 40

Occupational safety, health and injury management < 40

Injury management < 41

Compliance with Public Sector standards and ethical codes < 42

Ethical standards < 42

Record-keeping < 42

Freedom of Information < 42

Advertising < 42

SECTION 3 – DISCLOSURES AND LEGAL COMPLIANCE < 44

Auditor’s opinion < 44

Certification of financial statements < 47

Financial statements and notes < 48

Certification of Key Performance Indicators < 112


CONTENTSAPPENDICES < 114

Appendix 1: Legislation and changes to Legislation - Acts and State Agreement Acts (major resources projects) <114

Statutes administered by the department < 114

Agreement Acts administered by the department < 114

New Agreement Acts ratified < 116

New Statutes < 116

Variations < 116

Agreements terminated < 116

Agreement Acts repealed < 116

Appendix 2: Key staff < 117


Statement of Compliance

In accordance with Section 61 of the Financial Management Act 2006, I hereby submit for your information and presentation to Parliament, the Annual Report of the Department of State Development for the financial year ended 30 June 2013.

This Annual Report has been prepared in accordance with the provisions of the Financial Management Act 2006.

Stephen Wood Director General DEPARTMENT OF STATE DEVELOPMENT

13 September 2013


OVERVIEW

Propane sphere, Pluto Liquid Natural gas onshore gas plant, Karratha. Photo: Woodside

Western Australia’s economy was strong in 2012-13, with investment projects worth $174 billion commencing, or under construction, during the year. As a result, the department’s workload was substantial.

The resources economic cycle is starting to shift from construction towards production, and the department’s workload is adjusting accordingly.

During the next four years iron ore capacity is projected to grow to more than 700 million tonnes a year, and liquefied natural gas, from 21 to 50 million tonnes a year. This will be achieved through the Gorgon and Wheatstone LNG projects and expansion programs undertaken by BHP Billiton Iron Ore, Rio Tinto Iron Ore and Fortescue Metals Group, as well as smaller mineral and petroleum developments.

The department facilitated approvals processes for elements of these projects and monitored compliance with State Agreements to ensure projects progress to the State’s advantage. This included a major gas and petroleum exploration and development program in the onshore Canning Basin.

Director General’s review

Our work has focused also on ensuring the necessary infrastructure is in place to handle this increased regional activity, and that strategically-located, approved land is available for future projects.

As the Government’s lead agency for the Ashburton North Strategic Industrial Area, we are co-ordinating the expansion of Onslow and the development of new industrial and export facilities. This will accommodate the Wheatstone LNG project and potentially other gas projects.

The department has coordinated access to and planning for the State’s major industrial precincts. We managed the acquisition, approvals and planning processes for the Browse, Anketell and Oakajee projects.

In 2012-13 the department managed also the federally-funded $195 million East Kimberley Development Program, which saw 21 community and social facilities built alongside a major State Government funded expansion of the Ord Irrigation area.


OVERVIEW

The department was responsible for implementing the Government’s domestic gas policy to provide secure energy for the State’s industries and households, and led the Port Hedland Dust Taskforce in seeking to implement a management plan for air quality and noise management in Port Hedland.

Establishing and building relationships with key trading partners is also important in securing trade and investment into the future.

The department operates overseas trade and investment offices in key markets, supports inbound and outbound trade missions by government and industry, and maintains strong links with key economic agencies in these markets.

Celebrating a 25-year Sister State Relationship with Zhejiang Province in China, including hosting a visit by a 320-strong government and business delegation, was among the year’s highlights.

This year’s achievements are a tribute to the dedication, commitment and initiative of staff across the department.

I also acknowledge and thank the many other government agencies, without whose support and co-operation few of our objectives could be realised.

Stephen Wood Director General


Introducing the Department of State Development

OVERVIEW

The Department of State Development was established under the Public Sector Management Act 1994 in 2009 and reports to the Premier and Minister for State Development, the Honourable Colin Barnett MEc, MLA.

Who we areWe are the State Government’s lead agency for the promotion, coordination and facilitation of responsible development in Western Australia.

We work to achieve growth for Western Australia through building strategic infrastructure and by leading and facilitating government and industry projects that create jobs and underpin Western Australia’s long-term development.

The business we doWe have a unique role in the Western Australian public sector. Our business is to deliver the Western Australian Government’s priorities for state development in projects of State significance including in the Kimberley, Pilbara and Mid-West regions, and we assist project proponents to develop major

resource and industry projects. We also advise and assist Western Australian businesses in global export opportunities.

The way we do businessOur key roles are to:•Develop and coordinate significant

State projects.

•Facilitate and lead the coordination of approvals processes across Government for major resources and infrastructure projects.

•Negotiate and manage agreements between development proponents and the State Government.

•Enable the development of strategic industrial land and infrastructure to meet industry needs.

•Assist the development of export markets.

•Provide strategic policy advice on State development issues.

For more information on the way we do business, refer to page 16 of our Strategic Plan, available online at www.dsd.wa.gov.au

At the opening of the Ord Irrigation Channel (from left) Teddy Carlton, MG Corporation, Hon Colin Barnett, Premier and Minister for State Development, Hon Brendon Grylls Minister for Regional Development, and Peter Handel, Leighton Contractors. Photo: DSD.


OVERVIEW

ValuesThe Department of State Development’s Values support our corporate culture and are the principles we use to help serve the interests of the public and to produce positive results.

Working TogetherWe support each other in a team environment, treat others with fairness and respect, acknowledge innovation and effort and celebrate success.

LeadershipWe provide purpose and direction and empower and support our people to use their initiative to deliver effective outcomes.

IntegrityWe are ethical and accountable for our actions, deliver on our promises and share information appropriately.

TransparencyWe value two-way communication, providing appropriate feedback and using transparent processes.

Excellence in DeliveryWe produce high quality work to deliver value to the community, and we constantly seek to improve the way we operate.

Excellencein

Delivery

Working Togethe

r

Tran

sparency

Inte

grity

Lead

ership


OVERVIEW

Organisational structureThe organisational structure consists of three operational divisions and two areas that provide services across the department:•Strategic Policy Division

•State Initiatives Division

•Resources and Industry Development Division

•Corporate Services Division

•Legal and Commercial Strategy Division

PremierMinister for State Development

Colin Barnett

Director GeneralDepartment of State Development

Stephen Wood

Deputy Director GeneralStrategic Policy

Nicky Cusworth

Undertakes research and analysis and provides the Government with advice

which promotes responsible

development

Deputy Director GeneralState Initiatives

Gail McGowan

Develops and leads the delivery of key Government resource, industry and infrastructure

initiatives

Deputy Director GeneralResources and Industry

Development

Giles Nunis

Leads and facilitates the development

and expansion of Western Australia’s

resources and industry sectors along with the

management of 10 international

offices

DirectorCorporate Services

Steve Melville

Provides efficient and appropriate

corporate services to management and staff across the department

Principal Counsel, Legal and Commercial Strategy

Pamela Hass

Provides specialist commercial

and legal advice and coordinates

across the department.


OVERVIEW

Executive teamsStrategic Corporate ExecutiveThis group comprises the Director General and the five division heads.

Stephen Wood, B.Psych, MPub Ad Director General

Steve joined the department as Director General in 2011. Steve’s public service career started in 1979 in Canberra and he has worked in three Commonwealth and three State public sector agencies. He was also a Commissioner of the Western Australian Industrial Relations Commission for 10 years

Nicky Cusworth, BA (Hons), MA Deputy Director General Strategic Policy

Nicky joined the department in January 2010. Before, she worked as Director of Macro-Economic Policy for the WA Department of Treasury and Finance, and Chief Economist for the Chamber of Commerce and Industry of Western Australia. She has also been a researcher for the Small Business Development Corporation and for a UK research company.

Gail McGowan, BA, Grad.Dip. (Public Policy) Deputy Director General State Initiatives

Gail has extensive experience in working across government at State and Commonwealth level. Previous roles include senior management roles with the State Government’s occupational safety and health regulatory body. Gail has also worked in employment and training, industrial relations, women’s interests and the environment.

Giles Nunis, BBus Deputy Director General Resources and Industry Development

Giles is responsible for managing the development of private projects concerning mining and oil and gas within the terms of the relevant State Agreements. He is also responsible for the management of the State’s International Trade and Investment offices. Giles has an extensive senior commercial and government administration background, holding the position of Australian Managing Director of a multi-national consulting firm and previously fulfilling senior roles in the WA Departments of Justice and Lands.

Steve Melville, BBus, FCPA, GAICD Director Corporate Services

Steve joined the department in 2011 from the Forest Products Commission of WA. He has a range of financial, marketing and management experience in both the government and private sectors.

Pamela Hass, LLB (hons), LLM, BA Principal Counsel, Legal and Commercial Strategy

Joining the department in June 2011, Pamela brings a wealth of legal experience, particularly as an in-house counsel in private enterprise, universities and government. Pamela’s previous positions include University Secretary and Special Legal Counsel at the University of Western Australia and General Counsel at Curtin University of Western Australia. Pamela was the first national president of the Australian Corporate Lawyers Association (the association for in-house counsel) from Western Australia.


Corporate Executive.

OVERVIEW

Corporate ExecutiveThe Corporate Executive comprises the senior leadership of the department and includes members of the Strategic Corporate Executive, major project directors and communications staff.

Key legislationThe Department of State Development complies with all relevant legislation that governs its functions. The department also has responsibility for the administration of two Statutes and 64 State Agreements. These are listed in Appendix 1 on page 114.

Strategic Corporate Executive (seated, from left) Gail McGowan, Stephen Wood, Nicky Cusworth. (Standing) Giles Nunis, Pamela Hass, Steve Melville.


OVERVIEW

Strategic PlanOur Strategic Plan outlines our goals, objectives and targets. The plan comprises five priority strategic objectives, critical in achieving our strategic role.

1. We understand the drivers of State development and how they affect our work.

2. Policies, principles and frameworks give staff clear guidance about how to facilitate responsible development.

3. Project management systems aligned with cultural commitment, support delivery of government priorities in agreed timeframes.

4. We share an understanding of the department’s role and communicate it consistently to stakeholders, who are confident we can deliver.

5. We are motivated, appropriately-trained, happy and focused.

Performance Management Framework

Aerial view of the main irrigation channel in the Ord-East Kimberley Development Project. Photo: DSD.


OVERVIEW

Shared responsibilities with other agenciesOperating under the Lead Agency Framework, the department strives to achieve better cooperation and greater efficiency across Government for the delivery of projects that benefit the State. Formal governance arrangements and clear reporting frameworks assist in clarifying roles and responsibilities.

The following table provides a snapshot of initiatives, outcomes and the contributing agencies.

Initiative Related outcome Contributing agencies

Ord Irrigation Expansion project(State and Federal funding)

Working with State agencies on developing key infrastructure including roads and irrigation channels to provide opportunities for sustainable economic growth in the East Kimberley.

Managed delivery of Commonwealth funded social and community infrastructure to enhance facilities and delivery of services in towns such as Kununurra and Wyndham and remote communities such as Kalumburu and Warmun.

Department of Regional Development and Lands,Department of Environment and Conservation, Department of Health (WA Country Health Services),Department of Transport,Department of Housing,Department of Training and Workforce Development,LandCorp,Department of Water,Department of Agriculture and Food,Department of Aboriginal Affairs,Department of Education,

Department of Treasury,Department of Finance (Building Management and Works),State Solicitor’s Office,Department of Premier and Cabinet,Office of Northern Australia,Department of Regional Australia, Local Government, Arts and Sport, Department of Sustainability, Environment, Water, Population and Communities (Commonwealth).

Oakajee Mid-West Development

An integrated port, rail andindustrial estate to supportthe development of Mid-West resources.

Department of Planning, Geraldton Port Authority, LandCorp, Department of Transport,Public Transport Authority,State Solicitor’s Office,Department of Treasury,Mid-West Development Commission.


OVERVIEW


Browse LNG project The establishment of an LNG precinct on the Kimberley coast.

Australia’s North West Tourism,Chamber of Commerce and Industry,Environmental Protection Authority, Department of Commerce, Department of the Premier and Cabinet,Department of EducationDepartment of Environment and Conservation,Department of Fisheries, Department of Health, Department of Housing,Department of Aboriginal Affairs,Department of Local Government,

Department of Mines and Petroleum,Department of Planning,Department of Regional Development and Lands,Department of Training and Workforce Development,Department of Transport,Department of Treasury,Department of Water, Kimberley Development Commission,LandCorp,Landgate,Main Roads WA,State Solicitor’s OfficeTourism WAWestern Australia Police

Ashburton North Strategic Industrial Area (Onslow)

A greenfields hydrocarbon precinct for processing and export of natural gas and an associated multi-user deep water port.

Landcorp, Dampier Port Authority, Department of Planning, Department of Transport, Environmental Protection Authority,Department of Regional Development and Lands.


OVERVIEW


Anketell Multi-User Port

A greenfields multi-user, multi-commodity, deep-water port and associated industrial area at Anketell near Karratha.

Dampier Port Authority, Department of Planning, LandCorp, Department of Transport,Environmental Protection Authority, Department of Environment and Conservation, Main Roads WA,

Department of Regional Development and Lands, WaterCorp, Department of Water, Department of Premier and Cabinet,Department of Treasury, Pilbara Development Commission.

Bunbury to Albany Natural Gas Pipeline Project

To deliver a secure, reliable and safe natural gas supply for the future economic and social growth of the region and address the gap in the provision of gas supplies in the South West and Great Southern regions

Department of Regional Development and Lands,Department of Treasury,Department of Finance.


PERFORMANCESummaryOur function is to support sustainable and responsible development and to promote Western Australia to industry as a growing and dynamic economy in which to invest and operate. This includes international trade facilitation and industry promotion.As the Western Australian Government’s lead agency for major resources, industry and infrastructure projects, the department facilitates the development of major investments, such as:•The Pilbara iron ore expansion projects

of BHP Billiton, Rio Tinto and Fortescue Metals Group.

• Chevron’s liquefied natural gas projects at Barrow Island (Gorgon project) and Onslow (Wheatstone).

•Roy Hill iron ore project.

•Oil and gas exploration in the Canning Basin.

As well as facilitating private projects, the department also manages several major projects in which the State is the proponent, or has significant investments. These include:

•The Browse LNG Precinct near James Price Point.

•The proposed multi user port at Anketell.

• A new Mid-West iron ore port at Oakajee, near Geraldton.

• The Ord-East Kimberley Development Project, involving development of community and social infrastructure in the State’s north.

The department is also implementing a strategy to prepare key industrial estates for development. This Heavy Use Industrial Land Strategy is designed to progress targeted, industrial estates towards a ‘project-ready’ status that will be able to accommodate new heavy industry.

The department also develops strategic policy and provides advice to government on issues including energy security, port and rail infrastructure, local content, foreign investment, regional planning and utility demand to meet the requirements of a growing economy.

The department negotiates, on behalf of the Government of Western Australia, State Agreements for large, complex projects that require regulation and support beyond the usual regulatory framework (see list of State Agreement Acts in appendix 1).

Each Agreement Act outlines the rights, obligations, terms and conditions for the

development of a project, and establishes a framework for the ongoing operation of the project and the relationship between the proponent and the State.

Report on operationsLead Agency overview

The Lead Agency Framework was implemented by government to support project approvals processes for major resource projects. Under the Lead Agency Framework the department manages projects through planning, environmental, Aboriginal heritage and native title and other relevant approval processes and works closely with project proponents and with approvals agencies to ensure that processes expedite and facilitate responsible development.

The department is lead agency for more than 50 significant projects, including mine developments for a range of mineral resources and oil and gas products, infrastructure projects including ports and rail operations, industrial lands, and research sites for renewable energy.

These projects include State-sponsored resource infrastructure projects and major projects comprising new projects or expansions of existing projects, where the proposed investment is significant or of strategic significance to the State.


PERFORMANCE

The town of Onslow. Photo: DSD

Major resource projectsThe department continued to assist proponents with the development and expansion of major resource projects under the Lead Agency Framework, including:

Ashburton North Strategic Industrial Area (ANSIA)Chevron Australia Pty Ltd commenced major site works for its Wheatstone Liquefied Natural Gas (LNG) and domestic gas plants at the ANSIA. Dredging work in the port commenced and significant progress was achieved in building a 5000-bed temporary construction workers’ village.

The department concluded a State Development Agreement with BHP Billiton Petroleum (Australia) Pty Ltd for the Macedon domestic gas project development also being constructed at the ANSIA.

Case study, Ashburton NorthThe department is coordinating the implementation of a range of critical services and social infrastructure projects for Onslow, the funding for which is being provided by Chevron under the State Development Agreement for the Wheatstone LNG project, supplemented by Royalty for Regions and other State funding.

Chevron will build a desalination plant and power station and is contributing a further $121 million for State Government agencies to provide new and upgraded critical services infrastructure, which includes wastewater, roads, education, health, housing for government workers and emergency services to cater for a larger town population. A total of $76 million has also been allocated to social infrastructure projects which are to be developed in conjunction with the Shire of Ashburton.

Planning is underway for the new desalination plant and the power station, and for the upgrade of the town’s wastewater scheme. Construction has commenced for the enhancement of the Four Mile Creek recreation area and the redevelopment of

Onslow Airport is well advanced. A new 1900m runway is nearing completion, with the detailed design finished and the construction tender awarded for a new terminal building.

In conjunction with Landcorp, a major focus has been to coordinate services for the proposed subdivision to provide new housing for the town’s increasing population. Construction is expected to commence before the end of 2013.


PERFORMANCE

GorgonChevron’s Gorgon Project involves the construction of a three-train, 15.6 million tonnes per year LNG export facility and domestic gas plant and is now more than 60 per cent complete.

On Barrow Island the main construction phase is continuing with the ongoing delivery of the pre-assembled racks and modules.

Downstream, the domestic gas pipeline, meter station and tie-in to the Dampier to Bunbury Natural Gas Pipeline have been completed, and upstream, the major pipelay is expected to be finalised this year.

The total cost estimate for the Gorgon Project is $52 billion, of which to date, $17 billion has been committed to the Western Australian economy.

Plant start-up is scheduled for late 2014, leading to the first LNG cargo in 2015, with the provision of domestic gas by December 2015.

Browse LNG PrecinctThe Browse Liquefied Natural Gas (LNG) Precinct provides for the establishment of a

single LNG processing precinct near James Price Point, located 60km north of Broome. The Precinct is designed to accommodate at least two LNG processing facilities.

Planning for the LNG Precinct aims to minimise the environmental footprint of gas processing facilities in the region, while maximising opportunities for local people and businesses to participate in, and benefit from, employment and business opportunities. It also seeks to minimise the impact on significant cultural and heritage sites.

The department continued to manage the land acquisition, approvals and planning processes for the precinct. Woodside recently announced it would not proceed with its proposed on-shore option for the processing of Browse Basin gas.

Oakajee Mid-West DevelopmentThe department continued to progress planning and approvals for the Oakajee project, an integrated port, rail and industrial estate just north of Geraldton, to support the development and support of Mid-West iron ore

resources and ensure the long-term prosperity of the region. Notable achievements included:• The environmental approval for the Oakajee

port was extended by the Minister for Environment to 2018 to allow for a longer development timeframe.

• Environment Management Plans for the port were accepted by the Environmental Protection Authority.

• Continued development of a draft model that provides for joint State and Commonwealth contribution to common-use infrastructure at the Oakajee Port.

• Engagement with the National Development and Reform Commission of China and relevant companies in their assessment of the project.

The jetty at the Gorgon project on Barrow Island. Photo: Chevron.


PERFORMANCE

AnketellThe department, in conjunction with the Dampier Port Authority and industry, has substantially completed the development of a draft State port master plan for the development of a multi-user, multi-commodity ‘greenfields’ port at Anketell with an ultimate export capacity of not less than 350 million tonnes per annum (Mtpa) of iron ore.

The department facilitated environmental approvals, being made in the first half of 2013 under the Environmental Protection Act 1986 and the Environmental Protection and Biodiversity Conservation Act 1999.

The department has undertaken negotiations with the multiple holders of the underlying land, which includes the Ngarluma Aboriginal Corporation, in respect to the acquisition of land at Anketell, in accordance with the Land Administration Act 1997 and Native Title Act 1993.

Roy Hill Roy Hill Holdings is proceeding with its plans to develop the $9.9 billion Roy Hill iron ore project. This project includes mine development, mine processing infrastructure, a new heavy-haul railway and new port facilities at Port Hedland’s inner harbour.

Major project works began in late 2012. Dredging of the new berth areas at Port Hedland, the airstrip, mine roads and rail construction villages have been completed. Works are well advanced on the construction of mine and port accommodation villages.

Roy Hill Holdings is securing its debt funding, which will allow full construction to start. The project is expected to come into production in 2015 and will produce 55 Mtpa of iron ore for 20 years following ramp-up.

To date, Roy Hill has spent more than $1.2 billion on the project, with a high percentage of that flowing directly and indirectly to Western Australian businesses.

Sino Iron projectConstruction of the Sino Iron project is at an advanced stage with production scheduled to commence in late 2013. It is the largest magnetite mining and processing project in Australia. At full production the project will export up to 21.6Mtpa of magnetite concentrate and 6Mtpa of high grade pellets.

First exports from the project have been delayed several times as the operators address technical issues with the processing plant identified during the commissioning phase.

Roy Hill workers’ camp. Photo: BrookfieldMultiplex.


PERFORMANCE

Yara Pilbara Nitrates: technical ammonium nitrate plantThe department worked with relevant government agencies to assist Yara Pilbara Nitrates Pty Ltd gain government approvals and secure land for the construction of a $700 million, 350,000 tonne per annum Technical Ammonium Nitrate production facility on the Burrup Peninsula. The project will take ammonia, produced from natural gas at the adjacent Yara Pilbara Fertilisers Pty Ltd plant, to produce a base ingredient for explosives products, which will be used by the iron ore industry and other mining operations in the Pilbara. The project is an example of downstream processing of the Pilbara’s natural resources, creating synergies with existing infrastructure and industry, generating significant local business opportunities and employment over its expected 40-year lifespan.

Bunbury to Albany Gas Pipeline ProjectThe Bunbury to Albany Gas Pipeline project is to address the current gap in the provision of natural gas supplies in the South West and Great Southern regions and will enable the State to deliver a natural gas supply for the future economic and social growth of the regions. The department is progressing the planning for the pipeline along a preferred route through Donnybrook, Bridgetown, Manjimup and Mount Barker to Albany.

As lead agency for the project, the department is finalising project planning and due diligence work, including thorough market sounding with industry, and the development of commercial and financial structures to support project implementation.

The Burrup liquid ammonia plant.


PERFORMANCE

State Agreements

State Agreements are contracts between the Government of Western Australia and proponents of major resources projects which are ratified by an Act of the State Parliament. They specify the rights, obligations, terms and conditions for the development of the project and establish a framework for ongoing relations and cooperation between the State and the project proponent.

Canning Basin State AgreementBuru Energy Ltd and the State Government have entered into a State Agreement for an unconventional gas project and pipeline in the Canning Basin. As lead agency for this project, the department developed the Natural Gas (Canning Basin Joint Venture) Agreement Act 2013, which has passed through Parliament and was assented to on 26 June 2013.

Yeelirrie Uranium Project Cameco Australia Pty Ltd purchased the Yeelirrie Uranium project from BHP Billiton in December 2012. Under the provisions of the State Agreement, the department facilitated the assignment of BHP Billiton’s rights and obligations to Cameco Australia by execution of a deed of covenant.

Buru’s Ungani oilfield. Photo; Buru Energy

State Agreement Acts RepealedThe department progressed the State Agreements Legislation Repeal Act 2013 which repealed a number of State Agreement Acts no longer in use: the Broken Hill Proprietary Company Limited Agreements (Variation) Act 1980, Broken Hill Proprietary Company’s Integrated Steel Works Agreement Act 1960, Broken Hill Proprietary Steel Industry Agreement Act 1952, Iron and Steel (Mid West) Agreement Act 1997 & Nickel Refinery (Western Mining Corporation Limited) Agreement Act 1968. The repeal Act also amended the Nickel Refinery (BHP Billiton Nickel West Pty Ltd) (Termination Agreements) Agreement Act 2008.


PERFORMANCE

Case study: Ord East Kimberley Expansion ProjectThe State-funded expansion of the Ord Irrigation Area aims to stimulate economic growth in the Ord region. The State Government has invested $322 million in key infrastructure which has delivered roads, irrigation channels and off-farm infrastructure, doubling the agricultural land in the Ord Irrigation Area from 14,000 to approximately 28,000 hectares.

In its role as coordinator of the Ord East Kimberley Development Package, the department has also coordinated the delivery of $177 million of Commonwealth-funded projects in economic, community and social infrastructure across the East Kimberley region.

The projects have generated more than 24,000 hours of employment for indigenous workers and include, 108 new dwellings, accommodation for short-stay patients and health professionals, a new primary health care centre, improved environmental health and clinic services for indigenous people, an upgraded education precinct and teacher training facilities as well as a community library.

The completion of the projects, on time and to budget, has delivered positive outcomes to support community development through enhancement of facilities and delivery of services in towns such as Kununurra and Wyndham and remote communities such as Kalumburu and Warmun.

Part of the newly-constructed Kununurra District High School.


The port of Port Hedland. Photo: Port Hedland Port Authority.

PERFORMANCE

Strategic Industrial LandsThe department is responsible for the Heavy Use Industrial Lands Strategy which aims to make strategic industrial areas available for new heavy industry capable of the downstream processing of the State’s resources. The department facilitates this by making industrial land ‘project-ready’, through obtaining the necessary approvals providing greater certainty and shortened timeframes for occupancy by new industry. The department achieves through the identification, planning and development of Strategic Industrial Areas.

The department continued to promote investment opportunities and support development within new and established strategic industrial areas through facilitating the necessary applications and approvals with the appropriate government departments and providing advice and assistance to industrial proponents.

MaitlandThe department commenced the Maitland Industrial Estate Structure Plan process this year with detailed surveying of the estate completed and 2-dimentional flood modelling

and storm surge investigations underway. Environmental, engineering and heritage investigations will be undertaken in 2013/14 to progress estate-based approvals and ultimately deliver a structure plan for the estate.

BoodarieSignificant progress has been made with structure planning for the Boodarie Industrial Estate during 2012/13. This included completion of major studies and drafting of the final structure plan. Progress has also been made towards securing an unencumbered corridor to provide freight access between the estate and the Port Hedland Port.

The structure plan is expected to be lodged with the Town of Port Hedland for endorsement by the WA Planning Commission during 2013/14.

KemertonThe Draft Structure Plan for the Kemerton Industrial Park, including an Environmental Management Plan, a water management strategy and engineering studies have been

completed. Work towards obtaining approvals is anticipated to be completed in 2014/15, by which time the structure plan and zoning adjustments will be completed.

The department began discussions with the Department of Sustainability, Environment, Water, Population and Communities for assessment and approval of the Kemerton Industrial Park under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999.


PERFORMANCE

International trade and investment activitiesThe department manages a network of overseas offices in the Asian region to promote, attract and develop export markets and investment linkages to contribute to the State’s economic development. Strategically located to support the growth of Western Australia, the offices are in Shanghai, Mumbai, Seoul, Jakarta and Singapore.

The department, through its International Trade and Investment division, continued to strengthen relationships with Western Australia’s trade and investment partners and coordinated 164 international trade activities during the year. These included visits to Western Australia by potential international investors, dignitaries, trading partner officials and local exporters.

During the year the department also coordinated outbound Ministerial Missions for the Premier’s visits to China and Japan and a Ministerial Mission to the United States to attend LNG17.

Other highlights for the year also included:

Africa Down Under Trade ShowA three-day trade show involving 2450 delegates and 160 exhibitors intended to increase trade between Africa and Australia. There are 175 Western Australian companies operating across Africa in 30 countries. There were 27 African countries represented, with 15 African Ministers making presentations.

Banshu Fashion Textile ProgramAs part of the Western Australia-Hyogo Sister-State Relationship, the department coordinated the Banshu Fashion Textile Program, now in its third year. The program brought together emerging fashion design talent in Western Australia and the Banshu textile industry in Hyogo, Japan to develop creative market opportunities between the two regions.

Premier Colin Barnett pictured with Mr Tomoyuki Yoshimoto, Vice-Governor of the Hyogo Prefectural Government in Japan, and models displaying the 2013 WA-Hyogo Banshu Fashion Textile Program garments. Photo: DSD.

Western Australia – Korea Energy and Resources ForumIn November 2012, the department and the Korean Embassy jointly hosted the inaugural Western Australia-Korea Energy and Resources Forum in Perth. The event marked the first time that the Korean central government has collaborated on such an initiative with a state government. The forum was designed to meet the new Korean investment trend and to provide business networking opportunities for both Western Australia and Korean companies.


PERFORMANCE

Premier’s visit to China and JapanIn June 2013, Premier Colin Barnett visited Beijing and Tokyo to meet government and industry leaders of Western Australia’s two largest trading partners. In Beijing, he met with key state owned enterprises and the Chinese central government. In Tokyo, he met with a number of Japanese companies with significant trade and investment links with Western Australia. The visit reinforced Western Australia’s strong relationships with China and Japan and promoted continuing collaboration in the areas of agriculture, energy and resources.

WA-Zhejiang Sister State 25th Anniversary The department managed the WA-Zhejiang 25th Anniversary celebration in Perth in September 2012. His Excellency, Dr Xia Baolong, Party Secretary of Zhejiang led a 320-member delegation to Perth in his capacity as Governor of Zhejiang.

More than 20 government and private sector cooperation Memoranda of Understanding (MOUs) were signed at the celebration, with a commercial value of more than $2 billion.

Memorandum of Understanding with the China Development BankIn July 2012, the department signed a MOU with the China Development Bank (CDB). CDB was established by the Chinese Government to provide credit support for overseas investment activities by Chinese corporations and state-owned enterprises. Under the MOU, the CDB and the department will regularly communicate about issues including investment opportunities, the economic environment, regulation and approvals processes, and about specific projects involving, or potentially involving, CDB clients.

Ozmine 2013The Indonesian Trade and Investment Office supported Ozmine 2013 in Jakarta and sponsored a networking event attended by more than 400 people. Ozmine had a total of 86 exhibitors, of which 23 were from Western Australia, the largest state contingent present. These companies showcased their products and services to over 2,600 visitors.

Premier Colin Barnett at a meeting in Beijing. Photo: DSD.

Premier Colin Barnett and Dr Xia Baolong, Party Secretary of Zhejiang. Photo: DSD


PERFORMANCE

LNG 17The 17th International Conference and Exhibition on Liquefied Natural Gas (LNG 17) was held in April 2013 in Houston. It attracted 5,000 senior technical, commercial and strategic experts from more than 80 countries. The Minister for Mines and Petroleum invited delegates to LNG 18, to be held in Perth in 2016. LNG 18 will be the largest resource event in the State’s history and will inject more than $50 million into the local economy.

Australian Resources Conference 2012In November 2012, the department supported the planning and staging of the Australian Resources Conference, jointly delivered by the ASX and The Australian Financial Review. The Premier officiated at the event and the department’s Director General was on the Advisory Committee. The conference attracted 900 delegates, speakers and exhibitors and was the first of its kind in Australia to capture all facets of the resource sector with a capital market overlay.

Australasian Oil and Gas (AOG) Conference and ExhibitionIn February 2013 the department participated in AOG, Australia’s largest oil and gas event staged annually in Perth. More than 11,000 delegates and 450 exhibitors attended, a quarter from overseas. The department coordinated and co-hosted the inaugural Western Australian Government Investor Briefing Forum for 160 international industry and government representatives.

AustmineIn May 2013 the department co-sponsored the International Business Lounge at the Austmine Conference and Exhibition for Australia’s mining, equipment and technology services (METS) sector. The exhibition was sold out and the conference attracted 530 senior mining executives from Australia and overseas. The department co-hosted a seminar and networking session which showcased Western Australia’s innovation and prominence in the global METS sector.

WA delegates at LNG 17 included the Minister for Mines and Petroleum, Hon. Bill Marmion (centre) and DSD’s Deputy Director General, Mr Giles Nunis (second from left). Photo: DSD.

The WA delegation to Ozmine. (From left) WA Government representative Hon Phil Edman MLC, Ms Kellie-Jane Pritchard A/Regional Director Indonesia DSD, Mr Brian Wood, A/Executive Director Strategic Projects DSD and Mr Tim Griffin DMP. Photo: DSD.


PERFORMANCE

Australia China Natural Gas Technology Partnership Fund The Australia China Natural Gas Technology Partnership Fund was established in 2002 as part of an historic agreement for Australia to supply LNG to China. The fund, jointly funded by the State Government, the Commonwealth Government and the Liquefied Natural Gas Industry, supports activities aimed at establishing genuine, long-term partnerships within the energy sector that create positive economic and environmental outcomes, increase knowledge and skills, particularly in the LNG industry, and enhance the relationship between Australia and China.

The LNG Fund managed and coordinated the following programs in 2012/13:

• Successfully trained 35 LNG managers and Government officers from the Chinese National Development & Reform Commission (NDRC) in Perth

• Supported the Chinese Training Centre program in Guangdong, China which trains technicians from major Chinese oil and gas companies – approximately 1,500 technicians per annum

• Led a high level delegation of 11 Gas business managers from the North West Shelf LNG, the Department of State Development and Commonwealth Department of Resources, Energy and Tourism

• Awarded 46 PhD Top Up scholarships to scholars in China and Australia worth $522,291 to date

As part of their study program in Australia, Chinese managers visited the North West Shelf Gas project’s plant at Karratha. Photo: DSD

• Awarded and managing 13 research projects totalling $1,181,899

• Continued regular engagement and liaison between the Australian Funders and Chinese NDRC and the training providers in WA (University of WA, Curtin University and Phoenix Academy)


PERFORMANCE

Significant issuesEconomic conditionsIncreased exports are expected to be a major driver of economic growth during the next few years as business investment moderates and major projects move from construction to production.

New resource projects worth more than $174 billion began or were under way during 2012/13. During the investment phase of the resources cycle, the department focused on working with resource companies to facilitate the development of major projects to build the State’s economic capacity and output.

As the resources economic cycle shifts, the department’s priorities are adjusting accordingly.

Energy securityA secure, affordable and reliable energy supply is important for the development in Western Australia. The department works with energy project proponents to ensure domestic energy security.

In August 2012, the State Government released its Strategic Energy Initiative: Energy 2031, which outlines a long-term vision for the supply, planning, delivery and use of energy in the Western Australian economy. It included clarified arrangements for the State’s Domestic Gas Policy and how the State will apply the policy to LNG projects.

In 2012 the department finalised negotiations with the proponents of the Canning Basin natural gas project, with the agreement ensuring the proponents give initial priority to the domestic gas market and that the domestic gas policy will apply in the event that the project exports gas as LNG.

Domestic gas supply is a central to the WA Government’s energy security policies. Photo: DSD


PERFORMANCE

Monitoring development in the Pilbara The department monitors development in the Pilbara region. A key focus area is population growth, which is a major determinant of infrastructure needs. Short to medium-term shifts in population growth in the Pilbara are strongly influenced by the labour demands of major resource projects, and these can shift abruptly as market and economic conditions change. The department also tracks changes in the utility sector, focussing on electricity and water services.

The department leads the Port Hedland Dust Management Taskforce, bringing together industry and State and local government to implement a comprehensive plan for air quality and noise management in Port Hedland.

Regional services Growth in resource production and exports, and in the workforce needed to produce them, has resulted in rising regional demand for utilities such as water and electricity.

The State has developed a cross-agency approach to water supply planning, and the department is assisting the Department of Water with regional demand and supply planning. The department’s input has helped in planning water resources in the regions by identify triggers which indicate that regional water supplies should be augmented.

Transport The department works with other agencies on transport policy issues affecting state development. It is closely involved in implementing the Department of Transport’s Ports Review, participating in the Steering Committee and working with major private port users and owners to resolve implementation issues. It also participated in development of the WA Regional Freight Transport Network Plan and provided input on transport corridors, protection of landside access to ports, improved access to Strategic Industrial Areas, and the development of regional freight centres.

Hamersley Gorge, Karijini National Park WA - Pilbara

Regulatory reforms The department works with other State Government agencies, the Commonwealth Government and industry to improve approvals and regulatory systems. Notable work in the past year included participating in the Department of Mines and Petroleum’s Reforming Environmental Regulation program and the review of the State’s mining securities system, culminating in the establishment of the Mining Rehabilitation Fund.


The department’s goal of driving responsible development makes a major contribution to the Government’s strategic objective State Building – Major Projects. We also make contributions to other State Government goals, particularly the Stronger Focus on the Regions and Social and Environmental Responsibility.

Key Performance IndicatorsThrough the Outcome Based Management Framework the department measures its performance through agreed Key Performance Indicators (KPIs). These agreed KPIs have been used to measure the department’s performance since its establishment in 2009 and help evaluate our performance in achieving desired outcomes. The following is a summary of the department’s performance in those KPIs for 2012/13.

PERFORMANCEPerformance overview

State Government’s strategic goal: State-building - major projects

Build strategic infrastructure that will create jobs and underpin Western Australia’slong-term economic growth.

Agency-desired outcomes Service

Responsible industry development and resource investment.

Industry development and investment facilitation.


Effectiveness indicators* Effectiveness indicators provide information regarding the effectiveness of the department in achieving its objectives. The department has two effectiveness indicators:

PERFORMANCE

Effectiveness KPI #1 Actual 2011-12

Target 2012-13

Actual 2012-13

Extent to which agreed milestones for projects where the department is the lead agency, are achieved within the reporting period

73% 85% 76%

This indicator measures the extent to which 21 agreed milestones across major projects where the department is the lead agency were achieved. The department achieved 76 per cent of these milestones against a target of 85 per cent. There are many external variables involved in achieving these milestones, including the decision making progress of the various proponent companies associated with these projects. During 2012/13 a range of project proponents deferred or delayed their investment decisions, leading to some departmental project milestones also being delayed or postponed.

Effectiveness KPI #2 Actual 2011-12

Target 2012-13

Actual 2012-13

Extent to which State Agreement proponents comply with their reporting obligations and meet the agreement objectives.

97% 95% 98.5%

This indicator measures the extent to which companies, subject to State Agreement reporting requirements, met their reporting obligations during 2012/13. The result of 98.5% against a target of 95% is pleasing in that the department ensures companies perform to their obligations under the various State Agreements.

* Audited KPI:


Efficiency indicators*Effectiveness indicators provide information regarding the effectiveness of the department in achieving its objectives.

The efficiency indicators measure the cost efficiency of the department in delivering the projects where it is the lead agency. The department has two effectiveness indicators.

The first indicator measures the average cost incurred by the department in facilitating major resource projects proposed by industry and State promoted resource development projects.

The second indicator measures the average cost incurred by the department in facilitating the development of five major resource development initiatives where the State, through the department, is the proponent for the project. The five projects are:•Browse Liquefied Natural Gas Precinct•Oakajee Mid-West Development•Ord East Kimberley Expansion•Anketell Port•Ashburton North Strategic Industrial Area

PERFORMANCE

Efficiency KPI #1Actual 2011-12

Target2012-13

Actual 2012-13

Average cost per project facilitated. $495,281 $469,000 $466,000

The decrease in average cost per project facilitated when comparing 2012/13 actual to target is attributed to higher levels of spending on the development of Strategic Industrial Lands projects offset by lower levels of spending and overheads in other areas.

Efficiency KPI #2 Actual 2011-12

Target 2012-13

Actual 2012-13

Average cost per Major State Initiative $5,667,400 $12,293,000 $1,972,200

The target for average cost per Major State Initiative initially included estimated spending on the Onslow infrastructure project which was subsequently transferred from the department’s controlled fund to its administered fund and therefore removed from the KPI calculations. The target for 2012/13 would have been $4,444,000 with the reclassified Onslow funds removed. Spending on other major initiatives was also lower than budget due to repositioning of funds to later years in the Budget Estimates period resulting in a lower actual average cost per initiative.

* Audited KPI:


Financial performanceThe department operates in a project-based environment. Consequently, timing and variation in progress for specific projects determines that financial results as reflected in total cost of services. The department carefully monitors its budget to ensure funds are appropriately allocated and controlled over the life of each project.

The scope, complexity and range of stakeholders involved in the projects in which the department acts as lead agency requires careful budget estimating, notably in respect to timing of milestones and related expenditures. All projects are continuously monitored and budgets realigned to ensure that individual cost estimates remain aligned with the most up-to-date timing expectations. Realignment of funds can significantly affect the department’s annual results when compared with the original budget.

PERFORMANCE

The department entered the 2012/13 financial year with an estimated cost of services budget of $137.7 million in its controlled fund, including significant funding for major State projects. Two significant items subsequently impacted the department’s controlled budget for 2012/13:

(1) Non-cash asset transfers of Ord Irrigation assets, repositioned to later years ($47.2 million in original budget); and

(2) The Onslow Critical and Social infrastructure packages for the Wheatstone project, originally budgeted in the department’s controlled fund, were subsequently transferred to the department’s administered fund ($34.5 million in original budget).

The department’s actual cost of services for 2012/13 was $37.8 million, compared to $60.0 million in the prior year. A significant driver of the decrease between the years was grants and subsidies, mainly the result of differences in payment schedules, determined by planned milestone targets in major State projects. Supplies and services expenditure was also down from prior-year levels due to reduced contractor and consultant expenditure on State projects, including Browse LNG, Oakajee Mid-West Development and Anketell rail and port.


The actual outcome for the year was a surplus of $13.7 million. The surplus was determined after including current-year appropriations received in relation to 2011/12 Browse LNG expenditure ($7.2 million) and external income for the Onslow-Macedon Social Infrastructure Fund (Special Purpose Account, $5.0 million - to be spent in future years).

PERFORMANCE

The remainder of the surplus was generated by the department controlling its total cost of services for the year ($37.8 million) compared with the approved revised budget of $39.1 million and other minor variations.

Cost of Services by Expense Category $’000

2500

2000

15000

10000

5000

0Employee Benefits Supplies and Services Accommodation Grants and Subsidies Depreciation / Other

2012

2013


PERFORMANCEOur people

Workforce planning The department continues to develop its workforce through a range of initiatives from its “Workforce and Diversity Plan” including:

• A Training Needs Analysis and Skills audit leading to the development of a training and development framework and tailored Divisional training plans.

• A Retirement Intentions Survey for staff 45 years and over to assist in developing relevant retention and succession planning strategies.

• The department also celebrated International Women’s Day by holding an internal event, attended by 55 staff.

• An internal mentoring program was piloted this year and is a key initiative under our training and development framework.

• Eleven of our potential future leaders completing the Authentic Leadership Course, as part of our Leadership Development Program.

Career developmentCareer development assistance has continued to be provided to staff on an individual basis particularly in relation to identifying suitable training and development opportunities, completing job applications and interview preparation.

The Department also continued to provide capability sessions for staff on various departmental functions, including Freedom of Information, project finance and stakeholder engagement.

Comparative FTE allocation by categoryThe department managed its resourcing requirements within the constraints of the full-time equivalent (FTE) ceiling of 182, which was subsequently reduced to 170 in September 2012.

Employment Status 2011/12 (Ceiling 182)

2012/13 (Ceiling 170)

Permanent Full-time 136.5 127.5

Contract Full-time 20 15

Part-time – permanent & contract 11.9 14.08

Seconded In 3 2

Seconded Out 0 2

Total 171.4 160.58


PERFORMANCE

Industrial relationsMost departmental staff are employed under the Public Sector and Government Officers General Agreement 2011, with two staff employed under the Salaries and Allowances Tribunal Act 1975.

The department’s payroll services are delivered by the Department of Mines and Petroleum under a Service-Level-Agreement.

There were no significant industrial relations issues during 2012/13.

Employee performance and reviewThe department is committed to managing and developing its people through a performance management system, known as Employee Development Plans. The plans underpin the department’s approach to individual learning, career development and succession planning, which are aligned to strategic and operational objectives.

Asia-ready learning programIn line with the government’s drive to enable the Public Sector to be better equipped to engage professionally with international clients, this year for the first time the department conducted Japanese and Chinese, Language and Business Culture sessions.

These lunch-time sessions were conducted by staff members with particular expertise in various Asian cultures.

Youth employment initiativesThrough its Graduate and Business Traineeship Programs, the department supported six recent university graduates and one indigenous trainee, who completed a Certificate 3 in Business. The 18-month Graduate Program offers participants the opportunity to work across three government agencies, to build their skills and knowledge, establish networks and relationships that are vital for a successful public service career.

Participants in the Asia-Ready program. Photo: DSD

The department’s graduates and trainee with Director General Stephen Wood (from left) Kate Smith (graduate), Alex Gibson (graduate) and Kirsten Howard (trainee).Photo: DSD.


PERFORMANCE

Substantive EqualityThe department is committed to the principles of Substantive Equality and is implementing the framework with the assistance of the Equal Opportunity Commission. Although the department does not deliver services directly to indigenous or minority groups in our community, there is interaction with indigenous people through consultation and forums, where community members are invited to give feedback on proposed and existing State projects.

Disability Access & Inclusion Plan (DAIP) In 2012/13 the department formed a reference group, including an employee with a disability to review the current DAIP, and to incorporate recent changes to the Disability Services Act and Regulations.

The department commenced the development of a new website. One objective is to ensure the site complies with best-practice accessibility requirements and presentation for people with disability.

Occupational Safety, Health and Injury Management

Safety & Health Statistics Target 2010/11 2011/12 2012/13

Number of fatalities Zero (0) 0.0 0.0 0.0

Loss time injury/disease (LTI/D) incident rate

Zero (0) or 10 per cent improvement on the previous three (3) years

1 1.6 0

Loss time injury severity rate Zero (0) or 10 per cent improvement on the previous three (3) years

100% 0.0 0

Percentage of injured workers returned to work within (i) 13 weeks and (ii) within 26 weeks

Greater than or equal to 80% return to work within 26 weeks.

n/an/a

100%n/a

n/an/a

Percentage of managers and supervisors trained in occupational safety, health and injury management responsibilities

Greater than or equal to 80 per cent

75% 50 % 50 %


PERFORMANCE

The department reports information on Occupational Safety and Health (OSH) in accordance with the requirements of the recently released Public Sector Commissioner’s Circular 2012-01: Annual Reporting and the Annual Reporting Framework 2011-12; the Code of Practice: Occupational Safety and Health in the Western Australian Public Sector and in support of the Western Australian Government commitment to the goals of the National Occupational Health and Safety (OHS) Strategy 2002-2012.

The department is committed to developing a culture of safety awareness at all levels of the organisation. The executive works to support the work of managers, employees and other stakeholders in identifying and managing safety and health issues in the workplace.

Staff are encouraged to be proactive and identify and report hazards, as well as suggest improvements to practices and procedures. All OSH-related information is readily available to staff and all new employees receive this information at induction.

As required under the Occupational Safety and Health Act 1984, the department has elected safety and health representatives who provide a valuable role in hazard management and a mechanism for staff consultation on OSH. The formal consultative mechanism is the OSH Committee. Meetings are held bi-monthly.

During 2012/13, representatives conducted regular workplace inspections to ensure the workplace was hazard-free. Facilities management staff work closely with OSH representatives and safety coordinator to resolve OSH matters.

An agency Safety Management Strategic plan for 2012/13 was established. This followed a review of the department’s OSH System against the WorkSafe Plan and Code of Practice Occupational Safety and Health in the WA Public Sector. The Safety Strategic Plan includes a commitment to audit departmental OSH training needs, a review of role and responsibilities for safety across the department and a review of all OSH policies.

This year the department trained 17 staff in Senior First Aid as well as conducting skin cancer screening and ‘flu vaccinations. It also held a health and wellness expo, sponsored by HBF, that included health checks.

In respect to wellness activities, the department supported staff entering several corporate events, including HBF run for a reason, City to Surf, Great Santos Bike Race as well as participated in “corporate cup events”. Staff are also able to access on-site Pilates and yoga sessions after work and at lunchtimes.

Injury managementThe department complies with the Workers Compensation and Injury Management Act, 1981, with a focus on the officer being able to return safely to meaningful work, following illness or injury. Departmental policy outlines the steps to be taken to assist an officer impacted by these circumstances and this includes the completion of individual return-to-work plans.

In 2012/13, through the development of return-to-work plans, one employee was successfully returned to pre-injury duties.


PERFORMANCE

Ethical standardsThe department conducted Accountable and Ethical Decision Making training for all staff within the Department in the first half of 2013, with a 97 per cent attendance rate.

The department conducted a review of its Code of Conduct following the issuing of Commissioner’s Instructions 7 & 8. During 2012/13 there were:

• No Public Interest Disclosures

• One formal grievance.

• One disciplinary matter, and.

• No breaches of HR standards.

Record-keepingThe department commenced work on reviewing and updating its recordkeeping plan in accordance with the State Records Act.

A Records Management Improvement Program, which commenced in 2012, involved in part evaluating the management of file transfer between agencies, together with classifying and standardising terminology. The department’s recordkeeping induction program has been enhanced to include regular team briefings on appropriate

Compliance with Public Sector standards and ethical codes

recordkeeping practices and production of user guides has commenced.

Freedom of InformationThe department received 25 applications for access to information under the Freedom of Information Act 1992. The average time taken to process each application was 37 days.

The department received 10 applications for internal review of the department’s decisions of which nine decisions were confirmed and one varied. There were also three requests for external review.

AdvertisingThe department incurred the following expenditure in advertising, market research, polling, direct mail and media advertising.

Type of spend Amount

Media advertisingRoxby Media(Australia-China Trade Investment magazine liftout)Adcorp (Browse Community consultation)The Australian (“In the Zone” feature)Chamber of Commerce & Industry Trade HandbookIndian trade promotion

2250

3099

5175

1500

1516

Market research Nil

Polling Nil

Direct mail Nil

Total expenditure 13,540


DISCLOSURES AND LEGAL COMPLIANCEAuditor General

Page 1 of 3

7th Floor Albert Facey House 469 Wellington Street Perth MAIL TO: Perth BC PO Box 8489 PERTH WA 6849 Tel: 08 6557 7500 Fax: 08 6557 7600

INDEPENDENT AUDITOR’S REPORT

To the Parliament of Western Australia

DEPARTMENT OF STATE DEVELOPMENT

Report on the Financial StatementsI have audited the accounts and financial statements of the Department of State Development.

The financial statements comprise the Statement of Financial Position as at 30 June 2013, the Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows, Schedule of Income and Expenses by Service, Schedule of Assets and Liabilities by Service, and Summary of Consolidated Account Appropriations and Income Estimates for the year then ended, and Notes comprising a summary of significant accounting policies and other explanatory information, including Administered transactions and balances.

Director General’s Responsibility for the Financial StatementsThe Director General is responsible for keeping proper accounts, and the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the Treasurer’s Instructions, and for such internal control as the Director General determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityAs required by the Auditor General Act 2006, my responsibility is to express an opinion on the financial statements based on my audit. The audit was conducted in accordance with Australian Auditing Standards. Those Standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Department’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Director General, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

Auditor’s opinion

Auditor General

Page 1 of 3

7th Floor Albert Facey House 469 Wellington Street Perth MAIL TO: Perth BC PO Box 8489 PERTH WA 6849 Tel: 08 6557 7500 Fax: 08 6557 7600

INDEPENDENT AUDITOR’S REPORT

To the Parliament of Western Australia

DEPARTMENT OF STATE DEVELOPMENT

Report on the Financial StatementsI have audited the accounts and financial statements of the Department of State Development.

The financial statements comprise the Statement of Financial Position as at 30 June 2013, the Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows, Schedule of Income and Expenses by Service, Schedule of Assets and Liabilities by Service, and Summary of Consolidated Account Appropriations and Income Estimates for the year then ended, and Notes comprising a summary of significant accounting policies and other explanatory information, including Administered transactions and balances.

Director General’s Responsibility for the Financial StatementsThe Director General is responsible for keeping proper accounts, and the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the Treasurer’s Instructions, and for such internal control as the Director General determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityAs required by the Auditor General Act 2006, my responsibility is to express an opinion on the financial statements based on my audit. The audit was conducted in accordance with Australian Auditing Standards. Those Standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Department’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Director General, as well as evaluating the overall presentation of the financial statements.



Page 2 of 3

OpinionIn my opinion, the financial statements are based on proper accounts and present fairly, in all material respects, the financial position of the Department of State Development at 30 June 2013 and its financial performance and cash flows for the year then ended. They are in accordance with Australian Accounting Standards and the Treasurer’s Instructions.

Report on ControlsI have audited the controls exercised by the Department of State Development during the year ended 30 June 2013.

Controls exercised by the Department of State Development are those policies and procedures established by the Director General to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions.

Director General’s Responsibility for ControlsThe Director General is responsible for maintaining an adequate system of internal control to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of public and other property, and the incurring of liabilities are in accordance with the Financial Management Act 2006 and the Treasurer’s Instructions, and other relevant written law.

Auditor’s ResponsibilityAs required by the Auditor General Act 2006, my responsibility is to express an opinion on the controls exercised by the Department of State Development based on my audit conducted in accordance with Australian Auditing and Assurance Standards.

An audit involves performing procedures to obtain audit evidence about the adequacy of controls to ensure that the Department complies with the legislative provisions. The procedures selected depend on the auditor’s judgement and include an evaluation of the design and implementation of relevant controls.


OpinionIn my opinion, the controls exercised by the Department of State Development are sufficiently adequate to provide reasonable assurance that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions during the year ended 30 June 2013.

Report on the Key Performance IndicatorsI have audited the key performance indicators of the Department of State Development for the year ended 30 June 2013.

The key performance indicators are the key effectiveness indicators and the key efficiency indicators that provide information on outcome achievement and service provision.

DISCLOSURES AND LEGAL COMPLIANCE

Department of State Development Annual Report 2012-2013 46Page 3 of 3

Director General’s Responsibility for the Key Performance IndicatorsThe Director General is responsible for the preparation and fair presentation of the key performance indicators in accordance with the Financial Management Act 2006 and the Treasurer’s Instructions and for such controls as the Director General determines necessary to ensure that the key performance indicators fairly represent indicated performance.

Auditor’s ResponsibilityAs required by the Auditor General Act 2006, my responsibility is to express an opinion on the key performance indicators based on my audit conducted in accordance with Australian Auditing and Assurance Standards.

An audit involves performing procedures to obtain audit evidence about the key performance indicators. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the key performance indicators. In making these risk assessments the auditor considers internal control relevant to the Director General’s preparation and fair presentation of the key performance indicators in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the relevance and appropriateness of the key performance indicators for measuring the extent of outcome achievement and service provision.


OpinionIn my opinion, the key performance indicators of the Department of State Development are relevant and appropriate to assist users to assess the Department’s performance and fairly represent indicated performance for the year ended 30 June 2013.

IndependenceIn conducting this audit, I have complied with the independence requirements of the Auditor General Act 2006 and Australian Auditing and Assurance Standards, and other relevant ethical requirements.

Matters Relating to the Electronic Publication of the Audited Financial Statements and Key Performance IndicatorsThis auditor’s report relates to the financial statements and key performance indicators of the Department of State Development for the year ended 30 June 2013 included on the Department’s website. The Department’s management is responsible for the integrity of the Department’s website. This audit does not provide assurance on the integrity of the Department’s website. The auditor’s report refers only to the financial statements and key performance indicators described above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements or key performance indicators. If users of the financial statements and key performance indicators are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial statements and key performance indicators to confirm the information contained in this website version of the financial statements and key performance indicators.

COLIN MURPHYAUDITOR GENERAL FOR WESTERN AUSTRALIAPerth, Western Australia11 September 2013



Certification of financial statements



Financial statements and notes


Certification of Key Performance Indicators



APPENDICES

The Department administers two Statutes and 64 State Agreements on behalf of the Western Australian Government. As part of this responsibility, we also negotiate new agreements, variations, terminations and repeals of State Agreement Acts as required.

This list outlines the Acts and Agreement Acts, by commodity, as at the end of the 2012-2013 reporting year:

Statutes administered by the Department•Government Agreements Act 1979•Nuclear Activities Regulation Act 1978

Appendix 1: Legislation and changes to Legislation – Acts and State Agreement Acts (major resources projects)

Agreement Acts administered by the DepartmentAlumina•Alumina Refinery Agreement Act 1961

•Alumina Refinery (Mitchell Plateau) Agreement Act 1971

•Alumina Refinery (Pinjarra) Agreement Act 1969

•Alumina Refinery (Wagerup) Agreement and Acts Amendment Act 1978

•Alumina Refinery (Worsley) Agreement Act 1973

Charcoal Iron and Steel•Wundowie Charcoal Iron Industry Sale

Agreement Act 1974

Coal•Collie Coal (Griffin) Agreement Act 1979

•Collie Coal (Western Collieries) Agreement Act 1979

Copper•Western Mining Corporation Limited

(Throssell Range) Agreement Act 1985

Diamonds•Diamond (Argyle Diamond Mines Joint

Venture) Agreement Act 1981

Energy•Goldfields Gas Pipeline Agreement Act 1994

•Pilbara Energy Project Agreement Act 1994

•Ord River Hydro Energy Project Agreement Act 1994

Forest Products•Albany Hardwood Plantation Agreement Act

1993

•Bunbury Treefarm Project Agreement Act 1995

•Collie Hardwood Plantation Agreement Act 1995

•Dardanup Pine Log Sawmill Agreement Act 1992


APPENDICES

•Paper Mill Agreement Act 1960

•Wood Processing (WESFI) Agreement Act 2000

•Wood Processing (Wesbeam) Agreement Act 2002

Gas•North West Gas Development (Woodside)

Agreement Act 1979

•Barrow Island Act 2003 (which incorporates the Gorgon Gas Processing and Infrastructure Project Agreement)

Gold•Tailings Treatment (Kalgoorlie) Agreement

Act 1988

Iron Ore and Steel•BHP Billiton (Termination of Agreements)

Agreement Act 2006

• Iron Ore (Channar Joint Venture) Agreement Act 1987

• Iron Ore (FMG Chichester Pty Ltd) Agreement Act 2006

• Iron Ore (Goldsworthy-Nimingarra) Agreement Act 1972

•Iron Ore (Hamersley Range) Agreement Act 1963

•Iron Ore (Hamersley Range) Agreement Act Amendment Act 1968

•Iron Ore (Hope Downs) Agreement Act 1992

•Iron Ore (McCamey’s Monster) Agreement Authorization Act 1972

•Iron Ore (Marillana Creek) Agreement Act 1991

•Iron Ore (Mount Bruce) Agreement Act 1972

•Iron Ore (Mount Goldsworthy) Agreement Act 1964

•Iron Ore (Mount Newman) Agreement Act 1964

•Iron Ore (Murchison) Agreement Authorization Act 1973

•Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972

•Iron Ore (Robe River) Agreement Act 1964

•Iron Ore (Wittenoom) Agreement Act 1972

• Iron Ore (Yandicoogina) Agreement Act 1996

•Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002

Mineral Sands•Mineral Sands (Eneabba) Agreement Act 1975

•Mineral Sands (Cooljarloo) Mining and Processing Agreement Act 1988

•Mineral Sands (Beenup) Agreement Act 1995

Nickel•Nickel (Agnew) Agreement Act 1974

•Poseidon Nickel Agreement Act 1971

Oil•Oil Refinery (Kwinana) Agreement Act 1952

Salt•Dampier Solar Salt Industry Agreement Act

1967

•Evaporites (Lake MacLeod) Agreement Act 1967

•Leslie Solar Salt Industry Agreement Act 1966

•Onslow Solar Salt Agreement Act 1992

•Shark Bay Solar Salt Industry Agreement Act 1983

Uranium•Uranium (Yeelirrie) Agreement Act 1978


APPENDICES

Miscellaneous•Cement Works (Cockburn Cement Limited)

Agreement Act 1971

•Industrial Lands (CSBP & Farmers Limited) Agreement Act 1976

•Industrial Lands (Kwinana) Agreement Act 1964

•Pigment Factory (Australind) Agreement Act 1986

•Silicon (Kemerton) Agreement Act 1987

•Railway (Roy Hill Infrastructure Pty Ltd) Agreement Act 2010

•Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement Act 2004

•The Commonwealth Oil Refineries, Limited (Private) Act, 1940

•Texas Company (Australasia) Limited (Private)Act 1928

New Agreement Acts ratified•Natural Gas (Canning Basin Joint Venture)

Agreement Act 2013

New StatutesNil

VariationsNil

Agreements TerminatedNil

Agreement Acts Repealed•Broken Hill Proprietary Company Limited

Agreements (Variation) Act 1980

•Broken Hill Proprietary Company’s Integrated Steel Works Agreement Act 1960

•Broken Hill Proprietary Steel Industry Agreement Act 1952

•Iron and Steel (Mid West) Agreement Act 1997

•Nickel Refinery (Western Mining Corporation Limited) Agreement Act 1968


APPENDICES

Office of the Director General Stephen WoodDirector-General

Strategic PolicyNicky CusworthDeputy Director General

State InitiativesGail McGowanDeputy Director General

Brett SadlerExecutive Director, Oakajee

Tim FraserExecutive Director Infrastructure Planning and Implementation

Jenness GardnerExecutive Director, Browse

Peter BaldwinDirector, Project Approvals Strategy

Appendix 2: Key staff

Resources and Industry DevelopmentGiles NunisDeputy Director General

Joe OstojichExecutive Director, Strategic Projects

Milka KlobucarExecutive Director, Project Facilitation

Chris ClarkExecutive Director, Strategic Infrastructure

Gary SimmonsExecutive Director, Strategic Infrastructure

Roger DeanDirector, Industry Developments & Evaluation

Stuart CrockettDirector, International Trade and Investment

Corporate ServicesSteve MelvilleDirector, Corporate Services

Legal and Commercial StrategyPamela HassPrincipal Counsel


Government of Western AustraliaDepartment of State Development

1 Adelaide Terrace, East PerthWestern Australia 6004

Tel: + 61 8 9222 0555Fax: +61 8 9222 0505

Web: www.dsd.wa.gov.au

DMPJUL13_2655

Government of Western Australia

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