Private and public entities embarking on projects worth more than $500 million are now legally required to look first to Australian businesses over international suppliers, with those who don’t up for public naming and shaming.
The Government’s Australian Jobs Bill 2013 last night passed into law after being introduced in mid-May. The legislation is part of the Government’s $1 billion effort to support and create Australian jobs.
Under the new law, businesses undertaking major projects worth $500 million or more, such as the Commonwealth Bank's core banking overhaul or the Government's National Broadband Network, to demonstrate how they will offer opportunities within the project to local companies.
The Government has created an Australian Industry Participation Authority to enforce the law, as well as an accompanying advisory board, which will advise the the Authority and Industry and Innovation Minister Greg Combet on AIP matters. The advisory board will be made up of between two and four expert members and a Chair.
The new law requires major project managers to develop an AIP plan, outlining actions the relevant entity will take to provide local businesses with “full, fair and reasonable opportunity to participate in a major project”.
“AIP plans will continue to operate alongside procurement principles of value for money and leaves the decision about which suppliers to use with the project proponent. However, AIP plans will ensure that project proponents are fully informed of local capabilities when making these decisions.”
The entity is asked to prepare the AIP plan at an early stage of project approval to increase the chance of local businesses winning work, so “tender specifications can be developed with Australian capabilities in mind, rather than having to comply with pre-existing specifications drawn up with overseas suppliers and established supply chains in mind".
The AIP plan must also provide information on design specifications which specifically take into account Australian industry capabilities, capacity and standards, to ensure local businesses aren’t “designed out” of the project.
Entities that don’t adhere to the Act could find themselves publicly outed, as the Government has given the AIP Authority the power to publicise contraventions.
It also has the ability to seek injunctions to stop the project if a contravention is found to have occurred.