New laws that ensure local firms gain work from major projects has been criticised by Western Australian Premier Colin Barnett.
He said there are “grave risks” in pursuing the legislation, following the campaign launched by the steel industry and unions to keep resource fabrication and manufacturing jobs in Western Australia.
The WA Jobs from WA Resources campaign launched this morning by the Australian Steel Institute, the Association of Professional Engineers, Scientists and Managers, Australia and the Australian Metal Workers Union (AMWU) seeks legislation to ensure work that can be performed in WA is done by the local industry.
The group wants to highlight how the Barnett Government is allowing the WA’s big resource projects to send their skilled work offshore, which according to AMWU state secretary Steve McCartney, is the norm.
The campaign will see a joint protest from industry and unions at Parliament House on 15 March, as well as television, radio and print advertising.
The launch this morning follows the Premier’s meeting of industry leaders yesterday, which attempted to encourage them to award more work to the local manufacturing and contracting sector.
ASI state manager James England said work being sent offshore would be “devastating” on the local engineering and manufacturing sectors.
"People might be surprised to learn that, despite a large number of huge resources projects being under construction up north, most of our fabrication workshops are almost empty and some businesses are close to collapse," England said.
"Many of the businesses under threat are family businesses that have been in WA for generations and they simply can’t believe that they are being bypassed for this work.
"Our local fabrication businesses have the capacity and capability to do a lot of the work required, but they are not getting a fair opportunity.
"As a result, they can’t create the skilled jobs and apprenticeships that should be flowing during this resources construction boom."
Following the launch, Barnett said the legislation will not be effective.
“There are grave risks in pursuing a legislative approach,” he said.
“It runs the risk of taking more work offshore.
“Bear in mind we are talking about contracts which are between private resources companies and private manufacturing companies.
“The government has got a very clear interest in making sure work does stay in Western Australia and there are skills and job opportunities available for the Western Australian public, but it is very dangerous territory when governments get involved in direct private sector financial arrangements.
“I don’t favour legislation at all.
I think that would be a very poor way of proceeding and would probably make the companies recede even further from giving work locally.”
He went on to say WA’s steel fabrication workshops would experience an increase in work this year, with major projects progressing from preliminary works to full construction phases.
“Regardless of anything I do or don’t do, there will be more work flowing through those shops in the second half of this year as projects move from clearing sites and putting concrete down to actually erecting steel, that’s the inevitable factor.”
“It’s important that these companies have a good flow of work, they have to be cost competitive so they have to make sure they can meet the needs of industry, and I think it’s important that there be a steady flow of work.”
“One of the problems is that it’s very volatile, one minute it’s busy, the next minute there is no work, so we’re trying to smooth out the flow of work.”
Opposition spokesperson for state development, Mark McGowan, said steel fabrication worth $300 million for Chevron’s $44 billion Gorgon project had already gone offshore.
"This $300 million contract would have created many hundreds of local fabrication jobs, but we see no action from Mr Barnett in relation to local content," McGowan said.
According to APESMA state president Zaneta Mascarenhas, most of the work for major projects is done overseas, and the state was experiencing an economically damaging “brain drain”.
“With most of the engineering for our major projects now being done overseas, WA engineers have to uproot themselves and their families and go overseas if they want to help design the projects,” she said.
“There is a core engineering capability that is draining because the design of our Australian LNG resources is going overseas.
“This brain drain leaves our young engineers without senior people to learn from, with this potentially creating a serious long term skills problem across Western Australia’s engineering industry.
“And, if our LNG projects are designed and procured here, our projects are more likely to be built here. Major projects designed overseas are difficult to be fabricated here due to foreign specifications.
“This makes it hard for local businesses to tender for their work.”
The allowance by the Barnett Government for mining, oil and gas companies to send their skilled work overseas could impact future generations, according to UnionsWA secretary Simone McGurk.
"With the Barnett Government allowing the vast majority of the engineering and fabrication work for our major projects to go offshore, the number of young people starting apprenticeships and traineeships has plummeted," she said.
"At the same time, youth unemployment in the South Western suburbs surrounding the Kwinana strip, where many of our fabrication businesses are located, has almost doubled.
"So, despite the talk of supposed ‘skills shortages’ there are actually plenty of young Western Australians available to work.
"The problem is that our fabrication businesses are not getting the pipeline of work they need to create the jobs and apprenticeships our young people need to develop their skills.
"It would be completely unacceptable to most Western Australians that our natural gas and iron ore reserves are being used to create skilled jobs and opportunities for young people in South East Asia, while young people in Perth have trouble getting apprenticeships."