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20 January 2012 | Angeline Albert
The Australian government is threatening to go to the World Trade Organization if it finds evidence its manufacturers are being locked out of major mining projects run by foreign-owned firms.
Prime minister Julia Gillard made her views known this week in response to the Australian Industry Group's (Ai Group) claims that overseas-based mining firms operating in Australia often give preference to manufacturers and suppliers from their home country. The group also said there is evidence that some Australian-based mining firms are forced to use Chinese-made goods and services as a condition of export to China, which is the sector's biggest customer.
In a broadcast on Radio Australia, Gillard urged anyone with evidence of such practices to come forward.
She said: “I am very concerned about these anecdotal reports that there is a requirement that Australian firms are not used in mining. Any clear evidence of this will be taken by us to the World Trade Organization because it's in breach of the rules and it's not giving Aussie manufacturers a fair go.”
Heather Ridout, the CEO of the Ai Group which represents 60,000 businesses across sectors including mining, said in a letter sent to government: “Preference is often given by overseas-based prime contractors to sub-contractors and suppliers in their country of origin. There is increasing evidence that major Australian-based mining companies, under arrangements explicitly or implicitly linked to raw materials supply contracts with China, are required to give preference to Chinese-produced capital equipment and other inputs used in Australia.”
Ridout said the industry group has “outlined the need for an enhanced approach to procurement across all levels of government in order to reduce complexity and cost and give Australian-based business opportunities that many are currently denied.”