Ratings tool makes ‘good business sense’

By Paula Wallace
AGIC has the backing of major players in the rail industry in the development of a ratings tool, similar to the one employed in the design, construction and operation of commercial buildings. Dependent on Government funding the Sustainability Rating Tool could be available by mid-2010.
Doug Harland, CEO of AGIC spoke to The Australian Journal of Mining about the benefits of applying the ratings tool to new and existing mine infrastructure.

AJM: Would you have specific categories within the tool which relate to mining and resources industries?
DH: Applying the AGIC rating to new infrastructure projects or brownfields assets simply makes good business sense, and it also provides corporations with the material for corporate sustainability reporting.
Whilst the scheme is not designed to apply to the specialist area of mining processes, all of the seven sustainability assessment categories are applicable to the related civil works and infrastructure necessary to provide access, energy and water to the site and product transportation to markets. Large mining operations often involve access roads, dams, transmission lines, pipelines as well as railway and port facilities
The Centre for Sustainable Resource Processing (CSRP), a Government CRC based in the Perth Technology Park has developed a set of practical protocols (SUSOP – Sustainable Operations) that guides sustainability concepts and practices in the actual mining process area. SUSOP protocols applied to new mining process combined with the use of the AGIC Sustainability Rating Scheme for supporting infrastructure would provide a robust sustainability assessment framework for any new mine site.

AJM: Just as an example, could a mining company apply this ratings tool to a brownfields rail asset and produce significant improvements in a reasonable payback period?
DH: The investment community has shown great interest in the application of the tool to brownfields assets. Superannuation fund managers in particular are attracted to the reduced risk offered by brownfields assets with a proven performance record.
The benefits gained in the application of the tool to brownfields assets result from the new focus on areas such as energy, water, greenhouse gas emissions and carbon.
As carbon accounting becomes integrated into business systems, many current asset intangibles will gain a valuation that can enhance an assets value. Governance issues, procurement and regional employment practices would also come under the microscope and these fresh reviews on a brownfields asset often identify productivity gains and savings.

AJM: Many of the rail assets in Australia are actually owned and operated by mining companies? Do you think they will be enthusiastic about this tool?
DH: It is interesting to note that the notion of the scheme was first raised by a group at an Engineers Australia Society for Sustainable and Environmental Engineering Seminar in 2007.
On taking on the responsibility of CEO of AGIC, a major influence in my decision to accept the role was that the industry professionals in all stakeholder areas of Government and private companies related to infrastructure were so enthusiastic about addressing sustainability issues. There is a huge recognition amongst these professionals that we must do things differently and more sustainably, and in the area of infrastructure the AGIC scheme is seen as an urgent need.
In discussions AGIC has had Fortescue Metals Group, the iron ore miner’s response has been very positive.
Superannuation fund investors and law firms have facilitated panel sessions on the AGIC tool to raise awareness amongst their peers, where the scheme’s benefits in investment analysis and due diligence processes were highlighted.
Industry volunteers and organisations have committed approximately $2 million in kind and $500,000 in annual membership and Foundation membership sponsorship and tenderers have been selected and are ready to author the sub-categories subject to Government funding. It has been a major commitment by industry to date, and I look forward to the Government playing its part to bring the scheme into operation.

For more information email: dharland@agic.net.au

National Conference for Infrastructure Sustainability
AGIC’s inaugural National Conference for Infrastructure Sustainability is a significant milestone in its mission to deliver sustainable solutions in the design, construction and operation of Australian infrastructure. Conference details are as follows:

Date:               Wednesday 7 October 2009
Time:               7:30am – 5:00pm
Location:        Sydney Convention Centre

This conference will follow the NSW Major Projects Conference ’09 on Tuesday 6 October featuring major infrastructure projects across New South Wales.
To register for AGIC's conference, please visit: www.agic.net.au