Yesterday’s announcement that Japan’s JFE Steel Corporation and Marubeni-Itochu Steel Inc would manufacture 150,000 tonnes of pipeline for Chevron’s Wheatstone LNG project raises serious questions about whether the Barnett Government’s local industry participation policies are working.
This contract comes on top of 159,000 tonnes of other steel fabrication contracts announced for Wheatstone, which have also gone offshore. These include:
- Offshore platform – 57,000 tonnes – awarded to Daewoo Shipbuilding, South Korea
- Onshore LNG processing modules (outer battery limits) – 42,000 tonnes – awarded to Bohia Oil Marine Engineering and Supply, China
- Onshore LNG processing modules (inner battery limits) – 60,000 tonnes – awarded to Kencana, Malaysia
This means 100 per cent of the steel fabrication contracts for Wheatstone have gone offshore to date, with this representing an even worse performance than Gorgon, which offshored more than 90 per cent of the 300,000 tonnes of fabricated steel required for that project.
Since our campaign started highlighting the increased offshoring of skilled engineering and fabrication work by WA’s major resources projects early last year, the Barnett Government has announced a number of measures it says are designed to address the issue.
However, there is a growing body of evidence that indicates that WA is securing less local work, rather than more, from the resources industry.
In addition to Chevron awarding less work to local steel fabricators from its newest project, the Australian Bureau of Statistics (ABS) continues to confirm what we all know – WA manufacturing jobs are heading offshore.
The ABS has revealed that more than 2,000 manufacturing jobs were lost in the South West Metropolitan suburbs surrounding the Kwinana strip during 2011.
The ABS has also revealed that the youth unemployment rate in and around Kwinana has increased from 21.7 per cent in January 2011 to 28.1 per cent in January 2012. An even more shameful statistic is that the youth unemployment in and around Kwinana has almost doubled since the election of the Barnett Government.
Given these trends, it is clear much stronger action is needed from government to secure skilled local jobs and apprenticeships from our resources sector. This need is highlighted by the almost weekly announcements of job losses and closures in the broader manufacturing sector, as the mining boom makes local industry less competitive through high commodity prices, volumes and the resulting upward pressure on the Australian dollar.
When future generations of Western Australians look back at the current era, they will make a judgment about whether we secured the most from the natural resources we were given, or whether we wasted them. If our manufacturing sector is been completely offshored and deskilled during the resources construction boom, a positive verdict is not likely.