18/02/2011 - 13:57

Industry calls for local content reports

18/02/2011 - 13:57

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WA's steel industry has called for the Barnett government to release more details on how much local work has been created by Chevron's $43 billion Gorgon gas project and Fortescue Metals Group's iron ore operations in the Pilbara.

Industry calls for local content reports

WA's steel industry has called for the Barnett government to release more details on how much local work has been created by Chevron's $43 billion Gorgon gas project and Fortescue Metals Group's iron ore operations in the Pilbara.

Australian Metal Workers Union state secretary Steve McCartney said his union had requested the Department of State Development provide Chevron and FMG's local content reports under Freedom of Information laws, but the department refused.

"Chevron talks a lot about the $20billion it is spending in Western Australia as the Gorgon project is under construction, but provides scant details of how much of this money is being spent on skilled engineering and fabrication that is actually done in Western Australia," Mr McCartney said.

"Similarly, Mr Barnett says that our major resources projects have between 50 per cent and 90 per cent local content, but provides no evidence to back this up.

"We suspect that Chevron's $20billion 'local content' number includes things like phone bills, airfares, catering, public relations and CBD office rent.

"While all of this expenditure is welcome and will deliver a short term boost, it won't deliver a lasting benefit to the WA economy.

"Also, while it is great that FMG is developing its iron ore and infrastructure projects in the Pilbara, we question what the lasting benefit to the WA economy will be, given FMG is getting all 260 of its 40-tonne rail cars manufactured in China.

"Mr Barnett needs to come clean and tell the public if he has requested local content reports from Chevron and FMG.

"If he has the reports, he should release them so that the public can form its own view about whether our major resources projects are generating enough skilled work and apprenticeship opportunities for Western Australians."

Chevron released a statement earlier today that said it had already invested more than $10 billion in Australian contracts for Gorgon, and of the 4,000 associated jobs created, 90 per cent of those were in Western Australia.

It said it plans to invest $20 billion locally over Gorgon's contruction phase.

"We have worked assiduously with Australian industry for more than five years to maximise opportunities for local industry to secure work on the project," Chevron's statement said.

But it admitted local steel fabricators had missed out on contracts because their bids were "significantly uncompetitive".

"In many other sectors (transport, logistics, services, accommodation etc.) local companies have been competitive internationally and have secured significant contracts with the Gorgon Project," Chevron said.

Australian Steel Institute state manager James England said there was a need for greater transparency in the reporting of local content.

"On the one hand, you have Chevron saying they are spending $20billion in WA and talking up the benefits to the WA economy," Mr England said.

"On the other hand, you have scores of workshops all around Perth that are almost empty.

"Something doesn't add up and Mr Barnett should clear things up by releasing the local content reports the Gorgon and FMG State Agreements require him to request."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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