Steel origins under scrutiny in NSW government procurement changes

The commitment, from the Illawarra’s parliamentary secretary Gareth Ward, came as the Mercury questioned the MP over changes to government steel procurement.

The reforms, revealed exclusively by the Mercury on Saturday, include mandating a new Australian standard in government infrastructure tenders and publishing the amount of steel used online. 

Steel campaigner Ian Waters welcomed the plan, saying the government had finally recognised the Illawarra’s heavy manufacturing industry was the “engine room of the NSW economy”, but stressed concerns remained.

“Some of the aspects of the policy can lead to imported steel being used still; that’s a possibility with this policy,” Mr Waters, a project engineer at Unanderra’s K&R Fabrications, said.

“If there are high-quality fabricators accredited overseas, which there will be over time, then you can actually produce the raw steel, say in Korea, good-quality steel, you have a good quality fabricator there and they can potentially tick all the boxes with this new system.”

The Mercury asked Mr Ward about the term “Australian steel”, given concern steel produced overseas then fabricated here could be classed as Australian. 

“There are three categories; Australian suppliers, Australian fabricators, both of whom could be using imported steel, and Australian producers,” he said.

“My advice to the NSW Procurement Board is to make sure that when they are reporting that is clear, so people can have confidence that this policy is being implemented to its fullest extent.”

Asked if “Australian steel” was defined in the changes, Mr Ward said the definition was part of the new standard.

Phil Casey, the Australian Steel Institute’s NSW/ACT manager, said the transparency in the government’s planned system “goes a long way towards us being able to ... make sure that we are getting Australian-made steel”.

BlueScope Steel has backed the NSW governments planned steel procurement changes, saying the reforms would encourage the use of Australian-made and fabricated steel while better enforcing compliance to national standards.

Editorial: Clarity needed on what is ‘Australian steel’

Mark Vassella, BlueScope’s Australian and New Zealand chief executive, said the government had “listened to the concerns of both the community and industry in the Illawarra and acted”.

“This initiative really does pass the ‘pub test’ as it is good for Australian jobs and provides value for taxpayer money,” Mr Vassella said. 

“Given BlueScope supports over 19,000 direct, indirect and induced jobs in NSW, this is welcome news for creating a level playing field.”

Mr Vassella said the changes should recognise the economic, social and environmental benefits of buying from Australian manufacturers. 

“We urge the NSW government to ensure the economic benefit test, via a weighting or credit to local suppliers in recognition for our contribution to the NSW economy, comes into effect at the same time,” he said. 

“It will enable us to compete with steel imports on an ‘apples with apples’ basis.”