A cooperative approach to energy in the Latrobe Valley

For nearly a century, the Latrobe Valley has provided most of Victoria’s power. While there are distant views of chimney stacks and cooling towers from the Princes Freeway, the enormous size and scale of energy production is revealed along the Power Drive Scenic Route. Between the towns of Morwell and Moe, the route heads north through Haunted Hills where a brown tourist sign (‘OPEN CUT LOOK OUT’) directs drivers to a viewing area above the Yallourn open cut coal mine. Expanding out and downwards, the mine is vast.echo adrotate_group(2);

In total, the open cut mines at Yallourn, Hazelwood and Loy Yang cover more than 50 square kilometres. Under the State Electricity Commission (SEC), power first flowed from Yallourn to Melbourne in 1924. As demand for electricity from a growing population increased, the SEC employed thousands of workers to expand production. By the 1970s, around 20% of the working population in the Latrobe Valley was employed by the SEC. Privatisation in the 1990s by the Kennett Government resulted in massive job losses and a downturn in house prices, which left people trapped.

The future of the Latrobe Valley is often described as ‘uncertain’. This is not surprising. Engie, the owners of the Hazelwood Power Station, gave workers just five months’ notice when they announced the closure of the entire plant in 2017. Loy Yang B Power Station is scheduled to close around 2048, although owner Alinta Energy is considering an earlier timeframe. And while there are calls for a ‘just transition’ through retraining, re-employment and investment in industries that support a sustainable future, there is also support for new coal-fired power stations. Within this environment of uncertainty, Earthworker Cooperative set out to address the challenges of economic decline and climate change. As Cooperative Secretary Dan Musil explains, “We aim to grow a network of worker cooperatives that do socially and environmentally useful work while providing dignified livelihoods to people.”

Towards a solution

In 2011, Musil was part of efforts to organise a tour of the Latrobe Valley for environmental activists. He says, “I wanted to try and get the environmental movement, especially younger activists, to better engage with and understand some of the complexities around this notion of a ‘just transition’ and talk directly to workers and community members in the Latrobe Valley.” This provided an opportunity to meet with the co-founder of Earthworker Cooperative, Dave Kerin. The cooperative had just launched a crowdfunded campaign to help secure a licence and purchase equipment to manufacture solar hot water tanks. Following the tour, there was interest in providing more support. Musil offered to help organise a meeting, and by the end of it he was the cooperative secretary. Years of fundraising, business planning and enormous community input followed. In late 2017, Earthworker Energy opened in Morwell and began manufacturing. As Kerin remarked, “It’s a lot easier to organise a protest against something. Trying to get positive solutions happening is so much harder.”

The decision to set up the first worker cooperative in the Latrobe Valley means that Earthworker Energy can provide transitional jobs and utilise the existing skills of workers. The production process needs welders, boilermakers and engineers who will continue to be displaced as power stations close. Dickie Savva, a specialist in stainless steel welding and fabrication at Earthworker Energy, has lived through the changes in the area. Born in Morwell, he did his apprenticeship at the local paper manufacturing plant and knew many people who worked in the power industry, including his brother. Savva first heard about the cooperative at the 2018 Southern Gippsland Sustainability Festival. After bumping into an old friend, who was promoting Earthworker, he found out they were looking for an experienced fabricator. After visiting the factory and seeing the equipment, he knew it was a serious business. As Savva explains, “I want to see us producing quality products and employing local people.” There are currently four workers in the Morwell factory getting the business off the ground. The aim is to grow as quickly and democratically as possible with around 50 workers in manufacturing, sales, installation and servicing.

Cooperatives hidden value

Cooperatives are not new. The first known consumer-owned cooperative store in Victoria was formed in 1863. Cooperative dairy factories appeared throughout the Latrobe Valley from the early 1890s. As power production in the region expanded after World War II, cooperatives were formed to provide services for the increasing number of workers and their families, including groceries and healthcare. Cooperatives are not a marginal phenomenon either. Earthworker is influenced by the Mondragon Corporation in the Basque Country of Spain. Founded in 1956 by a young priest who established a technical college in the town of Mondragon, it has grown into a network of 96 cooperatives employing over 81,500 people.

Earthworker currently has a few hundred members including workers, environmentalists, businesspeople, trade unionists and academics. The cooperative is democratically managed, with each member getting one vote. This provides several benefits including a safer workplace, workers who are invested in the quality of goods being produced, decisions that are made in the interest of local communities, and profits that are shared equally and locally.

“Earthworker wants to be part of growing our manufacturing sector, but not at the expense of the environment or dignified employment.”

In 2018, Earthworker expanded with the launch of Redgum Cleaning Cooperative and HOPE Co-Op. Using environmentally friendly products, Redgum Cleaning provides well-paid, safe and secure jobs to members having experienced exploitative practices in the cleaning and retail sectors. HOPE’s members are mostly tertiary students who have sought asylum in Australia, and are now studying at TAFE or university. Denied access to JobKeeper, JobSeeker and the coronavirus supplement, HOPE is focused on fundraising to deliver food and direct support to affected students.

Earthworker is also a co-founder and member of Cooperative Power. Through their retail product partner Energy Locals, the cooperative sells environmentally friendly energy services and products. Any surplus is directed back into the community through investment in renewable energy, including solar plants, wind energy, battery storage and home-energy efficiency. This year, the cooperative will pass revenue directly back to those who need it most. Members experiencing income disruptions or decreases can choose to receive a $50 credit; members getting a decent income can choose to pass on their credit to those who need it.

A green recovery?

In May this year, business, unions, green groups and charitable organisations sent a joint letter to national cabinet, energy ministers and Nev Power, chair of the government’s National COVID-19 Coordination Commission. Collectively, they called for governments to bolster their jobs and recovery strategies with measures to reduce emissions and accelerate successful energy transitions across all Australia’s regions and economic sectors. Energy efficiency and energy management were identified as one area where useful upgrades could be made across Australia’s private and public housing; commercial, community and government buildings; and industrial facilities. The groups noted that, if done well, these investments would lower energy bills; ease strains on a rapidly changing energy system; improve health and safety during increasingly hot summers; boost the competitiveness of local manufacturers, whose value to Australia is clearer than ever; enable deeper emissions cuts; and sustain activity across a broad range of trades and industries.

While there is increasing support to grow Australian manufacturing, recent analysis by Dr Jim Stanford, director of the Australia Institute’s Centre for Future Work, revealed that Australia is ranked last among OECD countries based on manufacturing self-sufficiency. This measure compares the amount of goods that a country manufactures versus the amount of manufactured goods they use. Lockdowns due to the Covid-19 pandemic have further highlighted the importance of local manufacturing. Along with government policy settings and procurement processes, there are choices that individuals and business can make to support locally manufactured goods.

Just recently, one of Earthworker Energy’s hot water tanks fell off a customer’s truck en route to installation. The cooperative was able to accept the tank back at the factory, restore and re-test it, and hand it back to the customer to be used again. Material was saved from the scrapheap. It may be a small example, but it demonstrates the benefits of local manufacturing and cooperative values. This example is also scalable and transferable. As Vonda Fenwick, chief executive of the South East Melbourne Manufacturers Alliance, has noted, “If you look at any economically successful country in the world, you’re looking at a country that’s got a healthy, robust, industrialised sector – you’ve got a country that’s manufacturing.” Earthworker wants to be part of growing our manufacturing sector, but not at the expense of the environment or dignified employment.