Australia's Steel Industry: Forging Ahead
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The Senate Economics References Committee Australia’s steel industry: forging ahead December 2017 © Commonwealth of Australia 2017 ISBN 978-1-76010-683-6 PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3540 Fax: 02 6277 5719 E-mail: [email protected] Internet: www.aph.gov.au/senate_economics This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License. The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/ Printed by the Senate Printing Unit, Parliament House, Canberra. Senate Economics References Committee Committee members in the 45th Parliament Senator Chris Ketter (Chair) Queensland, ALP Senator Jane Hume (Deputy Chair) Victoria, LP Senator the Hon Ian Macdonald Queensland, LP (to 5 December 2016 and from 15 February 2017) Senator Jenny McAllister New South Wales, ALP Senator Nick Xenophon (to 30 October 2017) South Australia, NXT Senator Peter Whish-Wilson (from 14 November 2017) Tasmania, AG Substitute Members for this inquiry Senator the Hon Kim Carr Victoria, ALP (Substitute Member to replace Senator Sam Dastyari from 7 February 2017) Committee members in the 44th Parliament Senator Chris Ketter (Chair) Queensland, ALP Senator Sean Edwards (Deputy Chair) South Australia, LP Senator Matthew Canavan (to 23 February 2016) Queensland, NATS Senator Sam Dastyari New South Wales, ALP Senator Jenny McAllister New South Wales, ALP Senator Dean Smith (from 23 February 2016) Western Australia, LP Senator Nick Xenophon South Australia, IND Senators participating in this inquiry Senator the Hon Kim Carr Victoria, ALP Senator Gavin Marshall Victoria, ALP Senator Jacqui Lambie (to 14 November 2017) Tasmania, JLN Senator Lee Rhiannon New South Wales, AG Secretariat Dr Sean Turner, Committee Secretary (from 10 July 2017) Ms Ann Palmer, Committee Secretary (to 7 July 2017) Ms Ros Hewett, Senior Research Officer Ms Margaret Jones, Administrative Officer iii TABLE OF CONTENTS Membership of Committee iii Abbreviations ix Executive summary xi List of recommendations .................................................................................. xv Chapter 1.............................................................................................................. 1 Introduction .............................................................................................................. 1 Referral and conduct of the inquiry ........................................................................ 1 Background to the inquiry ...................................................................................... 1 Other parliamentary inquiries relevant to the this inquiry ..................................... 2 Scope and structure of the report ............................................................................ 2 Acknowledgements ................................................................................................ 3 Chapter 2.............................................................................................................. 5 Overview of the steel industry in Australia ............................................................ 5 Structure of the steel industry in Australia ............................................................. 5 Economic contribution of the steel industry to Australia ....................................... 9 Trends in Australian steel production and utilisation ........................................... 12 Competitiveness of Australian steel production and utilisation ........................... 17 Committee view .................................................................................................... 23 Chapter 3 ................................................................................................................. 25 The collapse and sale of Arrium ............................................................................ 25 Events leading up to voluntary administration ..................................................... 25 Arrium placed into voluntary administration ....................................................... 27 Commitments to support Arrium.......................................................................... 29 The sale of Arrium ................................................................................................ 31 Committee view .................................................................................................... 32 Chapter 4............................................................................................................ 33 Steel standards, certification and non-conforming products ............................. 33 Senate inquiry into non-conforming building products ....................................... 33 Defining standards, certification and product conformity.................................... 33 International obligations ....................................................................................... 34 Standards in Australia ........................................................................................... 35 Imported steel and Australian standards .............................................................. 37 Impact on Australian businesses .......................................................................... 45 Monitoring and reporting non-conforming products............................................ 46 Senior Officers' Group on non-conforming building products ............................ 49 Committee view .................................................................................................... 51 Chapter 5............................................................................................................ 55 Government Procurement ..................................................................................... 55 Current Commonwealth Procurement Rules ........................................................ 55 Other government procurement policies and instruments .................................... 56 Issues raised about government procurement ...................................................... 60 Issues raised by submitters addressed in current procurement rules .................... 74 Joint Select Committee on Government Procurement ......................................... 75 Committee view .................................................................................................... 77 Chapter 6............................................................................................................ 83 Imports and trade measures .................................................................................. 83 Defining trade remedies ....................................................................................... 83 How Australia's anti-dumping and countervailing framework works ................. 85 Global conditions .................................................................................................. 87 Impact of foreign trade measures on the Australian steel industry ...................... 94 Previous inquiries into trade remedies ................................................................. 96 Recent changes to Australia's anti-dumping and countervailing system ............. 98 Issues raised by submitters ................................................................................. 100 Committee view .................................................................................................. 106 Additional comments by Coalition Senators ................................................ 111 Australian Greens Additional Comments .................................................... 113 Additional comments by Senator Rex Patrick ............................................. 115 Appendix 1 ....................................................................................................... 121 Submissions received ............................................................................................ 121 Appendix 2 ....................................................................................................... 123 Tabled documents ................................................................................................. 123 Additional information ........................................................................................ 123 Answers to questions on notice ............................................................................ 124 Appendix 3 ....................................................................................................... 125 Public hearings and witnesses ............................................................................. 125 Abbreviations ACRS Australasian Certification Authority for Reinforcing and Structural Steel ADC Anti-Dumping Commission ANZGPA Australia and New Zealand Government Procurement Agreement BOF Blast Oxygen Furnace CPRs Commonwealth Procurement Rules EAM Electric Arc Method FTA Free-trade agreement GPA World Trade Organisation Agreement on Government Procurement HSS Hollow structural sections JSCGP Joint Select Committee on Government Procurement NCBPs Non-conforming building products SMEs Small and medium-sized enterprises SOG Senior Officers' Group TBT World Trade Organisation Agreement on Technical Barriers to Trade WTIA Welding Technology Institute of Australia WTO World Trade Organisation ix x Executive summary 1.1 This inquiry arose after a growing crisis